TASMAN RESOURCES LTD — Annual Report 2006

Sep 28, 2006

Tasman Resources NL ABN 85 009 253 187 and Controlled Entities

Financial Report for the Year Ended 30 June 2006

CORPORATE DIRECTORY

DIRECTORS:

Gregory Howard Solomon LLB (Executive) Douglas Howard Solomon BJuris LLB (Hons) (Non-Executive) Guy Touzeau Le Page B.A., B.Sc. (Hons)., M.B.A., ASIA., MAusIMM (Non-Executive)

COMPANY SECRETARY:

Raymond F Buscall

REGISTERED OFFICE:

Level 40, Exchange Plaza 2 The Esplanade Perth Western Australia 6000 Tel +61 8 9221 5323 Fax +61 8 9221 5955 Email: mailroom@edenenergy.com.au Website: www.edenenergy.com.au

SOLICITORS:

Solomon Brothers Level 40, Exchange Plaza 2 The Esplanade Perth WA 6000

Minter Ellison 1 King William Street Adelaide SA 5000

AUDITORS:

Bentleys MRI Perth Partnership Chartered Accountants Level 1 10 Kings Park Road West Perth WA 6005

SHARE REGISTRY:

Advance Share Registry Services 110 Stirling Highway Nedlands WA 6009

STOCK EXCHANGE LISTING:

ASX Code: TAS (ordinary shares)

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

CORPORATE GOVERNANCE STATEMENT

Corporate Governance

The Board of Directors is responsible for the corporate governance of the company. The Board monitors the business affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Board of Directors acknowledge the Principles of Good Corporate Governance and Best Practice Recommendations set by the Australian Stock Exchange ("ASX") Corporate Governance Council. However, in view of the Company's current size and extent and nature of operations, full adoption of the recommendations is currently not practical. The Board will continue to work towards full adoption of the recommendations in line with growth and development of the Company in the years ahead. Where the Company's framework was different to the Principles of Good Corporate Governance and Best Practice Recommendations set by the ASX Corporate Governance Council, it has been noted below.

A summary of the current corporate governance practices as adopted by the Board are as follows:

The Board of Directors

Board Responsibilities

The Board assumes responsibility for overseeing the affairs of the Company by ensuring that they are carried out in a professional and ethical manner and that business risks are effectively managed.

The board carries out its responsibilities according to the following mandate:-

• The Company's Constitution fixes the number of Directors to at least three directors and not more than six. The Board currently consists of three, with at least two-thirds being non-executive directors;
• The directors should possess a broad range of skills qualifications and experience; $\bullet$
• The Company's Constitution requires that not less than one third of the all the Directors other than the Managing Director retire by rotation at each annual general meeting. Directors appointed during the period since the last annual general meeting of the company must submit themselves for election at the next Annual General Meeting:
• The full board meets formally to conduct appropriate business. The Board uses resolutions in writing signed by all Directors to deal with matters requiring decisions between meetings;
• All available information in connection with items to be discussed at a meeting of the board shall be provided to each director prior to that meeting.

The primary responsibilities of the Board include:-

• Review and ratify systems of risk management and internal compliance and control, codes of conduct, $\bullet$ legal compliance, and any other regulatory compliance;
• $\ddot{\phantom{0}}$ Approve and monitor the progress of major capital expenditure, capital management, and acquisition and divestitures:
• Approve and monitor financial and other reporting to shareholders and the market;
• Monitor the Board composition, Director selection, Board process and performances and ensure $\bullet$ Directors have an understanding of the consolidated entities business;
• Monitor and influence the key standards of the consolidated entity including Ethical Standards, $\bullet$ reputation and culture;
• The approval of the annual and half-yearly financial report; $\bullet$
• The review and adoption of annual budgets for financial performance of the consolidated entity and the monitoring of results;
• Ensuring that the consolidated entity is able to pay its debts as and when they fall due.

CORPORATE GOVERNANCE STATEMENT

The Company discloses the details of qualifications and experience of each Director in its annual report.

Due to the Company's current size and extent and nature of operations, the following departures from the Principles of Good Corporate Governance and Best Practice Recommendations have occurred:-

• The Company does not have a majority of independent directors;
• The Chairman of the Board is an executive director. $\bullet$

Board Committees

Remuneration Committee

Due to the Company's current size and extent and nature of operations, the following departures from the Principles of Good Corporate Governance and Best Practice Recommendations have occurred:-

The Company does not have a Remuneration Committee. The Board believes that, with the number of $\bullet$ Directors on the Board, the Board itself is the appropriate forum to deal with this function.

The Company's Constitution allows for a maximum amount per annum to be paid to non-executive directors to be allocated at the discretion of the Directors. Any changes to the annual amount must be approved at a General Meeting of members of the Company.

Audit Committee

Due to the Company's current size and extent and nature of operations, the following departures from the Principles of Good Corporate Governance and Best Practice Recommendations have occurred:-

$\bullet$ The Company does not have an Audit Committee. The Board believes that, with the number of Directors on the Board, the Board itself is the appropriate forum to deal with this function.

Nomination Committee

Due to the Company's current size and extent of nature and operations, the following departures from the Principles of Good Corporate Governance and Best Practice Recommendations have occurred:-

The Company does not have a Nomination Committee. The Board believes that, with the number of Directors on the Board, the Board itself is the appropriate forum to deal with this function.

Independent Professional Advice

With prior approval of the Chairman, each director has the right to seek independent legal and other professional advice at the consolidated entity's expense concerning any aspect of the consolidated entity's operations or undertaking in order to fulfil their duties and responsibilities as directors.

Ethical Standards

The Board endeavours to ensure that the Directors, officers and employees of the Company act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities.

Specifically, that Directors, officers and employees must:-

• Comply with the law; $\bullet$
• Act in the best interests of the Company;
• $\bullet$ Be responsible and accountable for their actions; and
• Observe the ethical principles of fairness, honesty and truthfulness, including disclosure of potential

CORPORATE GOVERNANCE STATEMENT

conflicts.

Trading Policy

It is the company's policy to encourage Directors and employees to own Shares in the Company. The trading in shares policy reinforces the obligations of Directors and employees of the Company, under the Corporations Act 2001 and the ASX Listing Rules in relation to trading in Company Shares. The policy restricts directors and employees from acting on material information until it has been released to the market. Directors are required to report share trading to the Company Secretary.

Continuous Disclosure

The Executive Chairman and Company Secretary have been appointed as the persons responsible for communications with the ASX. These people are also responsible for ensuring the compliance with the continuous disclosure requirements in the ASX listing rules and overseeing and co-ordinating information disclosure to the ASX.

The Executive Chairman and the Company Secretary are responsible for the communications strategy to promote effective communications with shareholders and encourage effective participation at general meetings. The Company adheres to best practice in its preparation of Notices of Meetings to ensure all shareholders are fully informed.

Risk Management

The Board is responsible for the consolidated entity's system of internal controls. The Board constantly monitors the operation and financial aspects of the consolidated entity's activities and considers the recommendations and advice of external auditors and other external advisers on the operations and financial risks that face the consolidated entity.

The Board ensures that recommendations made by the external auditors and other external advisers are investigated and, where considered necessary, appropriate action is taken to ensure that the consolidated entity has an appropriate internal control environment in place to manage the key risks identified.

In addition, the Board investigates ways of enhancing existing risk management strategies, including appropriate segregation of duties and the employment and training of suitably qualified and experienced personnel.

Due to the Company's current size and extent and nature of operations, the following departures from the Principles of Good Corporate Governance and Best Practice Recommendations have occurred:-

The Company does not have a full time chief executive officer or chief financial officer and therefore statements are not obtained from such persons in relation to Best Practice Recommendation 4.1.

Code of Conduct

As part of the Board's commitment to the highest standard of conduct, the consolidated entity requires executives, management and employees in carrying out their duties and responsibilities to act ethically and lawfully with respect to all transactions and matters including:-

• Responsibilities to shareholders; $\bullet$
• Compliance with laws and regulations; $\bullet$
• Relations with customers and suppliers; $\bullet$
• Ethical responsibilities; $\bullet$
• $\bullet$ Employment practices; and
• Responsibilities to the environment and the community. $\bullet$

CORPORATE GOVERNANCE STATEMENT

Due to the Company's current size and extent and nature of operations, the following departures from the Principles of Good Corporate Governance and Best Practice Recommendations have occurred:-

The Company has not established a Formal Code of Conduct in accordance with Best Practice $\bullet$ Recommendation 10.1.

Communicating with Shareholders

The Board ensures that shareholders are kept informed of all major developments that affect their shareholding or the Consolidated Entity's State of Affairs through quarterly, half yearly, annual and ad hoc reports. All shareholders are encouraged to attend the Annual General Meeting to meet the Chairman and Directors and to receive the most updated report on the consolidated entity's activities.

Other Information

Further information relating to the company's corporate governance practices and policies has been made publicly available on the company's web site at www.tasmanresources.com.au. Shareholders may communicate with the Company through its email address.

DIRECTORS' REPORT

Your directors present their report on the company and its controlled entities for the financial year ended 30 June 2006.

Directors

The names of directors in office at any time during or since the end of the year are:

Gregory Howard Solomon

Douglas Howard Solomon

Guy Touzeu Le Page

Graham Roland Bedford (appointed 5 September 2005, resigned 8 September 2006)

Directors have been in office since the start of the financial vear to the date of this report unless otherwise stated.

Company Secretary

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

Mr Raymond F Buscall. Mr Buscall has worked for Tasman Resources NL for the past 16 years performing financial management roles of the business. Mr Buscall was appointed company secretary on 18 June 1990.

Principal Activities

The principal activities of the economic entity during the financial year were:

Mineral Exploration

The principal activity of the Company during the financial year ended 30th June 2006 was mineral exploration. In particular, the Company undertook exploration programmes and project generation activities covering areas on the Stuart Shelf around Lake Torrens, near fron Knob, northwest of Tarcoola in the central Gawler Craton and in Southwest Queensland.

Activities included geochemical sampling, geophysical surveys (including airborne and ground), percussion and core drilling programmes and ongoing reviews of previous exploration data leading to the acquisition of new projects.

Operating Results

The consolidated loss of the economic entity after providing for income tax and eliminating minority equity interests amounted to \$3,186,655. The results included a loss on de-consolidation of Eden Energy Limited of \$1,693,764.

Dividends Paid or Recommended

No dividends were paid or declared for payment during the year.

MINERAL EXPLORATION

Review of Operations

The majority of the Company's mineral exploration tenements and tenement applications are located in South Australia. A new project area has been applied for in Queensland. The Company is targeting a range of commodities, gold, copper, silver, uranium, zinc, lead, nickel/cobalt and diamonds, for which the Company's tenements are considered prospective. Tables 1 and 2 list the tenement details. All tenements are 100% beneficially held by the Company. The total area covered by the Company's tenements (granted and applications) is 10,206 $km^2$ .

DIRECTORS' REPORT

Table 1: Tasman Resources Granted Tenements
----------------------------------------------------	--	--	--	--	--	--

Area Tenement (km 2 )			Location
EL	2832	107	Approximately 50 km west of Marree
EL	2989	874	Approximately 50 km northeast of Andamooka
EL	3102	75	Approximately 50 km west of Port Augusta
EL	3109	244	Approximately 70 km NNW of Andamooka
EL	3123	615	Approximately 80 km west of Marree
EL	3140	440	Approximately 50 km north of Andamooka
EL	3174	230	Approximately 120km northwest of Adamooka
EL	3175	12	Immediately ENE of Andamooka
EL	3177	402	Approximately 45km west of Andamooka
EL	3209	1.302	Approximately 140 km northwest of Leigh Creek
EL	3254	247	Approximately 50 km southwest of Marree
EL	3261	707	Approximately 90 km NNW of Woomera
EL	3306	436	Approximately 90km 90 NW Tarcoola
EL	3307	194	Approximately 50 km WSW of Port Augusta
EL	3339	62	Approximately 100 km SSE of Coober Pedy
EL	3340	173	Approximately 100 km south of Coober Pedy
EL	3341	339	Approximately 90 km northwest of Tarcoola
EL	3342	184	Approximately 120 km southwest of Coober Pedy
EL	3343	430	Approximately 90 km southwest of Coober Pedy
EL	3344	262	Approximately 70 km north of Tarcoola
EL	3345	131	Approximately 80 km northwest of Tarcoola
EL	3423	215	Approximately 95 km southwest of Coober Pedy
EL	3449	62	Approximately 90 km northwest of Woomera
EL	3453	223	Approximately 70 km west of Port Augusta
EL	3532	379	Approximately 85 km southwest of Coober Pedy
EL	3541	271	Approximately 40 km southwest of Marree

Table 2: Tasman Resources Tenement Applications

ELA	Application Date	Area (km 2 )	Location
ELA 2000/0058	$13-$ Sep $-05$	281	Approximately 60 km west of Marree
ELA 2006/0131	22-Mar-06	473	Parakylia
ELA 2006/00189	11-Apr-06	168	Approximately 85 km southwest of Coober Pedy
ELA 2006/0289	12-Jun-06	40	Approximately 70 km west of Port Augusta
EPM 15642	01-Jun-06	314	Approximately 150 km NW of Bedourie
EPM 15645	01-Jun-06	314	Approximately 150 km NW of Bedourie

Exploration Targets

The Company's tenements are considered prospective for a range of target types. As is common with most areas of South Australia and southwest Queensland, almost all of the older, potentially mineralised lithologies within the project area are masked by younger sedimentary layers and sand dunes resulting in no surface expression of potential orebodies. Whilst presenting some challenges to exploration, this situation has also meant that large areas of South Australia and southwest Queensland are relatively unexplored and likely to host significant deposits of economic mineralisation.

The Company has taken a multi-commodity approach in its exploration program. The preferred commodities are base-metals (especially copper, zinc and cobalt) and precious metals (gold and silver).

DIRECTORS' REPORT

Iron Oxide Copper Gold Deposits and Sediment-hosted Base metals

The Stuart Shelf is a large under-explored area on the eastern edge of the Gawler Craton containing one of the world's major iron oxide copper gold silver uranium deposits at Olympic Dam, and largely lying between Lake Torrens and Lake Eyre. The area is traversed by major structural zones (including the Torrens Hinge Zone, Norwest Fault and the continental lineaments G2 and G9). The Company has a significant tenement position in this area - the Lake Torrens Project.

The Lake Torrens Project is considered prospective for several types of economic precious and base-metal deposits, including within the Mesoproterozoic basement rocks Olympic Dam-type iron oxide copper gold (IOCG) deposits, and, within the Adelaidean and Cambrian sediments, Mississippi-Valley-type ("MVT") lead-zinc-coppersilver mineralisation and carbonate-hosted willemite (zinc silicate) mineralisation, similar to the deposits in the Beltana area. Other possible types of mineralisation may include sediment-hosted copper deposits, similar to the Zambian Copperbelt style, or associated with diapiric brecciated structures; SEDEX or Mt Isa-type Zn-Pb-Ag deposits associated with pyritic, graphitic shales and dolomites, and structurally-hosted gold deposits associated with large fault systems in the Adelaidean sediments.

Epithermal Gold Silver Deposits

Epithermal style quartz vein hosted gold silver mineralisation has been recognised by the Company in the area northeast of Iron Knob. Epithermal deposits are quartz vein and stockwork style mineralisation that generally form at shallow depths (<1km) when hot hydrothermal fluids associated with volcanic activity boil or encounter different chemical conditions. Epithermal deposits can vary considerably in size, grade and metal association. Examples include Paiingo and Wirralie (North Queensland, Australia), Ladolam-Lihir (PNG), Hishikari (Japan) and Chatree (Thailand). Precious metal mineralised epithermal deposits have not previously been identified in South Australia.

Gawler Craton structurally hosted Gold Deposits

The Gawler Craton hosts a number of gold deposits, including the Challenger Gold Mine, considered to be structurally controlled. Extensive open file databases of calcrete geochemical data have recently been released facilitating the evaluation of these target types. The Company has acquired a suite of tenements covering untested anomalous calcrete gold targets, gold mineralised drill intersections that require follow-up and known poorly tested known gold systems that also require additional evaluation to assess their potential to host economic deposits.

Uranium

Uranium deposits of several types are known in South Australia, the main economic types being the IOCG system at Olympic Dam and palaeochannel sediment hosted deposits such as those being exploited by at Honeymoon on the Curnamona Craton. Both IOCG targets and palaeochannel targets are present on the Company's tenements with IOCG targets such as Marathon South and Titan located in the Lake Torrens Project area and significant portions of the Garford and Wynbring palaeochannels covered by tenements in the central Gawler Craton area. A third important type of uranium mineralisation is the unconformity related style of high grade mineralisation such as that being mined in the Alligator Rivers, Northern Territory (Ranger, Jabiluka) and Athabasca Basin, Canada (MacArthur River, Cigar Lake) areas. The company interprets a number of it's tenements areas as being prospective for this style of mineralisation.

Nickel/Cobalt Sulphide Deposits

Several areas within South Australia are considered prospective for nickel ± cobalt mineralisation, including mafic/ultramafic belts within the Gawler Craton and mafic intrusions (Voiseys Bay style) along the edges of the Gawler Craton. The Company's tenements cover a number of situations with favourable geology or anomalous Ni-Co geochemistry considered of interest for these types of mineralisation.

Diamonds

Desktop studies by the Company recognised the potential of several areas in South Australia to host diamond deposits. Reprocessing of aeromagnetic data and review of open file reports led to recognition of parts of the Torrens Hinge Zone/Stuart Shelf/Willouran Ranges and the central Gawler Craton as very prospective for

DIRECTORS' REPORT

diamonds. Important advances in diamond exploration have taken place since the Lake Torrens project area was assessed for diamonds in the past. Better geophysical surveying and processing tools; better diamond sample processing techniques encompassing finer fractions of stream sediments and loam samples; enhanced analytical techniques for geochemical analysis of outcrop areas; improved understanding of diamond exploration in Australian environments; and an expanded understanding of diamond geology together with recently published geological data and digital exploration data sets, have all combined to greatly increase The Company's chances of locating the primary sources of the diamonds in its tenements.

EXPLORATION RESULTS

SUMMARY

During the financial year, the Company spent \$1,037,0035 on various exploration activities, including:

Lake Torrens Iron Oxide Copper Gold Prospect

• Drilling MS2 to MS4 at Marathon South Prospect: $\bullet$
• Review of all data selection of new target areas; $\bullet$
• Review of existing targets & identification of new targets and exploration techniques; and. $\bullet$
• PACE 2 SA government funding secured to assist with drilling.

Parkinson Dam Epithermal Gold Silver Project

• Geochemical sampling and mapping; $\bullet$
• IP survey:
• Airborne magnetics and radiometrics; and, $\bullet$
• RC Percussion drilling

Central Gawler Craton Projects

• Field visits, prospecting and calcrete sampling;
• HoistEM survey at Wynbring;
• Identification of drill targets and finalisation of drilling programmes; and, $\blacksquare$
• Potential new ultramafic belt located at Sturt

Torrens Hinge Carbonate-hosted Zinc-Lead silver

SDP anomalies recognised

DETAILED EXPLORATION RESULTS

Lake Torrens Project - Iron Oxide Copper Gold Project (Tasman 100%)

The Company holds exploration title to 100% of a number of ELs bordering BHP Billiton's leases approximately 15km to the north and west, and 30km northeast of Olympic Dam. The Company has been conducting exploration for IOCG deposits within the basement and for base metal deposits within the overlying cover sediments for about 5 years.

Much of The Company's work has been focussed at the Titan Prospect following up the initial discovery of IOCG mineralisation made by WMC Resources in 1976 in drill hole BD1 (known at that stage as Bopeechee Prospect). The major part of The Company's work has consisted of detailed geophysics and the drilling of seven holes into basement.

Further significant exploration has occurred at Marathon South, where The Company has drilled three holes into basement, intersecting thick, strongly altered, haematitic breccias containing weak mineralisation. The breccias are of probable Hiltaba age, and thought to have formed from volcanic processes synchronous with formation of the Olympic Dam deposit.

Other prospects identified within the ELs include Vulcan, Zeus, Billy Barnes, Ferguson Hill, Atlas and Parakylia, based on significant gravity anomalies supported by magnetic responses.

DIRECTORS' REPORT

Marathon South Prospect

The Company's 100% owned Marathon South Prospect is located 24 km northeast of Olympic Dam in South Australia. The Company completed the first drill hole into the prospect MS 1 in November 2004.

Drilling at the Marathon South Prospect commenced on 30th July 2005. The SA Government PACE supported programme tested a large complex gravity anomaly (at least 20km2) associated with breccias drilled by The Company in MS1. The breccias show strong similarities with rocks comprising the nearby Olympic Dam deposit. The Company believes it may have discovered a large volcanic breccia system that could host a substantial copper-gold deposit. As at Olympic Dam, the size and complexity of such systems require the drilling of a number of relatively deep holes to adequately assess the potential.

Drill holes MS3 and MS4 intersected strongly brecciated, fractured and veined basement rocks, which have been variably altered with the development of hematite, carbonate minerals, sericite, chlorite and probably albite. There are similarities with the breccias intersected in the first hole at Marathon South, MS1, such as the alteration mineralogy and breccia textures, as well as some differences (for example, there is significantly more carbonate veining in MS4, with veins up to 0.5m wide). Apart from thin (5m to 10m) zones containing weak chalcopyrite mineralisation at the top of the basement, no significant sulphides were intersected.

The rocks have clearly been affected by significant hydrothermal alteration processes, which are interpreted to be analogous to those at Olympic Dam, however, a more detailed review of the drill core, its mineralogy, chemistry (assays) and regional significance is required to enable the most appropriate strategy for further work to be developed. Drilling of a fifth hole has been postponed pending completion of a thorough review of the four holes completed to date.

In summary. The Company is encouraged by the widespread evidence for strong alteration, brecciation and the types of geological processes believed important in the formation of Olympic Dam-type deposits in its initial followup holes over a 20km2 area at Marathon South.

New Exploration Approach

Working with experts from Monash University and PIRSA. The Company Resources has recognised a new technique to assist with targeting uraniferous iron oxide copper gold mineralisation. The technique is heat flow mapping and it has been demonstrated to work over the Olympic Dam orebody.

In prospects with adequate numbers of drill holes, measurements of downhole temperatures and thermal conductivities enable estimates of heat flow to be made. Areas with anomalous uranium will generate higher heat flows due to the heat released by the radiogenic decay from the uranium-bearing minerals. Plotting the results from all the drill holes at a prospect will provide a vector to areas with higher heatflows related to higher uranium contents that are associated with better mineralisation.

Both The Company's Titan and Marathon South prospects have adequate drill holes to attempt this new exploration technique for IOCG deposits. This technique is to supplement studies and ongoing exploration to date. Tests to confirm for open holes and depths are planned for late April, with temperature and conductivity measurements scheduled for May 2006 on the Marathon South Prospect.

Parkinson Dam (formerly Wartaka) Epithermal Gold Silver Project (Tasman 100%)

The Company's 100% owned Wartaka Project is located approximately 60km west of Port Augusta. The Parkinson Dam Prospect resulted from the follow-up of calcrete sampling data collected by a previous explorer in an area The Company had earlier identified as prospective for gold mineralisation and comprises an extensive area with outcropping epithermal gold-silver mineralised quartz veins and float.

Outcropping, subcropping and widely distributed float of epithermal textured banded quartz veining was located during follow-up of gold-in-calcrete anomalies from prior exploration. Reconnaissance rock samples from this material identified gold-silver mineralisation. The mineralisation is interpreted to be epithermal in character due to:

• the presence of "classic" banded quartz veins showing crustiform, colloform, cockade and comb textures, together with complex overprinting relationships (see photographs below);
• a distinctive gold-silver-lead-antimony metal association, typical of epithermal deposits; and,

DIRECTORS' REPORT

evidence of hydrothermal clav alteration in wallrocks at surface. $\bullet$

Epithermal deposits are quartz vein and stockwork style mineralisation that generally form at shallow depths (<1km) when hot hydrothermal fluids associated with volcanic activity boil or encounter different chemical conditions. Epithermal deposits can vary considerably in size, grade and metal association. Examples include Pajingo and Wirralle (North Queensland, Australia), Ladolam-Lihir (PNG), Hishikari (Japan) and Chatree (Thailand), Mineralised epithermal deposits have not previously been identified in South Australia to the company's knowledge.

The Company has completed the following activities:

• Calcrete sampling programmes over a significant part of the project area. These programmes have identified a number of highly anomalous gold-in-calcrete anomalies for drill testing and investigation. The results also highlighted additional areas outside the sampled area where further calcrete sampling is required.
• A gradient array electrical geophysical survey was conducted over part of the initial target area of interest $\bullet$ covering a 1km2 area. The survey produced complex images reflecting the combination of different host rock types, alteration zones and weathering and areas of stronger quartz veining, and assisted in defining initial drill targets.
• Ongoing reconnaissance surface rock chip and float sampling was conducted. This work extended the $\bullet$ area of interest to the southeast, at least 2.4km outside the limits of the calcrete survey noted above. Values up to 265ppb Au were obtained.

Reverse circulation percussion drilling was completed in five separate areas. This first ever drilling programme, totalling 3360m, undertaken at the prospect has confirmed the epithermal interpretation of the mineralisation and intersected strongly anomalous gold, silver and base metal mineralised zones.

Highly anomalous pathfinder element zones were also encountered. There is widespread mineralisation with 0.1-0.4g/t Au and 7-110g/t Ag in 3m composited downhole intervals, with the best gold result being 3.4g/t and 80g/t Ag over 3m downhole.

In addition, local concentrations of highly anomalous base metals have been revealed. For example in one hole, PD021, intersections of 24m at 0.4% Zn and 69m at 0.2% Pb were obtained, again from 3m downhole composite sampling (see Figure 4). This base metal anomalism clearly has no direct economic significance at this stage, but provides key geological information to help define vectors to the most prospective parts of the epithermal system for high grades.

A detailed airborne magnetic and radiometric survey was flown in May 2006. The survey has revealed a wealth of detail, defining geology and structure, clarifying the position of different rock units and revealing a number of unexplained uranium anomalies. The survey has made a significant contribution to the selection of targets for the upcoming drilling programme.

The prospect was also assessed by a leading international epithermal deposit consultant in June 2006. The conclusions of The Company's exploration team were validated during the visit.

The mineralisation is open to north, east, west and at depth, and it is characterised by an enclosing envelope of extensive alteration and wide zones of disseminated mineralisation. Recent mapping has discovered additional outcropping mineralisation that requires drill testing.

In general, the results confirm observations and sampling from surface outcrops, and emphasise the potential of the system. As noted previously, the Parkinson Dam epithermal system extends over a large surface area, but further work is required to establish the limits and erosional depth of the system, and in particular, where in the system are the most likely sites for higher-grade economic mineralisation. This includes investigation of the structural setting, metal zoning and stratigraphic relationships.

The Company is planning to drill about 20 shallow reverse circulation percussion holes designed to test a number of epithermal gold - silver targets. These targets are based on:

• Follow up of mineralisation previously intersected by The Company (e.g. 3m downhole at 3.4g/t Au and 80g/t Ag)
• Newly located outcropping gold-silver mineralisation (rock chip samples up to 1.0g/t Au and 15g/t Ag)
• Highly anomalous calcrete soil samples

DIRECTORS' REPORT

Geological interpretation, including new data from a detailed airborne survey

In addition, a deeper (approximately 300m) diamond drill hole will be drilled to test for higher-grade extensions to thick, but low grade lead-zinc (gold-silver) mineralisation intersected at the northern end of a previous drilling traverse. This mineralisation (with previous intersections of up to 96m at 0.2% Pb and 27m at 0.4% Zn) is believed to be part of the epithermal gold-silver system discovered by The Company last year, and may have the potential to yield economic grades of lead and zinc. Core drilling is expected to commence in September 2006.

Parkinson Dam Uranium Project (Tasman 100%)

The Company has located outcropping uranium mineralisation (as fine-grained uraninite or UO2). This mineralisation was first found by uranium explorer PNC in the mid-1980's, who recognised the uranium potential of the area, but did not test drill this occurrence.

The uraninite is located close to a regional unconformity or geological contact, considered a significant ingredient in certain uranium exploration models. In addition, nearby there are several airborne radiometric anomalies, a soil radon anomaly (from PNC's earlier work) and anomalous surface uranium geochemical values, all of which are untested.

The Company plans to test this area with a number of shallow, reverse circulation holes, as part of the gold-silver drilling programme at Parkinson Dam.

Central Gawler Craton Exploration - Gold and Nickel (Tasman 100%)

The Company has a significant tenement holding in the central Gawler Craton in South Australia. The area is currently a focus for Tertiary channel-hosted (roll front-type) uranium exploration, and also hosts the Challenger and Tarcoola gold deposits and other advanced gold prospects such as Tunkillia.

The Company has acquired a portfolio of selected tenements within the central Gawler Craton, which are considered prospective for uranium, gold, nickel and diamonds. The portfolio was developed by:

• the application of The Company's conceptual models for these types of deposits; $\bullet$
• recognition of significant anomalies or mineralisation; and, $\bullet$
• assessment of the comprehensive geological database provided by SA Government's Primary Industry and Resources Department (PIRSA) which was largely compiled from the results of previous exploration.

Targets and prospects assessed during the years included:

Uranium:

• Wynbring North Prospect $\bullet$
• Garford Channel $\bullet$

Gold:

• Eyre Prospect $\bullet$
• Norman Prospect
• Birdie and Skve Prospects

Nickel:

• Durkin Prospect $\bullet$
• Sturt Prospect

Wynbring North Uranium Project

The project area is within EL 3306 on the Gawler Craton and is located approximately 75km northwest of Tarcoola in South Australia near the Trans-Australia Railway, and is 15km west of the Warrior Uranium deposit which is located in an adjacent palaeochannel draining the same granitic source rocks as the Wynbring Channel.

This area was explored in the early 1980s by uranium explorer PNC (Australia) Pty Ltd and most of PNC's work was south of Tasman's exploration licence. However, PNC reported radiometric anomalies from probing of several drill holes within a Tertiary channel in the southern portion of Tasman's EL 3306, and concluded that roll front-type uranium mineralisation may exist within the channel. Granites, a possible primary source of the uranium, were intersected at the bottom of some of the PNC holes, and outcrops of granite occur sporadically in the catchment of

DIRECTORS' REPORT

the channel.

Interpretation of a new HoistEM (helicopter Electromagnetics) survey over the Wynbring uranium prospect in far west South Australia has confirmed the continuation of the Wynbring palaeochannel northwards from Hindmarsh Resources Ltd's uranium prospective EL 3348 into Tasman's EL 3306. Results from the latest survey suggest that the palaeochannel continues for at least another 13km within Tasman's EL and has several E-W trending tributaries possibly covering a further 30km. The extent of the palaeochannel, as defined by the HoistEM survey, within EL3306, represents a sizable uranium exploration target.

Tasman is currently integrating the available geological and geophysical data relating to Wynbring to assist in planning a cost effective drilling programme. Drilling is anticipated to occur later this year following resolution of access issues and depending on rig availability.

Garford Uranium Project (Tasman 100%)

The Company has tenements covering an approximately 80km length of the Garford palaeochannel on the Gawler Craton 85km southwest of Coober Pedy. The area is prospective for Tertiary palaeochannel-hosted (roll front-type or redox-related) uranium mineralisation.

A Tempest airborne electromagnetic survey over the Garford palaeochannel is planned for early August 2006. The survey is designed to better define the location and depth of the channel to aid planning of follow-up ground exploration such as aircore drilling and down hole gamma logging.

Birdie and Skye Gold Prospects (Tasman 100%)

The Skye and Birdie Prospects are about 95km southwest of Coober Pedy on the Gawler Craton. This area contains five separate areas of interest that were subject to drilling by prior explorers, who reported a number of significant, but sub-economic gold intersections in relatively sparse drilling.

These areas require re-evaluation and possibly further drilling as a result of:

• a better understanding of the complexity and controls on high grade mineralisation likely in this geological $\bullet$ environment, now evident at the Challenger deposit; and,
• a better understanding of the regolith and geochemical dispersion in this terrain. $\bullet$

Based on a reinterpretation of the historical drilling data the Company believes there is an excellent possibility of intersecting higher tenor gold mineralisation between the existing widely spaced shallow holes or at greater depth.

Drilling is planned for September 2006.

Eyre Gold Prospect (Tasman 100%)

Eyre Prospect is located 7km west of the Alice Springs railway line approximately 85km north of Tarcoola.

An intersection of 20m at 53ppb Au (including 8m at 92ppb Au) from 42m to the bottom of the hole and highly anomalous arsenic (20m at 115ppm As from surface in a hole located 40m away) was intersected in RAB drilling in past exploration. Follow up step-out and deeper RC drilling is planned, and offers the potential for an early discovery.

Infill and step-out calcrete samples were collected to better define previously identified gold mineralisation, locate new zones of mineralisation and assist in finalising drill targeting. Results are expected in August 2006.

The Company's objectives at Eyre will be to both explore around mineralisation identified earlier, but poorly tested, and to test new anomalies and zones identified from new work completed by the Company.

Goss and Forest Gold Prospects (Tasman 100%)

Significant gold-in-calcrete anomalies (up to 10ppb Au in areas sampled at about 1.6km sample spacing) were followed up during the year. The Company concluded that no further work was necessary.

Sturt Nickel Project (Tasman 100%)

The Sturt project area is within EL 3341 on the Gawler Craton and is located approximately 85km northwest of

DIRECTORS' REPORT

Tarcoola in South Australia.

Recent fieldwork by Tasman has located an area of weathered ultramafic rocks. These types of rocks have not been mapped in this area before and outcrop is very poor.

A single line of calcrete sampling in this area has returned elevated Ni assays up to 314ppm which supports the interpretation of ultramatics likely being present.

Regional aeromagnetic imagery also supports the interpretation of these rocks as possible ultramafics and/or mafics and shows a strike extent in excess of 10km.

The zone is part of the Fowler Domain of the Gawler Craton and lies on a major regional tectonic feature and boundary. This region has been identified by others as prospective for nickel mineralisation - associated either with komatiitic flows or with Voisey's Bay-style intrusions.

Tasman is planning follow-up calcrete sampling and RAB/aircore drilling to define the geology, rock chemistry and geochemical character of the area to test the nickel potential of this prospect. Drilling is proposed for the third or fourth quarters of 2006, depending on rig availability.

Durkin Nickel Prospect (Tasman 100%)

The northwestern corner of EL3306, which covers the Wynbring North Prospect, comprises the Durkin Prospect.

Durkin is defined by an area of interest for nickel mineralisation based on previous calcrete sampling. Highly anomalous nickel, copper and cobalt-in-calcrete (up to 300ppm Ni, 175ppm Cu and 75ppm Co in samples collected 1km apart) have been reported in prior exploration.

A helicopter-based electromagnetic (HoistEM) survey was completed during the quarter. The survey was designed to:

• locate and define extensions to, and tributaries from the Tertiary Wynbring channel, and
• Test for a strongly conductive geophysical response at Durkin prospect that could be due to nickel $\bullet$ sulphides.

Weak but distinct responses were noted in the Hoistem survey. The Company is currently assessing the significance of these features and whether they warrant drill testing.

Mirrica Gold and Base Metals Project, Southwest Queensland - New Tenement Applications (Tasman 100%)

The Company has identified a new project area in southwest Queensland and applied for two Exploration Permits for Minerals. The area applied for is located on the eastern edge of the Simpson Desert approximately 350km south-southwest of Mt Isa.

The Company's principal exploration target is Mesoproterozoic gold and/or base metal mineralisation under relatively thin cover rocks of the Eromanga Basin and Simpson Desert sands. The prospectivity of the region for uranium and diamonds is also open to further investigation.

Only limited previous exploration has been carried out in the Mirrica Bore area. In the early 1990's BHP identified the area as a zone of unexplained magnetic anomalism that could represent intrusive activity or magnetite creation associated with a major regional structure. BHP proposed geological models of high grade metamorphics with base metals potential (eq. Broken Hill) or mafic-ultramafic intrusions with Ni-Cu-PGE potential. They drilled 21 air core holes to test a number of magnetic anomalies. No significant base metal results were reported however there were no assays for gold. Petrological studies identified sericite-magnetite-pyrite±chalcopyrite alteration in two of the holes.

Surface geochemical sampling of the extensive sand dune terrain by Glengarry Resources from 2002 to 2004 defined a number of soil/lag anomalies. Their highest priority target for follow up based on its coherent nature, probable shallow cover and structural setting, a 3 km long, N-S trending +10 ppb gold anomaly, was not drilled due to access difficulties. The southern part of the anomaly is coincident with a discrete elliptical magnetic high which may represent an intrusive body. Assaying of chips from the collar of a BHP hole to the south of this anomaly returned 0.21g/t Au. Only very limited drill testing of several of the other gold anomalies was completed and none of the anomalies were explained.

DIRECTORS' REPORT

The Company views the Mirrica bore region as an attractive exploration target for a number of reasons:

• Relatively shallow cover: $\bullet$
• Virtually untested province:
• Palaeoproterozoic terrane with potential similarities to the Tanami, Tennant Creek or Challenger (South $\bullet$ Australia) gold provinces;
• Located near major regional structures and possible extensions of the Mt Isa block $\bullet$
• Unexplained significant gold anomalism in soils, lag, calcrete and aircore chips;
• Complex structural setting with folding, faulting, interpreted mafic units, demagnetised zones and $\blacksquare$ alteration noted in the limited drilling;
• No Native Title claim over the area; and,
• A new regional government airborne survey in progress.

The Company intends to:

• verify the gold anomalism identified by previous work; $\blacksquare$
• undertake additional geochemical sampling to better define drill targets and assess new untested geophysical targets;
• process and interpret all available (including the new government airborne survey) geophysical data $\bullet$ including new image processing and qualitative structural interpretations;
• integrate recent advances in the understanding of regolith in exploration geochemistry to better assess the $\bullet$ gold anomalism; and,
• complete aircore and/or deeper RCP drilling of the targets generated.

Data from the Government funded 400m-spaced airborne magnetic and radiometric survey currently in progress will allow a more detailed geophysical interpretation of the area and definition of drill targets than that undertaken by previous explorers.

Grant of the applications is likely to take at least nine months, based on recent experience in Queensland.

Lake Torrens Project - Carbonate-hosted Zinc Lead Exploration

Following the release of Geoscience Australia's seismic data along the Borefield road, north of Roxby Downs, the Company recognized structures within the Adelaidian sediments considered favourable for the focusing of basin dewatering brines into Cambrian carbonates. Such situations are commonly associated with the development of MVT-style zinc, lead and silver ± copper mineralisation.

The innovative SDP soil gas technique has been used to assess the target zone identified on the Stuart Shelf. Results from the field work are awaited. The prospect area was identified from major structures revealed by the seismic survey that could subsequently be recognised on the detailed magnetic images held by The Company over the area.

Robust and coherent SDP geochemical anomalies were defined over two targets. Chudys and 50 Mile, with a range of lesser anomalies defined, in an area approximately 40km north of Olympic Dam (see Figure 1). The Company plans to drill test the targets as soon as a suitable rig can be located and access issues resolved.

The anomalies were defined using soil desorption pyrolysis (or SDP) soil gas geochemistry. The areas and magnitudes of the anomalies are comparable with the responses seen over economic mineralisation in other MVT districts. SDP is a relatively new geochemical technique that involves "fingerprinting" of mineral deposits using gaseous compounds from mineralisation adsorbed on clay particles in the soil.

MVT (Mississippi Valley Type) deposits are limestone-hosted zinc, silver, lead ± copper deposits such as those in WA on the Lennard Shelf, Navan in Ireland or the famous US deposits of the Tri-state area. MVT deposits can be significant high-grade producers of zinc, silver and lead; with estimates that up to a fifth of the world's lead and zinc having been produced from these types of deposits. The Company has previously recognised this style of mineralisation in this area (at Shelf 6).

Financial Position

The net assets of the economic entity have decreased by \$3,354,142 from 30 June 2005 to \$7,362,614 in 2006. This change has largely resulted from the following factors:

DIRECTORS' REPORT

• Loss on de-consolidation and commencement of equity accounting on Eden Energy Limited ceasing to be treated as a subsidiary of Tasman Resources NL
• Ongoing operating costs

The economic entity has no borrowings, however, the group's future depends on its ability to raise future capital. The group's working capital, being current assets less current liabilities, has reduced from \$4,109,964 in 2005 to \$772,852 in 2006.

Significant Changes in State of Affairs

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

$(i)$ 16,806,722 fully paid ordinary shares were issued at an issue price of 11.9 cents per share raising \$2,000,000.00. These shares were issued to Top Energy Pty Ltd pursuant to a resolution passed at a meeting of shareholders held on 25 July 2005.

Changes in controlled entities and divisions:

• Eden Energy Limited the parent company's interest in Eden Energy Limited was diluted following the $(i)$ restructure of Eden's interest in the Brehon Energy PLC group. The parent company's interest was further diluted after Eden Energy Limited completed an initial public offer in May 2006 to list on the Australian Stock Exchange. Tasman Resources NL lost control of Eden Energy Limited on 31 May 2006. The loss of control resulted in a loss of subsidiary of \$1,813,361. From this date, the investment in Eden Energy Limited was accounted for using the Equity Method. Under the Equity Method, the investment is recorded at cost and adjusted for the economic entity's share of losses since the initial date of ownership, resulting in a carrying amount at 30 June 2006 of \$254,206. The economic entity's share of net assets in the Eden Energy Limited economic entity at 30 June 2006 was \$3,996,289. Fair value of the investment at 30 June 2006 based on the closing share price of \$0.13 was \$4,287,385.
• $(ii)$ Fission Energy Ltd (100%) – new company incorporated during the year as a 100% owned subsidiary of Tasman Resources NL.

Adoption of Australian Equivalents to IFRS

As a result of the introduction of Australian equivalents to International Financial Reporting Standards (AIFRS), the company's financial report has been prepared in accordance with those Standards. A reconciliation of adjustments arising on the transition to AIFRS is included in Note 2 to this report.

After Balance Date Events

Issue of options on 14 August 2006 as part of Employees Share Option Plan -

• 2,800,000 options issued free of charge to acquire 1 fully paid ordinary share in Tasman Resources NL;
• Exercisable on or before 30 August 2009 at an exercise price of 20c. $\bullet$

Arkenstone Pty Ltd (GH Solomon) acquired from Top Energy Pty Ltd 7,483,193 shares in Tasman as a result of the partial exercise of an option to purchase the shares. Settlement was 8 September 2006. Arkenstone now holds 15,172,560 shares - 14.735% of shares on issue. GH Solomon interest is now 14.897%.

March Bells Pty Ltd (DH Solomon) acquired from Top Energy Pty Ltd 7,483,193 shares in Tasman as a result of the partial exercise of an option to purchase the shares. Settlement was 8 September 2006. March Bells now holds 15,211,360 shares - 14.772% of shares on issue. DH Solomon interest is now 14.934%.

Resignation of Director - Graham Roland Bedford resigned on 8 September 2006.

Except for the above no other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years.

Future Developments, Prospects and Business Strategies

The Company proposes to continue with its exploration program as detailed in the Review of Operations.

Environmental Issues

The company is the subject of environmental regulation with respect to mining exploration and will comply fully with all requirements with respect to rehabilitation of exploration sites.

	DIRECTORS' REPORT
Information on Directors
Gregory Howard Solomon	Executive Chairman
Qualifications	LLB
Experience	Appointed chairman 1987. Board member since 1987. A solicitor with more than 30 years Australian and international experience in a wide range of areas including mining law, commercial negotiation (including numerous mining and exploration joint ventures) and corporate law. He is a partner in the Western Australian legal firm, Solomon Brothers and has previously held directorships of various public companies since 1984 including two mining/exploration companies.
Interest in Shares and Options	15,378,026 Ordinary Shares in Tasman Resources NL
Directorships held in other listed- entities	Current director of Director of Eden Energy Limited since May 2004.
Douglas Howard Solomon	Non-Executive
Qualifications	BJuris LLB (Hons)
Experience	Board member since 3 April 2003. A Barrister and Solicitor with more than 20 years experience in the areas of mining, corporate, commercial and property law. He is a partner in the legal firm, Solomon Brothers.
Interest in Shares and Options	15,378,027 Ordinary shares in Tasman Resources NL
Directorships held in other listed entities	Current director of Director of Eden Energy Limited since May 2004.
Guy Touzeau Le Page	(Non-Executive)
Qualifications	B.A., B.Sc. (Hons)., M.B.A., ASIA., MAusIMM Bachelor of Arts (University of Adelaide), Bachelor of Science (University of Adelaide), Masters Degree in Business Administration (University of Adelaide), Bachelor of Applied Science (Hons) (Curtin University of Technology), Graduate Diploma in Applied Finance and Investment (Securities Institute of Australia).
Experience	Board member since February 2001. Currently a corporate adviser specialising in resources. He is actively involved in a range of corporate initiatives from mergers and acquisitions, initial public offerings to valuations, consulting and corporate advisory roles. He previously spent 10 years as an exploration and mining geologist in Australia, Canada and the United States. His experience spans gold and base metal exploration and mining geology and he has acted as a consultant to private and public companies. This professional experience included the production of both technical and valuation reports for resource companies.
Interest in Shares and Options	810,779 Ordinary shares in Tasman Resources NL
Directorships held in other listed entities	Current director of Director of Eden Energy Limited since May 2004.
Graham Roland Bedford	Non-Executive nominee of Top Energy Pty Ltd
Qualifications	(F.R.A.I.A.)
Experience	Appointed director 5 September 2005.
	Resigned 8 September 2006

DIRECTORS' REPORT

and management of many major Governmental and private building projects in Australia and overseas. He has also helped establish broad business links with key Chinese business and government enterprises including the resources and energy markets

Interest in Shares and Options 350,000 Ordinary shares in Tasman Resources NL Directorships held in other listed Nil entities

REMUNERATION REPORT

This report details the nature and amount of remuneration for each director of Tasman Resources NL, and for the executives receiving the highest remuneration.

Remuneration policy

The remuneration policy of Tasman Resources NL has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific longterm incentives based on key performance areas affecting the economic entity's financial results. The board of Tasman Resources NL believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the economic entity, as well as create goal congruence between directors, executives and shareholders.

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

• The remuneration policy, setting the terms and conditions for the executive directors and other senior $\ddot{\phantom{0}}$ executives, was developed and approved by the board based on industry reports.
• All executives receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits and options.
• The board reviews executive packages annually by reference to the economic entity's performance. executive performance and comparable information from industry sectors.

Executives are also entitled to participate in the employee share and option arrangements.

All directors and executives receive a superannuation guarantee contribution where required by the government, which is currently 9%, and do not receive any other retirement benefits. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.

All remuneration paid to directors and executives is valued at the cost to the company and expensed. Any shares which may be issued to executives would be valued as the difference between the market price of those shares and the amount paid by the director or executive. Options are valued using the Black-Scholes methodology. No shares or options were issued to directors or executives during the year ended 30 June 2006.

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

Performance-based remuneration

No performance based remuneration was paid during the year.

Details of remuneration for year ended 30 June 2006

The remuneration for each director and each of the executive officers of the consolidated entity during the year was as follows:

	Salary, Fees and annuation Commi- ssions *	Super- Contri- bution	Cash Bonus	Non-cash Options Benefits		Total	Perform-ance related
	\$	\$	\$	S	\$	\$	%
Directors
Gregory Howard Solomon	336,726	23,175			$\overline{\phantom{m}}$	359,901
Douglas Howard Solomon	46,000	4,140			$\overline{\phantom{a}}$	50,140
Guy Touzeau Le Page	46,000	4,140			$\overline{\phantom{0}}$	50,140
Guiting Liu	3,419	$\overline{\phantom{a}}$			÷	3,419
Graham Roland Bedford	38,248	3,082			450	41,780
Gregory Joseph Egan	125,004				$\overline{\phantom{a}}$	125,004
	595,397	34,537			450	630,384
Specified Executives
Roger Marmaro	101,440				$\overline{\phantom{m}}$	101,440
Graham M Jeffress	112,110	13,869			$\overline{\phantom{a}}$	125,979
Robert N Smith	67,500	79,650			$\overline{\phantom{0}}$	147,150	$\overline{a}$
	281,050	93,519			$\qquad \qquad -$	374,569

* Includes amounts paid from Eden Energy Limited and their subsidiaries while Tasman Resources NL retained control.

Performance income as a proportion of total remuneration

No directors or executives are paid performance based bonuses.

Options issued as part of remuneration for the year ended 30 June 2006

Options are issued to directors and executives as part of their remuneration. The options are not issued based on performance criteria, but are issued to the majority of directors and executives of Tasman Resources NL and its subsidiaries to increase goal congruence between executives, directors and shareholders.

	Granted No.	Options as Part of Remune- ration	Total ration Repre- sented by Options	Options Granted Remune- Exercised Lapsed	Options	Total
		\$	%	\$	$(\mathbb{S})$	\$
Directors
Graham Roland Bedford	1,500,000	450	2.1	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	450
	1,500,000	450	2.1	۰		450

Meetings of Directors

During the financial year, 7 meetings of directors were held. Attendances by each director during the year were as follows:

	Directors' Meetings
	Number eligible to attend	Number attended
Gregory Howard Solomon	7	7
Douglas Howard Solomon

DIRECTORS' REPORT

Guy Touzeau Le Page
Graham Roland Bedford

Indemnifying Officers or Auditor

During or since the end of the financial year the company has paid or agreed to pay insurance premiums as follows:

The company has paid premiums to insure the directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of the company, other than conduct involving a wilful breach of duty in relation to the company. The total premium paid was \$38,445.

Options

At the date of this report, the unissued ordinary shares of Tasman Resources NL under option are as follows:

Grant Date	Date of Expiry	Exercise Price	Number under Option
3 March 2005	3 March 2007	\$0.25	200,000
3 March 2005	3 March 2008	\$0.30	200,000
14 August 2006	30 August 2009	\$0.20	2,800,000
			3.200.000

The above options were all granted as part of the Tasman Resources NL Employee Option Plan.

During the year ended 30 June 2006, no options granted under the Tasman Resources NL Employee Option Plan were exercised. No further shares have been issued since that date. No amounts are unpaid on any of the shares.

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

Proceedings on Behalf of Company

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

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

Non-audit Services

The board of directors, is satisfied that the provision of non-audit services during the vear is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor's independence for the following reasons:

• all non-audit services are reviewed and approved by the board prior to commencement to ensure they do ٠ not adversely affect the integrity and objectivity of the auditor; and
• the nature of the services provided do not compromise the general principles relating to auditor independence as set out in the Institute of Chartered Accountants in Australia and CPA Australia's Professional Statement F1: Professional Independence.

The following fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2006:

	\$
Taxation services
Due diligence investigations
Other	10,000
	10,000

DIRECTORS' REPORT

The lead auditor's independence declaration for the year ended 30 June 2006 has been received and can be found on page 23 of the directors' report.

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

Gregory Germannen

Gregory H Solomon Director

Dated this 29^th day of September 2006

Eantleys MRI Parth Partnership
ABM IT 735 344 538

(2020), th Rhogs Pape Roces
Versi Prais VIA 6005
Almoces

PEI BBX 576 Water Penth WA 65P2

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Wana akendegia Comuzia

AUDITORS' INDEPENDENCE DECLARATION Under Section 307C of the Corporations Act 2001

To the Directors of Tasman Resources NC

I declare that, to the best of my knowledge and betief during the year ended 30 June 2006, there have been:

• $\langle 0 \rangle$ no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
• $\langle \mathbf{h} \rangle$ no contraventions of any applicable code of professional conduct in relation to the sudit.

BENTLEYS MRI PERTH PARTNERSHIP

Ar William

MJ HILLGROVE Partner 29 September 2006

West Perth, WA

	Note	Economic Entity		Parent Entity
		2006 \$	2005 \$	2006 \$	2005 \$
Revenue	3	364,162	157,694	207,151	133,009
Discount on acquisition of subsidiary	3		2,070,944
Loss on de-consolidation		(1,693,764)
Cost of sales		(92,028)
Employee benefits expense		(1,280,285)	(433,708)	(503, 498)	(346, 620)
Exploration expenditure written off		(51, 514)	(101, 417)	(51, 514)	(101, 192)
Depreciation and amortisation expense		(35, 650)	(7, 409)	(8,212)	(7, 409)
Impairment of property plant and equipment		(2,304)	(4, 564)		(4, 564)
Impairment of investments			(281, 551)
Share of losses of associates accounted for using the equity method		(67, 495)	(5)
Borrowing costs		(3,892)
Foreign exchange losses		(165)	(2,070)
Marketing		(114, 685)
Administration		(721, 484)	(426, 641)	(338, 216)	(344, 412)
Other expenses		(295, 301)	(49, 517)	(46, 239)	(34, 386)
Profit/(loss) before income tax	4	(3,994,405)	921,756	(740, 528)	(705, 574)
Income tax expense	5
Profit/(loss) from continuing operations		(3,994,405)	921,756	(740, 528)	(705, 574)
Profit/(loss) from discontinued operations
Profit/(loss) for the year		(3,994,405)	921,756	(740, 528)	(705, 574)
Loss attributable to minority equity interest		807,750	227,472
Profit/(loss) attributable to members of the parent entity	2	(3, 186, 655)	1,149,228	(740, 528)	(705, 574)
Basic earnings per share (cents per share)	8	(3.1497)	1.3847	(0.7319)	(0.8501)

INCOME STATEMENT FOR YEAR ENDED 30 JUNE 2006

	Note	Economic Entity		Parent Entity
		2006 \$	2005 \$	2006 \$	2005 \$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	9	678,827	3,754,555	678,825	1,464,898
Trade and other receivables	10	298,515	469,077	298,515	292,291
TOTAL CURRENT ASSETS		977,342	4,223,632	977,340	1,757,189
NON-CURRENT ASSETS
Trade and other receivables	10			986,699
Investments accounted for using the equity method	11	373,804
Financial assets	14		1,310,735	2
Property, plant and equipment	16	24,375	21,349	24,375	21,349
Intangible assets	17	1,543	2,104	1,543	2,104
Other non-current assets	18	6,309,638	5,272,603	6,288,068	5,215,521
TOTAL NON-CURRENT ASSETS		6,709,360	6,606,791	7,300,687	5,238,974
TOTAL ASSETS		7,686,702	10,830,423	8,278,027	6,996,163
CURRENT LIABILITIES
Trade and other payables	19	204,490	113,668	204,490	86,238
TOTAL CURRENT LIABILITIES		204,490	113,668	204,490	86,238
TOTAL LIABILITIES		204,490	113,668	204,490	86,238
NET ASSETS		7,482,212	10,716,755	8,073,537	6,909,925
EQUITY
Issued capital	21	10,830,673	8,926,534	10,830,673	8,926,534
Reserves	22	343,355	343,355	343,355	343,355
Retained earnings/(accumulated) losses		(3,691,816)	(505, 162)	(3, 100, 491)	(2,359,964)
Parent interest		7,482,212	8,764,727	8,073,537	6,909,925
Minority equity interest			1,952,028
TOTAL EQUITY		7,482,212	10,716,755	8.073.537	6,909,925

BALANCE SHEET AS AT 30 JUNE 2006

STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2006

Economic Entity

		Share Capital
	Note	Ordinary	Option Reserve	Accumulated Losses	Minority Equity Interests	Total
		\$	s.	s	\$	\$
Balance at 1 July 2004	$\overline{c}$	6,755,888		(1,654,390) $\sim$		5,101,498
Profit/(loss) attributable to members of parent entity				1,149,228		1,149,228
Profit/(loss) attributable to minority shareholders					(227, 472)	(227, 472)
Shares issued during the year		2,514,001			2,179,500	4,693,501
Revaluation increment/(decrement)		(343, 355)	343,355
Balance at 30 June 2005		8,926,534	343,355	(505, 162)	1,952,028	10,716,755
Shares issued during the year		2.004.140				2,004,140
Transaction costs		(100,000)				(100,000)
Profit/(loss) attributable to members of parent entity				(3, 186, 655)		(3, 186, 655)
Profit/(loss) attributable to minority shareholders					(807,750)	(807,750)
Loss of subsidiary					$-(1, 144, 278)$	(1, 144, 278)
Balance at 30 June 2006		10,830,674	343,355	(3,691,817)		7,482,212

STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2006

Parent Entity

		Share Capital
	Note	Ordinary	Option Reserve	Accumulated Losses	Total
		\$	s	\$	\$
Balance at 1 July 2004		6,755,888		(1,654,390)	5,101,498
Profit attributable to members of parent entity				(705, 574)	(705, 574)
Option reserve on recognition of bonus element of options		(343, 355)	343,355
Shares issued during the year		2,514,001			2,514,001
Balance at 30 June 2005		8,926,534	343.355	(2.359.964)	6,909,925
Shares issued during the year		2,004.139		$\overline{\phantom{0}}$	2,004,139
Transaction costs		(100,000)			(100,000)
Profit/(loss) attributable to members of parent entity			-	(740, 527)	(740, 527)
Balance at 30 June 2006		10,830,673	343,355	(3,100,491)	8,073,537

CASH FLOW STATEMENT FOR YEAR ENDED 30 JUNE 2006

	Note		Economic Entity		Parent Entity
		2006 \$	2005 \$	2006 \$	2005 \$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers		225,178	80,520	125,000	80,520
Payments to suppliers and employees		(2,603,553)	(1,054,374)	(936,096)	(868, 334)
Interest received		138,984	77,174	82,151	52,489
Borrowing costs		(3,892)
Goods and Services Tax refunds		104,050	117,617	104,050	95,823
Net cash provided by (used in) operating activities	25a	(2, 139, 233)	(779,063)	(624, 895)	(639, 502)
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration expenditure		(1, 165, 550)	(660, 110)	(1,060,477)	(603, 449)
Purchase of property, plant and equipment		(25, 637)	(6, 819)	(10, 208)	(6, 819)
Purchase of intangible assets			(1,749)		(1,749)
Investment in associated entities			(1, 341, 298)
Investment in joint venture		(313,079)	(227, 056)
Loans to controlled entities				(963, 914)	(249, 525)
Loans to associated entities		1,176,219	(445, 736)	(30,716)
Cash disposed on loss of subsidiary		(150, 291)
Payment for subsidiary, net of cash acquired		(2,362,297)		(2)
Net cash provided by (used in) investing activities		(2,840,635)	(2,682,768)	(2,065,317)	(861, 542)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares		2,004,140	7,053,321	2,004,140	2,653,320
Share issue costs		(100,000)	(288, 875)	(100,000)	(139, 319)
Net cash provided by (used in) financing activities		1,904,140	6,764,446	1,904,140	2,514,001
Net increase (decrease) in cash held		(3,075,728)	3,302,615	(786, 072)	1,012,957
Cash at beginning of financial year		3,754,555	451,940	1,464,897	451,940
Cash at end of financial year	9	678,827	3,754,555	678,825	1,464,897

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers the economic entity of Tasman Resources NL and controlled entities, and Tasman Resources NL as an individual parent entity. Tasman Resources NL is a listed public company, incorporated and domiciled in Australia.

The financial report of Tasman Resources NL and controlled entities, and Tasman Resources NL as an individual parent entity comply with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.

The following is a summary of the material accounting policies adopted by the economic entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Basis of Preparation

First-time Adoption of Australian Equivalents to International Financial Reporting Standards

Tasman Resources NL and controlled entities, and Tasman Resources NL as an individual parent entity have prepared financial statements in accordance with the Australian equivalents to International Financial Reporting Standards (AIFRS) from 1 July 2005.

In accordance with the requirements of AASB 1; First-time Adoption of Australian Equivalents to International Financial Reporting Standards, adjustments to the parent entity and consolidated entity accounts resulting from the introduction of AIFRS have been applied retrospectively to 2005 comparative figures excluding cases where optional exemptions available under AASB 1 have been applied. These consolidated accounts are the first financial statements of Tasman Resources NL to be prepared in accordance with Australian equivalents to IFRS.

The accounting policies set out below have been consistently applied to all vears presented. The parent and consolidated entities have however elected to adopt the exemptions available under AASB 1 relating to AASB 132: Financial Instruments: Disclosure and Presentation, and AASB 139: Financial Instruments: Recognition and Measurement. Refer to Note 31 for further details on changes in accounting policy.

Reconciliations of the transition from previous Australian GAAP to AIFRS have been included in Note 2 to this report.

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Accounting Policies

a. Going Concern

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

The Group's operations require it to raise capital on an on-going basis to fund its planned exploration program and to commercialise its tenement assets. If the Group does not raise capital in the short term, it can continue as a going concern by reducing planned but not committed exploration expenditure until funding is available and/or entering into joint venture arrangements where exploration is funded by the joint venture partner.

Principles of Consolidation b.

A controlled entity is any entity Tasman Resources NL has the power to control the financial and operating policies of so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 14 to the financial statements. All controlled entities have a June financial year-end.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

Income Tax c.

The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

đ. Property, Plant and Equipment

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

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Plant and equipment

15-50%

Depreciation Rate

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

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

Exploration and Development Expenditure ė.

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

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

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

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

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

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

$\ddot{f}$ Financial Instruments

Recounition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Fair value

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

Impairment

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

Impairment of Assets g.

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the income statement.

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

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

h. Investments in Associates

Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognised group's share of postacquisition reserves of its associates.

i. Interests in Joint Ventures

The economic entity's share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated financial statements. Details of the economic entity's interests are shown at Note 14.

Employee Benefits j.

Provision is made for the company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Equity-settled compensation

The group operates a number of share-based compensation plans. These include both a share option arrangement and an employee share scheme. The bonus element over the exercise price of the employee services rendered in exchange for the grant of shares and options is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares of the options granted.

Cash and Cash Equivalents k.

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

Revenue $\mathbf{L}$

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

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

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

Borrowing Costs m.

All borrowing costs are recognised in income in the period in which they are incurred.

Goods and Services Tax (GST) n.

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Government Grants o.

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.

Comparative Figures p.

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

Critical Accounting Estimates and Judgments

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

Key Estimates - Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

	Note	Previous GAAP at 1 July 2004	Effect of Transition to 1 July 2004 AIFRS	AIFRS at
		\$	\$	\$
Economic Entity
Reconciliation of Equity at 1 July 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents		451,940		451,940
Trade and other receivables		32,831		32,831
TOTAL CURRENT ASSETS		484,771	$\overline{\phantom{a}}$	484,771
NON-CURRENT ASSETS
Property, plant and equipment		26,277	(726)	25,551
Exploration expenditure		4,737,611		4,737,611
Intangible assets			726	726
TOTAL NON-CURRENT ASSETS		4,763,888	$\bar{ }$	4,763,888
TOTAL ASSETS		5,248,659	$\frac{1}{2}$	5,248,659
CURRENT LIABILITIES
Trade and other payables		147,161		147,161
TOTAL CURRENT LIABILITIES		147,161	$\overline{a}$	147,161
NET ASSETS		5,101,498	$\overline{\phantom{a}}$	5,101,498
EQUITY
Issued capital		6,755,888		6,755,888
Reserves
Retained earnings		(1,654,390)		(1,654,390)
Parent interest		5,101,498		5,101,498
Minority equity interest
TOTAL EQUITY		5,101,498		5,101,498

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (CONTID)

	Note	Previous GAAP at 30 June 2005	Effect of Transition to AIFRS	AIFRS at 30 June 2005
		s	\$	s
Reconciliation of Equity at 30 June 2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents		3,754,555		3,754,555
Trade and other receivables		469,077		469,077
TOTAL CURRENT ASSETS		4,223,632	$\frac{1}{2}$	4,223,632
NON-CURRENT ASSETS
Exploration expenditure		5,272,603		5,272,603
Financial assets		1,310,735		1,310,735
Property, plant and equipment		23,453	(1,688)	21,765
Intangible assets			1,688	1,688
TOTAL NON-CURRENT ASSETS		6,606,791	$\overline{\phantom{0}}$	6,606,791
TOTAL ASSETS		10,830,423	$\overline{a}$	10,830,423
CURRENT LIABILITIES
Trade and other payables		113,668		113,668
TOTAL CURRENT LIABILITIES		113,668	$\overline{a}$	113,668
NET ASSETS		10,716,755	$\overline{a}$	10,716,755
EQUITY
Issued capital		9,269,889	(343, 355)	8,926,534
Reserves			343,355	343,355
Retained earnings		(505, 162)		(505, 162)
Parent interest		8,764,727	$\overline{\phantom{0}}$	8,764,727
Minority equity interest		1,952,028		1,952,028
TOTAL EQUITY		10,716,755	$\overline{\phantom{0}}$	10,716,755

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (CONT'D)

	Note	Previous GAAP at 1 July 2004	Effect of Transition to 1 July 2004 AIFRS	AIFRS at
		s	\$	\$
Parent Entity
Reconciliation of Equity at 1 July 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents		451,940		451,940
Trade and other receivables		56,757		56,757
TOTAL CURRENT ASSETS		508,697		508,697
NON-CURRENT ASSETS
Property, plant and equipment			26,277 (726)
Exploration expenditure			4,713,685
Intangible assets			726.
TOTAL NON-CURRENT ASSETS		4,739,962 $\overline{\phantom{a}}$		4,739,962
TOTAL ASSETS		5,248,659 $\overline{\phantom{0}}$		5,248,659
CURRENT LIABILITIES
Trade and other payables			147,161
TOTAL CURRENT LIABILITIES		147,161		147,161
NET ASSETS		5,101,498	$\overline{a}$	5,101,498
EQUITY
Issued capital		6,755,888		6,755,888
Reserves
Retained earnings		(1,654,390)		(1,654,390)
TOTAL EQUITY		5,101,498		5,101,498
	Note	Previous GAAP at 30 June	Effect of Transition to AIFRS	AIFRS at 30 June 2005
		2005
		s	\$	s
Reconciliation of Equity at 30 June 2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents		1,464,898		1,464,898
Trade and other receivables		292,291		292,291
TOTAL CURRENT ASSETS		1,757,189		1,757,189
Property, plant and equipment		23,453	(1,688)	21,765
Exploration expenditure		5,215,521		5,215,521
Intangible assets			1,688	1,688

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (CONT'D)

	Note	Previous GAAP at 30 June 2005	Effect of Transition to AIFRS	AIFRS at 30 June 2005
		\$	\$	\$
TOTAL NON-CURRENT ASSETS		5,238,974		5,238,974
TOTAL ASSETS		6,996,163		6,996,163
CURRENT LIABILITIES
Trade and other payables		86,238		86,238
TOTAL CURRENT LIABILITIES		86,238		86,238
NET ASSETS		6,909,925		6,909,925
EQUITY
Issued capital		9,269,889	(343, 355)	8,926,534
Reserves			343,355	343,355
Retained earnings		(2,359,964)		(2,359,964)
TOTAL EQUITY		6.909.925		6,909,925

	Note	Previous GAAP	Effect of Transition to AIFRS	AIFRS
		2005 S	2005 \$	2005 S
Economic Entity
Reconciliation of Profit or Loss for 2005
Revenue		2,228,638		2,228,638
Employee benefits expense		(433, 708)		(433, 708)
Depreciation and amortisation expense		(7,409)		(7,409)
Exploration expenditure written off		(101, 417)		(101, 417)
Impairment of property, plant and equipment		(4, 564)		(4, 564)
Impairment of investments accounted for using the equity method		(281, 551)		(281, 551)
Share of net profits of associates and joint ventures		(5)		(5)
Other expenses		(478, 228)		(478, 228)
Profit before income tax expense		921,756		921,756
Income tax expense
Profit from continuing operations		921,756		921,756
Profit/(loss) from discontinued operations			۰
Profit for the year		921,756		921,756
Loss attributable to minority equity interest		227,472		227,472
Profit attributable to members of the parent entity		1,149,228	$\overline{a}$	1,149,228

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 2: FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (CONT'D)

	Note	Previous GAAP	Effect of Transition to AIFRS	AIFRS
		2005 S	2005 \$	2005 \$
Parent Entity
Reconciliation of Profit or Loss for 2005
Revenues		133,009		133,009
Employee benefits expense		(346, 620)		(346, 620)
Depreciation and amortisation expense		(7, 409)		(7,409)
Exploration expenditure written off		(101, 192)		(101, 192)
Impairment of property, plant and equipment		(4, 564)		(4, 564)
Other expenses		(378, 798)		(378, 798)
Profit before income tax expense		(705, 574)		(705, 574)
Income tax expense
Profit for the year		(705, 574)		(705, 574)
Profit attributable to members of the parent entity		(705, 574)		(705, 574)

1 July 2004

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 3: REVENUE

		Note	Economic Entity		Parent Entity
			2006 \$	2005 \$	2006 \$	2005 \$
	Operating activities
	sales revenue		100,178
	interest received	3a	138,984	77,174	82,151	52,489
	PACE grant funding		125,000	80,520	125,000	80,520
	Total Revenue		364,162	157,694	207,151	133,009
	Non-operating activities
	discount on acquisition of subsidiary		۰	2,070,944
			-	2,070,944
	Other Income
a.	Interest revenue from:
	other persons		138,984	77,174	82,151	52,489
Total interest revenue			138,984	77,174	82,151	52,489

NOTE 4: PROFIT FOR THE YEAR

		Note	Economic Entity		Parent Entity
			2006 \$	2005 s	2006 \$	2005 \$
а.	Expenses
	Cost of sales		92,028
	Impairment of non-current investments			281,551
	Depreciation and amortisation expense		35,650	7,409	8,212	7,409
	Exploration expenditure written off		51,514	101,417	51,514	101,192
	Impairment of plant and equipment			4,564		4,564
b.	Significant Revenue and Expenses
	The following significant revenue and expense items are relevant in explaining the financial performance:
	Discount on acquisition of subsidiary			2,070,944
	Loss on de-consolidation		(1,693,764)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 5: INCOME TAX EXPENSE

		Note	Economic Entity		Parent Entity
			2006 \$	2005 \$	2006 \$	2005 \$
a.	The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows:
	Prima facie tax payable on profit from ordinary activities before income tax at 30% $(2005:30\%)$
	economic entity		(1, 198, 322)	276,527
	parent entity				(222, 158)	(211, 672)
			(1, 198, 322)	276,527	(222, 158)	(211, 672)
Add:
	Tax effect of:
	loss of subsidiary not allowable		508.129
	other non-allowable items		239	393	159	154
	Deferred tax assets not brought to account		689,954	344,363	221,999	211,518
				621,283
Less:
	Tax effect of:
	discount on acquisition of subsidiary			(621, 283)
	Income tax attributable to entity
	The applicable weighted average effective tax rates are as follows:		Nil%	Nil%	Nil%	Nil%

NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION

Names and positions held of economic and parent entity key management personnel in a. office at any time during the financial year are:

Key Management Person	Position
Gregory Howard Solomon	Executive Director
Douglas Howard Solomon	Non-Executive Director
Guy Touzeau Le Page	Non-Executive Director
Guiting Liu	Non-Executive Director
Graham Roland Bedford	Executive Director
Gregory Joseph Egan	Non-Executive Director
Roger Marmaro	Manager of Brehon Energy PLC
Graham M Jeffress	Geologist
Robert N Smith	Geologist

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION (CONT'D)

$_b$ Compensation Practices

The board's policy for determining the nature and amount of compensation of key management for the group is as follows:

The compensation structure for key management personnel is based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the company. The contracts for service between the company and key management personnel are on a continuing basis, the terms of which are not expected to change in the immediate future. Upon retirement key management personnel are paid employee benefit entitlements accrued to date of retirement.

c. Key Management Personnel Compensation

2006

Key Management Person		Short-term Benefits			Post- employment Benefits
	Cash, salary Cash profit and commis- sions *	share	Non-cash benefit	Other	Super- annuation
	\$	\$	\$	\$	\$
Gregory Howard Solomon	336,726				23,175
Douglas Howard Solomon	46,000				4,140
Guy Touzeau Le Page	46,000				4,140
Guiting Liu	3,419
Graham Roland Bedford	38,248				3,082
Gregory Joseph Egan	125,004
Roger Marmaro	101,440
Graham M Jeffress	112,110				13,869
Robert N Smith	67,500				79,650
	876,447		$\overline{\phantom{a}}$	$\overline{a}$	128,056
Key Management Person	Other Long- term Benefits	Share-based Payment		Total	Performance Related
	Other	Equity	Options
	\$	\$	\$	\$	%
Gregory Howard Solomon				359,901
Douglas Howard Solomon				50,140	۰
Guy Touzeau Le Page				50,140	÷
Guiting Liu				3,419
Graham Roland Bedford			450	41,780
Gregory Joseph Egan			L.	125,004
Roger Marmaro			$\frac{1}{2}$	101,440
Graham M Jeffress				125,979
Robert N Smith	$\equiv$		$\overline{\phantom{0}}$	147,150	$\overline{a}$
	$\overline{a}$	$\frac{1}{2}$	450	1,004,953	$\frac{1}{2}$

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION (CONT'D) 2005

Key Management Person	Short-term Benefits					Post- employment Benefits
	Cash, salary Cash profit and commis- sions *	share	Non-cash benefit	Other		Super- annuation
	\$	\$	\$	\$		\$
Gregory Howard Solomon	177,258					12,578
Douglas Howard Solomon	33,161					2.444
Guy Touzeau Le Page	33,161					2,444
Guiting Liu	9,161
	252,741					17.466

* Includes amounts paid from Eden Energy Limited and their subsidiaries while Tasman Resources NL retained control.

Key Management Person	Other Long- term Benefits	Share-based Payment		Total	Performance Related
	Other	Equity	Options
	\$	\$	\$	\$	%
Gregory Howard Solomon	-		- $\overline{\phantom{a}}$	189,836
Douglas Howard Solomon			$\overline{\phantom{a}}$ -	35,605
Guy Touzeau Le Page	$\overline{a}$		$\overline{\phantom{a}}$ $\overline{\phantom{a}}$	35,605	$\overline{\phantom{a}}$
Guiting Liu	۰		$\qquad \qquad$ ۰	9.161	$\overline{\phantom{a}}$
			$\overline{\phantom{a}}$	270,207

d. Compensation Options

Options Granted As Compensation

						Terms & Conditions for Each Grant
	Vested No.	Granted No.	Grant Date	Value per Exercise Option at Grant Date \$	Price \$	First Date	Last Exercise Exercise Date
Key Management Personnel
Graham Roland Bedford		1.500.000 1.500.000 25/08/05		0.0003	0.20	25/08/05	30/09/09
		1,500,000 1,500,000

The service and performance criteria set to determine compensation are included per Note 6(b) and Note 29.

All options were granted for nil consideration.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION (CONT'D)

$\mathbf{e}$ Options and Rights Holdings

Number of Options Held by Key Management Personnel

	Balance 1.7.2005	Granted as Compen- sation	Options Expired	Net Change Other
Gregory Howard Solomon	4,661,266		(4,661,266)
Douglas Howard Solomon	4,661,267		(4,661,267)
Guy Touzeau Le Page	273.890		(273, 890)
Graham Roland Bedford	200,000	۰	(200,000)
Graham M Jeffress	300,000	$\overline{\phantom{0}}$	(100,000)
Robert N Smith	300,000	$\overline{\phantom{a}}$	(100,000)
Total	10,396,423		(9.996.423)

The Net Change Other reflected above includes those options that have been forfeited by holders as well as options issued during the year under review.

$f_{\rm r}$ Options and Rights Holdings (cont'd)

Number of Options Held by Key Management Personnel

	Total Vested Total Exer- Balance 30.6.2006 30.6.2006		cisable 30.6.2006	Total Unexer- císable 30.6.2006
Gregory Howard Solomon
Douglas Howard Solomon
Guy Touzeau Le Page		۰
Graham Roland Bedford
Graham M Jeffress	200,000	200,000	200,000
Robert N Smith	200,000	200.000	200,000
Total	400,000	400.000	400.000

Shareholdings g.

Number of Shares held by Key Management Personnel

	Balance 1.7.2005	Received as Compen- sation	Options Exercised	Net Change Other*	Balance 30.6.2006
Gregory Howard Solomon	7,255,865			420.168 -	7,676,033
Douglas Howard Solomon	7.374.666			420.168 -	7.794.834
Guy Touzeau Le Page	710,779	-		100.000 -	810,779
Graham Roland Bedford	350.000	-		-	350,000
Robert N Smith	83,000			(33,000) $\overline{\phantom{a}}$	50,000
Total	15,774,310			907.336	16.681.646

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

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 7: AUDITORS' REMUNERATION

		Economic Entity		Parent Entity
	2006 \$	2005 \$	2006 \$	2005 \$
Remuneration of the auditor of the parent entity for:
auditing or reviewing the financial report	15.411	19,350	12.107	14,350
Other	10,000	$\overline{\phantom{a}}$	10.000	-

NOTE 8: EARNINGS PER SHARE

		Economic Entity
		2006 \$	2005 S
a.	Reconciliation of earnings to profit or loss
	Profit/(loss)	(3,994,405)	921,756
	Loss attributable to minority equity interest	807.750	227,472
	Earnings used to calculate basic EPS	(3, 186, 655)	1,149,228
	Dividends on converting preference shares
	Earnings used in the calculation of dilutive EPS	(3, 186, 655)	1,149,228
		No.	No.
ν.	Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS	101, 171, 723	82,994,733
	Weighted average number of options outstanding
	Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS	101.171.723	82,994,733
C.	Diluted earnings per share is not reflected for discontinuing

operations as the result is anti-dilutive in nature

NOTE 9: CASH AND CASH EQUIVALENTS

	Note	Economic Entity		Parent Entity
		2006 \$	2005 \$	2006 \$	2005 S
Cash at bank		678.468	3.753.816	678.468	1,464,160
Cash in hand		359	739	357	738
		678.827	3.754.555	678.825	1,464,898

The effective interest rate on shortterm bank deposits was 5.42% (2005: 4.3%).

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 9: CASH AND CASH EQUIVALENTS (CONT'D)

Reconciliation of cash

Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows:

Cash and cash equivalents	678.827	3.754.555	678.825	1,464,898
Bank overdrafts	-	-
	678.827	3.754.555	678.825	1,464,898

NOTE 10: TRADE AND OTHER RECEIVABLES

		Note	Economic Entity		Parent Entity
			2006 \$	2005 \$	2006 \$	2005 \$
	CURRENT
	GST refunds		20,227	9,468	20,227	6,893
	Deposit - funds held in trust		750	750	750	750
Bonds			5,000	5,000	5,000	5,000
	Cash advances		4,447	8,781	4,447	6,197
			30.424	23,999	30,424	18,840
	Amounts receivable from:
	partly-owned subsidiaries					273,451
	associated companies		268,091	445,078	268.091
			298,515	469,077	298,515	292,291
	NON-CURRENT
	Amounts receivable from:
	wholly-owned subsidiaries				986,699
					986,699

Non-Current receivable consist of receivables from wholly owned entities. There are no repayment a. plans but repayments are made out of surplus profits retained in the subsidiary for these receivables. Hence, the directors consider these receivables to be an investment.

b. The directors consider the receivable can be recovered as the fair value of the net assets of the wholly owned subsidiary exceed the carrying amount of the receivable.

NOTE 11: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

	Note	Economic Entity			Parent Entity
		2006 5	2005 \$	2006	2005 \$
Associated companies	12	373,804	$\qquad \qquad$	$\overline{\phantom{0}}$
		373,804	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 12: ASSOCIATED COMPANIES

Interests are held in the following associated companies

Name		Principal Activities	Country of Incorpor- ation		Shares Ownership Interest		Carry amount of investment
					2006 %	2005 %	2006 \$	2005 \$
Unlisted:
Ltd	Brehon Far East Pte Marketing of	Hythane in Aisa	Singapore	Ord		49.00
Limited.		Brehon Far East Pte Ltd ceased to be an associated company of Tasman Resources NL on 31 May 2006 when Tasman Resources NL lost control of Eden Energy
Listed:
		Eden Energy Limited Hydrogen and Hythane energy development	Australia	Ord	26.96	48.72	373,804
								373,804 1,059,753
			Note		Economic Entity		Parent Entity
				2006	2005	2006		2005
a.	in Equity Accounted Companies	Movements During the Year Investment in Associated		\$	\$	\$		\$
	financial year	Balance at beginning of the
Add:	year	New investments during the		441,299		5
		Share of associated company's profit/(loss) after income tax	12 b	(67,495)		(5)
	year	Balance at end of the financial		373,804
b.	follows:	Equity accounted profits of associates are broken down as
	Share of associate's profit

before income tax expense	(67.495)	(500.441)	-
Share of associate's income tax expense			-
Share of associate's profit after income tax	(67.495)	(500.441)	۰

$\mathbb{L}$

$\overline{\mathbb{R}}$

$\sim$ $\pm$

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 12: ASSOCIATED COMPANIES (CONT'D)

		Note	Economic Entity		Parent Entity
			2006 \$	2005 S	2006 \$	2005 \$
c.	Summarised Presentation of Aggregate Assets, Liabilities and Performance of Associates
	Current assets		7,129,397	438,858
	Non-current assets		8,599,292	434,071
	Total assets		15,728,689	872,929
	Current liabilities		704,917	908,057
	Non-current liabilities		200,615	130,941
	Total liabilities		905,532	1,038,998	$\overline{a}$
	Net assets		14,823,157	(166,069)	$\overline{a}$
	Revenues		27,337
	Profit after income tax of associates		(250, 356)	(1,659,844)
d.	Ownership interest in Eden Energy Limited at that company's balance date was 26.96% of ordinary shares. The reporting date of Eden Energy Limited is 30 June 2006. This reporting date coincides with the entity's holding company. The ordinary shares held in Eden Energy Ltd have a two year escrow period expiring 6 June 2008.
e.	Market value of listed investment in associate		4,287,385

Economic Entity			Parent Entity
2006	2005	2006	2005

a. Interest in Joint Venture Operations

Eden Energy Limited, a controlled entity for part of the year, has entered into a joint venture with Welsh-based Coastal Oil and Gas Limited that will give Eden Energy Limited the right to acquire a 50% interest in Coal Bed Methane (CBM)/Coal Mine Methand (CMM) and Natural Gas has also entered into a JV to acquire a 50% interest (up to 60% if expenditure > 1M) in an enterpreted Oil/Natural Gas

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

	NOTE 13: JOINT VENTURE (CONT'D)

target situated in South Wales coalfields The above are costs incurred to earn those rights. The economic entity lost control of Eden Energy Limited on 31 May 2006 and these costs are no longer recognised as assets of the economic entity.

The economic entity's share of assets employed in the joint venture is:

NON-CURRENT ASSETS

Exploration development expenditure	-	250.983	$\overline{\phantom{a}}$
Total non-current assets		250.983
Net interest in joint venture		250.983

NOTE 14: OTHER FINANCIAL ASSETS

			Note	Economic Entity		Parent Entity
				2006 \$	2005 S	2006 2	2005 S
		Available-for-sale financial assets	14a		1,310,735	2
					1,310,735	2
	Less non-current portion				(1,310,735)	(2)
	Current portion
a.	Assets Comprise	Available-for-sale Financial
		Unlisted investments, at cost
	entities	shares in controlled				2
		interest in joint venture operations			250,983
					250,983	$\overline{2}$
	recoverable amount	Unlisted investments, at
		shares in other related parties, at cost			1,341,303
		Less: Impairment Provision			(281, 551)
					1,059,752
	assets	Total available-for-sale financial			1,310,735	2

Available-for-sale financial assets comprise investments in the ordinary issued capital of various entities. There are no fixed returns or fixed maturity date attached to these investments.

The fair value of unlisted available-for-sale financial assets cannot be reliably measured as variability in the range of reasonable fair value estimates is significant. As a result, all unlisted investments are reflected at cost.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 14: OTHER FINANCIAL ASSETS

			Note	Economic Entity		Parent Entity
				2006 £	2005 \$	2006 \$	2005 \$
b.		Shares in Associated Companies
	i.	Unlisted
		Brehon Energy Plc
		Principal activity is Hydrogen and Hythane technology development and marketing
		Eden Energy Limited has a 100% (2005: 20%) interest in Brehon Energy Plc. Eden Energy is treated as an associated company in 2006.
		Investment at cost		$\overline{\phantom{a}}$	1,341,303
		Less: Impairment Provision		$\overline{\phantom{0}}$	(281, 551)
				-	1,059,752

NOTE 15: CONTROLLED ENTITIES

Controlled Entities Consolidated $a₁$

	Country of Incorporation Percentage Owned (%)*
		2006	2005
Parent Entity:
Tasman Resources NL	Australia
Ultimate Parent Entity
Tasman Resources NL	Australia
Subsidiaries of Tasman Resources NL:
Noble Energy Ltd	Australia	100
Fission Energy Ltd	Australia	100	۰
Eden Energy Ltd	Australia	N/A	48.72

* Percentage of voting power is in proportion to ownership

$\mathbf b$ . Acquisition of Controlled Entities

On 30 June 2005 the parent entity acquired 100% of Noble Energy Limited, with Tasman Resources NL entitled to all profits earned from 30 June 2005 for a purchase consideration of \$1. Tasman Resources NL's interest in Eden Energy Limited was transferred to Noble Energy Ltd on 17 March 2006.

On 30 March 2006 the parent entity acquired 100% of Fission Energy Ltd, with Tasman Resources NL entitled to all profits earned from 30 March 2006 for a purchase consideration of \$1.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 15: CONTROLLED ENTITIES

Disposal of Controlled Entities c.

On 31 December 2005, the parent entity's 48.72% interest in Eden Energy Limited was diluted when Eden Energy Limited acquired the remaining 80.83% of Brehon Energy PLC which was funded by issuing to Brehon Energy PLC shareholders 3.054 Eden Energy Limited shares for every Brehon Energy PLC share held. The parent entity's interest was further diluted following the initial public offer and subsequent listing on the Australian Stock Exchange of Eden Energy Limited in May 2006. The parent entity lost control of Eden Energy Limited and its controlled entities from 31 May 2006.

$\mathbf{d}$ . Controlled Entities with Ownership Interest of 50% or Less

The parent entity held 48.72% of the ordinary shares of Eden Energy Limited as at 30 June 2005. The parent entity was also represented by 3 of the 4 directors on the board of Eden Energy Limited. On 31 May 2006, the parent entity lost control of Eden Energy Limited.

NOTE 16: PROPERTY, PLANT AND EQUIPMENT

	Note	Economic Entity		Parent Entity
		2006 \$	2005 \$	2006 \$	2005 Ş
PLANT AND EQUIPMENT
Plant and equipment:
At cost		62.709	52.501	62.709	52,501
Accumulated depreciation		(38, 334)	(31, 152)	(38, 334)	(31, 152)
Accumulated impairment losses
Total plant and equipment		24.375	21.349	24.375	21,349
Total Property, Plant and Equipment		24.375	21.349	24.375	21,349

Movements in Carrying Amounts a.

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

	Note	Economic Entity		Parent Entity
		2006	2005	2006	2005
		\$	\$	\$	\$
Plant & Equipment
Balance at the beginning of year		21,349	25,166	21,349	25,166
Additions		36,599	7.400	10,208	7,400
Disposals		٠	(4, 564)		(4, 564)
Depreciation expense		(33, 573)	(6,653)	(7, 182)	(6,653)
Carrying amount at the end of year		24,375	21.349	24.375	21,349

b. Impairment losses

The total impairment loss recognised in the income statement during the current period amounted to \$2,304 (2005: \$4,564) and is separately presented in the income statement as 'impairment of property plant and equipment'.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 17: INTANGIBLE ASSETS

	Economic Entity		Parent Entity
	2006 \$	2005 \$	2006 \$	2005 \$
Computer software
Cost	23,628	23.159	23.628	23,159
Accumulated amortisation and impairment	(22, 085)	(21, 055)	(22,085)	(21, 055)
Net carrying value	1,543	2.104	1.543	2,104
Total intangibles	1.543	2.104	1.543	2,104

	Economic Entity		Parent Entity
	2006 2005 \$ \$ 2.104 1.111 1.515 1.749	2006	2005
			\$	\$
Computer Software
Year ended 30 June 2006
Balance at the beginning of year			2.104	1,111
Additions			469	1,749
Amortisation charge	(2,076)	(756)	(1,030)	(756)
Impairment losses
Closing value at 30 June 2006	1.543	2.104	1.543	2,104

Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the income statement. Goodwill has an infinite life.

NOTE 18: OTHER ASSETS

	Note	Economic Entity	Parent Entity
		2006 \$	2005 \$	2006 \$	2005 \$
NON-CURRENT
Exploration expenditure capitalised
exploration and evaluation phases		6,309,638	5.272.603	6.288.068	5.215.521
Total exploration expenditure		6,309,638	5,272,603	6,288,068	5.215.521

Recoverability of the carrying amount of exploration assets is dependent on the successful development and commercial exploitation or sale of respective mining areas.

The company's exploration tenements include areas subject to Native Title Claims. As a result, mining and exploration activities may be subject to exploration and mining restrictions or

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 18: OTHER ASSETS (CONT'D) compensation payments. At the date of this report Work Area Clearance Agreements which enable initial exploration to occur have been finalised with 3 of the 4 Native Title claimant groups, while the 4^th is being negotiated. However, the directors are unable to quantify the financial impact of any future claims.

Future economic benefits arising from the development of uranium deposits are subject to statutory regulations pertaining to uranium mining.

Capitalised costs included in cash flows from investing activities in the cash flow statement

1,165,550 660.110 1.060.477 603.449

NOTE 19: TRADE AND OTHER PAYABLES

	Note	Economic Entity		Parent Entity
		2006	2005	2006	2005
CURRENT		\$	\$	\$	\$
Unsecured liabilities
Trade payables		115,585	41.586	115,585	28,252
Sundry payables and accrued expenses		62,913	72.082	62.913	57,986
Employee entitlements		25,992	-	25,992
		204,490	113,668	204.490	86,238

	NOTE 20: TAX
			Note	Economic Entity		Parent Entity
				2006 \$	2005 \$	2006 \$	2005 \$
a.		Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1b occur
		temporary differences tax losses:			$(1,871,885)$ $(1,567,812)$ $(1,872,451)$ $(1,550,148)$
	سسس		operating losses	3,061,207	2.476.065	3.061.083	2,355,353
				1.189.322	908.253	1.188.632	805.205

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 21: ISSUED CAPITAL

			Economic Entity		Parent Entity
			2006 \$	2005 \$	2006 \$	2005 \$
		102,967,510 (2005: 86,160,788) fully paid
	ordinary shares		10,770,673	8,866,534	10,770,673	8,866,534
		Nil (2005: 43,795,417) options	60,000	60,000	60,000	60,000
			10,830,673	8,926,534	10,830,673	8,926,534
			Economic Entity		Parent Entity
			2006 No.	2005 No.	2006 No.	2005 No.
а.		Ordinary shares
		At the beginning of reporting period	86,160,788	66,752,515	86,160,788	66,752,515
		Shares issued - prior year		19,408,273		19,408,273
		Shares issued during the year
		8 August 2005	16,806,722		16,806,722
		At reporting date	102,967,510		86,160,788 102,967,510	86,160,788
	2005.	On 5 August 2005 the company issued 16,806,722 ordinary shares at \$0.119 per share to Top Energy Pty Ltd for cash pursuant to a resolution passed at a meeting of shareholders held on 25 July
		Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.
	hands.	At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of
b.	Options
		At the beginning of reporting period	44,395,417		34,630,849 44,395,417	34,630,849
		Options issued - prior year		9,764,568		9,764,568
		Options lapsed during the year
		28 February 2006	(43, 795, 417)		$-(43,795,417)$
		3 March 2006	(200,000)		(200,000)
		At reporting date	400,000	44,395,417	400,000	44,395,417
	i.	For information relating to the Tasman Resources NL employee option plan, including details of options issued, exercised and lapsed during the financial year and the options outstanding at year-end, refer to Note 35 Share- based Payments.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 21: ISSUED CAPITAL (CONT'D)

ii. For information relating to share options issued to key management personnel during the financial year, refer to Note 35 Share-based Payments.

NOTE 22: RESERVES

Option Reserve a,

	Economic Entity		Parent Entity
	2006 \$	2005 \$	2006 \$	2005 \$
At the beginning of reporting period	343,355	$\scriptstyle\star$	343.355
Revaluation of employee share options		343.355		343,355
Employee share options issued during the year
At reporting date	343,355	343.355	343.355	343,355
The option reserve records items recognised as expenses on valuation of

employee share options.

NOTE 23: CAPITAL AND LEASING COMMITMENTS

			Note	Economic Entity			Parent Entity
				2006 \$	2005 \$	2006 \$	2005 \$
а.		Capital Expenditure Commitments
		Exploration commitments:
		The company has certain obligations to perform minimum exploration work and to expend minimum amounts of money on such work on mining tenements. These obligations may be varied from time to time subject to approval and are expected to be fulfilled in the normal course of operations of the company subject to the company being able to raise sufficient additional capital.
	Payable:
		not later than 12 months		1,430,000
		between 12 months and 5 years
		greater than 5 years
				1,430,000

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 23: CAPITAL AND LEASING COMMITMENTS (CONT'D)

$_b$ Associates

The economic entity, through Eden Energy Limited, has entered into the following commitments:

To fund exploration i. expenditure in South Wales pursuant to the Joint Venture agreement with Coastal Oil and Gas Limited in respect of coal bed methane, coal mine methane and conventional hydrocarbons on two Petroleum Exploration and Development Licences covering an area of 430km². The estimated aggregate expenditure if these proceed is in the order of $£2 - 2.5$ million over 3 $-5$ years.

NOTE 24: CONTINGENT LIABILITIES AND CONTINGENT ASSETS

		Economic Entity					Parent Entity
		2006 \$		2005 \$		2006 \$		2005 \$
Estimates of the potential financial effect of contingent liabilities that may become payable:
Contingent Liabilities			$\overline{\phantom{a}}$		$\overline{\phantom{0}}$		$\overline{\phantom{a}}$
Contingent Assets	-		-		-		$\overline{\phantom{a}}$

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 25: CASH FLOW INFORMATION

		Economic Entity		Parent Entity
		2006 \$	2005 \$	2006 \$	2005 \$
a.	Reconciliation of Cash Flow from Operations with Profit after Income Tax
	Profit after income tax	(3,994,405)	921.756	(740, 528)	(705, 574)
	Cash flows excluded from profit attributable to operating activities
	Exploration expenditure	(110)
	Non-cash flows in profit
	Amortisation	2,076	756	1,030	756
	Depreciation	33,573	6,653	7,182	6,653
	Write-off of capitalised exploration expenditure	51,514	101,417	51,514	101,192
	Net loss on disposal of property, plant and equipment	2,304	4,564		4,564
	Operating expenses paid by associated entity			13,290
	Discount on acquisition of controlled entity		(2,070,944)
	Net loss on disposal of controlled entity	1,693,764
	Share options expensed	450
	Impairment loss on investment		281,551
	Share of associated companies net loss after income tax and dividends	67,495	5
	Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries
	(Increase)/decrease in trade and term receivables	(6, 424)	8,672	(11, 583)	13,831
	Increase/(decrease) in trade payables and accruals	90,822	(33, 493)	118,252	(60, 924)
	(Increase)/decrease in payables from investing activities	(80,292)		(64, 052)
	Cashflow from operations	(2, 139, 233)	(779,063)	(624, 895)	(639, 502)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 25: CASH FLOW INFORMATION (CONT'D)

b.	Acquisition of Entities
	During the year 100% of the controlled entity Fission Energy Ltd was acquired. Details of this transaction are:
	Purchase consideration
	Cash consideration
	Cash outflow
	Assets and liabilities held at acquisition date
	it was a substitution of the second total form to detect the

Loss of Fission Energy Ltd included in consolidated profit of the group since the incorporation date on 30 March 2006 of $$1.215.$

During the year Eden Energy Limited acquired the remaining 80.83% of the ordinary shares in Brehon Energy PLC. Eden Energy Limited ceased to be controlled by Tasman Resources NL on 31 May 2006.

Disposal of Entities c.

During the year the economic entity lost control of Eden Energy Limited.

NOTE 26: SHARE-BASED PAYMENTS

The following share-based payment arrangements existed at 30 June 2006:

Employee Share Option Plan

The purpose of the Plan is to provide Eligible Employees with an incentive to remain with the Company and to improve the longer-term performance of the Company and its return to shareholders. It is intended that the Plan will enable the Company to retain and attract skilled and experienced Eligible Employees and provide them with the motivation to make the Company more successful.

Eligible Employee means a full or part-time employee or director of the Company or of associated bodies corporate of the Company who is determined by the Board to be an Eligible Employee for the purposes of the Plan or any other person who is declared by the Board to be an Eligible Employee for the purposes of the Plan.

The Exercise Price is whichever is the greater of the following:

• (a) 125% of the Market Price of a Share determined on the date of grant of an Option;
• (b) $20$ cents; or
• (c) any greater price determined by the Board at the time of issue.

The Exercise Period means, in relation to an Option, the period:

• (a) commencing on the second anniversary; and
• (b) ending on the fifth anniversary

of the date of grant of an Option, subject to any variation under Rule 7 or as otherwise determined by the Company at the time of grant of an Option.

The Directors were issued options in May 2001 under the same terms and conditions for those which are listed on the Australian Stock Exchange. These options lapsed on 28 February 2006. The movements in holdings of the Directors are shown at Note 7.

No options have been exercised.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 26: SHARE-BASED PAYMENTS (CONT'D)

The closing share market price of an ordinary share of Tasman Resources NL on the Australian Stock Exchange at 30 June 2006 was \$0.089 (30 June 2005 \$0.175).

All options granted to key management personnel are ordinary shares in Tasman Resources NL, which confer a right of one ordinary share for every option held.

		Economic Entity					Parent Entity
	2006			2005	2006		2005
	Options	Average Price \$	of	Average Exercise Options Exercise Príce \$	Options	Average Exercise Price \$	Number of Weighted Number Weighted Number of Weighted Number of Weighted Options	Average Exercise Price \$
Outstanding at the beginning of the year	600.000	0.25		۰	600.000	0.25
Granted		$\overline{\phantom{0}}$	600,000	0.25		$\overline{\phantom{a}}$	600.000	0.25
Expired	(200, 000)	0.20		$\overline{\phantom{a}}$	(200, 000)	0.20
Outstanding at year- end	400.000	0.275	600,000	0.25	400.000	0.275	600,000	0.25
Exercisable at year- end	400.000	0.275	600,000	0.25	400.000	0.275	600.000	0.25

The options outstanding at 30 June 2006 had a weighted average exercise price of \$0.275 and a weighted average remaining contractual life of 1.2 years. Exercise prices range from \$0.25 to \$0.30 in respect of options outstanding at 30 June 2006.

There were no options granted during the year.

NOTE 27: EVENTS AFTER THE BALANCE SHEET DATE

• a. On 14 August 2006, the company issued 2,800,000 options to acquire 1 fully paid ordinary share in Tasman Resources NL as part of the Employee Share Option Plan. The options were issued for nil consideration and are exercisable on or before 30 August 2009 at an exercise price of 20 cents.
• The financial report was authorised for b. issue on 29 September 2006 by the board of directors.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 28: RELATED PARTY TRANSACTIONS

		Economic Entity		Parent Entity
		2006 \$	2005 \$	2006 \$	2005 \$
	Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.
	Transactions with related parties:
a.	Key Management Personnel
	Management fees and administration fees paid to Princebrook Pty Ltd, a company in which Mr GH Solomon and Mr DH Solomon have an interest.	275,811	231,756	157,500	157,500
	Legal and professional fees paid to Solomon Brothers, a firm of which Mr GH Solomon and Mr DH Solomon are partners.	10,503	38,478	9,139	13,583
	Professional fees paid to RM Capital Pty Ltd, a company in which Mr GT Le Page
	is a director and shareholder.	6,000	92,810	6,000	92,810

NOTE 29: FINANCIAL INSTRUMENTS

Financial Risk Management a.

The group's financial instruments consist mainly of deposits with banks, accounts receivable and payable and loans to and from subsidiaries.

The main purpose of non-derivative financial instruments is to raise finance for group operations.

i. Financial Risks

The main risk the group is exposed to through its financial instruments is credit risk.

Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

The economic entity does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the economic entity.

b. Financial Instruments

i. Interest Rate Risk

The economic entity's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 29: FINANCIAL INSTRUMENTS (CONT'D)

			Fixed Interest Rate Maturing
		Weighted Average Floating Interest Rate Effective Interest Rate
	2006	2005	2006 \$	2005 \$
Financial Assets:
Cash and cash equivalents	5.42%	4.30%	678.827	3,754,555
Total Financial Assets	5.42%	4.30%	678,827	3.754.555

	Non Interest Bearing		Total
	2006 \$	2005 \$	2006 \$	2005 \$
Financial Assets:
Cash and cash equivalents			678,827	3,754,555
Receivables	30.424	23,999	30.424	23,999
Receivables from related parties	268,091	445,078	268,091	445,078
Investments	373,804	1.310.735	373,804	1.310.735
Total Financial Assets	672.319	1.779.812	1.351.146	5,534,367
Financial Liabilities:
Trade and sundry payables	204.490	113,668	204.490	113,668
Total Financial Liabilities	204.490	113,668	204.490	113,668

ii. Net Fair Values

The aggregate net fair values of:

Financial assets and financial liabilities, at the balance date, are approximated by ...................................... their carrying value.

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

	2006		2005
	Carrying Amount \$	Net Fair Value \$	Carrying Amount \$	Net Fair Value \$
Financial Assets
Cash and cash equivalents	678.827	678,827	3.754,555	3.754,555
Available-for-sale financial assets at fair value	373.804	4.287.385	1.310.735	1.310.735
Loans and receivables	298.515	298.515	469.077	469,077
	1,351,146	5.264.727	5.534,367	5.534,367
Financial Liabilities
Trade and sundry payables	240,490	204,490	113,668	113,668
	240,490	204,490	113,668	113,668

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 29: FINANCIAL INSTRUMENTS (CONT'D)

Fair values are materially in line with carrying values except for the economic entity's investment in Eden Energy Limited. The carrying value of the investment is shown at cost to the economic entity. The fair value of the investment is based on the closing share price for Eden Energy Limited ordinary shares at 30 June 2006 of 13 cents.

NOTE 30: CHANGE IN ACCOUNTING POLICY

• The group has adopted the following Accounting Standards for application on or after 1 January a. 2005:
• ...................................... AASB 132: Financial Instruments: Disclosure and Presentation; and
• AASB 139: Financial Instruments: Recognition and Measurement. ......................................

The changes resulting from the adoption of AASB 132 relate primarily to increased disclosures required under the Standard and do not affect the value of amounts reported in the financial statements.

The adoption of AASB 139 has not resulted in material differences in the recognition and measurement of the group's financial instruments.

The following Australian Accounting Standards have been issued or amended and are applicable to b. the parent and economic entity but are not yet effective. They have not been adopted in preparation of the financial statements at reporting date.

AASB Amendment Affected	AASB Standard	Nature of Change in Accounting Policy and Impact	Application Date of Application Date the Standard	for the Group
$2004 - 3$	AASB 1: First-time Adoption of AIFRS	No change, no impact	1 January 2006	1 July 2006
	AASB 101: Presentation of Financial Statements	No change, no impact	1 January 2006	1 July 2006
	AASB 124: Related Party Disclosures	No change, no impact	1 January 2006	1 July 2006
$2005 - 1$	AASB 139: Financial No change, no Instruments: Recognition and Measurement	impact	1 January 2006	1 July 2006
2005-5	AASB 1: First-time Adoption of AIFRS	No change, no impact	1 January 2006	1 July 2006
	AASB 139: Financial No change, no Instruments: Recognition and Measurement	impact	1 January 2006	1 July 2006
2005-6	AASB 3: Business Combinations	No change, no impact	1 January 2006	1 July 2006

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006
NOTE 31: CHANGE IN ACCOUNTING POLICY (CONT'D)
2005-9	AASB 139: Financial Tasman Resources Instruments: Disclosure and Presentation	NL is in the process of evaluating the effect of these changes of which the impact is not reasonably estimable at the date of this financial report.	1 January 2006	1 July 2006
$2005 - 10$	AASB 139: Financial No change, no Instruments: Recognition and Measurement	impact	1 January 2007	1 July 2007
	AASB 101: Presentation of Financial Statements	No change, no impact	1 January 2007	1 July 2007
	AASB 133: Earnings No change, no per share	impact	1 January 2007	1 July 2007
	AASB 132: Financial No change, no Instruments: Disclosure and Presentation	impact	1 January 2007	1 July 2007
	AASB 1: First-time Adoption of AIFRS	No change, no impact	1 January 2007	1 July 2007
New Standard	AASB 7: Financial Instruments: Disclosure	No change, no impact	1 January 2007	1 July 2007
New Standard	AASB 119: Employee Benefits: December 2004	No change, no impact	1 January 2006	1 July 2006

All other pending Standards issued between the previous financial report and the current reporting dates have no application to either the parent or economic entity.

61

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006

NOTE 32: COMPANY DETAILS

The registered office of the company is:

Tasman Resources NL

Level 40, Exchange Plaza

2 The Esplanade

Perth

Western Australia 6000

The principal place of business is:

Tasman Resources NL ...................................... Level 40, Exchange Plaza 3 The Esplanade Perth Western Australia 6000

DIRECTORS' DECLARATION

The directors of the company declare that:

• $\mathfrak{1}.$ the financial statements and notes, as set out on pages 24 to 62, are in accordance with the Corporations Act 2001 and:
• a. comply with Accounting Standards and the Corporations Regulations 2001; and
• b. give a true and fair view of the financial position as at 30 June 2006 and of the performance for the year ended on that date of the company and economic entity;
• $\overline{2}$ . the Chief Executive Officer and Chief Finance Officer have each declared that:
• the financial records of the company for the financial year have been properly maintained in a. accordance with section 286 of the Corporations Act 2001;
• the financial statements and notes for the financial year comply with the Accounting b. Standards; and
• the financial statements and notes for the financial year give a true and fair view; Ċ.
• 1. in the director's opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Gregan Toroman

G H Solomon Director

Dated this 29^th day of September 2006

PO Box 570 West Perm WA 6972

3460 37 778 563 838 Level I. 195 Kaço Pest Rose
West Peth WA GIIS
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scimie/Ožervio, com, su some bestrevs.com.go

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ଜଣୁପୁର୍ଣ୍ଣ କୁହିନ୍ଦୁ ଶ୍ରୀତ
19788900 ବିଷୟ

INDEPENDENT AUDIT REPORT

TO THE MEMBERS OF TASMAN RESOURCES NO

Scope

The financial report and directors' responsibility

The financial report comprises the income statement, balance sheet, statement of changes in equity, cash Sow statement, accompanying notes to the financial statements, and the directors' declaration for Tasman Resources NL (the company) and Tasman Resources NL (the consolidated entity), for the year ended 30 June 2008. The consolidated entity comprises both the company and the entities it controlled daring that year.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2081. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect frace and error, and for the ascounting policies and accounting estimates wherent in the Financia) report.

Audit Approach

We conducted an independent audit in order to express an opinion to the reerabers of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is the of material misstatement. The nature of an audil is influenced by factors such as the use of professional judgment, selective testing, the inherent instations of miernal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guasantee that all material misstalements have been delected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and easit flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a lest basis, information to provide evidence supporting the amounts and disclosures in the financial report, and

assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide asserance on internal controls.

Independence

In conducting our sadit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit Opinion

in our opinion, the financial report of Tasman Resources NL is in accordance with:

(a) the Corporations Act 2001, including:

• i. giving a true and fair view of the company's and the consolidated entity's financial position as at 30 June 2008 and of their performance for the year ended on that date; .
  and
• complying with Accounting Standards in Australia and the Corporations Regulations
  2003; and ii.
• $\langle \mathbf{b} \rangle$ other mandatory professional reporting requirements in Australia.

INNERENT UNCERTAINTY REGARDING THE GOING CONCERN ASSUMPTION

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

GOING CONCERN

As indicated in Note 1, the financial statements have been prepared on the going concern basis and the ability of the company to extinguish its debts as and when they fall due is dependent on the company obtaining adequate funding for existing commitments and new ongoing business activities. Should the company be unable to obtain adequate funding then ongerig sugnificant uncertainty whether the company will be able to continue as a going
there is significant uncertainty whether the company will be able to continue as a going
concern and therefore whether it will realise normal ocurse of business and at the amounts stated in the financial report.

BENTLEYS MRIPERTH PARTNERSHIP

A phil

M J HILLGROVE Partner

Disted lats 29th pay of September 2036.

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

Shareholding

Number of Shareholders 1.535

Distribution of Shareholders Number

No. of Ordinary Shares	Shareholders
$1 - 1.000$	21
$1,001 - 5,000$	237
$5,001 - 10,000$	327
10.001 - 100.000	820
100,001 - and over	130

Marketable Parcels

The number of shareholdings held in less than marketable parcels is 258.

Substantial Shareholders	Ordinary shares
Total issued shares at 21 September 2006	102.967.510
March Bells Pty Ltd	15,211,360
Arkenstone Pty Ltd	15,172,560

Voting Rights

Subject to any rights or restrictions for the time being attached to any classes of Shares (at present there are none), at meetings of shareholders of the Company

• $(a)$ 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 $(b)$ representative of a Shareholder has one vote: and
• on a poll, every person present who is a Shareholder shall, in respect of each fully paid $(c)$ Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid shares, shall have such number of votes as bears the same proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited).

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

20 Largest Shareholders - Ordinary Shares

		Ordinary Fully Paid Shares	% Held of Issued Ordinary Capital
	Name
1.	March Bells Pty Ltd	15,211,360	14.772%
2.	Arkenstone Pty Ltd	15,172,560	14.735%
3.	K & V Lamb Pty Ltd	2,500,000	2.427%
4.	Synthe Pty Ltd	1,724,007	1.674%
5.	RBC Dexia Investor Services Australia Nominees Pty Limited
		1,329,172	1.290%
6.	Sabre Power Systems Pty Ltd	1,000,000	0.971%
7.	Weber, P	1,000,000	0.971%
8.	Scaife, TF	1,000,000	0.971%
9.	Lamb KW & VP < Lamb Superannuation Fund A/c>	940,000	0.912%
10.	5th Avenue Properties Pty Ltd Pty Ltd	747,000	0.725%
11.	ANZ Nominees Limited	745,035	0.723%
12.	Tascoast Pty Ltd Gray PR	729,343	0.708%
13.	Malenki Pty Ltd	719,800	0.699%
14.	Colbern Fiduciary Nominees Pty Ltd	685,000	0.665%
15.	Fortis Clearing Nominees P/L	630,000	0.611%
16.	Fergus, R & N	525,000	0.509%
17.	Powell, JD	521,000	0.505%
18.	Jarra Glen Pty Ltd	500,000	0.485%
19.	Clarke, RS	500,000	0.485%
20.	Watson, BJ	500,000	0.485%
		46.679.277	45.322%