TALONX RESOURCES LIMITED - Annual Report 2012

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and Controlled Entities ACN 009 067 476

Annual Report

for the Year ended 30 June 2012

CORPORATE DIRECTORY

MOUNT BURGESS MINING N.L.

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Directors: NIGEL RAYMOND FORRESTER, FCA MOLATLHEGI BENJAMIN MOSIGI, BSc, MSc RONALD WILLIAM O’REGAN ALFRED PATRICK STIRLING, FCA Joint Secretaries: JAN FORRESTER SERENE CHAU, CPA Registered Office: Unit 8 800 Albany Highway East Victoria Park Western Australia 6101 Telephone: +61 8 9355 0123 Facsimile: +61 8 9355 1484 Email: [email protected] Website: www.mountburgess.com Share Registry: Advanced Share Registry Services 150 Stirling Highway Nedlands, Western Australia, 6009 Telephone: +61 8 9389 8033 Facsimile: +61 8 9389 7871 Level 6 225 Clarence Street Sydney NSW 2000 PO Box Q1736 Queen Victoria Building NSW 1230 Telephone: +61 2 8096 3502 Website: www.advancedshare.com.au Auditors: BDO Audit (WA) Pty Ltd 38 Station Street Subiaco, Western Australia, 6008 Bankers: Australia and New Zealand Banking Group Ltd 77 St Georges Terrace Perth, Western Australia, 6000

Mount Burgess Mining NL is an ASX listed public company incorporated in Australia.

ADDRESS BY THE CHAIRMAN

MOUNT BURGESS MINING N.L.

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It is my pleasure to present to you our annual report for the year to 30 June 2012.

During the year, the Company continued its focus on expanding its resource base beyond the 25 million tonnes @3% zinc/lead and 3.3 million ounces of silver that it has currently delineated at its Kihabe and Nxuu deposits in Botswana.

To date close to 14,000 soil geochemical samples have now been taken, all of which have been processed through the Company’s on site Niton XRF analyzer, acquired in February last year.

The analysis results have generated seven new zinc/lead anomalies and one copper/cobalt anomaly in Botswana as well as one copper/cobalt anomaly in Namibia.

Initial drill testing has been conducted on the Copper/Cobalt anomaly in Namibia and it is intended that the soil geochemical anomalies generated in Botswana will be drill tested with an initial round of drilling once soil geochemical sampling has been completed over further selected prospective areas. The anomalies generated to date show there is good potential for significant additions to the Company’s resource base.

During the year world zinc and lead production remained in surplus. LME zinc stock levels rose from around 860,000 to 1,015,000 tonnes on 20[th] July 2012. However, since 20[th] July 2012 there were significant falls in LME zinc stock levels. These amounted to some 95,000 tonnes, reducing levels to 920,000 tonnes. These have since risen again to levels at the time of writing to around 976,000 tonnes. Zinc prices have been volatile ranging from US$2,500/t in July 2011 to a low of U$1750 in June 2012/t and are currently around US$2090/t.

LME lead stocks are currently sitting at around 278,000 tonnes at US$2285/t.

With the expected depletion of worldwide mineable zinc reserves over the next three to four years, the prospects of a significant reduction in world zinc stocks and the potential increase in zinc prices will be monitored by the Company in its effort to develop its resource base.

Again, this has been a difficult year from a funding point of view and I should like to thank our funding shareholders and Directors for the support they have given us during the year.

I should also like to thank all staff members for their commitment to focus on expanding the Company’s resource base despite the restrictions of limited funding.

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Nigel Forrester Chairman & Managing Director 28 September 2012

PROJECTS

MOUNT BURGESS MINING N.L.

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BOTSWANA AND NAMIBIA

BASE METALS

In North West Botswana and North East Namibia in Southern Africa, the Company has landholdings covering 3,000km² of a Damaran Proterozoic Belt. Depositional environments similar to this area host copper, lead and zinc deposits such as the Copperbelt in Zambia, Mount Isa, HYC, Lady Loretta, Century and Hilton in Australia, Meggen and Rammelsberg in Germany, Red Dog in the USA and Cirque, Howards Pass, Tom and Jason in Canada. The Company landholdings contain the Kihabe and Nxuu zinc/lead deposits, numerous other anomalies of these metals and still others of copper. Also included in the lease area are known zinc/lead/silver vein deposits of which the primary area of focus is the Gossan Anomaly.

On the Botswana side of the border, the Company has to date defined at the Kihabe and Nxuu deposits combined resources of 33.6 million tonnes @2.46% zinc equivalent grade, applying a 0.3% zinc equivalent low grade cut. From the above combined resources, 25.3 million tonnes @3% zinc equivalent grade were selected for a scoping study, designed for a 10 year mine life, at 2.5 million tonnes per annum throughput.

During the year the Company focussed on further expanding the resource base. To this end the Company has conducted significant soil geochemical sampling programmes, resulting in the generation of several new Zn/Pb anomalies and one Cu/Co anomaly in Botswana and a further Cu/Co anomaly in Namibia.

THE KIHABE DEPOSIT

The Kihabe zinc/lead/silver deposit is a classic SEDEX type, 2.4 km long. The zinc/lead/silver mineralisation occurs in a quartz wacke right at the almost vertical contact with the regional dolomite. Within this 2.4 km strike length, two proposed pits have been designed for the scoping study, covering a strike length of 1.8 km. Within the combined 1.8 km length, the average width of the deposit is 27m, down to a depth of 175m, the depth extent of the resource calculation to date. Many sections range from 35m to 65m true width, commencing between 5-15m below Kalahari sand cover.

The top 25% of the Kihabe deposit is oxidized and the remaining lower 75% is sulphidic.

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Aerial View of the Kihabe Deposit

PROJECTS

MOUNT BURGESS MINING N.L.

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Section 9900me

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Section 11700mE
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THE NXUU DEPOSIT

The Nxuu zinc/lead deposit is SEDEX type, covering an area 550m long and 250m wide with a maximum depth of only 60m. The zinc/lead mineralisation occurs within a flat lying quartz wacke, bounded by a regional dolomitic basin, 60m deep. The whole of the Nxuu deposit is oxidised.

Nxuu Section 7821700N

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PROJECTS

MOUNT BURGESS MINING N.L.

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METAL RECOVERIES

Test work to date has determined the following metal recoveries. Zinc recovered from acid leaching oxide zones will enable Zn metal to be recovered on site from electro-winning.

	Zone	Time	Zn	Pb	Ag
KIHABE DEPOSIT
Oxide Zone(see Note)
Acid leaching– 40o30 kg/t acid	Oxide *	24 hrs	96.9%	91.9%	n/a

Sulphide Zone
Rougher flot	Sulphide	90 seconds	91.9%	84.8%	94%
	Sulphide	15.5 minutes	93.8%	88.1%	96.4%
NXUU DEPOSIT
Oxide Zone(see Note)
Acid leaching– 25O,30 kg/t acid	Oxide *	12 hrs	93%	93%	n/a

Note: Zn mineralisation in the oxidised zones is hosted within Smithosonite and Baileychlore, both of which are amenable to acid leaching.

The existing Kihabe-Nxuu Resource Statement is as follows:

DEPOSIT	EXTERNAL CUT %	INDICATED M TONNES %	INFERRED M TONNES %	TOTAL M TONNES %
KIHABE	1.5%	11.4 @ 2.90%	3.0 @ 2.60%	14.4 @ 2.84%
NXUU	0.3%	-	10.9 @ 3.20%	10.9 @ 3.20%
		11.4 @ 2.90%	13.9 @ 3.07%	25.3 @ 3.00%

Zinc Equivalent Grade

Kihabe calculated on metal prices as at 17 July 2008:	Zn US$1,810/t	Pb US$1,955/t	Ag US$18.75/oz
Grades applied:	Zn 1.75%	Pb 0.76%	Ag 6.93 g/t
Nxuu calculated on zinc and lead at US$ par
Grades applied:	Zn 1.8%	Pb 1.4%

The information in the resource statement that relates to the Kihabe Resource is compiled by Byron Dumpleton, B.Sc., a member of the Australasian Institute of Geoscientists. The information that relates to the Nxuu Resource is compiled by Mr Ben Mosigi, M.Sc., (Leicester University – UK), B.Sc., (University of New Brunswick – Canada), Diploma Mining Tech (Haileybury School of Mines – Canada), a member of the Geological Society of South Africa.

Mr Dumpleton is an independent qualified person and Mr Mosigi is a Technical Director of the Company. Both Mr Dumpleton and Mr Mosigi have sufficient experience relevant to the style of mineralisation under consideration and to the activity to which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code of Reporting of Mineral Resources and Ore Reserves”. Both Mr Dumpleton and Mr Mosigi consent to the inclusion in this report of the matters based on the information in the form and context in which it appears.

PROJECTS

MOUNT BURGESS MINING N.L.

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SUMMARISED PROJECT ATTRIBUTES - KIHABE-NXUU

Both Kihabe and Nxuu are wide shallow potential open-cut deposits that commence 5m to 15m below surface (Kalahari sand).

Wide shallow open cut resources

The current Kihabe strip ratio of 5.5:1 has been calculated on conservative 40 deg pit slopes. With geotechnical drilling, pit slopes will steepen significantly and reduce strip ratios. The hanging wall quartz wacke and foot wall dolomite are very competent. A strip ratio around 4:1 is probably achievable. The Kihabe resource can be extended below the current 175m depth.

Whilst a pit still has to be designed for the Nxuu deposit, it will have a low strip ratio of probably around 3:1.

Mineralisation at both Kihabe and Nxuu is in quartz wacke, not dolomite, as are most of these SEDEX deposits. The quartz wackes do not contain the same proportion of carbonates as found in the dolomites. When acid leaching the oxidised zones, acid consumption in the quartz wacke is low (30kg/t).

Few carbonates in mineralised quartz wacke

Botswana temperatures (average daily 22 deg) contribute significantly to the acid leaching process without requiring induced power/heat in the process. With Botswana temperatures, recoveries from oxidised deposits in the region of 93% Zn can be achieved in 12 to 24 hours.

Average Botswana temperatures reduce power required

As a consequence of the above, Zn metal can be produced on site, with significant savings in concentrate transport costs and smelting costs.

Significant potential exists for generation of additional resources of Zn, Pb and Cu. The mineralisation in this region is hosted within quartz wackes, right at the contact with the regional dolomite. The key to further discoveries is to find further quartz wackes. Eight new potential quartz wackes have recently been discovered through geochemical sampling in Botswana – one copper cobalt anomaly and seven zinc/lead anomalies. A copper/cobalt anomaly has been discovered in Namibia.

Potential for further discoveries

Target 52 Zinc Anomaly

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Wanchu West Zinc Anomaly

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PROJECTS

MOUNT BURGESS MINING N.L.

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Wanchu West Zinc Anomaly
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Zinc Geochemical Soil Anomalies

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PROJECTS

MOUNT BURGESS MINING N.L.

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DIAMONDS

WESTERN NGAMILAND DIAMOND PROJECT, BOTSWANA

The Company has eight prospecting licences for diamond exploration, covering an area of some 7,000 km[2] , in Western Ngamiland, Botswana. The Company believes that high potential exists in this area for the discovery of kimberlites for the following reasons:

The area is part of or proximal to the south eastern margins of the Angolan Craton, prospective for the discovery of kimberlites.
Part of the area is some 30km south of the recently discovered Nxau Nxau kimberlite field.
The area falls within the Limpopo dolerite dyke swarm, conducive to the occurrence of kimberlite intrusives.
The area adjoins the Company’s Tsumkwe diamond project in Namibia, immediately to the east, where to date a number of G10 pyrope garnet anomalies and macro diamonds have been found in both drilling and loam sampling. It is possible that some of these anomalies have been sourced from kimberlites within the area the Company now has under licence on the Botswana side of the border.

The information contained in this report relative to the West Ngamiland, Tsumkwe and Hardap diamond projects is based on information approved for release by Mr Manfred Marx of Manfred Marx and Associates Pty Ltd, Bsc., Dip Env. Sc., Aus.I.M M., GSSA. Mr Manfred Marx is a consulting geologist to the Company. He has sufficient experience which is relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a competent person as defined in the 2004 edition of the Australasian Code for Reporting of exploration results, mineral resources and ore reserves. Mr Marx consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

PROJECTS

MOUNT BURGESS MINING N.L.

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NAMIBIA

TSUMKWE DIAMOND PROJECT

The Tsumkwe diamond project located in Bushmanland, Namibia has now reached a mature stage where the future of this project can be assessed, based on an extensive and very detailed data base. The conclusions and future work as set out below are based on a comprehensive review by Mr Manfred Marx, Consulting Diamond Geologist, of the information held by the Company.

The main conclusions reached are as follows:

Evidence suggests that the Tsumkwe Panneveld region is most likely to harbour more kimberlite or lamproite pipes, in addition to the three known Gura kimberlite pipes.
The kimberlite indicator mineral (KIM) grain distribution patterns are both locally transported (abraded surfaces) and residual (fresh surfaces).
Trace quantities of macro-diamonds, as well as G10 pyrope garnets (which are well represented within the Tsumkwe garnet population), support the occurrence of yet to be discovered diamond bearing kimberlites.
The target area with the highest potential identified for future exploration lies in a band along the Damara Fault Zone over a strike length of some 30km.
The modest kimberlite exploration success to date within the Tsumkwe area can be largely attributed to the complex sub-surface geology beneath the Kalahari sand cover.

The future work recommendations arising from these conclusions are as follows:

The loam sample density over the existing regional KIM anomalies associated with the Damara Fault Zone should be increased to define the primary source areas more clearly.
Detailed ground geophysical surveys should then be initiated to cover the resulting KIM clusters prior to drilling.

PROJECTS

MOUNT BURGESS MINING N.L.

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TSUMKWE REE PROJECT

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REE Magnetic Anomaly - Namibia

Recent drilling into a rare earth (REE) target in the Tsumkwe project has confirmed the presence of elevated total REE values. Randomly selected samples from open hole percussion Drill Hole NAM909 have returned the following assays in the table below.

Depth		TREO
(m)	NAM 909 Rare Earth Oxides g/t (ppm)	(g/t)

	Ce02 Nd2O3 La2O3 Dy2O3 Pr6O11 Sm2O3 Gd2O3 Er2O3 Tb4O7 Eu2O3 Ho2O3 Lu2O3 Tm2O3 Yb2O3
31-32	1231.96 392.49 661.34 16.76 123.20 43.60 27.78 8.00 3.52 2.43 2.98 1.50 1.11 9.27	2525.94
35-36	981.12 317.26 510.52 15.72 97.88 38.61 24.20 7.32 3.18 2.32 2.86 1.40 1.19 8.64	2012.22
41-42	1099.91 366.25 586.99 17.56 111.77 44.18 26.63 7.66 3.31 2.32 3.09 1.33 1.15 9.14	2281.28
45-46	975.84 336.86 512.87 16.87 102.32 43.25 28.24 8.12 3.41 2.08 3.21 1.48 1.23 10.03	2045.81
51-62	870.96 290.45 454.34 17.10 88.50 36.55 23.88 8.77 3.27 2.41 3.23 1.57 1.33 10.24	1812.62
65-66	843.67 284.95 441.68 17.10 86.52 35.25 24.20 8.69 3.18 2.20 3.32 1.44 1.23 9.91	1763.34
71-72	888.75 292.53 458.10 15.03 90.64 35.72 23.74 7.09 3.26 3.13 2.75 1.21 1.05 7.75	1830.74
75-76	847.96 276.09 442.85 14.58 84.91 34.09 21.44 7.43 2.86 2.43 2.75 1.40 1.18 8.89	1748.86
81-82	559.66 187.91 264.58 18.25 56.07 26.21 19.36 10.75 2.93 2.43 3.78 1.66 1.67 11.94	1167.20
85-86	423.68 155.48 210.05 13.20 47.07 22.61 16.94 6.98 2.25 2.89 2.41 1.14 1.07 8.38	914.14
91-92	340.51 122.71 162.90 11.36 36.33 17.63 13.14 6.86 1.94 2.08 2.29 1.26 1.08 8.76	728.86
95-96	536.20 188.37 251.33 13.31 55.83 26.21 19.02 6.63 2.53 3.13 2.52 1.13 1.03 8.13	1115.36

PROJECTS

MOUNT BURGESS MINING N.L.

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Mineralogical test work has confirmed that the REE mineralogy is predominantly comprised of the rare carbonate mineral synchysite. The predominance of synchysite is seen as prospective as it normally contains the lowest counts of thorium and uranium when compared with other REE host minerals. The low counts of thorium and uranium reduce any complications of radioactivity in the process of concentration and extraction.

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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The Directors of Mount Burgess Mining N.L. (“Mount Burgess” or the “Company”) submit herewith the annual report of Mount Burgess Mining N.L. and its subsidiaries (the Group) for the financial year ended 30 June 2012. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

Information about the Directors and Senior Management

The names, skills and experience of the Directors of the Company during or since the end of the financial year are:

Name	Particulars
Mr N R Forrester	Mr Forrester is a Fellow of the Institute of Chartered Accountants in England and Wales
Chairman & Managing Director	and also a Fellow of the Institute of Chartered Accountants in Australia. He has been
Chartered Accountant	involved in the exploration and mining industry over the past thirty two years. Mr
	Forrester is one of the original shareholders of the Company which he floated in 1985.
	Aged 67. Board member since 1985.
Mr M B Mosigi	Mr Mosigi has significant experience in base metal and diamond exploration/mining. His
Executive Director	previous diamond exploration and mining experience, which included a significant
Geologist B.Sc. M.Sc	period of time with Debswana and Botswana Diamondfields covered work on the Orapa, Lethlakane, Jwaneng and Damtshaa Diamond Mines in Botswana and the Bobbejaan, Water Fissure and Bellsbank kimberlites in the Republic of South Africa.
	Aged 53. Board member since 2009.
Mr R W O’Regan	Mr O’Regan became a member of the London Stock Exchange in the 1970s and	a
Non-executive Director	member of the board of Astaire and Partners, a firm of London stockbrokers, from 1987-
Retired Stockbroker	2009.
	Age 71. Board member since 2000.
Mr G E Taylor	Mr Taylor graduated in law from the University of Western Australia in 1968 and was
LLB	admitted to practice in 1970. He has been practising law for more than thirty years and
Non-executive Director	specialises in commercial and corporate law. Mr Taylor and his family were original
Practising Solicitor Resigned from the Board	shareholders in the Company and have been shareholders throughout its existence. Age 65. Board member since 1999.
20 June 2012
Mr A P Stirling	Mr Stirling, a Fellow of the Institute of Chartered Accountants in England and Wales, has
Non-executive Director	had significant experience in investment and fund management.
Chartered Accountant	Aged 76. Board member since 2003.

The above named Directors held office during the whole of the financial year and since the end of the financial year, except as noted.

Directorships of other Listed Companies

Directorships of other listed companies held by directors in the three years immediately before the end of the financial year are as follows:

	Name Company Position Period of Directorship
	Mr G E Taylor Iron Ore Holdings Limited Non-executive April 2005 - February 2009 Mr A P Stirling Welsh Industrial Investment Trust Plc SpaceandPeople Plc Executive Non-executive July 1993 – April 2010 Since 21 June 2007

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DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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Former Partners of the Audit Firm

At no time during the year was any officer of the Company a partner in an audit firm, or a director of an audit company that was an auditor of the Company for the year.

Directors’ Shareholdings

The following table sets out each director’s relevant interest in shares and options in shares of the Company or a related body corporate as at the date of this report.

N R Forrester and /or associates M B Mosigi and / or associates R W O’Regan and / or associates G E Taylor and /or associates A P Stirling and / or associates	Mount Burgess Mining NL
	Fully Paid Ordinary Shares Share Options
	18,508,522 4,000,000 3,000,000 2,000,000 11,773,530 2,000,000 8,835,574 - 26,443,530 2,000,000

Remuneration of Directors and Senior Management

Information about the remuneration of directors and senior management is set out in the remuneration report of this directors’ report, on pages 16 to 19.

Share Options granted to Directors and Senior Management

The following table discloses the details of the option holdings of the Directors and senior management of the Company. The issuing entity of all options is Mount Burgess Mining N.L.

DIRECTORS Chairman N R Forrester Executive director M B Mosigi Non-executive directors R W O’Regan G E Taylor1 A P Stirling SENIOR MANAGEMENT Company Secretary J E Forrester S Chau	Option held 1/7/2011 Granted during the year Balance as at 30/06/2012 Number of ordinary shares under option 2,000,000 - 2,000,000 2,000,000 2,000,000 - 2,000,000 2,000,000 2,000,000 - 2,000,000 2,000,000 2,000,000 - 2,000,000 2,000,000 2,000,000 - 2,000,000 2,000,000 2,000,000 - 2,000,000 2,000,000 2,000,000 - 2,000,000 2,000,000
	14,000,000 - 14,000,000 14,000,000

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1 Resigned from Board on 20 June 2012. The 2,000,000 employee share options have now expired as they were not exercised within 30 days of date of resignation.

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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Company Secretaries

The names and particulars of the Company Secretaries of the Company as at the end of the financial year are:

	Name Particulars
	Mrs J E Forrester Aged 63, joined the Company upon listing in 1985 and was appointed as Joint Company Secretary in 1993. Ms S Chau, CPA Certified Practising Accountant, aged 33, joined the Company in 2007 as Company Secretary/Accountant and previously held a position in the audit division of Deloitte, Perth.

Review of Operations

(a) The objectives of the Group are to explore for and in the event of discovery, develop commercial deposits of mineral resources. To this end, the Group is currently conducting the following exploration:
Western Ngamiland, Botswana – Base Metals and diamond exploration

Tsumkwe, Namibia – Base metals (including iron ore) and precious metals, rare earths and diamond exploration.

(b) Performance and indicators used by management in carrying out the above objectives include:
Assessing and reviewing the likeliness of making a discovery through exploration
Assessing the risks and rewards relative to the costs of exploration and the values of the minerals being explored for
(c) As the Group is involved only in exploration and resource development at this stage, any significant commercial discovery or resource upgrade could have a significant impact on the capitalisation of the Group. However, inherent in all exploration are risk factors relative to rates of success. Even beyond exploration at the point of resource development, risks prevail relative to fluctuations in commodity prices, rates of exchange and political risk.

Operations and Principal Activities

(a) The main business activity of the Group during the year was resource exploration and resource development. Funds applied to the various exploration and resource development activities were as follows:

(b) As the Group was involved only in exploration and resource development during the year there were not any returns to shareholders by way of dividends and increase in shareholder funds. Between 2008 and 2012 the Company’s shares traded as follows:

2012	2012		2011				2009		2008
Low	High	Low	High	Low	High	Low	High	Low	High
cents	cents	cents	cents	cents	cents	cents	cents	cents	cents
0.2	1.2	0.6	2.7	1.0	3.0	1.0	12	2.0	3.0

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DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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Financial Conditions

(a) Further resource exploration requirements beyond the Group’s current cash resources can only be funded from further share and loan capital raisings or the sale or joint venture of equity in the projects.
(b) At the end of the financial year, the Group had cash resources of $14,560.
(c) Other than bank facilities of $465,000, a loan agreement with Exchange Services Ltd, a company controlled by A.P Stirling, a Director of the Company for funding up to £205,000 if required and funding of $204,500 provided via a loan from Nigel Forrester and £20,000 from Ron O’Regan , there were no other resources available to the Group that are not reflected in the Statement of Financial Position, other than the availability to raise further funds through the issue of shares or the sale or joint venture of equity in projects.
(d) As the Group was involved only in exploration and resource development during the year there was not any cash generated from operations.
(e) The financial condition of the Group was not impacted by any legislation or other external requirements during the reporting period. It is not currently foreseen that the financial condition will be materially affected by such issues in future reporting periods.

A full review of operations is outlined on pages 3 to 11.

Change in State of Affairs

During the year there were no significant changes in the state of affairs of the Group.

Subsequent Events

On 15 May 2012, the Company completed a placement of 30,000,000 fully paid ordinary shares to raise $90,000. The placement was at an issue price of $0.003 per share. All the shares were subsequently allotted on 1 July 2012.

On 5 July 2012, the Company announced that it had an agreement in place to issue 86,000,000 ordinary shares at 0.3 of 1 cent to professional and institutional investors to raise $258,000 under the Company’s 15% placement capacity. As at 17 August 2012 a shortfall of $208,000 (representing some 69,333,334 shares) existed, resulting in the Company only issuing 16,666,666 shares from the 5 July placement. The shares were allotted in July 2012.

On 10 August 2012, the Company received an additional loan of GBP10,000 , which came in at $14,267, from Exchange Services Ltd, a company controlled by A P Stirling, a Director of the Company.

On 27 August 2012, the Company announced agreements had been reached to place 38,333,332 fully paid ordinary shares to raise $115,000. The placement was at an issue price of $0.003 per share. All shares were subsequently allotted on 29 August 2012.

On 24 September 2012, the Company received an additional loan of $100,000 from Nigel Forrester, a Director of the Company.

Other than the above, there have not been any matters or circumstances occurring subsequent to the end of the financial year that have significantly affected, or may significantly affect, the operations of the Group, the result of those operations, or the state of affairs of the Group in future financial years.

Future Developments

The Group will be continuing exploration and enhancement of resource development on the various projects that it has committed to as outlined in the Projects Section of this report.

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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Environmental Regulations

The Board is committed to environmental best practice in its operations and ensures full compliance with all statutory environmental regulations and guidelines in the countries in which it operates. No known environmental breaches have occurred in relation to the Group’s operations.

Dividends

The Directors do not recommend the payment of a dividend and no dividend has been paid or declared since the end of the previous financial year.

Shares under Option or Issued on Exercise of Options

On 30 July 2010, the Company introduced Employee Share Option Plan (2010) governed by the following terms and conditions:

(1) each option will be issued free of consideration;
(2) the Options shall not be transferred or assigned by the holder provided that the holder shall be at liberty at any time to transfer all or any of his or her Options to his or her wife or husband respectively or to a proprietary limited company all the issued shares of which are beneficially owned by the holder and his or her wife or husband or any other nominee of the Eligible Employee, provided that any such transferee first undertakes to the Company, in a deed, not to transfer or assign such Options until such time as they are exercised;
(3) each Option will entitle the holder to subscribe for one share at an exercise price;
(4) the Options expire at 5.00pm on 31 December of the year five (5) years from the year of grant;
(5) the Options are exercisable wholly or in part by forwarding to the Company an “Option Exercise Form”, accompanied by payment of the exercise price;
(6) the Options are exercisable at any time on or prior to the Expiry Date;
(7) there are no participating rights or entitlements inherent in the Options and holders will not participate in any new issue of capital offered to shareholders during the currency of the Options;
(8) shares issued on the exercise of Options will rank pari passu with the then existing ordinary share capital;
(9) an Option’s terms must not prevent the Option being reorganised as required by the Listing Rules on a reorganisation of capital; and
(10) the Company shall grant the Options and deliver the certificates relating to the Options to the Eligible employee within ten (10) business days of the Application Date.

Status of the Options

Any options issued under this plan will not be listed on the Australian Securities Exchange Limited for official quotation.

Only upon exercise of the Options issued under the plan will the Company make application to the Australian Securities Exchange Limited for the quotation of the shares issued pursuant to the exercise of the Options.

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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As at 30 June 2012 the following options over ordinary shares of Mount Burgess Mining N.L. remained on issue:

	Number of Shares under option Expiry Date Exerciseprice$
Issued 17 September 2010 Issued 04 October 2010 Issued 16 November 2010 Issued 1 September 2011	12,000,000 31/12/2015 0.05 3,600,000 31/12/2015 0.05 250,000 31/12/2015 0.05 500,000 31/12/2016 0.05 16,350,000

All of the above options were issued as an incentive and in recognition of past performance and none are dependent on the satisfaction of a performance condition. Further details of the options on issue are disclosed in Note 25 to the financial statements.

No shares have been issued during or since the end of the year as a result of the exercise of an option over unissued shares.

Indemnification of Officers and Auditors

During or since the end of the year, the Company, except to the extent permitted by law, has not given any indemnity to a current or former officer or auditor against a liability or made any agreement under which an officer or auditor may be given any indemnity .

During the year, the Group paid premiums in respect of directors’ and officers’ indemnity insurance for the financial year under review. The insurance contract offers continued indemnity to officers of the Company where the person is no longer a director or officer at the time the claim is made. Such insurance does not include such liabilities that arise from conduct involving a willful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for them or someone else or to cause detriment to the Company.

Remuneration Report – Audited

This report details the nature and amount of remuneration for each director and the key personnel management of Mount Burgess Mining NL. The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

Directors Details

The following persons acted as directors of the Company during or since the end of the financial year:

Mr N R Forrester (Chairman and Managing Director)

Mr M B Mosigi (Executive Director)

Mr R W O’Regan (Non-executive Director)

Mr A P Stirling (Non-executive Director)

Mr Godfrey Taylor (Non-executive Director) – resigned from Board on 20 June 2012

For the purpose of this report key management personnel of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any director (whether executives or otherwise) of the parent company and all key management personnel.

Remuneration Committee

Due to the limited size of the Group and its operations and financial affairs, the use of a separate remuneration committee is not considered appropriate. The Board has adopted the following policies for Directors’ and executives’ remuneration.

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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A. Remuneration policy

The Board of Directors maintains remuneration policies aimed at attracting and retaining a motivated workforce and management team which are within the economic capabilities of the Company. The intention is to match the outcomes from the remuneration system with the performance of the Company and ultimately the value received by our shareholders on a longterm basis.

As an overall policy, the Group will remunerate in such a way that it:
Motivates Directors and management to pursue the long-term growth and success of the Group; and
Demonstrates a clear relationship between key executive performance and remuneration.

B. Remuneration structure

In accordance with ASX Corporate Governance Principles and Recommendations, the structure of Non-executive Director and executive compensation is separate and distinct.

Non-executive Directors’ Remuneration

The non-executive directors receive fees either in cash or in shares in lieu of cash – subject to shareholder approval (including statutory superannuation where applicable) for their services. No non-executive directors’ fees have yet been paid for the year to 30 June 2012.

ASX Corporate Governance Principles 8.2 recommends that Non-executive directors should not receive options or bonus payments. The Company does not comply with this recommendation as it grants options to all non-executive Directors in recognition of the significant time they contribute to the Company. The non-executive directors are often called upon to perform duties for the Company overseas or spend considerable time away from their earning base to represent the Company. Their fees for these duties (currently waived) in no way cover what they could otherwise earn. The options granted are exercisable at a significant premium to the current share price.

Executive Remuneration

Directors and staff are granted options in recognition of their efforts and to act as long term incentives for their retention and for creating value for the Company. None of these options are issued for the satisfaction of any performance conditions. All options issued to directors are subject to shareholder approval.

The Board reviews the remuneration packages and policies applicable to executive directors, executives and non-executive directors on an annual basis. Remuneration levels relative to current market conditions will be competitively set to attract the most qualified and experienced directors and senior executives. Where necessary the Board will obtain independent advice on the appropriateness of remuneration packages. The Company did not utilise the services of remuneration consultant for the year.

Remuneration packages contain the following key elements:

(a) Short term employee benefits - salary/fees (including any annual leave accrued), share issued in lieu of directors fees or salary sacrifice and unlisted share options granted under Employee Share Option Plan and non-monetary benefits
(b) Post employment benefits – including superannuation
(c) Other long term employment benefits – long service leave
(d) Share based payment - unlisted share options granted under the Employee Share Option Plan

There is no link between the remuneration policy and the Company’s performance.

C. Key terms of employment contracts

Mr B Mosigi is a party to a service contract with Mount Burgess Mining NL, which sets out a fixed compensation package of AUD $24,000 per annum. There are no termination benefits specified in this contract. Mr B Mosigi was appointed as Technical Director on 1 March 2009.

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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D. Details of remuneration

The compensation of each member of the key management personnel of the Company and Group is set out below:

Remuneration for year ended 30 June 2012:

Short term employee benefits	Short term employee benefits	Post employ- ment benefits Super- annuation Other long- term employee benefits Share based payments. Options and rights Total Propor- tion related to perfor- mance Remu- neration consisting of options
Salary & fees *Non- monetary Shares issued in lieu of directors fees or salary sacrifice
$ $ $		$ $ $ $ % %
		- - - 24,000 - - - - - 24,000 - - - - - 24,000 - - 15,564 6,642 - 241,826 - - - - - 37,689 - - 15,564 6,642 - 351,515
	213,069 8,240 108,000

Remuneration for year ended 30 June 2011:

Short term employee benefits Post employ- ment benefits Super- annuation Other long- term employee benefits Share based payments. Options and rights Salary & fees *Non- monetary Shares issued in lieu of directors fees or salary sacrifice	Total	Propor- tion related to perfor- mance Remu- neration consisting of options
$ $ $ $ $ $	$	% %
	56,000 52,000 56,000 258,125 47,900	- 14.29 - 15.38 - 14.29 - 3.10 - 16.70
210,280 7,540 190,000 15,564 6,641 40,000	470,025

*Non-monetary short term employee benefits include parking and FBT

Resigned on 20 June 2012
Shares issued in lieu of Director’s fees covers two year period – 1 July 2008 – 30 June 2010
Shares issued in lieu of Director’s fees covers period 1 September 2008 – 30 June 2010
Shares issued in lieu of Director’s fees covers period 1 July 2009 – 30 June 2010
Shares issued in lieu of Director’s fees covers period 3 March 2009 – 30 June 2010

No director or senior management person appointed during the period received a payment as part of his or her consideration for agreeing to hold the position.

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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E. Issued of ordinary share in lieu and share-based payments granted as compensation for the current financial year

Issue of ordinary shares in lieu

At the General Meeting of shareholders held on 24 November 2011, approval was given for the issue of fully paid ordinary shares in the Company in lieu of director fees and for a salary sacrifice as follows:

Mr A P Stirling Mr R W O’Regan Mr G E Taylor Mr B M Mosigi Mr N R Forrester	Number of fully paid shares to be issued	Number of fully paid shares to be issued
	$24,000 worth at 0.6 cents = $24,000 worth at 0.6 cents = $24,000 worth at 0.6 cents = $12,000 worth at 0.6 cents = $24,000 worth at 0.6 cents* =	4,000,000 4,000,000 4,000,000 2,000,000 4,000,000
		18,000,000

*The fully paid shares to be issued are at the volume weighted average price (“VWAP”) of the shares in the five ASX trading days prior to issue (21, 22, 23, 24 and 25 November 2011)

The shares were granted for nil cash consideration and no funds were raised.

The shares were allotted on 5 December 2011.

Employee share option plan

Mount Burgess Mining NL operates an ownership-based scheme for executives and employees of the Group. In accordance with the provisions of the plan, executives and employees may be granted options which can be converted to ordinary shares.

Each employee share option converts into one ordinary share of Mount Burgess Mining NL on exercise (payment of the set exercise price). No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. All options granted during the financial year vest immediately.

The number of options granted is based on the discretion of the Board of Directors. The Board does not impose any restrictions in relation to a person limiting his or her exposure to the risk in respect of options issued by the Company. Given the nature of the company, options are not performance driven.

During the financial year, no option has been granted to directors and senior management, and no options granted previously affects the current or future period.

Share based payments in existence during the year are disclosed in Note 25.

There are no performance criteria that need to be met in relation to the options granted during the financial year before the beneficial interest vests in the recipient at date of grant.

Share issued on exercise of options

During or since the end of the financial year, the Company did not issue any ordinary shares as a result of the exercise of options.

Voting and comments made at the Company’s 2011 Annual General Meeting

Mount Burgess Mining NL received more than 79.34 % of “yes” votes on its remuneration report for the 2011 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

End of Remuneration Report

DIRECTORS’ REPORT

MOUNT BURGESS MINING N.L.

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Directors Meetings

Nineteen Board Meetings were held during the year. Messrs Forrester, O’Regan, Stirling, Taylor and Mosigi attended all nineteen Board Meetings held during the year.

Non-Audit Service

There were no amounts paid or payable to the auditors of the Group for non audit services provided during the year.

Auditor’s Independence Declaration

The auditor’s independence declaration follows on immediately from the Directors Report.

This Directors’ Report is signed in accordance with a resolution of directors made pursuant to s.298 (2) of the Corporations Act 2001.

On behalf of the Directors

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N R Forrester CHAIRMAN AND MANAGING DIRECTOR Perth, 28 September 2012

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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28 September 2012

Mount Burgess Mining NL The Board of Directors Level 4 109 St Georges Tce PERTH WA 6000

Dear Sirs,

DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF MOUNT BURGESS MINING N.L.

As lead auditor of Mount Burgess N.L. for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

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

This declaration is in respect of Mount Burgess Mining N.L. and the entities it controlled during the period.

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BRAD MCVEIGH Director

BDO Audit (WA) Pty Ltd

Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

Notes Revenue 5(a) Other income 5(b) Administration expenses 5(c) Finance costs 5(d) Exploration interests written off 5(e) Other expenses 5(f) Loss before tax Income tax benefit / (expense) 6 Loss for the year 19 Other comprehensive income Total comprehensive loss for the year attributable to the owners of Mount Burgess Mining NL Loss per share: Basic Loss per Share (cents per share) 19 Diluted Loss per Share (cents per share) 19	Consolidated
	2012 2011
	$ $
	- 222 2,663 - (876,154) (1,002,126) (61,305) (42,862) (351,179) (79,123) (4,553) (4,483)
	(1,290,528) (1,128,372) 90,725 111,914
	(1,199,803) (1,016,458)
	- -
	(1,199,803) (1,016,458)
	(0.25) (0.28) N/A N/A

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2012

MOUNT BURGESS MINING N.L.

Notes CURRENT ASSETS Cash and cash equivalents 23(a) Trade and other receivables 7 Inventories 8 TOTAL CURRENT ASSETS NON CURRENT ASSETS Plant and equipment 9 Exploration interests 10 TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 11 Borrowings 12 Other financial liabilities 13 Provisions 14 TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Borrowings 12 TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 16 Reserves 17 Accumulated losses 18 TOTAL EQUITY	Consolidated
	2012 2011
	$ $
	14,560 9,645 5,015 5,140 310 1,150
	19,885 15,935
	20,153 52,121 15,012,887 14,759,340
	15,033,040 14,811,461
	15,052,925 14,827,396
	109,871 77,901 982,680 556,692 89,990 20,000 58,893 34,373
	1,241,434 688,966
	3,132 5,725
	3,132 5,725
	1,244,566 694,691
	13,808,359 14,132,705
	41,805,740 40,934,883 490,017 485,417 (28,487,398) (27,287,595)
	13,808,359 14,132,705

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

MOUNT BURGESS MINING N.L.

For the year ended 30 June 2012

Balance at 1 July 2010 Loss for the year Other comprehensive income for the year Total comprehensive loss for the year Transactions with owners in their capacity as owners: Share based payments Share placement to professional investor Shares issued in lieu of directors fees or salary sacrifice Balance at 30 June 2011 Loss for the year Other comprehensive income for the year Total comprehensive loss for the year Transactions with owners in their capacity as owners: Share based payments Share placement to professional investor Shares issued in lieu of directors fees or salary sacrifice Balance at 30 June 2012	Issued Capital Employee Equity Settled Benefits Reserve Assets Realisation Reserve Accumulated Losses Total
	$ $ $ $ $
	39,787,892 308,045 109,972 (26,271,137) 13,934,772 - - - (1,016,458) (1,016,458) - - - - -
	- - - (1,016,458) (1,016,458)
	- 67,400 - - 67,400
	956,991 - - - 956,991
	190,000 - - - 190,000
	40,934,883 375,445 109,972 (27,287,595) 14,132,705
	- - - (1,199,803) (1,199,803) - - - - -
	- - - (1,199,803) (1,199,803)
	- 4,600 - - 4,600 762,857 - - - 762,857 108,000 - - - 108,000
	41,805,740 380,045 109,972 (28,487,398) 13,808,359

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

CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

Notes Cash flows from operating activities Payments to suppliers and employees Interest received R&D Benefit Interest and other costs of finance paid Net cash used in operating activities 23(b) Cash flows from investing activities Payment for plant and equipment Payments for exploration and evaluation expenditure Proceeds from sale of motor vehicles Net cash used in by investing activities Cash flows from financing activities Proceeds from issues of equity securities Payment for share issue costs Proceeds from borrowings Repayment of lease liabilities Repayment of borrowings Net cash provided by financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on the balance of cash held in foreign currencies Cash and cash equivalents at the end of the financial year 23(a)	2012 2011
	$ $
	(703,413) (792,230) - 222 90,725 111,914 (35,342) (23,094)
	(648,030) (703,188)
	(5,344) (25,167) (571,636) (436,311) 2,663 -
	(574,317) (461,478)
	858,000 952,857 (25,153) (22,859) 283,353 279,240 (2,334) (2,101) (62,500) (101,000)
	1,051,366 1,106,137
	(170,981) (58,529) (198,243) (135,945) (885) (3,769)
	(370,109) (198,243)

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

Note	Contents
1.	General Information	28
2.	Significant Accounting Policies	28
3.	Critical Accounting Judgements and Key Sources of Estimation Uncertainty	39
4.	Segment Information	39
5.	Loss from Operations	41
6.	Income Taxes	42
7.	Trade & Other Receivables	43
8.	Inventories	43
9.	Plant & Equipment at Cost	43
10.	Exploration Interests	44
11.	Trade & Other Payables	45
12.	Borrowings	45
13.	Other Financial Liabilities	45
14.	Current Provisions	46
15.	Obligations under Finance Lease	46
16.	Issued Capital	46
17.	Reserves	47
18.	Accumulated Losses	47
19	Loss per Share	47
20.	Commitments for Expenditure	48
21.	Joint Controlled Assets	48
22.	Controlled Entities	49
23.	Notes to the Statement of Cash Flows	49
24.	Financial Instruments	50
25.	Share-based Payments	53
26.	Related Party Disclosures	55
27.	Remuneration of Auditors	57
28.	Subsequent Events	57
29.	Contingent assets and contingent liabilities	58
30.	Parent entity disclosures	58

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

1. GENERAL INFORMATION

Mount Burgess Mining NL (the Company) is a public company listed on Australian Securities Exchange (trading under the symbol ‘MTB’) incorporated in Australia. The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report. The principal activities of the Company and its subsidiaries (the Group) are described in Note 4.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law.

The financial statements comprise the consolidated financial statements of the Group.

Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the directors on 28 September 2012.

2.2 Basis of preparation

The consolidated financial statements have been prepared on the basis of historical cost, except for certain noncurrent assets and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

2.2.1 Adoption of new and revised Accounting Standards

In the current year, the Company and the Group have adopted all of the new and revised Standards and interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period. Details of the impact of the adoption of these new accounting standards are included in the individual accounting policy notes set out below.

2.2.2 Standards affecting presentation and disclosure

Amendments to AASB 7 ‘Financial The amendments (part of AASB 2010-4 ‘Further Amendments to Instruments: Disclosure’ (adopted in Australian Accounting Standards arising from Annual advance of effective date of 1 January Improvements Project’) clarify the required level of disclosures 2011) about credit risk and collateral held and provide relief from disclosures previously required regarding negotiated loans.

Amendments to AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’

Disclosures in these financial statements have been modified to reflect the clarification in AASB 2009-5 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project’ that the disclosure requirements in Standards other than AASB 5 do not generally apply to noncurrent assets classified as held for sale and discontinued operations.

Amendments to AASB 101 Presentation of Financial Statements (adopted in advance of effective date of 1 January 2011)

The amendments (part of AASB 2010-4 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project’) clarify that an entity may choose to present the required analysis of items of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Amendments to AASB 107 ‘Statement The amendments (part of AASB 2009-5 ‘Further Amendments to of Cash Flows’ Australian Account Standards arising from the Annual Improvements Projects’) specify that only expenditures that result in a recognised asset in the statement of financial position can be classified as investing activities in the statement of cash flows. Consequently, cash flows in respects of development costs that do not meet the criteria in AASB 138 ‘Intangible Assets’ for capitalisation as part of an internally generated intangible asset (and, therefore, are recognised in profit or loss as incurred) have been reclassified from investing to operating activities in the statement of cash flows.

2.2.3 Standards and Interpretation issued not yet adopted

At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective. Management is currently evaluating the impact that the initial application of the following Standards and Interpretations will have on the financial report of the consolidated entity.

		Effective for annual	Expected to be initially
		reporting periods	applied in the financial
		beginning on or after	year ending
	AASB 9‘Financial Instruments (December	1 January 2013	30 June 2014
	2010)’AASB 2009-11‘Amendments to
	Australian Accounting Standards arising
	from AASB 9 (December 2010)’ andAASB
	2010-7 ‘Amendments to Australian
	Accounting Standards arising from AASB 9
	(December 2010)’
	AASB 10 ‘Consolidated Financial	1 January 2015	30 June 2016
	Statements’
	AASB 11‘Joint Arrangements’	1 January 2013	30 June 2014
	AASB 12‘Disclosure of Interest in Other	1 January 2013	30 June 2014
	Entities’
	AASB 13‘Fair Value Measurement’ and	1 January 2013	30 June 2014
	AASB 2011-8 ‘Amendments to Australian
	Accounting Standards arising from AASB 13
	AASB 119‘Employee Benefits’ andAASB	1 January 2013	30 June 2014
	2011-10 ‘Amendments to Australian
	Accounting Standards arising from AASB
	119 (2011)’
	AASB 2010-8‘Amendments to Australian	1 January 2013	30 June 2014
	Accounting Standards – Deferred Tax:
	Recovery of Underlying Assets’
	AASB 2011-9‘Amendments to Australian	1 July 2012	30 June 2013
	Accounting Standards – Presentation to
	Other Comprehensive Income’ [AASB 101]

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.3 Going concern basis

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

The Consolidated Entity have incurred net losses after tax of $1,199,803 (2011: $1,016,458) and the Consolidated Entity experienced net cash outflows from operating and investing activities of $1,222,347 (2011: $1,164,466) for the year ended 30 June 2012. As at 30 June 2012, the Consolidated Entity had a deficiency of current assets to current liabilities of $1,221,549 (2011: $673,031).

As at 28 September 2012, the Consolidated Entity had total funds available of $55,629 As at that date the amount owed to creditors (excluding amounts owed to Exchange Services Ltd and the Directors) was $58,983.

These conditions indicate a material uncertainty that may cause significant doubt about the Consolidated Entity’s ability to continue as going concerns.

The ability of the Consolidated Entity to continue as going concerns and pay their debts as and when they fall due, given the Consolidated Entity’s intended operational plans, assumes the following:

a) Utilisation of bank facilities of $465,000 as required, approximately $409,000 being available to draw down at the date of this report.
b) Continued financial support from Exchange Services Ltd (a company controlled by A.P Stirling, a Director of the Company) in that it will not call upon its loan to be repaid within the next 12 months, unless sufficient funds are available to do so without affecting the Company’s going concern. At the date of this report the Consolidated Entity has fully drawn down a £205,000 loan facility.
c) Additional funding via capital raisings. Initial discussions have commenced with potential brokers.
d) Active management of the current level of discretionary expenditure in line with the funds available to the Company and Consolidated Entity.
e) Continued financial support from the Directors of the Company. It has been confirmed that the loan of $239,596 will not called upon to be repaid within the next 12 months, unless sufficient funds are available to do so without affecting the Company’s going concern.

The directors are of the opinion that the use of the going concern basis of accounting is appropriate as they are confident in the ability of the Consolidated Entity to be successful in securing additional funds through debt or equity issues as and when the need to raise working capital arises .

Notwithstanding this, as a junior explorer with start up projects and a dependency on continued support from current financiers and on securing additional funding, should the Consolidated Entity be unable to secure sufficient funding from the above, there is significant uncertainty whether the Company and Consolidated Entity will be able to continue as going concerns.

Should the Consolidated Entity be unable to continue as going concerns, they may be required to realise their assets and extinguish their liabilities other than in the normal course of business and at amounts different from those stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Consolidated Entity be unable to continue as going concerns.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:

2.4 Basis of consolidation

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

Income and expense of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interest having a deficit balance.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, the profit and loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

2.5 Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any different between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.6 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the costs of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.7 Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition.

2.8 Earnings per share

2.8.1 Basic earnings per share

Basic earnings per share is calculated by dividing:

The profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares
By the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

2.8.1 Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
The after income tax effect of interest and other financial costs associated with dilutive potential ordinary shares; and
The weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

2.9 Employee Benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and that are capable of being measured reliably.

Liabilities recognised in respect of short term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to the reporting date.

Payment to define contribution retirement benefits plans are recognised as an expense when employees have rendered service entitling them to the contributions.

2.10 Exploration and expenditures

Exploration and evaluation expenditures in relation to each separate areas of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

(i) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

exploration and evaluation in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administration costs are only included in measurement of exploration and evaluation costs when they are related directly to operational activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (or the cash-generating unit(s) to which it has been allocated, being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

2.11 Financial assets

All financial assets are recognised and de-recognised on date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as fair value through profit and loss, which are initially measured at fair value.

2.11.1 Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

2.11.2 Available-for-sale financial assets

Listed shares held by Group that are traded in an active market are classified as being available-for-sale and are stated at fair value. Fair value is determined by reference to quoted market prices less costs to sell. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed off or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is classified to profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit and loss when the Group’s right to receive the dividends is established.

2.11.3 Loans and receivables

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.11.4 Impairment of financial assets

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

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

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

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impartment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

2.11.5 De-recognition of financial assets

The Group de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

2.11.6 Investment in subsidiaries

Investments in subsidiaries are recognised in the parent entity’s financial statements at cost less any impairment losses.

2.12 Financial Instruments issued by the Company

2.12.1 Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

2.12.2 Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

2.12.3 Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective yield basis.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.13 Foreign currency translation

The individual financial statements of each Group are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Australian dollars (‘$’), which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:

exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets where they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on disposal of partial disposal of the net investment.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into Australian dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.

2.14 Goods and services tax and VAT

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii) for receivables and payables which are recognised inclusive of GST.

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

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

2.15 Government grants

Grants from government are recognised at their fair value where there is reasonable assurance that the grant will be received and the group will comply with all attached conditions.

Government grants relating to the costs are deferred and recognised in the profit and loss over the period necessary to match tem with the costs that they are intended to compensate.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.16 Impairment of long-lived assets

At the end of each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cashgenerating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

2.17 Income tax

Income tax expense represents the sum of the tax currently payable and deferred tax. 2.17.1 Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

2.17.2 Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of the each reporting period and reduced to the extent that it is not longer probable that sufficient taxable profits will be available to allow all of part of the asset to be recovered.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they are relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2.17.3 Current and deferred tax for the period

Current and deferred tax are recognised in profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a business combination. The tax effect is included in the accounting for the business combination.

2.18 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories by the method most appropriate to the particular class of inventory, with the majority being valued on a first-in-first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

2.19 Jointly controlled assets

The proportionate interests in the assets of a joint venture activity have been incorporated in the financial statements under the appropriate headings. Details of the joint venture are set out in Note 21.

2.20 Leased assets

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

2.21.1 Group as Lessee

Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.21 Plant and equipment

Plant and equipment and equipment under finance lease are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item.

The cost of each item of plant and equipment is written off over its estimated useful life to its estimated residual value. Depreciation is calculated on a diminishing value or straight line basis. Each item’s economic life has due regard to both its own physical limitations and to any present assessments of economically recoverable resources of the mine property at which the item is located, and to possible future variations in those assessments. Estimates of remaining useful lives and residual values are made annually, with the effect of any changes recognised on a prospective basis. The following estimated useful lives are used in the calculation of depreciation:

Plant, equipment and vehicles 2 - 15 years Leased equipment and vehicles 3 - 5 years

Depreciation relating directly to plant and equipment utilised in exploration activities is allocated to particular areas of interest and capitalised into the exploration and evaluation asset for that area.

2.22 Provisions

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

2.23 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.

2.23.1 Dividend and interest revenue

Dividend income from investments is recognised when the shareholder’s right to receive payment has been established (provided that it is probably that the economic benefits will flow to the Group and the amount of revenue can be measured reliably).

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

2.24 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocation resources and assessing performance of the operating segments, has been identified as the strategic steering committee.

2.25 Share-based payments

Equity-settled share-based payments to employee granted are measured at fair value at the date of the grant. Fair value is measured by use of a binomial model where Black-Scholes option pricing model has been used to validate the valuation. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.26 Trade and other payables

These amounts represent liabilities for goods and services provided to the group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 2, management is required to make judgements, estimates, and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the entity’s accounting policies

The following are the critical judgements that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

(a) Going concern

The Company does not have a sustainable income base from which it can fund its continual exploration effort and resource development. Consequently, with regard to going concern, the Company is reliant upon raising funds through equity issues or from the sale of assets to fund its ongoing exploration and resource development. Alternatively, the Company can seek joint venture partners to fund exploration and resource development on its behalf.

(b) Commitments for exploration and evaluation expenditure not provided for

The Company has expenditure commitments in relation to its various exploration licences and mining leases. If any of these commitments fall into arrears through any funding inability, the Company has the choice to seek joint venture partners to meet these commitments or apply for expenditure exemptions.

(c) Recovery of capitalised Exploration Expenditure

The Company capitalises exploration expenditure incurred on ongoing projects. The recoverability of this capitalised exploration expenditure is entirely dependent upon returns from the successful development of mining operations or from surpluses from the sale of the projects or the subsidiary companies that control the projects. At the point that it is determined that any capitalised exploration expenditure is definitely not recoverable, it is written off.

4. SEGMENT INFORMATION

Mount Burgess Mining N.L. operates predominantly in one industry and two geographical segments being the mineral exploration industry in Namibia and Botswana. The Company has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operation decision makers) in assessing the performance and determining the allocation of resources. In Namibia the exploration focus is on diamonds and base metals, including iron ore and rare earths. In Botswana the focus is on base metals and diamond exploration.

As the Company is focused on mineral exploration, the Board monitors the company based on actual versus budgeted exploration expenditure incurred by area of interest. This internal reporting framework is the most relevant to assist the Board with making decisions regarding the Company and its ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed to date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

4. SEGMENT INFORMATION (Cont’d)

Segment information relating to the reportable segment being mineral exploration in Namibia and Botswana is outlined below.

External sales 2012 2011 $ $ Segment Other Income Namibia - - Botswana 2,663 - Total of all segments - Unallocated corporate revenue Consolidated total revenue Segment Results Namibia – Impairment expense Botswana – Gain on disposal Total of all segments Unallocated corporate revenue Unallocated corporate expenses Loss before income tax expense Income tax benefit / (expense) Loss for the year Segment Assets Namibia Botswana Total of all segments Unallocated corporate assets Consolidated total assets Segment Liabilities Namibia Botswana Total of all segments Unallocated corporate liabilities Consolidated total liabilities Acquisition of plant and equipment and exploration expenditure Namibia Botswana Total of all segments Unallocated corporate Consolidated total Depreciation/amortisation included in segment result Namibia Botswana Total of all segments Unallocated corporate Consolidated total	External sales	Total
	2012 2011	2012 2011
	$ $	$ $
	- - 2,663 -	- - 2,663 -
		2,663 - - 222
		2,663 222
		(351,179) (79,123) 2,663 -
		(348,516) (79,123) - 222 (942,012) (1,049,471)
		(1,290,528) (1,128,372) 90,725 111,914
		(1,199,803) (1,016,458)
		7,409,829 7,460,552 7,627,945 7,354,995
		15,037,774 14,815,547 15,151 11,849
		15,052,925 14,827,396
		2,329 - 23,751 19,568
		26,080 19,568 1,218,486 675,123
		1,244,566 694,691

		306,610 128,651 298,283 386,855
		604,893 515,506 5,177 -
		610,070 515,506
		- - - -
		- - 4,553 4,483
		4,553 4,483

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

4. SEGMENT INFORMATION (Cont’d)

Impairment included in segment result Namibia Botswana Total of all segments Unallocated corporate Consolidated total Non cash expense other than depreciation / amortisation Namibia Botswana Total of all segments Unallocated corporate Consolidated total	Total
	2012 2011
	$ $
	351,179 79,123 - -
	351,179 79,123 - -
	351,179 79123
	46,482 22,582 - -
	46,482 22,582 4,966 -
	51,448 22,582

5. LOSS FROM OPERATIONS

Loss from operations before income tax expense includes the following items of revenue and expense:

(a) Revenue Interest – other entities (b) Other Gain on disposal of motor vehicle (c) Administration expenses include: Salaries and wages Defined contribution plans Equity settled share based payments Net foreign exchange loss / (gain) (d) Finance costs Interest on bank overdrafts Interest on obligations under finance lease Interest on directors’ loan (e) Exploration interests written off	2012 2011
	$ $
	- 222
	2,663 -
	533,132 617,272 32,845 29,258 4,600 67,400 (2,498) (27,883) 25,368 15,541 714 948 35,223 26,373
	61,305 42,862
	351,179 79,123

Write offs relate to areas which the directors have decided not to renew the right to explore or areas that were required to be reduced in size under the relevant Mining Act.

(f) Other expenses Diesel written off Depreciation of non current assets Amortisation of leased assets	1,547 - 906 2,383 2,100 2,100
	4,553 4,483

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

6. INCOME TAXES

(a) Income tax expense Income tax recognised in profit and loss Tax expense / (income) comprises: R&D Benefit Deferred tax expense/(income) relating to the origination and reversal of temporary differences Benefits arising from previously unrecognised tax losses recognised Total tax expense/(income) Income tax expense/(income) attributable to loss from continuing operations	2012 2011
	$ $
	(90,725) (111,914) - - - -
	(90,725) (111,914)

The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense as follows:

	2012	2011
	$	$
Loss from operations	(1,290,528)	(1,128,372)
Income tax expense calculated at 30% (2011: 30%)	(387,158)	(338,512)
Tax effect of amounts which are not deductible/taxable in calculating taxable income:
Non deductible expenses	245	6,126
Share based payments	1,380	20,220
Tax benefits not recognised	(385,533)	(312,166)
R&D benefit	90,725	111,914
Income tax expense / (benefit)	(90,725)	(111,914)

The income tax R&D benefit received amounting to $90,725 is a cash rebate from Australian Tax Office in respect of research and development expenditure incurred during the year ended 30 June 2011(2010: $111,914).

(b) Deferred tax balances

Deferred tax assets /(liabilities) arise from the following:

2012 Gross deferred tax assets: Accruals Provisions Plant & equipment Share issue expenses Tax losses Unrecognised temporary differences Gross deferred tax liabilities: Intangible assets – mineral exploration Net deferred tax assets (not recognised)	Opening Balance Charged to income	Charged to equity Closing balance
	$ $	$ $
	6,000 - 10,312 7,357 (277) (312) 6,857 - 23,737 105,354 (22,892) (7,045)	- 6,000 - 17,669 - (589) 7,543 14,400 - 129,091 (7,543) (37,480)
	23,737 105,354	- 129,091
	23,737 105,354	- 129,091
	23,737 105,354	- 129,091
	- -	- -

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MOUNT BURGESS MINING N.L.

For the year ended 30 June 2012

6. INCOME TAXES (Cont’d)

	Opening	Charged to	Charged to	Closing
	Balance	income	equity	Balance
	$	$	$	$
2011
Gross deferred tax assets:
Accruals	8,050	(2,050)	-	6,000
Provisions Plant & equipment Share issue expenses Finance lease liabilities	9,276 - -	1,036 (277) -	- - 6,857	10,312 (277) 6,857
Tax losses	-	23,737	-	23,737
Unrecognised temporary differences	(17,326)	1,291	(6,857)	(22,892)
	-	23,737	-	23,737
Gross deferred tax liabilities:
Interest receivable on 11am account	-	23,737	-	23,737
	-	23,737	-	23,737
Net deferred tax assets (not recognised)	-	-	-	23,737
Unrecognised Australian deferred tax assets

	Unrecognised Australian deferred tax assets
		2012	2011
		$	$
	The following deferred tax assets have not been brought to account as assets:
	Tax losses	5,850,994	5,465,460
	Temporary differences	37,480	22,892
		5,888,474	5,488,352
7.	TRADE AND OTHER RECEIVABLES
		2012	2011
		$	$
	VAT/GST recoverable	5,015	5,140
8.	INVENTORIES
		2012	2011
		$	$
	Diesel at cost	310	1,150
9.	PLANT & EQUIPMENT AT COST

Gross carrying amount Balance as at 1 July 2010 Additions Balance as at 1 July 2011 Additions Disposal Balance as at 30 June 2012	Plant, Equipment and Vehicles Leased Equipment and vehicle Total
	$ $ $
	877,358 27,931 905,289 25,167 - 25,167
	902,525 27,931 930,456 5,344 - 5,344 (9,031) - (9,031)
	898,838 27,931 926,769

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MOUNT BURGESS MINING N.L.

For the year ended 30 June 2012

9. PLANT & EQUIPMENT AT COST (Cont’d)

Plant, Equipment and Vehicles $ Accumulated depreciation/amortisation Balance as at 1 July 2010 796,970 Depreciation/amortisation expense 59,910 Balance as at 1 July 2011 856,880 Depreciation/amortisation expense 35,212 Disposal (9,031) Balance as at 30 June 2012 883,061 Net Book Value As at 30 June 2011 45,645 As at 30 June 2012 15,777 Aggregate depreciation and amortisation allocated during the year Plant, equipment and vehicles Recognised as an expense Capitalised as part of the carrying amount of exploration interests Leased equipment and vehicles Recognised as an expense EXPLORATION INTEREST Tenement acquisition at cost Balance as at the start of the financial year Write offs Balance as at the end of the financial year Exploration expenditure at cost Balance as at the start of the financial year Additions Write offs – Note 5(e) Balance as at the end of the financial year Total Exploration Interests	Plant, Equipment and Vehicles	Leased Equipment and Vehicle Total
	$	$ $
	796,970 59,910	19,355 816,325 2,100 62,010
	856,880 35,212 (9,031)	21,455 878,335 2,100 37,312 - (9,031)
	883,061	23,555 906,616
	45,645	6,476 52,121
	15,777	4,376 20,153

		2012 2011
		$ $
		906 2,383 34,706 57,527 2,100 2,100
		37,712 62,010

		2012 2011
		$ $
		- - - -
		- -
		14,759,340 14,348,125 604,726 490,339 (351,179) (79,124)
		15,012,887 14,759,340
		15,012,887 14,759,340

10. EXPLORATION INTEREST

During the year, the amount spent on Makuri Vlei project was written off to reflect the potential non-recoverability of the exploration expenditure.

The ultimate recoupment of the value of assets is dependent upon their successful development and commercial exploitation, or alternatively their respective sale for amount in excess of their current carrying value.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MOUNT BURGESS MINING N.L.

For the year ended 30 June 2012

11. TRADE AND OTHER PAYABLES

Trade payables	2012 2011
	$ $
	109,871 77,901

Trade payables are non-interest bearing and are normally settled on terms of 30 days from month end.

12. BORROWINGS

Unsecured – at amortised cost Loan from a director related company (i) Loan from a director (ii) Secured – at amortised cost Bank overdrafts (iii) Loan from a director (iv) Finance lease liability (v) (Note 15) Current Non-current (Note 15)	2012 2011
	$ $
	355,822 246,470 30,000 -
	385,822 246,470
	384,669 207,888 209,596 100,000 5,725 8,059
	599,990 315,947
	985,812 562,417
	982,680 556,692
	3,132 5,725

(i) The loan from a director related company amounts to £205,000. Interest will accrue on the loan at the rate of 4% above the Bank Bill Rate in Australia as from 1 July 2010 until the loan has been repaid in full.
(ii) Interest is not payable on this loan.
(iii) As at 30 June 2012 the Company had a Visa Credit card facility to the value of $65,000 (2011: $65,000) and an overdraft facility to the value of $400,000 (2011: $350,000). These facility are secured by a mortgage over a property which is belongs to one of the directors of the Company Mr N R Forrester. The interest rate on bank overdraft facility is based on BMI rate plus a margin in 0.33% pa. No fees have been paid to Mr N R Forrester for providing his property as a mortgage.
(iv) Secured by a mortgage over a property which belongs to one of the directors of the Company Mr N R Forrester. Subsequent to year end the loan term has been extended to 17 October 2012 with an agreement to extend the loan for a further 12 months to 17 October 2013. The loan incurs interest at 9.0% pa. No fees have been paid to Mr N R Forrester for providing his property as a mortgage
(v) Secured by the asset held. The interest rate on finance lease is 10.57% with repayment period of 5 years. (2011: 10.57%)

13. OTHER FINANCIAL LIABILITIES

Other (i) Current Non-current	2012 2011
	$ $
	89,990 20,000
	89,990 20,000
	- -

(i) Other financial liabilities representing the funds received from the share placement announced on 15 May 2012 where shares were allotted subsequent to the year end. (2011: Other financial liabilities representing the funds received from the share placement announced on 17 June 2011 where shares were allotted subsequent to the year end.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

14. CURRENT PROVISIONS

CURRENT PROVISIONS
Employee entitlements	2012 2011
	$ $
	58,893 34,373

The current provision for employee entitlements includes accrued annual leave and long service leave. For long service leave it covers all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled pro-rata payments in certain circumstances. The entire amount of the provision is presented as current, since the group does not have an unconditional right to defer settlement for any of these obligations.

15. OBLIGATIONS UNDER FINANCE LEASE

Not later than one year Later than one year and not later than five years Less future finance charges Present value of minimum lease payments Included in the financial statements are: - current borrowings - non-current borrowings (Note 12)	2012 2011
	$ $
	3,049 3,049 3,302 6,350
	6,351 9,399 (626) (1,340)
	5,725 8,059
	2,593 2,334
	3,132 5,725

Finance lease relates to a photocopying machine with a lease term of 5 years. The Group’s obligations under the finance lease are secured by the lessor’s title to the lease asset.

16. ISSUED CAPITAL

543,838,604 fully paid ordinary shares (2011: 406,371,937) 2012 2012 No. $ Fully paid ordinary share capital Balance at beginning of financial year 406,371,937 40,934,883 Share placements to professional investors 119,466,667 788,000 Less costs - (25,143) Issued of ordinary shares in lieu (i) 18,000,000 108,000 543,838,604 41,805,740	543,838,604 fully paid ordinary shares (2011: 406,371,937) 2012 2012 No. $ Fully paid ordinary share capital Balance at beginning of financial year 406,371,937 40,934,883 Share placements to professional investors 119,466,667 788,000 Less costs - (25,143) Issued of ordinary shares in lieu (i) 18,000,000 108,000 543,838,604 41,805,740	2012 2011
		$ $
		41,805,740 40,934,883

	2012 2012	2011 2011
	No. $	No. $
	406,371,937 40,934,883 119,466,667 788,000 - (25,143) 18,000,000 108,000	320,257,000 39,787,892 74,938,466 979,850 - (22,859) 11,176,471 190,000
	543,838,604 41,805,740	406,371,937 40,934,883

(i) Issue of ordinary shares in lieu of Directors’ fees.

Mr A P Stirling Mr R W O’Regan Mr G E Taylor Mr B M Mosigi Mr N R Forrester	Number of fully paid shares to be issued	Number of fully paid shares to be issued
	$24,000 worth at 0.6 cents = $24,000 worth at 0.6 cents = $24,000 worth at 0.6 cents = $12,000 worth at 0.6 cents = $24,000 worth at 0.6 cents* =	4,000,000 4,000,000 4,000,000 2,000,000 4,000,000
		18,000,000

*The fully paid shares to be issued are at the volume weighted average price (“VWAP”) of the shares in the five ASX trading days prior to issue. (21, 22, 23, 24 and 25 November 2011)

The shares were granted for nil cash consideration, and no funds were raised. The shares were allotted on 5 December 2011.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

17. RESERVES

Equity-settled employee benefits Asset realisation reserve Equity-settled employee benefits Balance at beginning of financial year Share based payments Balance at end of financial year	2012 2011
	$ $
	380,045 375,445 109,972 109,972
	490,017 485,417

	2012 2011
	$ $
	375,445 308,045 4,600 67,400
	380,045 375,445

The equity-settled employee benefits arise on the grant of share options to employees under the employee share option plan. Further information about share-based payments to employees is made in Note 25 to the financial statements.

Asset realisation reserve represents realised benefits transferred from a previous asset revaluation reserve.

18. ACCUMULATED LOSSES

Balance at beginning of financial year Net loss Balance at end of financial year 19. LOSS PER SHARE Basic loss per share Diluted basic loss per share	2012 2011
	$ $
	(27,287,595) (26,271,137) (1,199,803) (1,016,458)
	(28,487,398) (27,287,595)

	2012 2011
	Cents per share Cents per share
	(0.25) (0.28)
	N/A N/A

The loss and weighted average number of ordinary shares used in the calculation of basic and dilutive earnings per share are as follows:

Net loss Loss used in calculation of basic and dilutive EPS Weighted average number of ordinary shares used in the calculation of basic earnings per share	2012 2011
	$ $
	(1,199,803) (1,016,458) (1,199,803) (1,016,458)
	2012 2011
	No. No.
	487,984,494 364,634,085

The following potential ordinary shares are not dilutive as they would decrease the loss per share and are therefore excluded from the weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share:

Employee share options

	2012	2011
	No.	No.
	16,350,000	16,350,000

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

19. LOSS PER SHARE (Cont’d)

There have been no conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report other than disclosed in subsequent events.

20. COMMITMENTS FOR EXPENDITURE

(a) Exploration Commitments

The Group has certain obligations to perform minimum exploration work on mineral licences held. These obligations may vary over time, depending on the Group’s exploration programmes and priorities. As at reporting date, total exploration expenditures commitments on tenements held by the Group have not been provided for in the financial statements. The commitments, which cover the twelve month period, amount to $1,160,000 (2011: $2,190,000). These obligations are also subject to variations by farm-out arrangements or sale of the relevant licences.

Namibia (i) Botswana (ii)	2012 2011
	$ $
	400,000 459,000 760,000 1,731,000
	1,160,000 2,190,000

(i) Namibia

In terms of the Minerals (Prospecting and Mining) Act of Namibia the Company has prescribed annual expenditure estimates as proposed by it at the time of application or renewal of the various prospecting licences which are held in Namibia. As at 30 June 2012 the Company had, since project commencement, exceeded its cumulative annual expenditure commitments by $459,000.

(ii) Botswana

The Company has a minimum annual expenditure estimates as proposed by it when applying for or renewing licences in Botswana. The Company may from time to time notify the Minister of any amendments it wishes to make to the proposed prospecting operations. The Minister has the discretion to suspend the obligation to expend the estimated amount of moneys on the exploration licences.

(b) Operating Lease Commitments (i) no later than 1 year (ii) later than 1 year and not later than 5 years
	2012 2011
	$ $
	36,917 53,126 - -
	36,917 53,126

The above operating lease commitment is for the lease of the Company premises. The annual lease commitments are fixed and there are no contingent rental payments. The lease agreement contains an option to renew the lease for 4 years. Refer to Note 15 for finance lease obligations.

21. JOINTLY CONTROLLED ASSETS

The Company has an interest in the following jointly controlled assets as at the 30 June 2012:

(a) a joint venture, known as the Tsumkwe Joint Venture, with Kimberlite Resources Pty Ltd, for the exploration and development of mines on Exclusive Prospecting Licences 2012, 2014, 2817, 2818, 2819, 3019 and 3020 in Namibia, where the Company holds 90% and Kimberlite Resources Pty Ltd holds 10%.

The capital commitments arising from the Company’s interests in joint venture operations are disclosed in Note 20(a).

The following amounts represent the Group’s interest in assets employed in the above joint venture. The amounts are included in the financial statements under their respective asset categories.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

21. JOINTLY CONTROLLED ASSETS (Cont’d)

JOINTLY CONTROLLED ASSETS (Cont’d)
Current Assets Cash assets Receivables Total Current Assets Non Current Assets Exploration interests Plant and equipment Total Non Current Assets Total Assets	2012 2011
	$ $
	1,313 2,864 1,528 1,463
	2,841 4,327
	6,320,291 6,364,904 - 4,667
	6,320,291 6,369,571
	6,323,132 6,373,898

22. CONTROLLED ENTITIES

Country of Incorporation Parent Entity Mount Burgess Mining N.L. Australia Controlled Entity MTB (Namibia) (Proprietary) Ltd Namibia Mount Burgess (Botswana) (Pty) Ltd Botswana	Ownership Interest(%)
	2012 2011
	100% 100% 100% 100%

23. NOTES TO THE STATEMENT OF CASH FLOWS

(a) Reconciliation of Cash and Cash Equivalents

For the purpose of the cash flow statement, cash includes cash on hand and in banks. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement are reconciled to the related items in the statement of financial position as follows:

Cash and cash equivalents Bank overdraft	2012 2011
	$ $
	14,560 9,645 (384,669) (207,888)
	(370,109) (198,243)

(b) Reconciliation of Loss for the Period to the Net Cash Flows from Operating Activities:

Loss for the year Depreciation Amortisation Write off of exploration and development expenditure Unrealised foreign exchange (gain)/ loss on loan Gain on disposal of Motor Vehicle Net exchange differences Equity settled expenses Changes in operating assets and liabilities: Decrease in trade receivables Increase / (decrease) in trade payables Increase / (decrease) in borrowings Increase in provision for employee entitlements Net cash flows from operations	2012 2011
	$ $
	(1,199,803) (1,016,458) 906 2,383 2,100 2,100 351,179 79,123 2,133 (27,408) (2,663) - 885 3,769 112,600 257,400 (1,142) 1,260 35,293 (22,469) 25,962 19,767 24,520 (2,655)
	(648,030) (703,188)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

23. NOTES TO THE STATEMENT OF CASH FLOWS (Cont’d)

(c) Financing Facilities

As at reporting date the Company had a Visa Card credit facility to the value of $65,000 (2011: $65,000), an overdraft facility to the value of $400,000 (2011: $350,000) and indemnity / guarantee facility of $18,300 (2011: $18,300). At balance date the total amount unused for all facilities was $80,000 (2011: $207,000).

24. FINANCIAL INSTRUMENTS

(a) Significant Accounting Policies

Details of significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements. No financial derivative instruments were in place at year end.

(b) Financial Risk Management Objectives

Note 24 (c), (d), (e) (f) (g) and (h) present information about the Group’s exposure to credit, liquidity and market risks, their 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 derivatives financial instruments, for speculative purposes.

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

(c) Interest Rate Risk Management – cash flow

The Group is exposed to interest rate risk (primarily on its cash and cash equivalents and variable rate borrowings), 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.

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

Weighted average effective interest rate % Non-interest bearing Financial assets - Financial liabilities - Fixed rate instruments Financial assets - Financial liabilities 8.67% Variable rate instruments Financial assets 1.50% Financial liabilities 9%-10.57%	2012 2011
	$ $
	18,262 11,921 139,871 77,901
	158,133 89,822
	- - 625,347 339,114
	625,347 339,114
	1,333 2,907 386,672 267,839
	388,005 270,746

Sensitivity Analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for variable rate instruments at the end of the reporting period. The analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

24. FINANCIAL INSTRUMENTS (Cont’d)

If interest rates had been 50 basis point higher/lower and all other variables constant, the Group’s:

Loss for the year ended 30 June 2012 would decrease/increase by $3,709 (2011: decrease/increase by $2,269). This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings.

(d) Foreign Currency Risk Management

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. The Company monitors relevant rates of exchange on a daily basis to determine as best as possible the more advantageous rates at which to transfer funds to overseas accounts.

The Group has not entered into any derivative financial instruments to hedge such transactions.

The Group is exposed to currency risk, however at reporting date the Group holds insignificant amounts of financial assets or liabilities which are exposed to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

	Liabilities		Assets
	2012	2011	2012	2011
GBP	225,000	150,000	-	-

(e) Sensitivity Analysis

A 10 percent strengthening of the Australian dollar against the following currency as at 30 June would have increased (decreased) equity and profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2011.

	GBP impact
	2012	2011
Profit or loss	34,589	22,679

A 10 percent weakening of the Australian dollar against the above currencies at 30 June would have had the equal but opposite effect on the above currencies to the amount shown above, on the basis that all other variables remain constant.

(f) Credit Risk Management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company measures credit risk on a fair value basis.

The Group does not have any significant credit risk exposure to a single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral or other security obtained.

Non-trade receivables from wholly owned controlled entities are assessed for impairment by reference to any future prospects in relation to development of the tenements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

24. FINANCIAL INSTRUMENTS (Cont’d)

(g) Net Fair Value

The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in Note 2 to the financial statements.

(h) Liquidity Risk Management

Ultimate responsibility of liquidity risk management rests with the Board of Directors, which continually monitors the Company’s future funding plans. Future funding plans are subject to change, according to prevailing and anticipated market conditions determining the ease at which further funding capital can be raised. Capital raisings are planned at times that the Company still holds adequate cash resources or has in place banking and resource borrowing facilities.

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

30 June 2012 Non-interest bearing Finance lease liability Variable interest rate instruments 30 June 2011 Non-interest bearing Finance lease liability Variable interest rate instruments	Weighted average effective interest rate	Less than 1 year 1-5 years Total
	%	$ $ $
	10.57 8.78 10.57 9.02	109,871 - 109,871 2,867 3,463 6,330 1,066,152 - 1,066,152
		1,178,890 3,463 1,182,353
		77,901 - 77,901 2,581 6,330 8,911 604,372 - 604,372
		684,854 6,330 691,184

The following table details the Company’s expected maturity of its non-derivative financial assets. The table has been drawn up based on the undiscounted maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

Consolidated 30 June 2012 Non interest bearing Variable rate instruments 30 June 2011 Non interest bearing Variable rate instruments	Weighted average effective interest rate	Less than 1 year 1-5 years Total
	%	$ $ $
	1.50 1.50	18,262 - 18,262 1,333 - 1,333
		19,595 - 19,595
		11,921 - 11,921 2,907 - 2,907
		14,828 - 14,828

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

24. FINANCIAL INSTRUMENTS (Cont’d)

(i) Capital Risk Management

The Group manages its capital to ensure that companies in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt to equity balance. The Group’s focus has been to raise sufficient funds through equity to fund exploration activities.

The Group’s overall strategy remains unchanged from 2011. Risk management policies and procedures are established with regular monitoring and reporting.

The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and accumulated losses as disclosed in Notes 16, 17 and 18 respectively. The Group operates in Australia, Namibia and Botswana. None of the Group’s companies are subject to externally imposed capital requirements.

Operating cash flows are used to maintain and expand the Group’s operations.

25. SHARE-BASED PAYMENTS

Employee Share Option Plan

On 30 July 2010, the Company introduced a new Employee Share Option Plan 2010 as approved by shareholders to reward past services and contributions of Eligible Employees and also to assist in the recruitment, retention, incentive and motivation of Eligible Employees of the Company. Employee share options carry no rights to dividends and no voting rights. In accordance with the terms of the Employee Share Option Plan all options, including any issued during the year ended 30 June 2012, vest in the option holder at the date of their issue and may be exercised at any time from the date of their issue to the date of their expiry. No amounts are paid by the recipient on receipt of the option. Each share option converts to one ordinary share of Mount Burgess Mining N.L. on exercise. The exercise price of the options issued to date is 5 cents.

2012
Weighted
Average
exercise price
2011
Weighted
Average
exercise price
No.
$
No.
$
Employee share option plan
Balance at the start of the year (i)
16,350,000
0.05
7,800,000
0.21
Granted during the year(ii)
500,000
0.05
16,350,000
0.05
Terminated during the year (iii)
(500,000)
0.05
(7,800,000)
0.21
Balance at the end of the year (iv)
16,350,000
0.05
16,350,000
0.05
(i)
Balance at the beginning of the Year
No.
Grant Date
Expiry Date
Exercise Price
$
Fair Value
at grant
date
$
Issued 17 September 2010
12,000,000
17/09/2010
31/12/15
0.05
0.004
Issued 04 October 2010
4,100,000
04/10/10
31/12/15
0.05
0.004
Issued 16 November 2010
250,000
16/11/10
31/12/15
0.05
0.012
16,350,000

12,000,000
17/09/2010
31/12/15
0.05
0.004
4,100,000
04/10/10
31/12/15
0.05
0.004
250,000
16/11/10
31/12/15
0.05
0.012
16,350,000

(ii) Granted During The Year

Issued 1 September 2011	No. Grant Date Expiry Date Exercise Price $ Fair Value at grant date $
	500,000 01/09/2011 31/12/16 0.05 0.009

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

25. SHARE-BASED PAYMENTS (Cont’d)

(iii) Terminated during the Year Issued 26 August 2005 Issued 12 January 2006 Issued 24 February 2006 Issued 22 March 2006 Issued 9 August 2007 Issued 20 November 2007 Issued 13 May 2008 Issued 19 December 2009 Issued 04 October 2010	2012 2011
	No. No.
	- 2,500,000 - 250,000 - 1,750,000 - 50,000 - 300,000 - 500,000 - 250,000 - 2,200,000 500,000 -
	500,000 7,800,000

On 30 July 2010, the Company introduced Employee Share Option Plan (2010) governed by the following terms and conditions:

(a) each option will be issued free of consideration;

(b) the Options shall not be transferred or assigned by the holder provided that the holder shall be at liberty at any time to transfer all or any of his or her Options to his or her wife or husband respectively or to a proprietary limited company all the issued shares of which are beneficially owned by the holder and his or her wife or husband or any other nominee of the Eligible Employee, provided that any such transferee first undertakes to the Company, in a deed, not to transfer or assign such Options until such time as they are exercised;
(c) each Option will entitled the holder to subscribe for one share at an exercise price;
(d) the Options expire at 5.00pm on 31 December of the year five (5) years from the year of grant;
(e) the Options are exercisable wholly or in part by forwarding to the Company an “Option Exercise Form”, accompanied by payment of the exercise price;
(f) the Options are exercisable at any time on or prior to the Expiry Date;
(g) there are no participating rights or entitlements inherent in the Options and holders will not participate in any new issue of capital offered to shareholders during the currency of the Options;
(h) shares issued on the exercise of Options will rank pari passu with the then existing ordinary share capital;
(i) an Option’s terms must not prevent the Option being reorganised as required by the Listing Rules on a reorganisation of capital;
(j) the Company shall grant the Options and deliver the certificates relating to the Options to the Eligible employee within ten (10) business days of the Application Date.

Status of the Options

Any options issued under this plan will not be listed on the Australian Securities Exchange Limited for official quotation.

As of the date of this report 16,350,000 options with an expiry date 31 December 2015 and 31 December 2016 were issued. None of these have yet been exercised.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

25. SHARE-BASED PAYMENTS (Cont’d)

(iv) Balance at the end of the year

(iv) Balance at the end of the	year
Issued 17 September 2010 Issued 04 October 2010 Issued 16 November 2010 Issued 1 September 2011	No. Grant Date Expiry Date Exercise Price $ Fair Value at grant date $
	12,000,000 17/09/2010 31/12/2015 0.05 0.004 3,600,000 04/10/2010 31/12/2015 0.05 0.004 250,000 16/11/2010 31/12/2015 0.05 0.012 500,000 01/09/2011 31/12/2016 0.05 0.009 16,350,000

Share options outstanding at the end of the financial year had an exercise price of $0.05 (2011: $0.05) and a weighted average remaining contractual life of 3.53 years (2011: 4.51 years).

Consideration received on the exercise of employee share options is recognised in contributed equity.

The weighted average fair value of the share options granted during the financial year is $0.009 (2011: $0.004). Options were priced using a binomial option pricing model and Black Scholes option pricing model has been used to validate the valuation. Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural considerations. Expected volatility is based on the historical share price volatility over the past 3 years.

Inputs into the Model for Issues made

Inputs into the Model for Issues made
	2012		2011
Issue date	01 Sep 2012	17 Sep 10	4 Oct 10	16 Nov 10
Grant share data price	$0.012	$0.008	$0.008	$0.019
Exercise price	$0.05	$0.050	$0.050	$0.050
Expected volatility	130%	100%	100%	100%
Option life	5years	5 years	5 years	5 years
Dividend yield	Nil	Nil	Nil	Nil
Risk-free interest rate	4.03%	4.92%	4.83%	5.13%

Expenses arising from share-based payment transactions

Expenses arising from share-based payment transactions
Options issued under employee option plan	2012 2011
	$ $
	4,600 67,400

26. RELATED PARTY DISCLOSURES

(a) Equity Interest in Related Parties

Details of the percentage of ordinary shares held in subsidiaries are disclosed in Note 22 to the financial statements.

(b) Key Management Personnel Compensation

Remuneration of Directors and Senior Management

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

Short term employee benefits (including annual leave accrued) Post employment benefits Other long term benefits – long service leave accrued Share based payment	Consolidated
	2012 2011
	$ $ 454,887 438,180 33,564 32,505 10,341 9,920 108,000 246,000
	606,792 726,605

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

26. RELATED PARTY DISCLOSURES (Cont’d)

(c) Key Management Personnel Equity Holdings of Mount Burgess Mining NL Full Paid Ordinary Shares

2012 N R Forrester B Mosigi G E Taylor1 R W O’Regan A P Stirling Total 2011 N R Forrester B Mosigi G E Taylor R W O’Regan A P Stirling Total	Balance at 1 July Granted as compensation Off market purchased during the year	Balance at 30 June Balance held nominally
	No. No. No.	No. No.
	12,705,367 4,000,000 1,170,000 1,000,000 2,000,000 - 4,835,574 4,000,000 - 7,773,530 4,000,000 - 22,443,530 4,000,000 -	17,875,367 3,000,000 - 8,835,574 - 11,773,530 - 26,443,530 -
	48,758,001 18,000,000 1,170,000	67,928,001 -
	10,764,191 1,941,176 - - 1,000,000 - 2,247,339 2,588,235 - 4,950,000 2,823,530 - 19,620,000 2,823,530 -	12,705,367 - 1,000,000 - 4,835,574 - 7,773,530 - 22,443,530 -
	37,581,530 11,176,471 -	48,758,001 -

Resigned from Board on 20 June 2012

Employee Share Options of Mount Burgess Mining N.L.

Employee	Share Options of Mount Burgess Mining N.L.
2012 N R Forrester M B Mosigi G E Taylor1 R W O’Regan A P Stirling 2011 N R Forrester M B Mosigi G E Taylor R W O’Regan A P Stirling	Balance at 1 July Granted as Remuneration Net other Change Balance at 30 June	Balance vested & exercisable at 30 June Options vested during Year
	2,000,000 - - 2,000,000 2,000,000 - - 2,000,000 2,000,000 - - 2,000,000 2,000,000 - - 2,000,000 2,000,000 - - 2,000,000	2,000,000 - 2,000,000 - 2,000,000 - 2,000,000 - 2,000,000 -
	10,000,000 - - 10,000,000	10,000,000 -
	1,000,000 2,000,000 (1,000,000) 2,000,000 500,000 2,000,000 (500,000) 2,000,000 1,000,000 2,000,000 (1,000,000) 2,000,000 1,000,000 2,000,000 (1,000,000) 2,000,000 500,000 2,000,000 (500,000) 2,000,000	2,000,000 - 2,000,000 - 2,000,000 - 2,000,000 - 2,000,000 -
	4,000,000 10,000,000 4,000,000 10,000,000	10,000,000 -

Resigned from Board on 20 June 2012

On 23 July 2010, the Company terminated the Employee Share Options Plan introduced in 2000. Please refer to Note 25.

All options once granted vest in the option holder at the date of their issue and may be exercised at any time from the date of their issue to the date of their expiry. Any share options issued to a director during the financial year were made in accordance with the provisions of the Company’s Share Option Plan. No amounts are payable by the recipient of the option. Each option is exercisable at 5 cents. No options were exercised during the year.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

26. RELATED PARTY DISCLOSURES (Cont’d)

(d) Other Transactions with Key Management Personnel (and their Related Parties) of Mount Burgess Mining N.L.

The Company has a joint venture with Kimberlite Resources Pty Ltd in respect of its diamond exploration project at Tsumkwe in Namibia. Mr Godfrey Taylor is a director of Kimberlite Resources Pty Ltd. He is also a shareholder of the Company and was a Director of the Company up until his resignation on 20[th] June.

During the year the Company received a loan amounting to £55,000 equivalent to $86,755 (2011: £50,000 equivalent to $84,048)) from Exchange Services Limited. Mr A P Stirling is a Director of Exchange Services Limited and a Director of the Company. Interest will accrue on the loan at the rate of 4% above the Bank Bill Rate in Australia as from 1 July 2010 until the loan has been repaid in full.

During the year the Company received a loan amounting to £20,000 equivalent to $30,000 (2011: Nil) from Mr Ronald O’Regan, a director of the Company. Interest is not payable on this loan.

During the year the Company received a loan amounting to $107,500 (2011: $100,000) from Nigel and Jan Forrester. Mr Nigel Forrester is a Director of the Company. Interest will accrue on the loan at the rate of 9% pa.

(e) Transactions with Subsidiary

All loans advanced to and payable to MTB (Namibia) (Pty) Ltd and Mount Burgess (Botswana) (Proprietary) Limited are interest free, unsecured and subordinate to other liabilities.

(f) Parent Entity

The parent entity in the Group is Mount Burgess Mining N.L. Equity interests in controlled entities are disclosed in Note 22. The Company’s bank overdraft facility is secured by a property belonging to Nigel Forrester who is a Director of the Company.

27. REMUNERATION OF AUDITORS

Auditor of the parent entity Auditing of the financial report The auditor of Mount Burgess Mining N.L. is BDO (2011: Deloitte Touche Tohmatsu).	2012 2011
	$ $
	30,000 27,318

28. SUBSEQUENT EVENTS

On 15 May 2012, the Company completed a placement of 30,000,000 fully paid ordinary shares to raise $90,000. The placement was at an issue price of $0.003 cent per share. All the shares were subsequently allotted on 1 July 2012.

On 10 August 2012, the Company received an additional loan of GBP10,000, which came in at $14,267, from Exchange Services Ltd, a company controlled by A P Stirling, a Director of the Company.

On 27 August 2012, the Company announced agreements had been reached to place 38,333,332 fully paid ordinary shares to raise $115,000. The placement was at an issue price of $0.003 cent per share. All shares were subsequently allotted on 29 August 2012.

On 24 September 2012, the Company received an additional loan of $100,000 from Nigel Forrester, a Director of the Company.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2012

MOUNT BURGESS MINING N.L.

29. CONTINGENT ASSETS AND CONTINGENT LIABILITIES

As at reporting date there are no known contingent assets and liabilities .

30. PARENT ENTITY DISCLOSURES

(a) Financial Position

Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net Assets Equity Issued capital Reserves Accumulated losses (b) Financial Performance Loss for the year Other comprehensive income Total comprehensive loss	2012 2011
	$ $
	4,248 3,084 7,782,941 7,176,914
	7,787,189 7,179,998
	1,215,354 669,398 3,157 5,750
	1,218,511 675,148
	6,568,678 6,504,850
	41,805,740 40,934,883 490,017 485,417 (35,727,079) (34,915,450)
	6,568,678 6,504,850

	2012 2011
	$ $
	(811,629) (889,009) - - (811,629) (889,009)

(c) Guarantees entered into by the Parent Entity in relation to the Debts of its Subsidiaries

As at reporting date there are no known guarantees entered into by the parent entity in relation to the debts of its subsidiaries.

(d) Contingent Liabilities of the Parent Entity

As at reporting date there are no known contingent liabilities of the parent entity.

(e) Commitments of the Parent Entity

The commitments of the parent entity have been disclosed in Note 20 (b).

DIRECTORS’ DECLARATION

MOUNT BURGESS MINING N.L.

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In the Directors’ opinion:

(a) the financial statements and notes set out on pages 23 to 59 are in accordance with the Corporations Act 2001, including:
(i) complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the financial year ended on that date, and
(b) there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become due and payable, and

Note 2.1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations required by s.295A of the Corporations Act 2001 .

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

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On behalf of the Directors

N R Forrester CHAIRMAN and MANAGING DIRECTOR Perth, 28 September 2012

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MOUNT BURGESS MINING N.L.

Report on the Financial Report

We have audited the accompanying financial report of Mount Burgess Mining N.L., which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Independence

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

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Opinion

In our opinion:

(a) the financial report of Mount Burgess Mining N.L. is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Emphasis of Matter

Without modifying our opinion, we draw attention to Note 2 in the financial report, which indicates that the consolidated entity incurred a net loss of $1,199,803 during the year ended 30 June 2012 and, as of that date, the consolidated entity’s current liabilities exceeded its current assets by $1,221,549. As such, in order to continue its current operations and fund working capital, the consolidated entity will need to raise further equity/debt or sell assets. These conditions, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business at the value carried in the statement of financial position.

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Mount Burgess Mining N.L. for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001.

BDO Audit (WA) Pty Ltd

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Brad McVeigh Director

Perth, Western Australia Dated this 28[th] day of September 2012

CORPORATE GOVERNANCE

MOUNT BURGESS MINING N.L.

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CORPORATE GOVERNANCE POLICY

Role of the Board and Directors

ASX Corporate Governance Principles and Recommendations 1.1, 1.2 and 1.3

The Board of Directors of the Company is responsible for the corporate governance of the Company which it endeavours to conduct at all times, where possible, in accordance with the ASX Corporate Governance Principles and Recommendations. The Board determines and monitors on behalf of shareholders the day to day business and affairs of the Company and its subsidiaries. In accordance with the determination of the Board, Senior Management/Executives has/have the actual responsibility of conducting the day to day business of the Company. The responsibility for the day to day business and affairs of the Company are as delegated and outlined below.

Day to Day Business Responsibilities	Board	Senior Management/ Executives
Overseeingthe Group,includingits control and accountabilitysystems	√	√
Monitoring and guiding the Group in accordance with its planned and approved strategic direction and requiredperformance.	√	√
Approvingand monitoringthe Group’s budgets.	√	√
Reporting to shareholders and authorities, as required, on the performance and state of the Company.	√	√
Approving and monitoring the progress of capital management, capital expenditure,acquisitions and divestments;	√	√
Continually monitoring and implementing the Group’s systems of internal compliance and control, risk management and legal compliance and ensuringthe integrityand effectiveness of those systems;	√	√
Approving and monitoring financial and other reporting, including reporting to shareholders, the Australian Securities Exchange and other authorities as required.	√	√
Appointing and removing the Chief Executive Officer, Company Secretary and Chief Financial Officer;	√
Selectingand ratifyingthe appointment of senior management	√
Monitoringsenior management’sperformance	√
Ensuring that the remuneration and conditions of service are appropriate to attract and retain required senior management;and	√
Establishing and monitoring succession planning for the Board and senior management.	√

The process of evaluating the performance of Board members and senior executives, in respect of the duties which they are required to perform, within the capacity for which they are engaged, is conducted on an ongoing basis. The Company is of the size where this process can be conducted satisfactorily without having to engage in evaluation regimes to determine states of performance. Any unsatisfactory states of performance are dealt with accordingly.

Director Independence

ASX Corporate Governance Principles and Recommendations 2.1

The ASX Best Practice Recommendations maintain that directors are considered to be independent if they are not major shareholders, are independent of management and are free from any business or other relationship that could materially interfere with their exercise of free and independent judgement. ASX Corporate Governance Principles and Recommendations 2.1 recommends that the Board should comprise a majority of independent directors.

Apart from the last eleven days of the financial year, the Board was made up of three independent and two nonindependent directors. Because of the size of the Company, a majority of executive directors may occur where the direction of the Company requires additional executive expertise. For commercial reasons, the Company will not necessarily appoint additional non-executive directors simply for the purpose of maintaining a majority of independent non-executive directors

CORPORATE GOVERNANCE

MOUNT BURGESS MINING N.L.

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on the Board. Refer to ASX Corporate Governance Principles and Recommendations 2.6 for Directors’ status of independence.

Role of Chairman

ASX Corporate Governance Principles and Recommendations 2.2 and 2.3

The ASX Best Practice Recommendations 2.2 and 2.3 maintain that the Chairman should be an Independent Director and that the roles of Chairman and Chief Executive Officer should not be exercised by the same individual.

Mr Forrester, engaged in the role of Managing Director is not, therefore, considered to be independent in his role as Chairman. For the sake of preserving administrative costs Mr Forrester is currently filling the role of both Chairman and Managing Director.

Nomination Committee

ASX Corporate Governance Principles and Recommendations 2.4

The ASX Best Practice Recommendation 2.4 maintains that the Board should establish a nomination committee to assess the competencies of Directors, review Board succession plans, evaluate the performance of the Board and the appointment and re-election of Directors.

Because of its size the Company does not have an independent Nomination Committee. Any relevant matters to be dealt with are dealt with by the Board as a whole.

Process of Evaluating the Performance of the Board

ASX Corporate Governance Principles and Recommendations 2.5

The ASX Corporate Governance Principles and Recommendations 2.5 maintains that the performance of the Board should be reviewed regularly in respect of:

Participation of all Board members in Board decision making
Having access to relevant information for the purpose of decision making
Communications with the Company Secretary

The Company is of the size where all members of the Board are updated on a regular basis, both telephonically and by way of update reports, in respect of the ongoing operations of the Company. In order to eliminate high travel costs involved for the overseas directors to be present in Australia for meetings, the majority of the Company’s Board Meetings are held telephonically. Any abnormal situations are reported and discussed in a timely manner. Specific requests for information are responded to as soon as possible. Monthly financial statements are circularised to all members of the Board and all members of the Board are free to communicate with the Joint Company Secretaries.

Nineteen Board meetings were held during the year.

Composition of the Board

ASX Corporate Governance Principles and Recommendations 2.6

The Company’s Constitution requires a minimum of three Directors. This number can be increased in accordance with the requirements of the Company.

The names of the Directors of the Company at the date of this report are as follows:

CORPORATE GOVERNANCE

MOUNT BURGESS MINING N.L.

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DIRECTOR	ROLE	APPOINTED	RETIRING AT 2012 AGM	SEEKING RE- ELECTION AT 2012 AGM
Nigel Raymond Forrester	Chairman and ManagingDirector	1985	No	-
Molatlhegi Benjamin Mosigi	Technical Director Exploration	2009	Yes	Yes
Ronald William O’Regan	Non Executive Director	2000	Yes	Yes
Alfred Patrick Stirling	Non Executive Director	2003	No	No

The Company maintains a mix of Directors from different backgrounds with complementary skills and experience. The skills, experience and expertise of the current Directors of the Company are outlined in the Directors’ Report on Page 14.

The executive Directors of the Company are Mr Forrester, Chairman and Managing Director and Mr Mosigi, Technical Director, Exploration. Non-executive Directors of the Company, Mr O’Regan and Mr Taylor, are both shareholders of the Company and are considered independent to the extent that:

They are not individually substantial shareholders of the Company or otherwise associated with a substantial shareholder of the Company
They are not employed nor have they in the last three years been employed in an executive capacity by the Company
They have not in the previous three years been a professional advisor to the Company
They have not been a material supplier to or customer of the Company
They do not have a contractual relationship with the Company other than as a Director.

Non-executive Director of the Company, Mr A.P. Stirling may be considered under ASX Corporate Governance Principles and Recommendations 2.1 to be non-independent as:

 He has a contractual relationship with the Company other than as a Director.

Regarding the Board’s policy for the nomination and appointment of Directors, it reviews its composition on a continual basis to ensure that an appropriate mix of skills, experience, expertise and diversity is brought to the Board.

Except for the Managing Director, all Directors appointed to the Board are subject to election by shareholders, initially at the Annual General Meeting following their appointment and thereafter every three years.

Independent Professional Advice for Board Members

Any member of the Board of Directors is entitled to take independent professional advice at the expense of the Company. However, in so doing the Board must reasonably consider any request for any such expenses to be borne by the Company and meet any such expenses where relevant to the business of the Company.

CORPORATE GOVERNANCE

MOUNT BURGESS MINING N.L.

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Promote ethical and responsible decision making

ASX Corporate Governance Principles and Recommendations 3

3.1 Companies should establish a code of conduct

Regarding the Company’s Code of Conduct, the Board of the Company endeavours to engage fellow Board Members, Senior Management and Employees of high ethical standard. As the Company is engaged in operations in countries outside Australia it engages a high proportion of local senior management and employees to achieve familiar compliance with local laws and customs. At the same time the Company requires compliance with legal and operational procedures relative to Australia. Any divergence from the standard of ethics required is dealt with in accordance with the laws and procedures as laid down in the countries in which the Company operates.

The Code of Conduct includes but is not necessarily limited to such issues as accountability, dealing with concern, violation of Company policies and standards, treatment of Company personnel and co-workers, confidentiality, personal information and intellectual property, misuse of Company assets and resources, fraud and theft, bribery and corruption, alcohol and drug abuse, use of Company information systems, respect for host country’s laws etc.

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

Mount Burgess Mining and its subsidiaries have always been committed to workplace diversity. It is an equal opportunity employer and recognizes the benefits arising from diversity in the workplace throughout its workforce.

Full details of the Company’s diversity policy can be found on the Company website – www.mountburgess.com

3.3 Companies should disclose in each annual report the measureable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress in achieving them.

The Board believes that at this stage in its development it is not of sufficient size to justify the development and monitoring of measurable objectives and strategies of its Diversity Policy.

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

Ms Serene Chau and Ms J Forrester are senior executives in the Company and they fulfil the following roles:

Mount Burgess Mining NL

Mount Burgess Mining NL
Joint Company Secretary	Ms S Chau and Ms J Forrester
Chief Financial Accountant	Ms S Chau
Mount Burgess (Botswana) Pty Ltd
Director	Ms S Chau
Director	Ms J Forrester
MTB Namibia (Pty)Ltd
Director	Ms S Chau
Director	Ms J Forrester

The following table shows the proportional representation of women at various levels within the Company's workforce in 2012:

Directors of Holding Company	Nil
Directors of Subsidiary Companies
Botswana	40%
Namibia	50%
Non-executive directors	Nil
Senior executives	50%
Other	83%
Total in the whole organization	5

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

CORPORATE GOVERNANCE

MOUNT BURGESS MINING N.L.

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Explanations of the Company’s compliance with, and departures from, the ASX’s Principles and Recommendations 3.1 through to 3.4 have been detailed in the sections above.

Safeguard Integrity in Financial Reporting

ASX Corporate Governance Principles and Recommendations 4.1, 4.2, 4.3 and 4.4

The ASX Best Practices Recommendation 4 is in relation to the establishment of an audit committee. Because of its size, the Company does not have a separate Audit Committee. Any controls required to be introduced, monitored or reviewed are done so by the five Directors who currently comprise the Board.

Make timely and Balanced Disclosure

ASX Corporate Governance Principles and Recommendations 5.1 and 5.2

As a public exploration company, listed on the Australian Securities Exchange, the Company adopts the policy of strict adherence to the ASX Listing Rules and requirements under the Corporations Act in respect of responsible, timely, balanced and factual continuous disclosure requirements, for the purpose of keeping the market fully informed in respect of price sensitive information.

The Managing Director is responsible for determining what amounts to price sensitive information and in so doing may seek legal advice or advice from the Board.

Draft announcements are prepared for review by either administrative or geological staff or geological consultants, dependant upon the type of announcement to be made.

Price sensitive information for this Company would normally include:

Significant exploration results, resource/reserve results or mining results. All such results are reported in compliance with the JORC Code and only released with the approval of relevant qualified personnel.
Changes to the Company’s Board of Directors or Auditors
Changes to the Company’s issued share capital through capital raisings
Changes to the Company’s Directors’ shareholdings
The acquisition or disposal of exploration areas and resources/reserves
The formation of joint ventures

All price sensitive announcements are posted to the Company’s website as soon as possible after the announcements have been released to the market by the ASX.

Respect the rights of shareholders

ASX Corporate Governance Principles and Recommendations 6.1 and 6.2

The Company’s auditors will be available at the Company’s Annual General Meeting to answer any shareholder queries relating to the audit of the Company’s Annual Report.

It is the Company’s policy to ensure that a full review of the Company’s operations will be presented following the Company’s Annual General Meeting and that its website, www.mountburgess.com is regularly updated with all Securities Exchange announcements including its Annual and Quarterly Reports. Beneficial owners who request the Company to automatically provide them with any announcements can receive such information by electronic means.

Significant group briefings and presentations are posted to the Company’s website and are accessible to all shareholders in advance of such briefings/presentations.

Recognition and Management of Risk

ASX Corporate Governance Principles and Recommendations 7.1, 7.2, 7.3 and 7.4

The Company recognises that there are inherent risks in being involved in the resource exploration industry and operating in non-domicile countries. The policy of the Board is to monitor and if considered necessary, seek advice on areas of operational and financial risk and implement strategies for appropriate risk management arrangements.

CORPORATE GOVERNANCE

MOUNT BURGESS MINING N.L.

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Specific areas of risk, which are regularly considered at Board Meetings, include expenditure levels relative to exploration success, going concern, foreign currency and commodities price fluctuations, performance of activities, human resources, the environment, land access, political instability and internal control. With regard to internal control the Managing Director and Chief Financial Officer are required to certify to the Board that:

The Company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the Company and Group and are in accordance with relevant accounting standards; and
That the above statement is founded on a sound system of risk management and internal compliance and control and which implements the policies adopted by the Board and that the Company’s risk management and internal compliance and control is operating efficiently and effectively in all respects.

The financial reports of the Company are produced in accordance with Australian Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accountings Standards Board and the Corporations Act and in many cases exceed the disclosure requirements of the Corporations Act and the Australian Accounting Standards Board Policy 1434. The financial statements and reports are subject to review of every half year and the auditor issues an audit opinion accompanying the full year results for each financial year.

Remunerate fairly and responsibly

ASX Corporate Governance Principles and Recommendations 8.1, 8.2 and 8.3

ASX Corporate Governance Principle 8.1 advises that the Board should establish a remuneration committee. Because of its size the Company does not have a separate remuneration committee.

The Board, as a whole, reviews the remuneration packages and policies applicable to executive Directors, senior executives and non-executive Directors on an annual basis. Remuneration levels will be realistically and competitively set to attract the most qualified and experienced Directors and senior executives. Where necessary the board will obtain independent advice on the appropriateness of remuneration packages.

Executive Directors receive a salary and share options. Non-Executive Directors normally receive a set fee per annum and share options and are fully reimbursed for any out of pocket expenses necessarily incurred in carrying out their duties.

Because of the difficulty of raising funds as an exploration company, under the current global economic conditions, the nonexecutive directors of the Company have volunteered to waive their fees for the time being and the Managing Director of the Company has not taken the salary increase as recommended by the Board at the last salary review.

SECURITIES EXCHANGE INFORMATION

MOUNT BURGESS MINING N.L.

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The information set out below was applicable as at 17 September 2012.

1. Distribution of Equity Securities and Voting Rights:

(a) Distribution of Shareholders of Ordinary shares:-

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total No. of Shareholders	No. of Holders 203 477 345 863 438
	2326

(b) Each shareholder entitled to vote may vote in person or by proxy, attorney or representative. On a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote. On a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the share.
(c) There existed 2,046 shareholders who held less than a marketable parcel of shares.
(e) Substantial Shareholders

Strata Drilling WA Pty Ltd 70,666,665 shares representing 11.24 %of the Company

2. Top Twenty Shareholders

Shareholder Name
1
Strata Drilling WA Pty Ltd
2
Citicorp Nominees Pty Limited
3
W B Nominees
4
Cen Pty Ltd
5
N R Forrester & Associates
6
HSBC Custody Nominees
7
J P Morgan Nominees
8
Jerd Pty Ltd
9
Ms Eileen Anne English
10
Ronald William O’Regan
11
Alfred Patrick Stirling
12
Godfrey Edward taylor and Susanne Peta Taylor
13
Carter Capital Ltd
14
Bevis Michael Leigh Coulson
15
Mr/s P Davies (Alison Davies Family A/C)
16
Ms Mooi Fah Lee
17
Michael Damien and Luke Gerard Murphy
18
Paloma Enterprises Pty Limited
19
Running Water Limited
20
Mrs V Gregory Swindon & Mrs D M Swindon (VGS Super Fund)

Units Held
Percentage
of Issued
Capital
70,666,665
11.24
25,666,666
4.08
23,429,489
3.72
21,895,127
3.48
18,256,303
2.90
15,729,085
2.50
13,331,932
2.12
10,500,000
1.67
9,999,999
1.59
8,886,730
1.41
6,823,530
1.09
6,588,235
1.05
6,271,796
1.00
5,846,666
0.93
5,100,000
0.81
5,064,086
0.81
4,819,231
0.77
4,641,308
0.74
4,000,000
0.64
4,000,000
0.64

271,516,848
43.19

DETAILS OF THE COMPANY’S MINERAL TENEMENTS AS AT 28 SEPTEMBER 2012

MOUNT BURGESS MINING N.L.

Tenement No.	Percentage of Equity	Tenement No.	Percentage of Equity
NAMIBIA		BOTSWANA
Tsumkwe		Kihabe
EPL 2012	90	PL 69/2003	100
EPL 2014	90
EPL 2817	90	West Ngamiland
EPL 2818	90	PL 418/2009	100
EPL 2819	90	PL 419/2009	100
EPL 3019	90	PL 420/2009	100
EPL 3020	90	PL 421/2009	100
EPL 3021	100	PL 422/2009	100
EPL 3022	100	PL 423/2009	100
EPL 4070	85	PL 424/2009	100
EPL 4071	85	PL 512/2009	100
EPL 4078	85
EPL 4320	85

AI assistant

TALONX RESOURCES LIMITED — Annual Report 2012

65972_rns_2012-09-27_6f7ebdef-8aa5-4bc8-adb2-89aaa9f155b7.pdf

Annual Report

BOTSWANA AND NAMIBIA

BASE METALS

THE KIHABE DEPOSIT

Section 9900me

THE NXUU DEPOSIT

Nxuu Section 7821700N

METAL RECOVERIES

Zinc Equivalent Grade

SUMMARISED PROJECT ATTRIBUTES - KIHABE-NXUU

Target 52 Zinc Anomaly

Wanchu West Zinc Anomaly

DIAMONDS

WESTERN NGAMILAND DIAMOND PROJECT, BOTSWANA

NAMIBIA

TSUMKWE DIAMOND PROJECT

TSUMKWE REE PROJECT

Information about the Directors and Senior Management

Directorships of other Listed Companies

Former Partners of the Audit Firm

Directors’ Shareholdings

Remuneration of Directors and Senior Management

Share Options granted to Directors and Senior Management

Company Secretaries

Review of Operations

Operations and Principal Activities

Financial Conditions

Change in State of Affairs

Subsequent Events

Future Developments

Environmental Regulations

Dividends

Shares under Option or Issued on Exercise of Options

Status of the Options

Indemnification of Officers and Auditors

Remuneration Report – Audited

Directors Details

Remuneration Committee

A. Remuneration policy

B. Remuneration structure

Non-executive Directors’ Remuneration

Executive Remuneration

There is no link between the remuneration policy and the Company’s performance.

C. Key terms of employment contracts

D. Details of remuneration

Issue of ordinary shares in lieu

Employee share option plan

Voting and comments made at the Company’s 2011 Annual General Meeting

End of Remuneration Report

Directors Meetings

Non-Audit Service

Auditor’s Independence Declaration

DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF MOUNT BURGESS MINING N.L.

BDO Audit (WA) Pty Ltd

For the year ended 30 June 2012

TABLE OF CONTENTS

1. GENERAL INFORMATION

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance

2.2 Basis of preparation

2.2.1 Adoption of new and revised Accounting Standards

2.2.2 Standards affecting presentation and disclosure

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.2.3 Standards and Interpretation issued not yet adopted

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.3 Going concern basis

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.4 Basis of consolidation

2.5 Borrowings

2. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.6 Borrowing costs

2.7 Cash and cash equivalents

2.8 Earnings per share

2.8.1 Basic earnings per share

2.8.1 Diluted earnings per share

2.9 Employee Benefits

2.10 Exploration and expenditures

TALONX RESOURCES LIMITED Annual Report 2012