SUREFIRE RESOURCES NL — Annual Report 2012

Sep 27, 2012

BLACK RIDGE MINING NL ABN 48 083 274 024

ANNUAL REPORT

FOR THE YEAR ENDED 30 JUNE 2012

CORPORATE DIRECTORY

FINANCIAL REPORT FOR THE YEAR

1 July 2011 to 30 June 2012

Board of Directors Auditors

Alan Winduss – Non-executive Chairman Vladimir Nikolaenko – Non-executive Director Robert Molkenthin – Executive Director (Appointed 11 April 2012)

Company Secretary

Mr Stuart Third (Appointed 12 September 2012) Mr David Semmens (Resigned 12 September 2012)

Registered Office

Level 1, 47 Ord Street WEST PERTH WA 6005 Phone: +61 8 9322 7822 Fax: + 61 8 9322 7823 Email: info@blackridgemining.com www.blackridgemining.com

Banker

Westpac Banking Corporation 1257 – 1261 Hay Street WEST PERTH WA 6005

National Australia Bank Limited 226 Main Street OSBORNE PARK WA 6017

Rothsay Chartered Accountants Level 18, Central Park Building 152-158 St Georges Terrace PERTH WA 6000 Phone: + 61 8 6364 5076

Solicitors

Steinepreis Paganin Level 4 The Read Buildings 16 Milligan Street PERTH WA 6000 Phone: + 61 8 9321 4000 Fax: + 61 8 9321 4333

Share Registry

Advanced Share Registry 150 Stirling Highway NEDLANDS WA 6009 Phone: +61 8 9389 8033 Fax: + 61 8 9389 7871

Stock Exchange Listing

Australian Securities Exchange Black Ridge Mining NL ASX Code: BRD, BRDOA

CONTENTS

REVIEW OF OPERATIONS	3
DIRECTORS' REPORT	6
AUDITOR'S INDEPENDENCE DECLARATION	15
CONSOLIDATED STATEMENTOF COMPREHENSIVE INCOME	16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	17
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	18
CONSOLIDATED STATEMENT OF CASH FLOWS	19
NOTESTO THE FINANCIAL STATEMENTS	20
DIRECTORS' DECLARATION	54
INDEPENDENT AUDITOR'SREPORT	55
CORPORATE GOVERNANCE STATEMENT	57
ASX ADDITIONAL INFORMATION	63

REVIEW OF OPERATIONS

Unaly Hill (E57/420), Western Australia –Vanadium- Magnetite-Titanium

Upon further review of the RC drilling program carried out in 2010 and the results obtained, the Company concluded that no further drilling was required to prepare an Inferred Mineral Resource estimate. Drilling completed in 2010 targeted titaniferous magnetite mineralisation and a Maiden Inferred Mineral Resource, announced on 21 November 2011, revealed significant high grade vanadium mineralisation in association with magnetite iron mineralisation.

Highlights of the announcement were:

• Significant vanadium Inferred Resource with over 86 million tonnes of 0.42% V2O5 at a 0.30% cutoff grade
• Confirmation of similar mineralization type to Quest Minerals Limited's (ASX:QNL) Victory Bore Deposit
• Two significant high-grade zones
• The deposit remains open along strike and depth with strong potential to increase the estimated resource

Figure 1 Location and geological setting of the Unaly Hill Project

The Unaly Hill project area is located approximately 48 km south of Sandstone in Western Australia.

Aeromagnetic data interpretation of the Unaly Hill Project and the Quest Minerals Limited (ASX:QNL) Victory Bore deposit to the north indicates that the vanadiferous magnetite horizons persist throughout most of the Atley Igneous Complex. Their presence was also confirmed by drilling.

Following the announcement of the Maiden Inferred Mineral Resource in 2011, which is summarized in the following table, the Company has been investigating opportunities to maximize on its return before any additional exploration takes place, given that the project tonnages are already substantial.

REVIEW OF OPERATIONS

Inferred Mineral Resource for V2O5%
Content (Kt)Million tonnesV2O5 %Fe2O3%Fe %TiO2%SiO2%V2O5
86.2	0.42	36,533	24.79	23.57	4.51	30.1

Table 1 Unaly Hill vanadium Inferred Mineral Resource tonnage and grade report

The Company is currently discussing with its mining consultants the processing of fine crushings by densimetric beneficiation involving jig and spirals, or heavy-media, rather than conventional fine-grind and magnetic concentration; this enables the transitional oxide zone as well as the primary BIF to be commercialised.

Plans are underway to conduct some further drilling which will allow the Company to conduct its metallurgical testing. The metallurgical validation of the densimetric process route is expected to be completed shortly. Preliminary pit design and scoping study development plans are also under investigation in order to assess the economic opportunities available to the Company.

Avdrant Project, Mongolia – Rare Earths

On 2 March 2012, the Company announced that it had signed a Heads of Agreement to develop a licenced Rare Earths project located in the Tuv Province, 80 kms east of Ulaanbaatar, the capital of Mongolia. The Heads of Agreement allowed for a 120 day due diligence period, during which time the Company would seek to finalise a definitive agreement to jointly develop the project.

Samples assayed in mid-2011 and presented to the Company had confirmed encouraging concentrations of lanthanum, scandium, yttrium, cerium and other Rare Earth Elements (REE).

The Company initiated its 120 day due diligence process with Company personnel, accompanied by their consultant geologist, visiting Mongolia during which time a site visit was conducted and various meetings were held to establish a network of key professional service providers.

On 5 July 2012, the Company announced that the results of the due diligence conducted on the Avdrant Rare Earths project in Mongolia did not support continued development of this project and, as the Company had been unable to replicate and verify the results and grades as presented to it when the project was introduced, the Company would not be proceeding.

Durminskoe Gold and Silver project, Far Eastern Russia

In April 2011, the Company announced that a Heads of Agreement had been entered into to carry out due diligence on the Durminskoe gold and silver project located in Khabarovski Krai in Far East Russia. The project has had substantial exploration and 'technical' assessment carried out to date, and environmental, hydrological and financial studies completed.

The Company is working to assess previous samples taken from the project and continues to explore ways in which the returns from this project can be optimized and initiatives are underway to advance the project further.

REVIEW OF OPERATIONS

Corporate

10,500,000 unlisted options exercisable at $0.10 each and expiring on 31 December 2011 were not exercised by the due date and therefore lapsed.

On 11 April 2012, the Company announced the appointment to the Board of Mr. Robert Molkenthin as Executive Director. Mr. Molkenthin joined the Company in July 2011 as Chief Operating Officer and continues in that role.

The Company also advised that non-Executive Director, Mr. Angus Middleton resigned, effective 13 April 2012.

Post year end, on 12 September 2012, the Company announced the appointment of Mr Stuart Third as Company Secretary following the resignation from that position of Mr David Semmens.

The information in this report that relates to the drilling data and geological interpretations is based on information compiled by Mr V Trashliev who is a member of the South African Council for Natural Scientific Professions ("SACNASP"). Mr Trashliev is responsible for the Mineral Resource modelling and reporting and is an employee of Gemcom Pty Ltd. The Competent Person responsible for the Independent Audit of the Mineral Resource is Mr Andrew Bewsher from BM Geological Services Pty Ltd and is a member of the Australian Institute of Geoscientists (MAIG). Both persons have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that they are undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and do consent to the inclusion in the report of the matters based on information in the form and context in which it appears

Your directors submit their report for the Company and its controlled entities ("the Consolidated Entity" or "Group") for the year ended 30 June 2012.

DIRECTORS

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

Mr Alan Winduss	Non-executive Chairman
Qualifications	CPA, FTIA, FAICD, AFAIM
Experience	Appointed director 4 February 2011
	Mr Winduss is a director of Winduss & Associates Pty Ltd, CharteredAccountants, and has been involved in professional accounting in publicpractice for over 25 years, specialising in corporate management, finance,capital raising, restructuring and corporate governance matters includingASX and ASIC compliance.
	Mr Windussis a Fellow of the Australian Institute of Company Directors, aFellow of the Taxation Institute of Australia, an Associate Fellow of theAustralian Institute of Management and a registered company auditor.
	Mr Windusshas extensive experience in advising companies operating in themining exploration sector.
Interest in Shares & Options	Nil ordinary shares, nil options.
Special Responsibilities	Mr Winduss is the Non-executive Chairman of the Company.
Directorships held in otherlisted entities	United Overseas Australia Limited ASX and SGX Listed(ASX: UOS)(since November 1995), UOA REIT BHD Bursa Malaysia Listed (sinceOctober 2008), UOA Development Bursa Malaysia Listed (since January2011), Quest Minerals Limited (Chairman) (ASX: QNL)(since August2008), Advanced Share Registry Limited (ASX: ASW)(since August 2008),Magna Mining Limited (ASX: MAN)(sinceSeptember 2009).
	Former directorships in other listed entities in past 3 years are: Alloy SteelInternational Inc USA Listed (1 July 2000 to 30 June 2010) andIFSConstruction Services Limitd (ASX: AFS)(20 July 2012 to 27 August2012).
Mr Vladimir Nikolaenko	Non-executive Director
Experience	Appointed director 4 February 2011
	Mr Nikolaenko has over 30 years of commercial experience in exploration,project evaluation, development and operations, predominantly focused in

the base metals, gold and diamond sectors. He has a depth of management

	and corporate expertise in the operation of public companies and has held theposition of managing director of four public companies over a period ofmore than 20 years involved in exploration and production, propertydevelopment and technology.
Interest in Shares & Options	20,069,511 ordinary shares, 20,067,011 options.
Special Responsibilities	Mr Nikolaenko is aNon-executive Director of the Company.
Directorships held in otherlisted entities	Magna Mining Limited (ASX: MAN)(since April 2012).
	Mr Nikolaenko has not held any directorships in other listed entitiesin thepast 3 years.
Mr Robert Molkenthin	Executive Director (Appointed 11 April 2012)
Qualifications	BA, ACA
Experience	Appointed as Chief Operating Officer on 5 July 2011 and as ExecutiveDirector on 11 April 2012
	MrMolkenthinhasover25years'experienceinAustraliaandinternationally in a wide range of business environments at all levels incorporate finance and business operations. Previous experience encompassescapital raising, IPOs and corporate restructuring in the engineering, mining,property and retail sectors.
Interest in Shares & Options	Nil ordinary shares, nil options.
Special Responsibilities	Mr Molkenthin is theExecutive Director of the Company.
Directorships held in otherlisted entities	Mr Molkenthin doesnotcurrently hold, and has not heldin the past 3 years,anydirectorshipsin other listed entities.
Mr Angus Middleton	Non-executive Director (Resigned 13 April 2012)
Experience	Appointed Director 1 January 2009 and resigned 13 April 2012
	Mr Middleton is a fund manager and former stockbroker who has extensiveexperience in the capital market sector in Australia. He is currently a directorofSA Capital Pty Limited, a corporate advisory firm specialising in equityraising in underwriting, and the Managing Director of SA Capital FundsManagement Limited, an Adelaide based investment fund that has beeninvolved in advising and raising equity for corporations in the form ofventure capital, seed capital, private equity, pre-initial public offering andinitial public offerings. Mr Middleton is also the Managing Director of CrestMinerals Limited.

DIRECTORS' REPORT

Mr David Semmens	Company Secretary(Resigned 12 September2012)
	Mr Third is a Chartered Accountant and a Chartered Tax Advisor, and holdsa Bachelor of Business and Master of Taxation. He is a director of a WesternAustralian Chartered Accounting practice and has been involved inprofessional accounting in public practice for over 15 years, undertakingroles in corporate management, finance and corporate governance mattersincluding ASX and ASIC compliance.He has extensive experience inadvising companies both listed and in the private sector.
Mr Stuart Third	Company Secretary(Appointed 12 September 2012)
OTHER OFFICERS
	Mr Middleton has not held any directorshipsin other listed entitiesin the last3 years.
Directorships held in otherlisted entities	Hillcrest Litigation ServicesLimited (ASX:HLS)(since 2010), RubiannaResourcesLimited (ASX: RRE) (fromSeptember 2009to April 2012),Magna Mining Limited (ASX: MAN)(23 September 2008 to 11 April 2012)
Special Responsibilities	Mr Middleton was aformer Non-executive Director of the Company.
Interest in Shares & Options	44,630,000 ordinary shares, 21,350,000 options (Ceasing office 13 April2012)

PRINCIPAL ACTIVITIES

The principal activity during the financial year was mineral exploration including the exploration and evaluation of opportunities located domestically and internationally.

OPERATING RESULTS

The Consolidated Entity's operating loss after tax for the year ended 30 June 2012 was $1,124,934 (2011: loss of $1,165,885).

REVIEW OF OPERATIONS

Progress of the Group's activities, and future emphasis, in relation to projects and negotiations thereon located in Western Australia and overseas are detailed in the Review of Operations which precedes the Directors' Report.

FINANCIAL POSITION

At the end of the financial year, the Consolidated Entity had $580,810 (2011: $2,010,686) in cash and on deposit.

DIVIDENDS

The directors do not recommend the payment of a dividend for this financial year. No dividends have been paid or declared by the Company since the end of the previous financial year (2011: Nil).

LIKELY DEVELOPMENTS AND FUTURE RESULTS

Other than as referred to in the Review of Operations, further information as to likely developments in the operations of the Consolidated Entity would, in the opinion of the directors, be speculative and may hinder the Consolidated Entity in the achievement of its commercial objectives.

SIGNIFICANT CHANGE IN STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Consolidated Entity during the financial year, not otherwise disclosed in this Directors' Report or in the Review of Operations.

SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE DATE

On 6 September 2012, the Company advised that a Conversion of Creditor Deed had been executed between Magna Mining NL ("Magna") and the Company in respect of an amount owing to the Company by Magna of $178,715 ("Outstanding Amount") arising from trading accounts payable.

Magna and the Company have agreed terms for the repayment of the Outstanding Amount by the issue of the following Settlement Securities to the Company:

• a) 178,715,000 fully paid ordinary shares in Magna at a deemed issue price of $0.001 per share; and
• b) 178,715,000 unlisted options in Magna exercisable at $0.001 on or before 31 August 2017.

The obligation of Magna to issue the Settlement Securities and the conversion of the Outstanding Amount, is conditional upon the shareholders of Magna approving the issue of the Settlement Securities to the Company in general meeting in compliance with the Listing Rules of ASX.

There has not arisen in the interval between the end of the financial year and the date of this report, any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect substantially the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years.

OPTIONS

Share options

As at 30 June 2012, there are 150,894,590 (2011: 161,394,590) unissued ordinary shares in respect of which options were outstanding comprising:

Number of options		Exercise price	Expiry date
150,894,590	Listed	0.015	31 December 2012

During the year 150,894,590 (2011: 150,894,590) options were issued and listed on ASX, and at the date of this report the Company had nil (2011: 10,500,000) unlisted options on issue.

During the year ended 30 June 2012, the following options expired:

10,500,000 unlisted options exercisable at 10 cents expired on 31 December 2011

During, and since the end of the financial year, no fully paid ordinary shares were issued by the virtue of the exercise of options (2011: Nil).

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

REMUNERATION REPORT (AUDITED)

This remuneration report outlines the remuneration arrangements for the Company's directors.

Remuneration policy

The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company must attract competent and experienced directors and executives.

To ensure this the Company has put in place a remuneration structure:

• That provides a balance of base compensation long term incentive plans;
• That provides market-based director fees for its non executive directors.

Remuneration committee

The Board elected that the Company was of the size that a Remuneration Committee was not warranted and that these issues would be continually considered by the Board.

The full Board is responsible for establishing the Company's remuneration policies and practices and to ensure they match the group's objectives. The Company's Board proposed the Managing Director's total remuneration package and is responsible for reviewing the non executive remuneration.

Non-executive director and executive remuneration

The remuneration of non-executive directors may not exceed in aggregate in any financial year the amount fixed by the Company. Currently the non-executive directors are remunerated by way of directors' fees which have been set at $30,000 p.a. for the non-executive Chairman and $30,000 for the non-executive directors, amounts considered reasonable for a company of its size and operational activity.

Details of executives - employment contracts

Mr Robert Molkenthin, Chief Operating Officer is employed under contract and was the only executive of the Company. He was appointed as Chief Operating Officer of the Company on 5 July 2011 and Executive Director on 11 April 2012.

The engagement pursuant to the terms of the service agreement commences from the commencement date, and continues for a term of 2 years unless terminated by the Company. During the engagement, the Company will pay Mr Molkenthin an annual fee of $256,100 plus GST payable in 52 equal weekly instalments of $4,925 plus GST.

Reward for performance

During the year there was no reward for the performance component of any remuneration package.

Key management personnel positions

• A Winduss Non-executive Chairman
• V Nikolaenko Non-executive Director
• R Molkenthin Executive Director: appointed as Chief Operating Officer on 5 July 2011, appointed as Executive Director on 11 April 2012.

DIRECTORS' REPORT

Remuneration report (cont'd) Remuneration of directors and named executives

	Short-term employee benefits		PostShare-basedemploymentpaymentbenefits
		Profit			Equity-settled			Proportion ofremuneration	Value ofoptions as
	Salary &Fees	Share &Bonus	Nonmonetary	Superannuation	Shares	Options	Total	–performance	proportion ofremuneration
	$	$	$	$	$	$	$	related (%)	(%)
2012
Alan Winduss	$55,939	-	-	-	-	-	$55,939	-	-
VladimirNikolaenko	$30,000	-	-	-	-	-	$30,000	-	-
Angus Middleton	$30,000	-	-	$135	-	-	$30,135	-	-
Robert Molkenthin	$194,073	-	-	-			$194,073
Roger Smith	-	-	-	$810	-	-	$810	-	-
Gordon Hatch	-	-	-	$1,090	-	-	$1,090	-	-
Total 2012	$310,012	-	-	$2,035	-	-	$312,047	-	-
2011
Alan Winduss	$23,273	-	-	-	-	-	$23,273	-	-
VladimirNikolaenko	$12,500	-	-	-	-	-	$12,500	-	-
Angus Middleton	$37,500	-	-	$2,700	-	-	$40,200	-	-
Roger Smith	$34,500	-	-	$2,340	-	-	$36,840	-	-
Gordon Hatch	$156,442	-	-	$12,055	-	-	$168,497	-	-
Total 2011	$264,215	-	-	$17,095	-	-	$281,310	-	-

Options granted as part of remuneration

During the year, no options were granted as part of remuneration.

DIRECTORS' INTERESTS

As at the date of this report, the interests of the directors in the shares and options of the Company were:

	DIRECT		INDIRECT
	Ordinary sharesNumber	OptionsNumber	Ordinary sharesNumber	OptionsNumber
A Winduss	-	-	-	-
R Molkenthin	-	-	-	-
V Nikolaenko	-	-	20,061,511	20,067,011

Note: Direct holdings are those held in the individual's name, indirect holdings are all other holdings controlled by the individual.

END OF REMUNERATION REPORT (AUDITED)

DIRECTORS' MEETINGS

During the year, 9 directors' meetings were held. The number of meetings in which directors were in attendance is as follows:

	Directors' Meetings
	No. of meetings held
	while in office	Meetings attended
A Winduss	9	9
V Nikolaenko	9	8
A Middleton	8	8
R Molkenthin	-	-

As at the date of this report, the Consolidated Entity did not have an audit committee, as the directors believe the size of the Consolidated Entity and the size of the Board do not currently warrant its existence.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

During the financial year, the Consolidated Entity paid premiums totalling $9,976 (2011: $9,364) in respect of a contract insuring all the directors of the Company against a liability incurred in their role as directors of the consolidated entity, except where:

• the liability arises out of conduct involving a wilful breach of duty;
• there has been a contravention of the relevant sections of the Corporations Act;
• the conduct involves trading whilst insolvent;
• the conduct involves an operation carried on outside Australia.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of the Company support and have adhered to the principles of Corporate Governance.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company's exploration operations are subject to environmental regulations under Commonwealth and State legislation. The directors believe that the Company has adequate systems in place for the management of the requirements under those regulations, and are not aware of any breach of such requirements as they apply to the Company.

PROCEEDINGS ON BEHALF OF THE COMPANY

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

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

AUDITOR INDEPENDENCE

A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001, is set out on the following page.

NON-AUDIT SERVICES

There were no non-audit services provided by the external auditors during the financial year.

SIGNED in accordance with a resolution of the directors

Alan Winduss Chairman

Perth, 28 September 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012$	2011$
Continuing operations
Revenue from ordinary activities
Gross revenue	3	197,967	38,665
Total revenue		197,967	38,665
Expenses from ordinary activities
Depreciation	4	(5,468)	(6,021)
Employee benefit expense	7	(100,006)	(278,689)
Lease rental payment	4	(91,264)	(40,002)
Professional fees	4	(698,445)	(479,454)
Insurance		(13,257)	(12,747)
Exploration expense	12	(357,725)	(324,833)
Due diligence, travel andaccommodation		(391)	(10,352)
Other expense from ordinary activities		(28,697)	(50,872)
Loss on disposal of non-current asset		-	(1,580)
Foreign exchange loss		(27,648)	-
Loss from ordinary activities before income taxexpense		(1,322,901)	(1,165,885)
Income tax expense	5	-	-
Loss from continuing operations		(1,124,934)	(1,165,885)
Total comprehensive loss for the year		(1,124,934)	(1,165,885)
Earnings per share
Basic lossper share(cents per share)	8	0.15	0.20
The company's potential ordinary shares are not considered dilutive and accordingly basic loss pershare is the same as diluted loss per share.
Diluted lossper share(cents per share)	8	0.15	0.20

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

	Note	2012	2011
		$	$
ASSETS
Current assets
Cash and cash equivalents	9	580,810	2,010,686
Trade and other receivable	10	203,298	32,525
Other asset	11	15,385	10,823
Total current assets		799,493	2,054,034
Non-current assets
Property, plant and equipment	14	10,960	12,952
Exploration expenditure	12	147,068	147,068
Total non-current assets		158,028	160,020
TOTAL ASSETS		957,521	2,214,054
LIABILITIES
Current liabilities
Trade and other payables	15	106,760	141,822
Total current liabilities		106,760	141,822
Non-current liabilities
Total non-current liabilities		-	-
TOTAL LIABILITIES		106,760	141,822
NET ASSETS		850,761	2,072,232
EQUITY
Contributed equity	17(a)	20,339,069	20,435,606
Reserves	17(d)	223,350	223,350
Accumulated losses		(19,711,658)	(18,586,724)
TOTAL EQUITY		850,761	2,072,232

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

CONSOLIDATED STATEMENT OF CHANGE OF EQUITY FOR THE YEAR ENDED 30 JUNE 2012

	Note	ContributedEquity	AccumulatedLosses	Reserves	TotalEquity
		$	$	$	$
Balance at 1 July 2010		17,900,760	(17,420,839)	236,750	716,671
Shares issued during theyear		2,522,746	-	-	2,522,746
Share based payments		66,000	-	-	66,000
Net loss recognised directlyin equity		-	(1,165,885)	-	(1,165,885)
Share issue costs		(67,300)	-	-	(67,300)
Movement in reserves		13,400	-	(13,400)	-
Balanceat 30 June 2011		20,435,606	(18,586,724)	223,350	2,072,232
Balance at 1 July 2011		20,435,606	(18,586,724)	223,350	2,072,232
Shares issued during theyear		-	-	-	-
Share based payments		(6,000)	-	-	(6,000)
Net loss recognised directlyin equity		-	(1,124,934)	-	(1,124,934)
Share issue costs		(90,537)	-	-	(90,537)
Movement in reserves		-	-	-	-
Balanceat 30 June 2012		20,339,069	(19,711,658)	223,350	850,761

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

CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Income received		-	12,829
Interest received		43,305	27,001
Other revenue		154,662	-
Payment to suppliers and employees		(1,370,581)	(1,006,733)
Net cash used in operating activities	22	(1,335,863)	(966,903)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	14	(3,476)	(842)
Acquisition of investments		-	5,323
Net cash provided by investing activities		(3,476)	4,481
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares		-	2,465,618
Share issue expenses		(90,537)	(67,300)
Net cash provided by financing activities		(90,537)	2,398,318
Net increase in cash held		(1,429,876)	1,435,896
Cash and cash equivalents at the beginning offinancial year		2,101,686	574,790
Cash and cash equivalents at the end of financialyear	9	580,810	2,010,686

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

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This financial report includes the financial statements and notes of Black Ridge Mining NL and its Controlled Entities.

Basis of preparation

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

a. Principles of consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Black Ridge Mining NL at the end of the reporting period. A controlled entity is any entity over which Black Ridge Mining NL has the ability and right to govern the financial and operating policies so as to obtain benefits from the entity's activities.

Where controlled entities have entered or left the Group during the year, the financial performance of those entities is included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 13 to the financial statements.

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated in full on consolidation.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

b. Income tax

The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

c. Plant and equipment

Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(g) for details of impairment).

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are recognised as expenses in the statement of comprehensive income during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land and leasehold improvements, is depreciated on a diminishing value basis over the asset's useful life to the Company commencing from the time the asset is held ready for use. Leasehold improvements are depreciated on a straight line basis over the estimated useful lives of the improvements.

The depreciation rates used for the depreciable assets are:

Class of fixed asset	Depreciation rate
Plant and Equipment	15%-37.5%
Computer Equipment	37.5%

The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

d. Exploration, evaluation and development expenditure

Exploration, evaluation and development expenditures incurred are capitalised in respect of each identifiable area of interest. These costs are only capitalised to the extent that they are expected to be recovered 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.

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

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

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

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

e. Lease

Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to entities in the consolidated group, are classified as finance leases.

Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term.

f. Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement

Finance instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method, or cost.

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

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

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss.

The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments.

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

Financial assets are classified at "fair value through profit or loss" when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company's intention to hold these investments to maturity. They are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the

equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign exchange gains and losses recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.

Available-for-sale financial assets are classified as non-current assets when they are expected to be sold after 12 months from the end of the reporting period. All other available-for-sale financial assets are classified as current assets.

(v) Financial Liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.

Fair values

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

Impairment

At the end of each reporting period, the Company assesses whether there is objective evidence that a financial instrument has been impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events (a "loss event") having occurred, which has an impact on the estimated future cash flows of the financial asset(s).

In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point.

In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic conditions that correlate with defaults.

For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the written-off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly if no impairment amount was previously recognised in the allowance account

When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the Company recognises the impairment for such financial assets by taking into account the original terms as if the terms have not been renegotiated so that the loss events that have occurred are duly considered.

Financial guarantees

Where material, financial guarantees issued that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due are recognised as a financial liability at fair value on initial recognition.

The fair value of financial guarantee contracts has been assessed using a probability-weighted discounted cash flow approach. The probability has been based on:

• the likelihood of the guaranteed party defaulting during the next reporting period;
• the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
• the maximum loss exposure if the guaranteed party were to default.

Financial guarantees are subsequently measured at the higher of the best estimate of the obligation in accordance with AASB 137: Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the Company no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

g. Impairment of non-financial assets

At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information, including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, to the asset's carrying amount. Any excess of the asset's carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Accounting Standard (eg in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Accounting Standard.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

h. Investments in associates

Associates are companies in which the Group has significant influence through holding, directly or indirectly, 20% or more of the voting power of the associate company. Investments in associates are accounted for in the financial statements by applying the equity method of accounting, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group's share of net assets of the associate company. In addition, the Group's share of the profit or loss of the associate company is included in the Group's profit or loss.

i. Intangibles

Research and development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

j. Foreign currency transactions and balances

Functional and presentation currency

The functional currency of each of the Group's entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars, which is the parent entity's functional currency.

Transactions and balances

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

Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in

other comprehensive income; otherwise the exchange difference is recognised in profit or loss.

Group companies

The financial results and position of foreign operations, whose functional currency is different from the Group's presentation currency, are translated as follows:

• assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
• income and expenses are translated at average exchange rates for the period; and
• retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed of.

k. Contributed equity

Issued and paid-up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

l. Employee benefits

Provision is made for the company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. 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. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy any vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows attributable to employee benefits.

Equity-settled compensation

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, 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 of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a pricing model which incorporates all market vesting conditions.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company (market conditions) if applicable.

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

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 Group's best estimate of the number of equity instruments that will ultimately vest. 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. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

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

If 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 modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If any 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 awards are treated as if they were a modification of the original award, as described in the previous paragraph.

m. Provisions

Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.

n. Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities in the statement of financial position.

o. Revenue and other income

Revenue is measured at the fair value of the consideration received or receivable after taking into account any discounts and rebates allowed. Any consideration deferred is treated as the

provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.

Interest revenue is recognised using the effective interest rate method.

Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at reporting date and where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable.

All revenue is stated net of the amount of goods and services tax (GST).

p. Trade and other payables

Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

q. Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.

r. Comparative information

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

Where the Group has retrospectively applied an accounting policy, made a retrospective restatement of items in the financial statements or reclassified items in its financial statements, an additional statement of financial position as at the beginning of the earliest comparative period will be disclosed.

s. Critical accounting estimates and judgments

The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company.

Key estimates

(i) Impairment – general

The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions. No impairment has been recognised for the year ended 30 June 2012.

(ii) Impairment – carbon price

There is presently uncertainty in relation to the impacts of the carbon pricing mechanism recently introduced by the Australian Government. This carbon pricing system could potentially affect the assumptions underlying value-in-use calculations used for asset impairment testing purposes. The Company has not incorporated the effect of any carbon price implementation in its impairment testing at 30 June 2012.

t. Earnings per share

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

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

• costs of servicing equity (other than dividends)
• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

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

u. Share-based payments

Equity Settled Transactions:

Share-based payments to employees are measured at the fair value of the instruments issued and amortised over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using the Black-Scholes pricing model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services

received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest.

v. New accounting standards for application in future periods

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Group. The Group has decided not to early adopt any of the new and amended pronouncements. The Group's assessment of the new and amended pronouncements that are relevant to the Group but applicable in future reporting periods is set out below:

• AASB 9: Financial Instruments (December 2010) and AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (applicable for annual reporting periods commencing on or after 1 January 2015).

These Standards are applicable retrospectively and include revised requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments.

The key changes made to accounting requirements include:

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

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

- AASB 2010–8: Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112] (applies to periods beginning on or after 1 January 2012).

This Standard makes amendments to AASB 112: Income Taxes and incorporates Interpretation 121: Income Taxes – Recovery of Revalued Non-Depreciable Assets into AASB 112.

Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax assets depends on whether an entity expects to recover an asset by using it or by selling it. The amendments introduce a presumption that an investment property is recovered entirely through sale. This presumption is rebutted if the investment property is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale.

The amendments are not expected to significantly impact the Company.

- AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of Interests in Other Entities, AASB 127: Separate Financial Statements (August 2011), AASB 128: Investments in Associates and Joint Ventures (August 2011) and AASB 2011–7: Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards [AASB 1, 2, 3, 5, 7, 9, 2009–11, 101, 107, 112, 118, 121, 124, 132, 133, 136, 138, 139, 1023 & 1038 and Interpretations 5, 9, 16 & 17] (applicable for annual reporting periods commencing on or after 1 January 2013).

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

AASB 11 replaces AASB 131: Interests in Joint Ventures (July 2004, as amended). AASB 11 requires joint arrangements to be classified as either "joint operations" (where the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities) or "joint ventures" (where the parties that have joint control of the arrangement have rights to the net assets of the arrangement). Joint ventures are required to adopt the equity method of accounting.

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

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

- AASB 13: Fair Value Measurement and AASB 2011–8: Amendments to Australian Accounting Standards arising from AASB 13 [AASB 1, 2, 3, 4, 5, 7, 9, 2009–11, 2010–7, 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132] (applicable for annual reporting periods commencing on or after 1 January 2013).

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

AASB 13 requires:

The key changes made to accounting requirements include:

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

These Accounting Standards are not expected to significantly impact the Group.

- AASB 2011–9: Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049] (applicable for annual reporting periods commencing on or after 1 July 2012).

The main change arising from this Standard is the requirement for entities to group items presented in other comprehensive income (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently.

This Standard affects presentation only and is therefore not expected to significantly impact the Group.

- AASB 119: Employee Benefits (September 2011) and AASB 2011–10: Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) [AASB 1, AASB 8, AASB 101, AASB 124, AASB 134, AASB 1049 & AASB 2011–8 and Interpretation 14] (applicable for annual reporting periods commencing on or after 1 January 2013).

These Standards introduce a number of changes to accounting and presentation of defined benefit plans. The Group does not have any defined benefit plans and so is not impacted by the amendment.

AASB 119 (September 2011) also includes changes to the accounting for termination benefits that require an entity to recognise an obligation for such benefits at the earlier of:

(i) for an offer that may be withdrawn – when the employee accepts;

• (ii) for an offer that cannot be withdrawn when the offer is communicated to affected employees; and
• (iii) where the termination is associated with a restructuring of activities under AASB 137: Provisions, Contingent Liabilities and Contingent Assets, and if earlier than the first two conditions – when the related restructuring costs are recognised.

The Company has not yet been able to reasonably estimate the impact of these changes to AASB 119.

w. Going concern

The financial report has been prepared on a going concern basis, which contemplates the continuity of the normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

For the year ended 30 June 2012, the Group incurred an operating loss of $1,124,934 (2011: $1,165,885) and an operating cash outflow of $1,335,863 (2011: $966,903).

Based upon the Group's ability to modify expenditure outlays if required, and the directors' confidence of sourcing additional funds, the directors consider there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable, and therefore the going concern basis of preparation to be appropriate for the preparation of the Group's 2012 financial report.

	Note	2012	2011
		$	$
NOTE 2: PARENT INFORMATION

The following information has been extracted from the books and records of the parent and has been prepared in accordance with Accounting Standards.

STATEMENT OF FINANCIAL POSITION

ASSETS
Current assets	799,493	2,054,034
TOTAL ASSETS	957,521	2,214,055
LIABILITIES
Current liabilities	106,760	141,822
TOTAL LIABILITIES	106,760	141,822
EQUITY
Issued capital	20,339,069	20,435,606
Reserves	223,350	223,350
Accumulatedlosses	(19,711,657)	(18,586,723)
TOTAL EQUITY	850,762	2,072,233

Financial Report 2011/2012 Page 35 of 65 Black Ridge Mining NL and its controlled entities

	Note	2012$	2011$
STATEMENT OF COMPREHENSIVE INCOME
Total lossfor the year		(1,124,934)	(1,165,885)

Guarantees

The Company has not entered into any guarantees in the current or previous financial year, in relation to the debts of its subsidiaries.

Contingent liabilities

Details of contingent liabilities are set out in Note 19.

Contractual commitments

At 30 June 2012, the Company had not entered into any contractual commitments for the acquisition of property, plant and equipment (2011: Nil).

NOTE 3: REVENUE AND OTHER INCOME

Finance income	43,305	27,001
Other	154,662	11,664
Total revenue from ordinary activities	197,967	38,665

NOTE 4: LOSS FOR THE YEAR

Loss from ordinary activities before income tax expense has been arrived at after charging the following items:

Professional fees

-	Audit fees	38,500	31,800
-	Company secretarial fees	62,757	52,173
-	Consulting and management fees	475,142	330,335
-	Legal fees	3,450	15,191
-	Accounting fees	34,670	6,120
-	Recruitment fees	40,909	-
-	ASX / Share registry fees	43,017	43,835
		698,445	479,454

	Note	2012$	2011$
Rental expenses on operating leasesMinimum lease payments-		91,264	40,002
Depreciation		5,468	6,021

NOTE 5: INCOME TAX

A reconciliation between tax revenue and the product of accounting loss before income tax multiplied by Group's applicable income tax rate is as follows:

Accounting loss before tax from continuing operations
Loss before tax from discontinued operations	(1,124,934)	(1,165,885)
At the Parent Entity's statutory income tax rate of 30%
(2011: 30%)	(337,480)	(349,766)
Section 40-880 deduction-	(14,402)	(8,970)
Unused tax losses and temporary differences not
recognised as deferred tax assets	351,138	358,736
Income tax attributable to entity	-	-

Net deferred tax assets have not been brought to account, as it is not probable within the immediate future that tax profits will be available against which deductable temporary differences and tax losses can be utilised.

NOTE 6: KEY MANAGEMENT PERSONNEL (KMP) COMPENSATION

Refer to the remuneration report contained in the Directors' Report for details of the remuneration paid or payable to each member of the Group's key management personnel for the year ended 30 June 2012.

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

Short-term employee benefits	97,971	259,905
Post-employment benefits	2,035	18,784
	100,006	278,689

KMP options and rights holdings

The number of options over ordinary shares held by each KMP of the Company during the financial year is as follows:

30 June 2012	Balance atstart of year	Commencingoffice	Granted asRemunerationduring the year	Acquiredduring theyear	Expiredduring theyear	Disposedduring theyear	Ceasingoffice	Balance atthe end ofthe year
A Middleton	21,350,000	-	-	-	-	(312,496)	21,037,504	-
A Winduss	-	-	-	-	-	-	-	-
R Molkenthin	-	-	-	-	-	-	-	-
V Nikolaenko	20,067,011	-	-	-	-	-	-	20,067,011
	41,417,011	-	-	-	-	(312,496)	21,037,504	20,067,011

Detailed remuneration disclosures are provided in the Remuneration Report on pages 11 – 14.

30 June 2011	Balance atstart of year	Commencingoffice	Granted asRemunerationduring the year	Acquiredduring theyear	Expiredduring theyear	Cancelledduring theyear	Ceasingoffice	Balance atthe end ofthe year
R Smith	4,375,000	-	-	-	(1,375,000)	-	3,000,000	-
G Hatch	3,250,000	-	-	-	(250,000)	(3,000,000)	-	-
A Middleton	6,735,000	-	-	21,350,000	(6,735,000)	-	-	21,350,000
A Winduss	-	-	-	-	-	-	-	-
V Nikolaenko	-	-	-	20,067,011	-	-	-	20,067,011
	14,360,000	-	-	41,471,011	(8,360,000)	(3, 000,000)	3,000,000	41,417,011

KMP shareholdings

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

-
-
-
20,069,511
20,069,511

30 June 2011	Balance atstart of year	Commencingoffice	Issued duringthe year	Purchased/(sold)during the year	Ceasingoffice	Balance at theend of theyear
R Smith	7,490,523	-	-	-	7,490,523	-
G Hatch	4,287,000	-	-	-	4,287,000	-
A Middleton	41,508,000	-	21,350,000	(18,228,000)	-	44,630,000
A Winduss	-	-	-	-	-	-
V Nikolaenko	-	2,500	20,067,011	-	-	20,069,511
	53,285,523	2,500	41,417,011	(18,228,000)	11,777,523	64,699,511

Financial Report 2011/2012 Page 38 of 65 Black Ridge Mining NL and its controlled entities

	Note	2012	2011
NOTE 7: AUDITORS' REMUNERATION		$	$
Audit of accounts		38,500	31,800
		38,500	31,800
NOTE 8: EARNINGS PER SHARE
Earnings used in the calculation of EPS
Loss		(1,124,934)	(1,165,885)
		Number	Number
Weighted average number of ordinary shares used
as the denominator in calculating basic EPS		754,472,951	564,618,879
The Company's potential ordinary shares are not considered dilutive and accordingly basic loss pershare is the same as diluted loss per share.
	Note	2012	2011
NOTE 9: CASH AND CASH EQUIVALENTS		$	$
Cash at bank		580,810	2,010,686

NOTE 10: TRADE AND OTHER RECEIVABLES

GSTreceivable	24,583	32,525
Other receivables *	178,715	-
	203,298	32,525

*Other receivables represent the amount owing to the Company by Magna Mining NL, and which is to be converted to an investment in Magna Mining NL as outlined in Note 22 on Events After the Reporting Period.

NOTE 11: OTHER CURRENT ASSETS

Prepayments	15,385	10,823
	15,385	10,823

580,810 2,010,686

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
NOTE 12: EXPLORATION AND DEVELOPMENT EXPENDITURE
Balance at beginning of year		147,068	147,068
Exploration expenditure incurred		357,725	324,833
Exploration expenditure expensed to income statement		(357,725)	(324,833)
		147,068	147,068
NOTE 13: CONTROLLED ENTITIES
Controlled entities consolidated		Percentage Owned (%)
Subsidiaries of Black Ridge Mining NL		2012	2011
Direct
Unaly Hill Pty Ltd		100	100
Sandstone Holdings Pty Ltd		100	100
NOTE 14: PROPERTY, PLANT AND EQUIPMENT
		$	$
Plant and equipment
At cost		25,076	25,076
Accumulated depreciation		(20,294)	(18,391)
		4,782	6,685
Computer equipment
At cost		21,620	18,144
Accumulated depreciation		(15,442)	(11,877)
		6,178	6,267
		10,960	12,952
Movements in carrying amount

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:

Plant and equipment

Balanceat beginning of the year	6,685	9,684
Additions	-	842
Disposals	-	(1,579)
Depreciationexpense	(1,903)	(2,262)
Carrying amount at the end of the year	4,782	6,685

	Note	2012	2011
		$	$
Computerequipment
Balanceat beginning of the year		6,267	10,026
Additions		3,476	-
Disposals		-	-
Depreciationexpense		(3,565)	(3,759)
Carrying amount at the end of the year		6,178	6,267
		10,960	12,952

NOTE 15: TRADE AND OTHER PAYABLES

Trade payables*	91,260	104,524
Sundry payables and accrued expenses	15,500	37,298
	106,760	141,822

*Trade payables are non-interest bearing and normally settled in 30 days.

NOTE 16: TAX

NON-CURRENT

Deferred tax assets

Deferred tax not brought to accounts, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(b) occur:

Section 40-880 deductions	37,659	24,900
Losses available for offset against future tax liabilities(at 30%)	4,690,102	4,332,964
Accrued expenses and provisions	4,500	9,756
	4,732,261	4,367,620

NOTE 17: ISSUED CAPITAL

a. Issued share capital

754,472,951 fully paid ordinary shares
(2011: 754,472,951)	20,339,069	20,435,606

b.	Ordinary shares	Note	2012Number	2011Number
	At the beginning of the reporting period:		754,472,951	461,578,361
-	Shares issued during the yearShares issued on 24 August 2010 pursuant to a
	placement at $0.0132 each		-	5,000,000
-	Shares issued on 15 October 2010 pursuant to aplacement at $0.0074 each		-	137,000,000
--	Shares issued on 29 June 2011 pursuant to aplacement at $0.01 eachShares issued on 29 June 2011 pursuant to a		-	18,135,579
	placement at $0.01 each		-	132,759,011
	At the end of the reporting period		754,472,951	754,472,951

c. Options

As at 30 June 2012, there are 150,894,590 (2011: 161,394,590) unissued ordinary shares in respect of which options were outstanding comprising:

Number of options		Exercise Price	Expiry Date
150,894,590	Listed	0.015	31 December 2012

Terms and conditions of contributed equity

Ordinary shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

	Note	2012	2011
		$	$
d.Option premium reserve
Opening balance		223,350	236,750
Transfer to equity		-	(13,400)
		223,350	223,350

2012

During the year ended 30 June 2012, the following options expired:

10,500,000 unlisted options exercisable at 10 cents expired on 31 December 2011

2011

During the year ended 30 June 2011, the following options were issued:

150,894,590 listed options exercisable at 1.5 cents each on or before 31 December 2012

During the year ended 30 June 2011, the following options expired:

• 101,150,000 listed options exercisable at 4 cents expired on 30 November 2010
• 1,700,000 unlisted options exercisable at 4 cents expired on 31 December 2010

During the year ended 30 June 2011, the following options have been cancelled in accordance with the terms and conditions of those options (For details of disclosure refer to Note 23: Share Based Payments):

• 1,000,000 unlisted options exercisable at 4 cents each and expiring 30 November 2012
• 1,000,000 unlisted options exercisable at 7 cents each and expiring 30 November 2012
• 1,000,000 unlisted options exercisable at 10 cents each and expiring 30 November 2012

e. Capital management policy

The Group's objective when managing capital is to safeguard the Group's ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group's focus has been to raise sufficient funds through equity to fund its activities. The Group monitors capital on the basis of the gearing ratio. However there are no external borrowings as at balance date.

There were no changes in the Group's approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting.

The Group is not subject to externally imposed capital requirements.

NOTE 18: CONTRACTUAL AND LEASING COMMITMENTS

a. Operating lease commitments

The Company occupies its business premises via a periodic tenancy. There is no future lease commitment as either the Landlord or the Company may terminate the tenancy by providing two months' notice to the other party whilst occupying premises under a periodic tenancy.

b. Administration service agreement

The Company is party to an Administration Services Agreement with Corporate Admin Services Pty Ltd (the "Contractor") from 1 July 2010 for a fee of $55,000 (excl GST) per quarter payable in advance. The term of the agreement is for a period of three years, with an option by the Contractor to extend the term for a further two years. Subject to terms included in the Agreement, should the Company terminate the Agreement without prior notice, it will be liable to pay the Contractor the full amount of fees payable for the then remainder of the contract term.

These obligations are not provided for in the financial report and are payable:

Note	2012	2011
	$	$
- not later than 12 months	220,000	220,000
- between 12 months and 5 years	-	220,000
- greater than 5 years	-	-
	220,000	440,000

c. Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Company is required to outlay tenement lease rentals and perform minimum exploration work to meet minimum expenditure requirements specified by various government authorities. These obligations are subject to renegotiation when application for a mining lease is made and at various other times. These obligations are not provided for in the financial report and are payable:

- not later than 12 months	92,820	67,840
- between 12 months and 5 years	90,033	-
- greater than 5 years	-	-
	182,853	67,840

NOTE 19: CONTINGENT LIABILITIES

The Company has a contingent liability in relation to the acquisition of the Unaly Hill mining tenement E57/420:

• a) Upon establishment of an Inferred, Indicated or Measured resource, royalty payments must be made to the vendor based on mineral ore tonnages identified.
  • i) Where the resource relates to iron ore, vanadium or phosphate Inferred resource $0.02 per tonne of ore, Indicated resource $0.04 per tonne of ore and Measured resource $0.06 per tonne of ore.
  • ii) Where the resource relates to U3O8 or any base metal Inferred resource $0.05 per tonne of ore, Indicated resource $0.08 per tonne of ore and Measured resource $0.10 per tonne of ore.
  • iii) Where the resource relates to gold or any other precious metal Inferred resource $0.20 per tonne of ore, Indicated resource $0.30 per tonne of ore and Measured resource $0.50 per tonne of ore.
• b) A further royalty equal to 2.25% of gross revenue arising from sale of minerals derived from the tenement.

An agreement with the vendor was entered into when an Initial Inferred resource was announced deferring the payment of the additional amount identified in (a) above until an alternative agreement is reached.

NOTE 20: OPERATING SEGMENT

For the year ended 30 June 2012, the Company's operations were in mining exploration.

The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by the directors (the Chief Operating Decision Makers) in assessing performance and in determining the allocations of resources.

	At 30 June 2012	Mining &Exploration$	Corporate$	Consolidated$
REVENUE
	Other revenue	-	197,967	197,967
	Segment Result	(357,725)	(767,209)	(1,124,934)
	ASSETS / LIABILITIES
Asset
	Segment assets	147,068	810,453	957,521
Liabilities
	Segment liabilities	-	(106,760)	(106,760)
Net Assets		147,068	703,693	850,761
	At 30 June 2011	Mining &Exploration$	Corporate$	Consolidated$
REVENUE
	Other revenue	-	38,665	38,665
	Segment Result	(324,833)	(841,052)	(1,165,885)
Asset	ASSETS / LIABILITIES
	Segment assets	147,068	2,066,986	2,214,054
Liabilities
	Segment liabilities	-	(141,822)	(141,822)
Net Assets		147,068	1,925,164	2,072,232
	NOTE 21: CASH FLOWINFORMATION
		Note	2012	2011
			$	$
a.	Reconciliation of cash
	Cash at end of financial year as shown in thecash flow statement is reconciled to items inthe balance sheet as follows:
	Cash and cash equivalents		580,810	2,010,686

		Note	2012$	2011$
b.	Reconciliation with operating loss
	Reconciliation of cash flows from operations with operating loss after income tax is set out as follows:
	Operating losses		(1,124,934)	(1,165,885)
	Non-cash flows included in loss:
-	Depreciation expense		5,468	6,021
-	Profit on disposal of equity investments		-	1
-	Loss on sale of non-current asset		-	1,579
	Changes in assets and liabilities:
-	(Increase)/decrease in receivables		(178,715)	-
-	(Increase)/decrease in prepayments		(4,562)	(173)
-	(Increase)/decrease in creditors and accruals		(41,062)	209,581
-	Increase/(decrease) in provisions		7,942	(18,027)
	Net cash used by operating activities		(1,335,863)	(966,903)
c.	Non-cash operating activities
	Share based payments	24(b)	-	66,000

5,000,000 ordinary shares were issued to a supplier on 24 August 2010 at $0.0132 each in settlement of payment for services rendered to the Company valued at $66,000.

NOTE 22: EVENTS AFTER THE REPORTING PERIOD

On 6 September 2012, the Company advised that a Conversion of Creditor Deed has been executed between Magna Mining NL ("Magna") and the Company in respect of an amount owing to the Company by Magna of $178,715 ("Outstanding Amount") arising from trading accounts payable.

Magna and the Company have agreed terms for the repayment of the Outstanding Amount by the issue of the following Settlement Securities to the Company:

• a) 178,715,000 fully paid ordinary shares in Magna at a deemed issue price of $0.001 per share; and
• b) 178,715,000 unlisted options in Magna exercisable at $0.001 on or before 31 August 2017.

The obligation of Magna to issue the Settlement Securities and the conversion of the Outstanding Amount, is conditional upon the shareholders of Magna approving the issue of the Settlement Securities to the Company in general meeting in compliance with the Listing Rules of ASX.

There has not arisen in the interval between the end of the financial year and the date of this report, any other item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect substantially the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years.

NOTE 23: SHARE-BASED PAYMENTS

a. Options granted to key management personnel as share-based payments

On 24 November 2009, the Company issued a total of 3,000,000 unlisted options to Mr Gordon Hatch, the Managing Director of the Company.

Mr Gordon Hatch resigned as managing Director and Chief Executive Officer of the Company on 28 February 2011.

Under the Terms and Conditions applying to the grant of the options, options not exercised by the Expiry Date (30 November 2012) will automatically expire and in the event that the employment is terminated by either the Managing Director or the Company in accordance with the termination provisions contained in the Employment Agreement, any options not exercised will expire within one (1) month of termination, unless they are exercised within that time. The options were not exercised and were cancelled on 29 March 2011.

A summary of the movement of Company options issued to Mr Gordon Hatch is as follows:

	Number	WeightedAverageExercise Price
Options outstanding at 30 June 2010	3,000,000	7 cents
Forfeited	(3,000,000)	7 cents
Options outstanding at 30 June 2011	-

NOTE 24: RELATED PARTY TRANSACTIONS

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

a) Key management personnel

The names of each person holding the position of director of the Company during the financial year are:

A Winduss

V Nikolaenko

R Molkenthin (Appointed 11 April 2012)

A Middleton (Resigned 13 April 2012)

For details of disclosures relating to key management personnel, refer to Note 6: Key Management Personnel (KMP) Compensation.

b) Administration service agreement

- Corporate Admin Services Pty Ltd

The Company has an administration service agreement with Corporate Admin Services Pty Ltd, a company of which Mr. Vladimir Nikolaenko is a director. The contract is for provision of strategic and corporate advisory service. The amount paid to Corporate Admin Services Pty Ltd at 30 June 2012 is $435,906 (2011: $349,102), and represents reimbursements for

costs incurred in the provision of strategic and corporate advisory services. The amount owing to Corporate Admin Services Pty Ltd at 30 June 2012 is $64,027 (2011: $86,680).

c) Commercial services agreement

– Winduss & Associates Pty Ltd

The Company receives accounting and bookkeeping services from Winduss & Associates Pty Ltd, an accounting practice of which Mr. Alan Winduss is a director and shareholder. Fees charged are at normal commercial rates and conditions. The amount of fees paid or accrued to 30 June 2012 for accounting and bookkeeping services is $30,856 (2011: $2,378). There are no amounts owing to Winduss & Associates Pty Ltd at 30 June 2012 (2011: $nil).

d) Acquisition of mining tenement – additional consideration - Plato Mining Pty Ltd

In 2009, the Company acquired the Unaly Hill Tenement (E57/420) from Plato Mining Pty Ltd, a company of which Mr Vladimir Nikolaenko is a director. Upon the establishment of a JORC Code compliant Inferred resource, Indicated resource or Measured resource on the Tenement, the Company is pay further amounts to Plato Mining Pty Ltd.

For details of disclosures relating to amount payable to Plato Mining Pty Ltd, refer to Note 19.

NOTE 25: FINANCIAL RISK MANAGEMENT

This note presents information about the Group's exposure to credit, liquidity and market risks, its objectives, policies and processes for measuring and managing risk and the management of capital.

The Group does not use any form of derivatives as it is not at a level of exposure that requires the use of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Board of Directors of the Company has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the Company and the Group through regular reviews of the risks.

The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payable, leases and preference shares.

The totals for each category of financial instruments, measured in accordance with AASB 139, as detailed in the accounting policies to these financial statements, are as follows:

Categories of financial instruments	Note	2012	2011
		$	$
Financial assets
Cash and cash equivalents	9	580,810	2,010,686
		580,810	2,010,686
Financial liabilities
Payables and borrowings	15	106,760	141,822
		106,760	141,822

a. General objectives, policies and processes

In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This note describes the Company's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

The principal financial instruments from which financial instrument risk arises:

-	-
trade and other receivables	cash at bank
-	-
trade and other payables	borrowings

The Board has overall responsibility for the determination of the Company's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure effective implementation of the objectives and policies to the Company's finance function. The Company's risk management policies and objectives are therefore designed to minimise the potential impact of these risks on the results of the Company where such impacts may be material.

Specific financial risk exposures and management

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, foreign currency risk and other price risk (commodity and equity price risk). There have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board's objectives, policies and processes for managing or measuring the risks from the previous period.

b. Credit risks

Exposure to credit risk relating to financial assets arises from the potential non-performance by counter parties of the contract obligations that could lead to a financial loss to the Company. There is no material amount of collateral held as security at 30 June 2012.

Cash and cash equivalents

The Company limits its exposure to credit risk by only depositing cash at banks or financial institutions that have an acceptable credit rating.

Trade and other receivables

As the Company operates primarily in investment and exploration activities, it does not have trade receivables and therefore is not exposed to credit risk in relation to trade receivables.

The Company, where necessary, establishes an allowance for impairment that represents its estimate of incurred losses in respect of other receivables and investments. Management does not expect any counterparty to fail to meet its obligations.

Exposure to credit risk

The carrying amount of the Group's financial assets represents the maximum credit exposure. The Company's maximum exposure to credit risk at balance date is as follows:

	Note	2012	2011
		$	$
Other Receivables		203,298	32,525

c. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

The Company manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by continuously monitoring forecast and actual flows. The Company does not have any external borrowings.

The Company anticipates a need to raise additional capital in the next 12 months to meet forecast operational activities. The decision on how the Company will raise future capital will depend on market conditions existing at that time.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Financial liability and financial asset maturity analysis

At 30 June 2012

	Within 1 Year	1 to 5 Years	Over 5 years	Total
	$	$	$	$
Financial liabilities duefor payment
Payables and borrowings	106,760	-	-	106,760
Total expected outflows	106,760	-	-	106,760
Financial assets –cashflows realisable
Cash and cash equivalents	580,810	-	-	580,810
Total anticipated inflows	580,810	-	-	580,810
Net (outflow)/ inflow onfinancial instruments	474,050	-	-	474,050

At 30 June 2011
	Within 1 Year	1 to 5 Years	Over 5 years	Total
	$	$	$	$
Financial liabilities duefor payment
Payables and borrowings	141,822	-	-	141,822
Total expected outflows	141,822	-	-	141,822
Financial assets –cashflows realisable
Cash and cash equivalents	2,010,686	-	-	2,010,686
Total anticipated inflows	2,010,686	-	-	2,010,686
Net (outflow)/ inflow onfinancial instruments	1,868,864	-	-	1,868,864

Financial arrangements

At 30 June 2012: Nil (2011: nil).

d. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return.

i) Foreign exchange risk

Overseas transactions are negotiated in foreign currencies which give rise to assets and liabilities which are translated to Australian currency in accordance with the accounting policies set out in Note 1(j).

At 30 June 2012, there were no amounts receivable and payable in foreign currency and therefore the Group does not have any exposure to foreign currency risk.

ii) Interest rate risk

The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a financial instrument's value will fluctuate as a result of changes in the market interest rates on interest-bearing financial instruments. The Group does not use derivatives to mitigate these exposures.

The Company adopts a policy of ensuring that, as far as possible, it maintains excess cash and cash equivalents on short-term deposit at best available market interest rates.

Profile

At the reporting date the interest rate profile of the Company's interest-bearing financial instruments was:

		Consolidated and Companycarrying amount
	Note	2012	2011
	$		$
Variable rate instruments
Financial assets –cash and cash equivalents		580,810	2,010,686

Fair value sensitivity analysis for variable rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss or through equity, therefore a change in interest rates at the reporting date would not affect profit or loss or equity.

Cash flow sensitivity analysis for variable rate instruments

The group has performed a sensitivity analysis relating to its exposure to interest rate risk at 30 June 2012.

A change 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. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2011.

	Profit or loss		Equity
	100bp	100bp	100bp	100bp
	increase	decrease	increase	decrease
	$	$	$	$
At 30 June 2012Variable rate instruments	5,734	(5,734)	5,734	(5,734)
At 30 June 2011Variable rate instruments	19,934	(19,934)	19,934	(19,934)

e. Fair values

The fair values of:

• Term receivables, government and fixed interest securities and bonds are determined by discounting the cash flows, at the market interest rates of similar securities, to their present value
• Other loans and amounts due are determined by discounting the cash flows, at market interest rates of similar borrowings, to their present value
• Other assets and other liabilities approximate their carrying value

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

Aggregate fair values and carrying amounts of financial assets and financial liabilities at balance date:

	Carrying amount		Fair value
	2012	2011	2012	2011
	$	$	$	$
Financial assets:
Cash and cash equivalents	580,810	2,010,686	580,810	2,010,686
Total financial assets	580,810	2,010,686	580,810	2,010,686
Financial liabilities:
Payables and borrowings	106,760	141,822	106,760	141,822
Total financial liabilities	106,760	141,822	106,760	141,822

Capital management

The Group's objective when managing capital is to safeguard the Group's ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group's focus has been to raise sufficient funds through equity to fund exploration and evaluation activities. The Group monitors capital on the basis of the gearing ratio; however there are no external borrowings as at 30 June 2012.

There were no changes in the Group's approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting. The Group is not subject to externally imposed capital requirements.

END OF NOTES TO FINANCIAL STATEMENTS (AUDITED)

DIRECTORS' DECLARATION

The directors declare that:

• a. The attached financial statements and associated notes are in accordance with the Accounting Standards and the Corporations Regulations.
• b. The attached financial statements and notes give a true and fair view of the financial position as at 30 June 2012 and the performance of the Company for the year ended on that date; and
• c. The financial statements and notes are in accordance with the Corporations Act 2001.

In the opinion of the directors there are reasonable grounds to believe the Company will be able to pay its debts as and when they become due and payable.

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

……………………………….. Alan Winduss Chairman

Perth, 28 September 2012

CORPORATE GOVERNANCE STATEMENT

Introduction

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

The Company has adopted systems of control and accountability as the basis for the administration of corporate governance. The Board of the Company is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs.

Further information about the Company's corporate governance policies can be found on the Company's website.

Taking into account the size of the Company, the Company endeavours to comply with the Corporate Governance Principles and the corresponding Best Practice Recommendations as published by the ASX Corporate Governance Council ("Corporate Governance Principles and Recommendations") and has adopted the revised Principles and Recommendations. Significant policies and details of any significant deviations from the principles are specified below.

Corporate Governance Council Recommendation 1 Lay Solid Foundations for Management and Oversight

Role of the Board of Directors

The Board has responsibility for protecting the rights and interests of Shareholders and is responsible for the overall direction, monitoring and governance of the Company. Responsibility for managing the business on a day-to-day basis has been delegated to the Managing Director and the management team.

The Board is responsible for the overall corporate governance of the Company and its subsidiaries. Responsibilities and Functions of the Board are set out under the Board Charter and include:

• i. setting the strategic direction of the Company, establishing goals to ensure that these strategic objectives are met and monitoring the performance of management against these goals and objectives;

• ii. ensuring that there are adequate resources available to meet the Company's objectives;

• iii. appointing the Managing Director, evaluating the performance and determining the remuneration of senior executives, and ensuring that appropriate policies and procedures are in place for recruitment, training, remuneration and succession planning;

• iv. evaluating the performance of the Board and its Directors on an annual basis;

• v. determining remuneration levels of Directors;

• vi. approving and monitoring financial reporting and capital management;

• vii. approving and monitoring the progress of business objectives;

• viii. ensuring that any necessary statutory licences are held and compliance measures are maintained to ensure compliance with the law and licence(s);

• ix. ensuring that adequate risk management procedures exist and are being used;

• x. ensuring that the Company has appropriate corporate governance structures in place, including standards of ethical behaviour and a culture of corporate and social responsibility;

• xi. ensuring that the Board is and remains appropriately skilled to meet the changing needs of the Company;

• xii. ensuring procedures are in place for ensuring the Company's compliance with the law; and financial and audit responsibilities, including the appointment of an external auditor and reviewing the financial statements, accounting policies and management processes.

In complying with Recommendation 1.1 of the Corporate Governance Council, the Company has adopted a Board Charter which clarifies the respective roles of the Board and senior management and assists in decision making processes. A copy of the Board Charter can be found on the Company's website.

Board Processes

An agenda for the meetings has been determined to ensure certain standing information is addressed and other items which are relevant to reporting deadlines and or regular review are scheduled when appropriate. The agenda is regularly reviewed by the Chairman, the Executive Director or Chief Operating Officer and the Company Secretary.

Corporate Governance Council Recommendation 2 Structure the Board to Add Value

Board Composition

The relevant provisions in the Constitution and the Corporations Act determine the terms and conditions relating to the appointment and termination of Directors. All Directors, other than the Managing Director, are subject to re-election by rotation every three years.

The Board does not have a separate Nomination Committee comprising of a majority of Independent Directors and as such does not comply with Recommendation 2.4 of the Corporate Governance Council. The Board believes that given the size of the company and the stage of its development a separate nomination committee is not warranted at this time. Any changes to Directorships will, for the foreseeable future, be considered by the full Board subject to any applicable laws. Identification of potential Board candidates includes consideration of the skills, experience, personal attributes and capability to devote the necessary time and commitment to the role.

The Board consists of Non-executive Chairman Mr Alan Winduss, Executive Director Mr Robert Molkenthin and Non-executive Director Mr Vladimir Nikolaenko.

The Constitution requires a minimum number of three Directors. The maximum number of Directors is fixed by the Board but may not be more than 9, unless the members of the Company, in general meeting, resolve otherwise. The skills, experience and expertise of all Directors is set out in the Directors' section of the Annual Report.

Although Directors are expected to bring independent views and judgement to the Board's deliberations, it has been determined that the Non-executive Chairman, Mr Alan Winduss, satisfies

the criteria for independence as outlined in recommendation 2.1 of the ASX Corporate Governance Principles.

The Board considers, however, that given the size and scope of the Company's operations at present, it has the relevant experience in the exploration and mining industry and is appropriately structured to discharge its duties in a manner that is in the best interests of the Company and its Shareholders from both a long-term strategic and operational perspective.

Independent Chairman

The Chairman is considered to be an independent director and as such Recommendation 2.2 of the Corporate Governance Council has been complied with. The Board believes that Mr Winduss is an appropriate person for the position as Chairman because of his experience and proven track record as a public company director.

Roles of Chairman and Managing Director

The roles of Chairman and Managing Director are exercised by different individuals, and as such the Company complies with Recommendation 2.3 of the Corporate Governance Council. In the absence of a Managing Director, the responsibilities assigned to the Managing Director are overseen by the Chief Operating Officer or a nominated Executive Director.

Evaluation of Board Performance

The Company does not have a formal process for the evaluation of the performance of the Board and as such does not comply with Recommendation 2.5 of the Corporate Governance Council. The Board is of the opinion that the competitive environment in which the Company operates will effectively provide a measure of the performance of the Directors, in addition the Chairman assesses the performance of the Board, individual directors and key executives on an informal basis.

Education

All Directors are encouraged to attend professional education courses relevant to their roles.

Independent Professional Advice and Access to Information

Each Director has the right to access all relevant information in respect of the Company and to make appropriate enquiries of senior management. Each Director has the right to seek independent professional advice at the Company's expense, subject to the prior approval of the Chairman, which shall not be unreasonably withheld.

Corporate Governance Council Recommendation 3 Promote Ethical and Responsible Decision Making

The Board actively promotes ethical and responsible decision making.

Code of Conduct

The Board has adopted a Code of Conduct that applies to all employees, executives and Directors of the Company, and as such complies with Recommendation 3.1 of the Corporate Governance Council. This Code addresses expectations for conduct in accordance with legal requirements and agreed ethical standards. A copy of the Code is available on the Company's website.

Diversity Policy

The Board recognises the benefits of promoting and encouraging diversity within the Company and its Controlled Entities and has adopted a Diversity Policy encompassing these principles.

The Company's policy allows the Board to determine whether measureable objectives should be set based on the size and nature of the Company. The Board believes that the Company will not be able to successfully meet measurable objectives given the Company's current size and nature. Notwithstanding this, the Company strives to provide opportunities for current and prospective employees of all backgrounds in such a manner that best improves shareholder value and which reflects the values, principles and intention of the Company's Diversity Policy.

For the 2012 financial year, the Company had no female employees or any females holding senior executive or board positions. The Company had 1 employed consultant during the year.

Corporate Governance Council Recommendation 4 Safeguarding Integrity in Financial Reporting

Audit Committee

The Board does not have a separate Audit Committee with a composition as suggested by Recommendations 4.1, 4.2 and 4.3 of the Corporate Governance Council. The full Board carries out the function of an audit committee. The Board believes that the Company is not of a sufficient size to warrant a separate committee and that the full Board is able to meet objectives of the best practice recommendations and discharge its duties in this area. The relevant experience of Board members is detailed in the Directors' section of the Directors' Report.

Financial Reporting

The Board relies on senior executives to monitor the internal controls within the Company. Financial performance is monitored on a regular basis by the Executive Director who reports to the Board at the scheduled Board meetings.

Corporate Governance Council Recommendation 5 Make timely and balanced disclosure

The Board reviews the performance of the external auditors on an annual basis and meets with them during the year to review findings and assist with Board recommendations.

In the absence of a formal audit committee the Directors of the Company are available for correspondence with the auditors of the Company.

Continuous Disclosure

The Board places a high priority on communication with Shareholders and is aware of the obligations it has, under the Corporations Act and ASX Listing Rules, to keep the market fully informed of information which is not generally available and which may have a material effect on the price or value of the Company's securities.

The Company has adopted policies which establish procedures to ensure that Directors and management are aware of and fulfill their obligations in relation to the timely disclosure of material

price sensitive information. A copy of the Company's Disclosure Policy can be found on the Company's website.

Continuous disclosure is discussed at all regular Board meetings and on an ongoing basis the Board ensures that all activities are reviewed with a view to the necessity for disclosure to security holders.

In accordance with ASX Listing Rules the Company Secretary has been appointed as the Company's disclosure officer.

Corporate Governance Council Recommendation 6 Respect the Rights of Shareholders

Communications

The Board fully supports security holder participation at general meetings as well as ensuring that communications with security holders are effective and clear. This has been incorporated into a formal shareholder communication strategy, in accordance with Recommendation 6.1 of the Corporate Governance Council. A copy of the Company's Shareholder Communication Policy is available on the Company's website.

In addition to electronic communication via the ASX web site, the Company publishes all significant announcements together with all quarterly reports. These documents are available in both hardcopy on request and on the Company web site at www.blackridgemining.com

Shareholders are able to pose questions on the audit process and the financial statements directly to the independent auditor who attends the Company Annual General Meeting for that purpose.

Corporate Governance Council Recommendation 7 Recognise and manage risk

Risk Management Policy

The Board has adopted a risk management policy that sets out a framework for a system of risk management and internal compliance and control, whereby the Board delegates day-to-day management of risk to the Managing Director, therefore complying with Recommendation 7.1 of the Corporate Governance Council. The Board is responsible for supervising management's framework of control and accountability systems to enable risk to be assessed and managed. A copy of the Company's Risk Management Policy can be found on the Company's website.

The Company is committed to ensuring that sound environmental management and safety practices are maintained for its exploration activities. A copy of the Company's Environmental Policy is available on the Company's website. A copy of the Company's Occupational Health and Safety Policy is available on the Company's website.

The Company's risk management strategy is evolving and will be an ongoing process and it is recognised that the level and extent of the strategy will develop with the growth and change in the Company's activities.

Risk Reporting

As the Board has responsibility for the monitoring of risk management it has not required a formal report regarding the material risks and whether those risks are managed effectively therefore not

CORPORATE GOVERNANCE STATEMENT

complying with Recommendation 7.2 of the Corporate Governance Council. The Board believes that the Company is currently effectively communicating its significant and material risks to the Board and its affairs are not of sufficient complexity to justify the implementation of a more formal system for identifying, assessing monitoring and managing risk in the Company.

The Company does not have an internal audit function.

Managing Director and Company Secretary Written Statement

The Board requires that the Executive Director and another relevant Officer or holder of a Key Management position provide a written statement that the financial statements of the Company present a true and fair view, in all material aspects, of the financial position and operational results and have been prepared in accordance with Australian Accounting Standards and the Corporation Act. The Board also requires that the Executive Director and another relevant Officer or holder of a Key Management position provide sufficient assurance that the declaration is founded on a sound system of risk management and internal control, and that the system is working effectively.

The declarations have been received by the Board, in accordance with Recommendation 7.3 of the Corporate Governance Council.

Corporate Governance Council Recommendation 8 Remunerate Fairly and Responsibly

Remuneration Committee

The Board has not created a separate Remuneration Committee and as such does not comply with Recommendation 8.1 of the Corporate Governance Council. The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify a separate Remuneration Committee.

The executive director and senior executives receive salary packages which may include performance based components designed to reward and motivate. Non executive Directors receive fees agreed on an annual basis by the Board.

The full Board determines all compensation arrangements for Directors. It is also responsible for setting performance criteria, performance monitors, share option schemes, incentive performance schemes, superannuation entitlements, retirement and termination entitlements and professional indemnity and liability insurance cover.

The Board ensures that all matters of remuneration will continue to be in accordance with the Corporations Act requirements.

ASX ADDITIONAL INFORMATION

The following additional information is required by the Australian Securities Exchange Limited and was the status on 25 September 2012.

Shareholding

(a) Distribution of ordinary shareholders:

Category (size of Holdings)	Number ofOrdinaryShareholders	Number of Shares
1 -1,000	37	11,460
1,001 -5,000	131	432,504
5,001 -10,000	178	1,601,221
10,001 -100,000	475	22,468,048
100,001 -9,999,999,999	514	729,959,718
Total	1,335	754,472,951

(b) The number of shareholders holding less than marketable parcels is 848.

(c) 20 largest shareholders at 25 September 2012 - fully paid ordinary share capital.

Rank	Name	Units held atend of period	% of IssuedCapital
1	NATWEST SECURITIES LIMITED	77,500,000	10.27
2	EUROBOND TRADING LIMITED	32,000,000	4.24
3	MR CHRIS CARR & MRS BETSY CARR	28,000,000	3.71
4	SACHA INVESTMENTS PTY LTD	26,447,000	3.50
5	TRAYBURN PTY LTD	25,000,000	3.31
6	CITICORP NOMINEES PTY LIMITED	20,476,060	2.71
7	KALIARA NOMINEES PTY LTD	20,067,011	2.66
8	SA CAPITAL FUNDS MANAGEMENT LIMITED <sacfm 1="" a="" c="" fund="" no="">	18,750,000	2.48
9	SA CAPITAL FUNDS MANAGEMENT LIMITED <sacfm 1="" a="" c="" fund="" no="">	17,600,000	2.33
10	MALACCA CAPITAL LIMITED	16,353,213	2.17
11	ADMARK INVESTMENTS PTY LTD	14,000,000	1.86
12	ADMARK INVESTMENTS PTY LTD	10,000,000	1.32
13	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	8,441,540	1.12
14	ELYSIAN FIELDS INVESTMENTS PTY LTD	8,130,048	1.08
15	MALACCA CAPITAL LIMITED	7,000,000	0.93
16	MR MATTHEW DERBYSHIRE	6,692,333	0.89
17	MR GEOFFREY HERMAN BLACK & MR RUSSELL ALEXANDER BLACK <gH BLACK SUPER FUND A/C></g	6,150,000	0.81
18	MISS MARY HARDING	6,041,830	0.80
19	MR ALAN HARVEY MOFFATT	5,000,000	0.66
20	ROD PEARCE	5,000,000	0.66
	Top 20 holders of ORDINARY FULLY PAID SHARES as at 25 September2012	358,649,035	47.54

ASX ADDITIONAL INFORMATION

Option holding

(a) Distribution of option holders:

Range	Total holders	Units
1 -1,000	10	5,938
1,001 -5,000	27	83,150
5,001 -10,000	13	102,338
10,001 -100,000	41	1,532,331
100,001 -9,999,999,999	30	149,170,833
Total	121	150,894,590

(b) The number of option holders holding less than marketable parcels is 95.

(c) 20 largest option holders at 25 September 2012

Rank	Name	Units held atend of period	% ofIssuedcapital
1	NATWEST SECURITIES LIMITED	77,500,000	51.36
2	KALIARA NOMINEES PTY LTD	20,067,011	13.30
3	SA CAPITAL FUNDS MANAGEMENT LMITED <sacfm 1="" fund<br="" no="">A/C>	17,600,000	11.66
4	MR ALLAN HARVEY MOFFATT	7,500,000	4.97
5	DARVER INVESTMENTS INCORPORATED	6,615,292	4.38
6	MELANTO PTY LTD	3,476,708	2.30
7	SA CAPITAL FUNDS MANAGEMENT LMITED <sacfm 1="" fund<br="" no="">A/C>	3,437,504	2.27
8	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	1,688,308	1.12
9	MISS MARY HARDING	1,360,366	0.90
10	LAWRENCE CROWE CONSULTING PTY LTD	1,336,419	0.88
11	ELYSIAN FIELDS INVESTMENTS PTY LTD	1,300,000	0.86
12	ADMARK INVESTMENTS PTY LTD	1,250,000	0.83
13	MR TOM KOULOUKAKIS & MRS ANGELA KOULOUKAKIS	1,000,000	0.66
14	MONACAN NOMINEES PTY LTD	1,000 ,000	0.66
15	KOPEL PTY LTD	550,000	0.36
16	MS YAN KE	504,750	0.33
17	MR SAM SARGON DANIEL	500,000	0.33
18	MR VINCENZO BRIZZI & MRS RITA LUCIA BRIZZI <brizziFAMILY S/F A/C></brizzi	500,000	0.33
19	MR GEOFFREY HERMAN BLACK & MR RUSSELL ALEXANDERBLACK	350,000	0.23
20	CONTESSI BUSINESS PTY LTD	312,500	0.20
	Top 20 holders of OPTIONS Exp 31/12/2012 as at 25 September 2012	147,848,858	97.98

ASX ADDITIONAL INFORMATION

(d) As at 25 September 2012 the Company has the following Substantial Shareholder:

Shareholder	Ordinary shares	% Held
Natwest Securities Limited	77,500,000	10.27%

(e) Restricted securities

There are no restricted securities on issue by the company.

(f) Voting rights No restrictions. On a show of hands every member or proxy present shall be entitled to one vote unless a poll is called in which case every share shall have one vote.

(g) On market buy back

There has been no on market-buy back of the Company's shares during the financial year.

(h) Securities Exchange Listing

Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian Securities Exchange Limited.

(i) Schedule of tenements:

Project	Tenement Ultimate Interestdetails	Interest %
Western Australia
Unaly Hill	E57/420	100%