TIVAN LIMITED - Annual Report 2007

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ABN 12 000 817 023

C o n t e n t s

Review of Operations	2
Corporate Governance Statement	13
Directors’ Report	15
Auditor’s Independence Declaration	28
Income Statements	29
Balance Sheets	30
Statements of Cash Flows	31
Statements of Changes in Equity	32
Notes to the Financial Statements	34
Directors’ Declaration	75
Independent Audit Report	76
ASX Additional Information	78

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C o n Review of Operationst e n t s

The 2006/07 fi nancial year represented another year of strong corporate and exploration activity for TNG.

Overview

After laying the foundations for its growth strategy last year, the Company achieved a number of important milestones during the 2007 fi nancial year. To refl ect its broader focus as a base metals company, the Company changed its name during the year from Tennant Creek Gold Limited to TNG Limited (TNG).

The Company’s initial objective was to position itself to commence a major exploration program at the Manbarrum Zinc-Lead-Silver Project in the Northern Territory, and then to add value to the project by initiating resource drilling programs at the Sandy Creek deposit and testing other prospects in the broader project area.

Key highlights for the year included:

the commencement of a Phase 1 resource drilling program at Manbarrum in August 2006, resulting in the defi nition of an initial JORC compliant resource estimate of 10.5 million tonnes @ 3.3% combined Zn-Pb at Sandy Creek;
the re-commencement of exploration at Manbarrum in May 2007 with a budget of more than $8 million to further refi ne and extend the Sandy Creek resource and test other targets;
the appointment of experienced geologist and geochemist, Paul Burton, as Exploration Manager to lead the resource drilling programs at Manbarrum and manage TNG’s extensive exploration portfolio;
the appointment of CSA Australia Limited, the Australian arm of global geological and management consultants CSA, as Manbarrum Project Manager. CSA’s key staff members, led by Dr Simon Dorling, have excelled during a demanding period;
exploration expenditure for the 2006/07 fi nancial year of more than $3.7m. Expenditure spent to the date of this report was $3.2m with a further $1.4m to be spent by November 2007;
the raising of more than $12.8m from placements and the exercise of options to fund the Company’s aggressive exploration programs;
the distribution of the Company’s investments in Thor Mining PLC, Batavia Mining Limited and Western Desert Resources Ltd to TNG shareholders.
• the recent in principle Board approval to proceed with a further restructuring of the Company’s non-core assets, including the potential sale of other tenements and the transfer of its nickel assets to a separate, listed nickel-focused Company. This should result in further distributions to shareholders.

The Company remains well placed to focus on the exploration and development of the Manbarrum Project. This strategic focus is supported by the positive outlook for commodity markets, underpinned by continuing strong levels of demand for both zinc and lead from evolving economies such as China and India.

Most importantly, the year’s achievements would not have been possible without the efforts of a highly dedicated consulting and staff group, and the Board thanks everyone involved with the Company for their efforts.

The Board endeavours to be accessible to all shareholders and stakeholders and encourages interested parties to contact the Company directly or via our website at: www.tngltd.com.au

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Fig. 1: Tenement Map
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Projects

TNG’s main focus is on the Manbarrum Project in the Northern Territory (NT) of Australia, while at the same time maintaining its interest in a number of other prospective tenements in both the NT and Western Australia and managing its Joint Venture interests.

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4
C o n t e n t s
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Manbarrum Project: Zinc-Lead-Silver.

The Manbarrum Project is the Company’s fl agship exploration project.

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Fig. 2: Manbarrum Project Location

Manbarrum is located 82 kilometres north-east of the township of Kununurra in the Northern Territory. The granted Manbarrum tenements comprise three Exploration Licences and an Authority to Prospect (under Section 178) covering a combined area of approximately 550 square kilometres.

The tenements cover a 50 kilometre strike length of the Bonaparte Shelf margin, where widespread Mississippi Valley Type (MVT) Zinc-Lead-Silver mineralisation occurs.

TNG has applied for a further two Exploration Licences on the Western Australia side, which will give TNG comprehensive tenement coverage of the most prospective margins of the Bonaparte Shelf Margin. The Sandy Creek deposit, located in the south west corner of the Manbarrum Project, has been the core focus of TNG’s exploration programs to date. Following completion of the initial drilling program carried out in 2006, a preliminary resource estimate of 10.5 million tonnes @

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3.3% combined Zn/Pb grade was defi ned for Sandy Creek. The Company has identifi ed a number of additional geophysical and geochemical targets within its broader tenement area which represent priority exploration targets for further MVT-style mineralisation along strike from Sandy Creek.

The Sandy Creek deposit is interpreted to be a strata-bound carbonate matrix replacement-type zinc-lead deposit, with similarities to several global MVT deposits (for example, the SE Missouri MVT district and the Tri State district, both in the USA). MVT-style mineralisation generally occurs in clusters with numerous mineralised bodies normally present.

GEOLOGY and MINERALISATION

The Manbarrum Project is located on the eastern margin of the Bonaparte Gulf Basin, where DevonianCarboniferous marine sediments unconformably overlie faulted Proterozoic basement. Three Palaeozoic units are recognised in the area: Devonian Cockatoo Group, Lower Carboniferous Burt Range Formation and Milligans formation.

Milligans Formation black shales and siltstones locally cap the dolomitised Burt Range Formation carbonates and, in conjunction with north-south trending syn-depositional growth faults, provide a prospective setting for MVT base metal sulphide deposits.

EXPLORATION MODEL

2006 EXPLORATION PROGRAM

The Phase 1 reverse circulation (RC) drilling program was completed in mid-November 2006 with a total of 9,605 metres drilled in 63 holes. Excellent results were returned from the drilling, with the majority of holes intersecting signifi cant zinc mineralisation within the Sandy Creek zone, the initial focus of resource drilling. This successful fi rst phase provided the company with suffi cient information to undertake a preliminary resource estimate, which was released in early 2007. The initial JORC compliant resource estimate was 10.5 million tonnes at 3% Zn, 0.74% Pb and 5.5g/t Ag (3.3% Zn Eq).

TNG’s exploration team has confi rmed the potential for the Manbarrum Project to host multiple pods of MVT base metal mineralisation of similar scale or larger than the Sandy Creek deposit.

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Reverse Circulation Drilling, Manbarrum Project
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6
C o n t e n t s
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Table 1: Sandy Creek Resource Estimation, February 2007

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Tonnes
Resource Estimation Category Zn% Pb% Ag g/t Zn + Pb%
Mt
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Pipes	Indicated 3.3 3.5 0.9 6.4 4.4
	Inferred 2.1 4.6 0.3 4.1 4.9
	Total 5.4 3.9 0.7 5.5 4.6
Stratabound	Indicated 4.0 1.9 0.9 5.7 2.8
	Inferred 1.3 2.0 1.3 6.4 3.3
	Total 5.3 1.9 1.0 5.9 2.9
	Grand Total 10.7 3.0 0.8 5.7 3.8

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Fig. 3: 2007 Exploration Prospects
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2007 EXPLORATION PROGRAM

The broader objective of the 2007 exploration program is to confi rm potential of the Manbarrum Project to host multiple deposits and to establish a strategically signifi cant inventory of zinc-lead-silver resources. Drilling programs were initially focussed at the Sandy Creek resource, with further exploration taking place over 34km of the tenement area.

The Phase 2 exploration program commenced in late May 2007, at the conclusion of the northern wet season, and was ongoing at the time of preparing this report.

Table 2: Drilling Summary

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RC DD
Prospect
holes metres holes metres
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Sandy Creek 2006	63	9,605	~~-~~	~~-~~
Sandy Creek 2007 NEIP	52 26	10,536 3,758	37 ~~-~~	7,914 ~~-~~
DJIBITGUN
IN PROGRESS	~~-~~	~~-~~	~~-~~	~~-~~
	141	23,899	37	7,914

*Figures correct as of 3 September 2007. Drilling is ongoing.

The program is focused on confi rming extensions to the current mineralisation at the Sandy Creek deposit and establishing the extent and grade of the expanded resource zone to underpin a revised JORC compliant resource estimate. Additional exploration of other key targets is also being undertaken.

The results received to date indicate that the mineralisation is more extensive and complex than fi rst thought, with a signifi cant quantity of assay results still pending – refl ecting slow turnaround times in the assay laboratories.

Once all the results are received, an updated resource estimate will be completed and the current geological model for the Sandy Creek deposit refi ned.

Exploration has also commenced at two other prospects within the project area, with RC drilling commencing at the North East IP Anomaly (NEIP) in July 2007 and the Djibitgun prospect in September 2007. These targets will continue to be refi ned during the 2007/08 period.

The drilling summary for the Manbarrum Project is shown in the following table:

A detailed high-powered Induced Polarisation (IP) survey was completed during the year over the area from the Sandy Creek to the Landandi prospects. A total of 83 line kilometres were surveyed, with the results highlighting signifi cant anomalies at Browns, Djibitgun and Landandi – which remain high priority targets for the Company’s continuing exploration program.

A detailed gravity survey has been planned to supplement the information already gained.

SANDY CREEK DEPOSIT

The Sandy Creek deposit comprises sphalerite-galenapyrite type mineralisation. It is almost exclusively a primary sulphide deposit, although some secondary zinc mineralisation may be present in the supergene zone. No lead sulphates (anglesite) or carbonates (cerrusite) have been observed.

The mineralisation is predominantly hosted by a quartzsandy carbonate unit, 100-120m thick. In places, the

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C o n t e n t s
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tenor to the IP response generated by the Sandy Creek deposit itself.

mineralisation appears to extend into the underlying silty carbonate unit. High-grade galena mineralisation has been intersected in several holes in the saprolitic clays immediately above the main host unit. This zone is also likely to contain zinc oxide mineralisation.

In July 2007, 27 RC holes (3,932m) were completed at the NEIP Anomaly. Sulphides have been intersected however analytical results are pending.

The mineralisation remains open at depth, to the south, west and north.

The NEIP anomaly represents a key exploration target for TNG in the context of the geological model for the Manbarrum Project as an emerging MVT province comprising multiple pods of mineralisation.

Figure 4 shows a cross section schematic view of the deposit.

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Fig. 4: Cross Section of the Sandy Creek Deposit
Fig. 4: 2007 Exploration Prospects
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RESULTS

Signifi cant results were reported during the year at Sandy Creek. These continue to support the mineralisation style and extend the resource. A large number of results are still awaited and a further refi nement of the geological model and revision of the resource estimate will be completed once all the results are received.

OTHER PROSPECTS

Signifi cant surface geochemical soil and rock zinc-lead anomalies have been identifi ed from historic data within TNG’s tenement portfolio at Manbarrum (Figure 3).

Three of these – Browns, Djibitgun , and Landandi , have coincident IP, gravity and soil zinc anomalism. Interpretations of the gravity and seismic data show that these overlie the prospective sandy dolomite in favourable structural settings.

These remain high priority targets for the company and are considered to represent further MVT-style base metal targets.

NEIP ANOMALY

The NEIP anomaly, which lies 400m to the north-east of the Sandy Creek Main Zone, was defi ned by a large chargeable IP anomaly which, signifi cantly, is of a similar

Drilling at Djibitgun commenced in September 2007 and results are awaited.

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Sphalerite Crystals, Diamond Core, Manbarrum Project

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Galena Mineralisation, Diamond Core, Manbarrum Project

WARRAMUNGA PROJECT NT: Gold – Copper – Bismuth EXPLORER, ROVER, McLAREN CREEK and GOSSE RIVER

TNG has an interest in several granted mining and exploration tenements in the immediate vicinity of the town of Tennant Creek. These tenements contain fi rst order Tennant Creek-style magnetic ironstone targets with the potential to host gold and gold-copper-bismuth deposits.

All projects are hosted within the Warramunga Formation and have the same magnetic trend and magnitude as some of the world-class gold and gold-copper-bismuth deposits in the Tennant Creek Inlier.

TNG has an additional three Exploration Licence applications in the area surrounding Explorer. This area, particularly the Rover prospect, is considered highly prospective because of its geological setting and proximity to the recent successful drilling by Westgold Resources on an adjacent tenement.

No work was carried out on these tenements during the 2007 fi nancial year due to the Company’s focus on the Manbarrum Project. However, fi eld programs are planned for next fi nancial year.

MELVILLE ISLAND: Bauxite

This exploration application covers 1,445 sq km of the northern part of Melville Island, 125km north of Darwin. There is bauxitic laterite development over Tertiary Van Diemen sandstone within the application area. The tenement currently is subject to moratorium by the Tiwi Land Council.

CROKER ISLAND: Bauxite

Two exploration licence applications cover the entire area of Croker Island, located 240km north east of Darwin. Bauxitic laterite development over Cretaceous Bathurst Island Formation sediments has occurred in the application area.

MOUNT PEAKE: Nickel

Mount Peake is located in the Arunta Province, 80 kilometres north east of Alice Springs.

Airborne magnetic surveys have indicated possible ultramafi c intrusion hosted nickel targets.

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C o n t e n t s

OTHER NORTHERN TERRITORY TENEMENTS

TNG holds several other prospects in the Northern Territory which are at various stages of exploration and have not been specifi cally mentioned in this report as only minor work was completed during the year.

WESTERN AUSTRALIAN TENEMENTS –

Carlton Shelf Project : Zinc-Lead-Silver

Burt Range Shelf Project: Zinc-Lead-Silver

Both of these projects were strategically selected in light of the broader zinc-lead potential of the Bonaparte Basin and potential extensions of the Manbarrum Project. Granting of these Exploration Licences is anticipated in late 2007.

CAWSE EXTENDED JV (80% Norilsk Nickel/20% TNG)

Norilsk Nickel Cawse Ltd. (Norilsk) owns and manages the Cawse Nickel-Cobalt Operation near Kalgoorlie in Western Australia, with Norilsk and TNG jointly owning the adjacent Cawse Extended Project. TNG’s interest is 20%, freecarried to production, convertible at TNG’s election to a 2% net smelter return.

The commercial success of the Cawse nickel operation is dependent in part upon the ability of the principal ore type to be benefi ciated. A simple process of rejecting lower grade material on the basis of particle size achieves this. This process, which is called upgrading, enables subgrade material to become commercial ore grade and also enables higher ore grades to be processed in the early parts of the operation. The success of the upgrade process is dependent upon the physical and chemical properties of the ore being processed and the nickel grade of the ore. The upgrade ore type represents >80% of the Cawse nickel resource and is hosted mostly within a limonite unit, represented by goethitic clays in the upper saprolite zone. The ore is crushed and slurried in the upgrade processing circuit. It is then passed over a series of screens that remove all material over 0.5mm. This ensures that coarse material is removed from the main ore stream. The upgrading process is reliant on selectively rejecting lower grade or barren material, which can include silica, magnesite and relict saprock.

TNG has also entered into a separate agreement for a wet tonne royalty payment, which replaces the current agreement only for ore mined from the Unicorn Pit and transported to the Cawse ROM pad. The Cawse Extended Project is located in the Eastern Goldfi elds region of Western Australia approximately 60 kilometres north west of Kalgoorlie.

Four main types of mineralisation have been identifi ed at Cawse. These are the oxide ores of limonite, talc, and siliceous cobalt and the smectite-saprolite ore (locally termed nontronite).

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Table 3: Resource Estimate for Cawse Extended as at end 2006, (source: Norilsk Nickel Cawse)

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Metal Content Metal Volume
Resource Category Product Total Mass (t) ni (%) co (%) ni (t) co (t)
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Measured	Upgrade Ore	2,537,468	0.67	0.03	17,081	858
	Grind Ore	30,775	1.02	0.26	314	80
Indicated	Upgrade Ore	12,112,649	0.70	0.03	84,486	3,544
	Grind Ore	54,993	1.16	0.20	636	111
Inferred	Upgrade Ore	81,550,543	0.70	0.03	566,829	22,985
	Grind Ore	503,850	1.34	0.21	6,756	1,056
Total		96,790,278	0.70	0.03	676,101	28,634

Qualifying statement

1. Reserves and resources have been prepared by J. Fitzsimons, a member of the AusIMM, according to the Australasian Code for Reporting of Mineral Resources and Ore Reserves (“JORC Code”) developed by the Australasian Joint Ore Reserves Committee (“JORC”) formed by the Australian Mining industry Council, The Australasian Institute of Mining and Metallurgy, and The Australian Institute of Geoscientists. The reserves are based on the detailed 4 to 5 year mine production plan and the conceptual life of mine plan where economically viable pits have been identifi ed.

2. Approximate drill spacing used to classify the ore reserves is 20m x 20m for proved and 40m x 40m for probable.

3. Upgrade ore is laterite ore that is put through a benefi ciation circuit prior to treatment through a hydrometallurgical process. A cut-off grade of 0.5% Ni was used with additional modifying factors based on the benefi ciation process to determine the reserves.

4. Grind ore is a siliceous ore with elevated cobalt that is ground in a ball mill prior to treatment through a hydrometallurgical process. Cut-off grade used is 0.8% Ni.

5. The measured and indicated mineral resources are additional to the ore reserves.

6. Metallurgical recovery from the hydrometallurgical process is 92% for Ni and 89% for Co. Overall plant recovery cannot be directly related to the metal contained in the reserve due to the benefi ciation process prior to hydrometallurgical processing.

7. Based on historical performance, an 8% mining loss factor has been incorporated into the reserve numbers. Production performance shows mining dilution to be insignifi cant.

OTHER WESTERN AUSTRALIAN TENEMENTS

TNG holds an interest in two other tenement groups, however, in each case, the Company does not contribute towards exploration expenditure as the projects are subject to joint venture or options for sale. These projects include Kintore East and McTavish.

ENVIRONMENTAL POLICY

As part of TNG environmental policy, the company has contracted GHD (Darwin) to undertake a baseline and monitoring survey of fl ora, fauna and water quality of the Manbarrum project area.

The baseline and initial monitoring surveys have been completed and no issues have arisen.

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C o n t e n t s

TRADITIONAL OWNER POLICY

The Company’s Traditional Owner Policy has been a prime focus of all exploration work undertaken. At Manbarrum this has led to employment of elders, sponsorship of the local community and ongoing training and assistance. The Company enjoys a very good working relationship with the local community.

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CORPORATE ACTIVITIES

THOR MINING PLC & BATAVIA MINING LIMITED

TNG owned shares in both Thor and Batavia at the end of 2006. During the 2007 fi nancial year, these shares were returned to TNG shareholders via an in specie distribution.

The Company also successfully underwrote the outstanding 2007 options which resulted in an additional raising of $9.18m.

The proceeds of the share placement and option exercise underpins the exploration programs at the Manbarrum Project.

SALE OF NON-CORE ASSETS

In February 2007 the Company reached agreement with Western Desert Resources for the sale of a portfolio of non-core mineral assets including the Spring Hill project for 10 million shares in the newly listed Western Desert Resources Ltd.

These shares were distributed to TNG shareholders via an in specie distribution in September 2007.

The rationalisation of other assets will be considered by the Board should suitable transactions be presented.

SALE OF NICKEL ASSETS

The Directors have now announced their intention that TNG’s nickel assets, primarily being the Cawse Extended Project and Mount Peake Project, form the basis of a new company, to be listed on the ASX via an IPO in early 2008. The Board also proposes, subject to obtaining the required approvals, to distribute shares in this company to the shareholders of TNG.

A meeting will be called to place this matter before Shareholders for their consideration.

CHANGE OF NAME

The Company’s shareholders approved a change of name to TNG Limited at a general meeting of shareholders.

PLACEMENT AND UNDERWRITING

In March 2007 TNG placed 6 million shares with CBH Resources Ltd (ASX:CBH) at a price of $0.39. CBH has subsequently increased its holding to almost 16.2 million shares.

This transaction will add to the $15m that has been returned to shareholders by TNG over the past few years, maintaining the Company’s commitment to maximise the value of its assets while at the same time maintaining a vigorous exploration program, and ensuring that adequate liquidity levels are maintained.

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Corporate Governance

TNG is committed to the pursuit of achieving the best value for their shareholders through their efforts in exploration and exploitation of the Company’s tenement assets.

Introduction

TNG Limited (“Company”) has adopted a philosophy which is a commitment to the highest standards of corporate governance. The Company is committed to the pursuit of achieving the best value for their shareholders through their efforts in exploration and exploitation of the Company’s tenement assets. Detailed information of the Company’s corporate governance practices is set out on the Company’s website at www.tngltd.com.au

CORPORATE GOVERNANCE DISCLOSURE

The Code on Corporate Governance requires that every public company disclose its compliance with each principle of the Code. During the fi nancial year 2006/07 (“Reporting Period”) the Company has complied with each of the Ten Essential Corporate Governance Principles and Best Practice Recommendations as published by the ASX Corporate Governance Council, other than in relation to the matters specifi ed below.

Recommendation 2.1, 2.2

2.1 Majority of the Board should be Independent Directors.

The Board considers that Mr Terence N Smith is an Independent Director in accordance with Recommendation 2.1. Whilst the remainder of the Board are not independent, the Board believes that all the individuals on the Board can make, and do make, quality and independent judgements in the best interests of the Company and possess the skills and experience suitable for building the Company. Directors having a confl ict of interest in relation to a particular item of business must absent themselves from the Board meeting before commencement of discussion on the topic.

The Board considers that its structure has been, and continues to be, appropriate in the context of the Company’s history and the size and scale of operations. The Board intends to reconsider its composition as the Company’s operations evolve, and appoint further Independent Directors as appropriate.

2.2 The Chairman should be an Independent Director.

Mr John W Barr is the Chairman and is not considered to be independent in respect of the ASX Corporate Governance Council’s defi nition of independence. The Board considers that the expertise and dedication of Mr John W Barr gives constructiveness and organisation to the Board and its functions.

Recommendation 2.4

A separate Nomination Committee has not been formed. The Board considers that the Company is not currently of a size to justify the formation of a Nomination Committee. The Board as a whole undertakes the process of reviewing the skill base and experience of existing Directors to enable identifi cation of attributes required in new Directors. Where appropriate, independent consultants are engaged to identify possible new candidates for the Board.

Recommendation 4.3

The Audit Committee does not comprise a majority of Independent Directors.

The role of the Audit Committee is carried out by Mr John W.Barr, Mr Neil G Biddle, Mr Michael P Bowen, Mr Edward J Fry and Mr Terence N Smith of which only one member is an Independent Director. The Board considers that given the fi nancial expertise of the members of the Audit Committee, the Company is well serviced by their expertise.

Recommendation 8.1

Non-disclosure of the process of evaluating the Board.

The process for evaluation of the Board, individual Directors and key executives was not disclosed. However, an evaluation of the Board, Directors and key executives does occur on an informal basis by the Chairman at least annually.

Recommendation 9.2

There was no separate Remuneration Committee. The full Board carried out the functions of the Remuneration Committee. All matters of remuneration

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C o n t e n t s

were determined by the Board in accordance with Company’s remuneration policies Corporations Act requirements, especially in respect of related party transactions. That is, no Directors participated in any deliberation regarding their own remuneration or In addition: related issues.

All of the Directors receive a separate Directors’ fee of $40,000 per annum, plus statutory superannuation. In addition:

Kensington Consulting Pty Ltd of which Mr John W Barr is a director, receives a consulting fee for Mr Barr’s services under a service agreement approved at the 2006 Annual General Meeting;
• Hatched Creek Pty Ltd of which Mr Neil G Biddle is a director, receives consulting fees for Mr Biddle’s services under a service agreement approved at the 2006 Annual General Meeting; and

Skills, experience, expertise and term of offi ce of each Director A profi le of each director containing the applicable information is set out in the Directors’ Report.

Identifi cation of Independent Directors

Mr Terence N Smith is independent in accordance with the criteria set out in Box 2.1 of the ASX Principles and Recommendations.

Hardy Bowen, of which Mr Michael P Bowen is a partner, receives legal fees for services provided to TNG; and

Statement concerning availability of independent professional advice

Gimbulki Services of which Mr Edward J Fry is the sole proprietor, receives consulting fees, currently set at a retainer of $10,000 a month, for Mr Fry’s services.
The service agreement for Kensington Consulting Pty Ltd and Hatched Creek Pty Ltd contain a termination clause of a maximum of 12 months ($240,000).

Subject to the approval of the Chairman, an individual director may engage an outside adviser at the expense of TNG for the purposes of seeking independent advice in appropriate circumstances.

Names of Nomination Committee members and their attendance at committee meetings

There is no direct link between remuneration paid to any of the Directors and corporate performance such as bonus payments for achievements of key performance indicators. Remuneration of Directors and key executives is competitively set with the assistance of externally prepared surveys and reports, taking into account the experience and qualifi cations of each individual.

The full Board carries out the functions of the Nomination Committee. The Board did not convene formally as the Nomination Committee during the Reporting Period, but rather, discussed relevant issues on an as-required basis.

Names and qualifi cations of Audit Committee members

The Audit Committee comprises Mr John W Barr, Mr Neil G Biddle, Mr Michael P Bowen, Mr Edward J Fry and Mr Terence N Smith. This Committee is fi nancially literate and possesses fi nancial expertise by virtue of their academic qualifi cations. Mr Edward J Fry has extensive experience in the Australian Resource Sector.

Names of Remuneration Committee members and their attendance at committee meetings

The full Board carried out the function of the Remuneration Committee. During the Reporting Period, the Board did not convene formally as the Remuneration Committee, but rather, dealt with remuneration-related issues on an asrequired basis during regular meetings of the Board.

Number of Audit Committee meetings and names of attendees During the Reporting Period the Audit Committee met with the external auditors in respect of the half year and full year fi nancial reports.

Existence and terms of any schemes for retirement benefi ts for non-executive Directors

There are no retirement benefi ts for non-executive Directors.

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Directors Report

Directors

The Directors present their report for the year ended 30 June 2007. The Directors of the Company at any time during or since the end of the fi nancial year are:

John W Barr CA, FAICD

Chairman

Mr John W Barr was appointed in 1998. He has extensive Australian and international experience with exposure to manufacturing, mining and mineral exploration and development.

Mr Barr has managed his own consultancy business since 1987 which specialises in the management of public companies including advice on capital raisings, mergers and acquisitions, negotiating onshore and offshore acquisitions and joint ventures, negotiating commodity based funding, and compliance with corporate and stock exchange requirements.

During the last four years Mr Barr has served as a director of the following listed companies:

Batavia Mining Limited (2003 to 2005);and • Thor Mining PLC (2005 to date).

Neil G Biddle B.App.Sc(Geology), M.Aus.IMM

Managing Director

Mr Neil G Biddle was appointed in 1998. He has over 18 years professional and management experience in listed public companies involved in mining and exploration. During the last four years Mr Biddle has served as a director of Batavia Mining Limited since 2005 and previously from 2003 to 2004.

Michael P Bowen B.Juris, LLB, B.Com

Non-Executive Director

Mr Michael P Bowen was appointed in 2004. Mr Bowen is a partner of the law fi rm Hardy Bowen, practising primarily corporate, securities, commercial and mining law. During the last four years Mr Bowen has served as a director of the following listed companies:

IMF (Australia) Ltd since 2001;
Medical Corporation Australasia Limited since 2004; • Vietnam Industrial Investments Limited since 2004.

Edward J Fry

Non-Executive Director

Mr Edward J Fry was appointed in 2006. Mr Fry is the proprietor of a Land Access/Management consulting company primarily focusing on Native Title and Exploration and Mine Development Agreements. His past experience includes various positions in the Australian Resources sector including Corporate Offi cer – Native Title and Investor Relations analyst for Normandy Mining Ltd, Senior Offi cer for Aboriginal & Torres Strait Islander Commission and Aboriginal Development Commission.

Terence N Smith Dip.Bus Non-Executive Director

Mr Terence N Smith was appointed in 2004. He was one of the founding partners of the Smith Coffey Group which has provided taxation, accounting and fi nancial advice to clients in Perth for over 34 years prior to his retirement. He has a wide range of business skills in the areas of fi nancial planning and corporate management. Mr Smith holds a number of Directorships in a number of companies in the wine industry.

Mr Smith has served on the Board of Batavia Mining Limited since 2005.

Damian P Delaney

Chief Financial Offi cer and Company Secretary

Mr Damian P Delaney is a Chartered Accountant with many years experience working with international listed companies.

Mr Delaney commenced his career in South Africa, before taking up a series of positions in the United Kingdom. He has held a number of senior CFO and Finance Director positions in the UK.

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C o n t e n t s

Mr Delaney manages all aspects of the Company’s fi nancial, ASX reporting, regulatory and IT operations. He is also CFO and Company Secretary for Batavia Mining Limited and Thor Mining PLC.

Mr Delaney also serves on the Board of Batavia Mining Limited since 2006.

DIRECTORS MEETINGS

The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company during the fi nancial year are:

Director	Number of meetings held during the time the Director held off ce	Number of meetings attended
John W Barr 12 12
Neil G Biddle 12 12
Michael P Bowen 12 12
Edward J Fry 5 5
Terence N Smith 12 12

DIVIDENDS

No dividends were paid during the year and the Directors do not recommend payment of a dividend.

STATE OF AFFAIRS

There were no signifi cant changes in the state of affairs of the Group during the fi nancial year or to the date of this report, although the Directors would like to draw shareholders attention to some matters.

In February 2007 TNG acquired a property to be used as the Kununurra logistics base.

In June 2007 TNG distributed its investment holdings in Batavia Mining Limited and Thor Mining PLC representing a strategic move to return value to shareholders and focus on the Manbarrum Project. This continued in September 2007 with the distribution of Western Desert Resources Ltd shares received in return for the disposal of some non-core tenements in February 2007.

REMUNERATION REPORT

1. Principles of Remuneration

PRINCIPAL ACTIVITIES

The principal activities of the Group during the course of the fi nancial year were the signifi cant exploration of its Manbarrum Project; the review of advanced exploration projects for acquisition; the management of its other exploration properties and management of its interest in the Cawse Extended Project.

There were no other signifi cant changes in the nature of the activities of the Group during the year.

REVIEW AND RESULTS OF OPERATIONS

The operating loss of the Group after income tax for the year was $5,652,091 (2006: profi t $620,323).

A review of the operations during the fi nancial year is set out on pages 2 to 12.

This report details the amount and nature of remuneration of each director of the Company and the executives receiving the highest remuneration.

Key management personnel have authority and responsibility for planning and controlling the activities of the Company and the Group, including Directors of the Company and other Executives. Key management personnel includes the fi ve most highly remunerated s300A Directors and executives for the Company and the Group.

Remuneration Policy – audited

The remuneration policy is to provide a fi xed remuneration component and a specifi c equity related component. The Board believes that this remuneration policy is appropriate

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given the stage of development of the Company and the activities which it undertakes and is appropriate in aligning director and executive objectives with shareholder and business objectives.

The remuneration policy, setting the terms and conditions for the executive Directors and other executives has been developed by the Board after seeking professional advice and taking into account market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.

Directors receive a base fee of $40,000 per annum. Shareholders have approved Directors fees of an amount of up to $200,000 cash in aggregate per annum. Superannuation contributions of 9% are paid on these fees as required by law.

Directors and executives receive either a salary plus superannuation guarantee contributions as required by law, currently set at 9%, or provide their services via a consultancy arrangement. Directors and executives do not receive any retirement benefi ts. Individuals may, however, choose to sacrifi ce part of their salary to increase payments towards superannuation.

Options

All remuneration paid to Directors and executives is valued at cost to the Company and expensed. Options are valued using the Black-Scholes methodology.

The Board policy is to remunerate non-executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board performing the role of 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 Directors is subject to approval by shareholders at a General Meeting. Fees for nonexecutive 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 may receive options.

2. Directors and Executives offi cers remuneration (Company and Consolidated) – audited Details of the nature and amount of each major element of remuneration of each director of the Company and relevant Group executives who receive the highest remuneration and other key management personnel are:

Movement in Options

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Vested and
Held at Granted as Other Held at 30
Exercised exercisable at
1 July 2006 remuneration Changes [3] June 2007
30 June 2007
Directors
John W Barr 5,099,999 3,000,000 (1,830,999) (3,269,000) 3,000,000 3,000,000
Neil G Biddle 7,669,642 3,000,000 (1,140,000) (6,529,642) 3,000,000 3,000,000
Michael P Bowen 2,185,088 2,000,000 - (2,185,088) 2,000,000 2,000,000
Edward J Fry1 - 1,500,000 - - 1,500,000 1,500,000
Terence N Smith 3,510,087 2,000,000 (260,087) (3,250,000) 2,000,000 2,000,000
Executives
Damian P Delaney 1,400,000 1,500,000 - (1,400,000) 1,500,000 -
Paul E Burton2 - 1,500,000 - - 1,500,000 500,000
----- End of picture text -----

1 Appointed 28 November 2006

2 Appointed Exploration Manager 22 January 2007

3 All other changes during the year were disposals off market at published market rates at the date of the transaction

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C o n t e n t s

Directors Remuneration for the year ended 30 June 2007

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Company and Post
Short Term Long Term
Consolidated Employment
Share-based Value of options
Salary &
Directors Other Super Payment Total as a proportion of
Fees
Options remuneration
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Company and Consolidated		Short Term	Short Term	Post Employment	Long Term
Directors		Salary & Fees	Other	Super	Share-based Payment Options	Total	Value of options as a proportion of remuneration

		$	$	$	$	$	%
John W Barr Chairman	2007 148,833 ~~-~~ 3,225 1,182,000 1 1,334,058 89%
	2006 113,000 ~~-~~ 2,700 ~~-~~ 115,700 ~~-~~
Neil G Biddle Managing Director	2007 331,633 ~~-~~ 3,225 1,182,000 1 1,516,858 78%
	2006 132,820 ~~-~~ 2,700 ~~-~~ 135,520 ~~-~~
Michael P Bowen Non-Executive	2007 98,091 ~~-~~ ~~-~~ 788,000 1 886,091 89%
	2006 111,602 ~~-~~ ~~-~~ ~~-~~ 111,602 ~~-~~
Edward Fry Non-Executive	2007 93,333 ~~-~~ 2,100 421,500 2 516,933 82%
	2006 ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~
Terence N Smith Non-Executive	2007 35,833 ~~-~~ 3,225 788,000 1 827,058 95%
	2006 30,000 ~~-~~ 2,700 ~~-~~ 32,700 ~~-~~
Total	2007 707,723 ~~-~~ 11,775 4,361,500 5,080,998
	2006 387,422 ~~-~~ 8,100 ~~-~~ 395,522

1 Options have been valued at $0.394 per option using the Black-Scholes calculation for June 2007

2 Options have been valued at $0.281 per option using the Black-Scholes calculation for December 2006

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Remuneration of the 2 named executives who received the highest remuneration for the year ended 30 June 2007

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Company and Post
Short Term Long Term
Consolidated Employment
Share-based Value of options
Salary
Executives Other Super Payment Total as a proportion of
& Fees
Options remuneration
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Company and Consolidated		Short Term	Short Term	Post Employment	Long Term
Executives		Salary & Fees	Other	Super	Share-based Payment Options	Total	Value of options as a proportion of remuneration

		$	$	$	$	$	%
Damian P Delaney CFO and Company Secretary 1	2007 55,162 ~~-~~ 4,992 94,267 5 154,421 61%
	2006 26,766 ~~-~~ 2,409 47,133 5 76,308 62%
Chris Bath Company Secetary²	2007 ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~
	2006 20,490 5,307 4 1,844 ~~-~~ 27,641 0%
Paul Burton Exploration Manager	2007 79,615 ~~-~~ 7,165 144,500 6 231,280 62%
	2006 ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~
Pedro Kastellorizos Exploration Manager³	2007 ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~
	2006 22,920 ~~-~~ 2,063 ~~-~~ 24,983 0%
Total	2007 134,777 ~~-~~ 12,157 238,767 385,701
	2006 70,176 5,307 6,316 47,133 128,932

1Damian P Delaney is remmunerated by TNG Ltd at a current annual salary of $180,000 and recharged on a pro rata basis to Batavia Mining Ltd and Thor Mining PLC

2Resigned 30 September 2005

3Resigned 3 January 2006

4Includes the provision of a motor vehicle

5Options have been valued at $0.101 per option using the Black-Scholes calculation for the May 2006 issue

6Options have been valued at $0.289 per option using the Black-Scholes calculation for the April 2007 issue

The fair value of the options are calculated at the date of grant using the Black-Scholes model and are allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed above is a portion of the fair value of the options allocated to this reporting period. The terms ‘director’ and ‘executive’ have been treated as mutually exclusive for the purposes of this disclosure.

The following factors and assumptions were used in determining the fair value of options on grant date.

Grant Date	Expiry Date	Fair Value per Option	Exercise Price	Price of Shares on Grant Date	Expected Volatility	Risk free interest rate	Dividend yield
19 June 2007 31 Mar 2010 $0.394 $0.50 $0.760 80.00% 6.48% Nil
30 Nov 2006 31 Nov 2007 $0.281 $0.23 $0.515 60.00% 6.02% Nil
5 Apr 2007 31 Dec 2011 $0.289 $0.38 $0.420 80.00% 6.09% Nil

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C o n t e n t s

3. Options granted as part of remuneration – audited

During the year, the Company granted options for no consideration over unissued ordinary shares in the Company to the following Directors and Executives:

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Number of Number of Fair value Exercise price
Grant Expiry date
Director/Offi cer options granted options vested of option at per option at
Date of options
during 2007 during 2007 Grant Date Grant Date
----- End of picture text -----

Director/Off cer	Number of options granted during 2007	Grant Date	Number of options vested during 2007	Fair value of option at Grant Date	Exercise price per option at Grant Date	Expiry date of options
John W Barr * 1 3,000,000 19 Jun 2007 3,000,000 $0.394 $0.50 31 Mar 2010
Neil G Biddle * 1 3,000,000 19 Jun 2007 3,000,000 $0.394 $0.50 31 Mar 2010
Michael P Bowen * 1 2,000,000 19 Jun 2007 2,000,000 $0.394 $0.50 31 Mar 2010
Edward J Fry * 2 1,500,000 30 Nov 2006 1,500,000 $0.281 $0.23 30 Nov 2007
Terence N Smith * 1 2,000,000 19 Jun 2007 2,000,000 $0.394 $0.50 31 Mar 2010
Damian P Delaney * 3 1,500,000 5 Apr 2007 ~~-~~ $0.289 $0.38 31 Dec 2011
Paul E Burton * 4 1,500,000 5 Apr 2007 500,000 $0.289 $0.38 31 Dec 2011

*1 Options granted approved by shareholders at a General Meeting held 17 May 2007.

*2 Options granted approved by shareholders at an Annual General Meeting held 28 November 2007.

*3 Options granted vest one third 31 December 2007, one third 31 December 2008 and the balance 31 December 2009.

*4 Options granted vest 500,000 31 May 2007, 500,000 31 May 2008 and 500,000 31 May 2009.

All option valuations have been calculated using the Black-Scholes calculation.

No options have been granted since the end of the fi nancial year. The options were provided at no cost to the recipients.

Director/Off cer	Number of options granted during 20062	Grant Date	Number of options vested during 2006²	Fair value of option at Grant Date3	Exercise price per option	Expiry date of options
Damian P Delaney CFO/Company Secretary 1 1,400,000 25 May 2006 466,667 $0.101 $0.15 31 May 2007

1 Appointed Company Secretary 4 November 2005

2 466,667 options were exercisable at 30 June 2006. Balance vested October 2006 and January 2007.

3 Options have been valued at $0.101 per option using the Black-Scholes calculation.

Options granted in the fi nancial year ended 30 June 2006 were approved by shareholders at a General Meeting held 1 March 2006. The options were provided at no cost to the recipients.

All of these options were exercised by the recipients on 31 May 2007.

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4. Exercise of options granted as compensation – audited

During the year the following shares were issued on the exercise of options previously granted as remuneration:

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----- Start of picture text -----

Amount Paid
2007 Number of shares
$/share
Directors
John W Barr 3,269,000 $ 0.15
Neil G Biddle 6,529,642 $ 0.15
Michael P Bowen 2,185,088 $ 0.15
- -
Edward J Fry
Terence N Smith 3,250,000 $ 0.15
Executives
Damian P Delaney3 1,400,000 $ 0.15
Paul E Burton - -
----- End of picture text -----

2006	Number of shares	Amount Paid $/share
Directors
John W Barr 1,700,000 $ 0.15
Neil G Biddle 1,500,000 $ 0.15
Michael P Bowen 650,000 $ 0.15
Terence N Smith ~~-~~ ~~-~~
Executives
Damian P Delaney 3 ~~-~~ ~~-~~
Chris Bath 1 1,200,000 $ 0.15
Pedro Kastellorizos 2 200,000 $ 0.15

1 Resigned 30 September 2005

2 Resigned 3 January 2006

3 Appointed Company Secretary 4 November 2005

There are no amounts unpaid on the shares issued as a result of the exercise of the options in 2006 or 2007.

A N N U A L R E P O R T 2 0 0 7

C o n t e n t s

5. Analysis of options and rights over equity instruments granted as compensation – unaudited.

Details of the vesting profi le of the options granted as remuneration to each director of the Company and relevant group executive who receive the highest remuneration is detailed below:

	Options Granted	Options Granted				Value yet to Vest $	Value yet to Vest $
	Number	Date1	% vested in year	Forfeited in Year (a)	Financial years in which grant vests	Min (b)	Max (c)
Directors
Terence N Smith	1,500,000 2 June 2006 100% ~~-~~ 2005 ~~-~~ ~~-~~
Executives
Damian P Delaney	466,667 25 May 2006 33.3% ~~-~~ 2006 ~~-~~ ~~-~~
	933333 25 May 2006 66.7% ~~-~~ 2007 ~~-~~ 141399

a. The percentage forfeited in the year represents the reduction from the maximum number of options available to vest due to the highest level performance criteria not being achieved.
b. The minimum value of options yet to vest is $nil as the performance criteria may not be met and consequently the option may not vest.
c. The maximum value of options yet to vest is not determinable as it depends on the market price of shares of the Company on the ASX at the date the option is exercised. These share prices represent a maximum price included in the volatility assumptions within the valuation of the options.

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6. Analysis of movements in options – unaudited

The movement during the reporting period, by value, of options over ordinary shares held by each Company Director and each relevant group executive is detailed below:

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Value of Options
Granted in year (a) Exercised in year (b) Forfeited in year (c) Total option
value in year
$ $ $ $
----- End of picture text -----

Directors	Directors
John W Barr		1,182,000	964,940		~~-~~	2,146,940
Neil G Biddle		1,182,000	2,042,873		~~-~~	3,224,873
Michael P Bowen		788,000		710,154	~~-~~	1,498,154
Edward J	Fry	421,500		~~-~~	~~-~~	421,500
Terence N Smith		788,000	1,041,750		~~-~~	1,829,750
Executives
Damian P Delaney		433,500	462,000		~~-~~	895,500
Paul E Burton		433,500		~~-~~	~~-~~	433,500

a. The value of the options granted in the year is the fair value of the options calculated at the grant date using the Black-Scholes model. The total value of the options granted is included in the table above. This amount is allocated to remuneration over the vesting period.

b. The value of the options exercised during the year is calculated as the market price of shares of the Company on the ASX as at close of trading on the date the options were exercised after deducting the price paid to exercise the option. c. The value of the options that lapsed during the year represents the benefi t forgone and is calculated at the date the option lapsed using the Black-Scholes model with no adjustments for whether the performance criteria have or have not been achieved.

A N N U A L R E P O R T 2 0 0 7

C o n t e n t s

DIRECTORS’ INTERESTS

The relevant interest of each Director in the shares and options over such instruments issued by the companies within the Group and other related body corporates, as notifi ed by the Directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

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Options over
Director Ordinary Shares
Ordinary Shares
----- End of picture text -----

John W Barr	11,120,000	3,000,000
Neil G Biddle	10,356,625	3,000,000
Michael P Bowen	3,265,090	2,000,000
Edward J Fry	526,785	1,400,000
Terence N Smith	5,272,710	2,000,000

Unissued shares under option

At the date of this report unissued ordinary shares of the Company under option are:

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----- Start of picture text -----

Expiry date Exercise price [1] Number of options
----- End of picture text -----

			$0.23	1,400,000
	31	December 2011	$0.38	5,100,000 2
	31	March 2010	$0.50	12,500,000

1 Subsequent to the balance sheet date the exercise prices have been adjusted in accordance with ASX Listing Rule 7.22.3 due to the capital reduction as a result of the distribution of the investments in Batavia Mining Ltd, Thor Mining PLC and Western Desert Resources Ltd.

2 Includes 4,600,000 options not yet vested.

ETHICAL STANDARDS

All Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Group. Every employee has a nominated supervisor to whom they may refer any issues arising from their employment.

Code of Conduct

Commitment of the Board and Management to Corporate Code of Conduct

The Board and management approve and endorse this code of conduct and support the code and all it strives to achieve.

The Board and management encourage all staff to consider the principles of the code and use them as a guide to determining how to respond when acting on behalf of the Company.

This code of conduct sets out the standard which the Board, management and employees of the Company are encouraged to comply with when dealing with each other, shareholders and the broader community.

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Responsibilities to Shareholders and the Financial Community generally

The Company aims:

To increase shareholder value within an appropriate framework which safeguards the rights and interests of the Company’s shareholders and the fi nancial community; and

To comply with systems of control and accountability which the Company has in place as part of its corporate governance with openness and integrity.

Responsibilities to Clients, Customers and Consumers

The Company is to comply with all legislative and common law requirements which affect its business, in particular those in respect of occupational health and safety, the environment, native title and cultural heritage. Any transgression from the applicable legal rules is to be reported to the managing director as soon as a person becomes aware of such a transgression.

Employment Practices

The Company will employ the best available staff and consultants with skills required to carry out vacant positions.

The Company will ensure a safe work place and maintain proper occupational health and safety practices commensurate with the nature of the Company’s business and activities.

Responsibility to the Community

The Company will recognise, consider and respect environmental issues which arise in relation to the Company’s activities and comply with all applicable legal requirements.

Responsibility to the Individual

The Company recognises and respects the rights of individuals and to the best of its ability will comply with the applicable legal rules regarding privacy, privileges, private and confi dential information.

Obligations Relative to Fair Trading and Dealing

The Company will deal with others in a way that is fair and will not engage in deceptive practices.

The Board, management and employees must not involve themselves in situations where there is a real or apparent confl ict of interest between them as individuals and the interests of the Company. Where a real or apparent confl ict of interest arises the matter should be brought to the attention of the Chairperson in the case of a Board member or the Managing Director, the Managing Director in the case of a member of management and a supervisor in the case of an employee, so that it may be considered and dealt with in an appropriate manner for all concerned.

Compliance with the Code

Any breach of compliance with this code is to be reported directly to the Managing Director or Chairperson, as appropriate.

Periodic Review of Code

The Company will monitor compliance with the code periodically by liaising with the Board, management and staff especially in relation to any areas of diffi culty which arise from the code and any other ideas or suggestions for improvement of the code. Suggestions for improvements or amendments to the code can be made at any time by providing a written note to the Managing Director.

Incorporation of Code of Conduct for executives

The Code of Conduct for executives forms part of this Corporate Code of Conduct. It provides as follows: All executives will:

Actively promote the highest standards of ethics and integrity in carrying out their duties for the Company.
Disclose any actual or perceived confl icts of interest of a direct or indirect nature of which they become aware and which they believe could compromise in any way the reputation or performance of the Company.

A N N U A L R E P O R T 2 0 0 7

C o n t e n t s

Respect confi dentiality of all information of a INDEMNIFICATION AND INSURANCE OF DIRECTORS confi dential nature which is acquired in the course AND OFFICERS of the Company’s business and not disclose or make The Company has agreed to indemnify current and

improper use of such confi dential information to former Directors and offi cers against all liabilities to

any person unless specifi c authorisation is given for another person (other than the Company or a related body

disclosure or disclosure is legally mandated. corporate), including legal expenses that may arise from

Deal with the Company’s customers, suppliers, their position as Directors and offi cers of the Company competitors and each other with the highest level of and its controlled entities, except where the liability honesty, fairness and integrity and to observe the rule arises out of conduct involving a lack of good faith or for a and spirit of the legal and regulatory environment in pecuniary penalty under section 1317G or a compensation which the Company operates. order under section 1317H of the Corporations Act 2001.

The Company has agreed to indemnify current and former Directors and offi cers against all liabilities to another person (other than the Company or a related body corporate), including legal expenses that may arise from their position as Directors and offi cers of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith or for a pecuniary penalty under section 1317G or a compensation order under section 1317H of the Corporations Act 2001.

Protect the assets of the Company to ensure availability for legitimate business purposes and ensure all corporate opportunities are enjoyed by the Company and that no property, information or position belonging to the Company or opportunity arising from these are used for personal gain or to compete with the Company.

INSURANCE PREMIUMS

The Directors have not included details of the amount of the premium paid in respect of the Directors’ and Offi cers’ liability insurance contracts, as such disclosure is prohibited under the terms of the contract.

ENVIRONMENTAL REGULATIONS

Report any breach of this code of conduct to the chairperson, who will treat reports made in good faith of such violations with respect and in confi dence.

The Group’s operations are not subject to any signifi cant environmental regulations under either Commonwealth or State legislation. However, the Board believes that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Group.

Indigenous Policy

TNG recognises the traditional attachment and customary requirements and preservation of culture and customs by Indigenous people in relation to land.

EVENTS SUBSEQUENT TO REPORTING DATE

It is our desire to develop long term relationships with Indigenous people and communities where we conduct exploration and mine development and operations. The Company’s Indigenous Policy can be found on our website www.tngltd.com.au

Western Desert Resources Pty Ltd Distribution

In February 2007, TNG executed an agreement with Western Desert Resources Pty Ltd (WDR) to dispose of a number of TNG’s non-core tenements for a consideration of 10 million WDR shares upon a successful listing. On 19 July 2007, WDR was successfully listed on the ASX and the sale was completed.

LIKELY DEVELOPMENTS

The Group will continue to develop its Northern Territory exploration projects and manage its interest in Cawse Extended.

At a general meeting held on 4 September 2007 the shareholders approved the distribution of these shares as a return of capital. The WDR shares were distributed on the basis of 1 WDR share for every 18.22 TNG shares held on the record date of 13 September 2007.

Additional comments on likely developments of the Group are included under the review of operations and activities on pages 2 to 12. of this report.

A N N U A L R E P O R T 2 0 0 7

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Proposed IPO of Subsidiary

The Board has approved to proceed with a further restructuring of the Company’s non-core assets, including the potential sale of other tenements and the transfer of its nickel assets in Western Australia to a separate, nickel-focused listed Company. This should result in further distributions to shareholders.

Major Expenditure

Exploration expenditure since 1 July 2007 to the date of this report is $3.2m with a further commitment of $1.4m to November 2007.

Capital Changes

Since 1 July 2007 a director, Mr Edward J Fry, has exercised 100,000 options.

NON AUDIT SERVICES

KPMG, the Company’s auditor did not perform any other services in addition to their statutory duties.

AUDITOR INDEPENDENCE DECLARATION

The auditor’s independence declaration is included on page 28 of the fi nancial report and forms part of the Directors’ report for the fi nancial year ended 30 June 2007.

Signed in accordance with a resolution of the Directors.

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John W Barr Chairman 25 September 2007

A N N U A L R E P O R T 2 0 0 7

28 C o n t e n t s

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Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of TNG Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the fi nancial year ended 30 June 2007 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

J G Robinson Partner Perth 28 September 2007

A N N U A L R E P O R T 2 0 0 7

I N C O M E S T A T E M E N T S For the year ended 30 June 2007

Note Gain on sale of tenements 5(a) Other income 5(a) Total income Occupancy expenses Administrative expenses Corporate expenses Employment expenses Depreciation and amortisation expenses 5(c) Reversal of impairment loss of investment in associates Impairment loss of investment in associates 27 Share based payments expense for directors/ consultants/employees 29 Shares issued to consultants 18(a) Share of prof t/(loss) in associates 27 Other expenses (Loss) before net f nance income and tax Financial income 5(b) Financial expenses Net f nancing income (Loss)/prof t before income tax Income tax expense 7 (Loss)/prof t attributable to members of TNG Basic earnings per share 8 Diluted earnings per share 8	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ Restated Restated ~~-~~ 648,072 ~~-~~ ~~-~~ 109,759 122,450 9,759 63,846
	109,759 770,522 9,759 63,846 (62,850) (41,390) (62,850) (41,390) (190,590) (54,842) (160,627) (50,496) (1,108,816) (963,166) (821,675) (798,063) (231,103) (180,479) (222,840) (178,800) (263,490) (44,115) (113,366) (42,851) ~~-~~ 1,103,347 ~~-~~ 1,103,347 (2,965,091) ~~-~~ (1,981,926) ~~-~~ (7,064,073) (549,317) (7,064,073) (549,317) (1,440,000) ~~-~~ (1,440,000) ~~-~~ 498,660 (650,682) ~~-~~ ~~-~~ (211,683) (14,618) (106,780) ~~-~~
	(12,929,277) (624,740) (11,964,378) (493,724) 7,288,789 1,247,613 6,289,590 823,859 (11,603) (2,550) ~~-~~ (2,550)
	7,277,186 1,245,063 6,289,590 821,309
	(5,652,091) 620,323 (5,674,788) 327,585 ~~-~~ ~~-~~ ~~-~~ ~~-~~
	(5,652,091) 620,323 (5,674,788) 327,585
	(4.819) 0.689 (4.819) 0.689

The income statements are to be read in conjunction with the notes to the fi nancial statements.

A N N U A L R E P O R T 2 0 0 7

30 B A L A N C E S H E E T S As at 30 June 2007

==> picture [280 x 72] intentionally omitted <==

Note Current assets	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ Restated Restated 9,880,637 3,327,132 9,773,339 3,323,556 281,381 144,462 125,292 114,999 ~~-~~ 370,950 ~~-~~ 319,800 26,486 40,598 23,645 39,740
Cash and cash equivalents 10
Trade and other receivables 11
Financial assets held for trading 33

Prepayments
Total current assets Non-current assets Trade and other receivables 11 Other f nancial assets 12(a) Available-for-sale investments 12(a)	10,188,504 3,883,142 9,922,276 3,798,095
	~~-~~ 14,451 4,559,064 ~~-~~ ~~-~~ ~~-~~ 1,656,323 1,656,323 617,527 ~~-~~ 617,527 4,631,857 ~~-~~ 4,285,546 ~~-~~ ~~-~~ 1,436,806 126,168 327,078 122,315 9,433,453 5,098,914 ~~-~~ ~~-~~
Investments accounted for using equity method 12(b)

Plant and equipment 13

Exploration and evaluation expenditure 14
Total non-current assets Total assets Current liabilities	11,487,786 9,525,079 7,159,992 6,410,495
	21,676,290 13,408,221 17,082,268 10,208,590
	1,051,150 159,287 279,592 85,363 ~~-~~ 6,846 ~~-~~ 6,846 32,850 22,013 32,850 22,013
Trade and other payables 15

Loans and borrowings 16
Provisions 17 Total current liabilities Non-current liabilities
	1,084,000 188,146 312,442 114,222
	480,000 22,652 456,876 652,732
Loans and borrowings 16
Total non-current liabilities Total liabilities Net assets Equity	480,000 22,652 456,876 652,732
	1,564,000 210,798 769,318 766,954
	20,112,290 13,197,423 16,312,950 9,441,636
	15,490,639 9,346,022 15,490,639 9,346,022 ~~-~~ 1,037,584 ~~-~~ 1,003,370 4,621,651 2,813,817 822,311 (907,756)
Issued capital 18
Reserves 20
Retained earnings
	20,112,290 13,197,423 16,312,950 9,441,636
Total equity

The balance sheets are to be read in conjunction with the notes to the fi nancial statements.

S T A T E M E N T S O F C A S H F L O W S For the year ended 30 June 2007

Note Cash f ows from operating activities	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ (1,439,476) (1,318,867) (1,051,585) (1,329,721) 159,457 92,856 161,113 92,762 48,853 ~~-~~ ~~-~~ ~~-~~ 9,877 58,604 ~~-~~ ~~-~~
Cash payments in the course of operations
Interest received Sale of tenements
Proceeds from royalties
	(1,221,289) (1,167,407) (890,472) (1,236,959) (715,958) ~~-~~ ~~-~~ ~~-~~ ~~-~~ 1,184,094 ~~-~~ 557,938 ~~-~~ 63,846 ~~-~~ 63,846 ~~-~~ ~~-~~ (4,923,067) 67,401 (872,155) (57,075) (332,114) (57,075) (173,476) (1,303,106) (173,476) (1,141,852) (3,712,529) (705,541) ~~-~~ ~~-~~
Net cash used in operating activities 28
Cash f ows from investing activities
Payments for land and buildings
Proceeds from sale of investments
Proceeds from subunderwriting
Loan to controlled entities
Payments for plant and equipment

Payments for investments in associates
Payments for exploration and development
expenditure
	(5,474,118) (817,782) (5,428,657) (509,742) 12,777,840 3,767,998 12,777,840 3,767,998 480,000 ~~-~~ ~~-~~ ~~-~~ (8,928) (6,379) (8,928) (6,379)
Net cash used in investing activities
Cash f ows from f nancing activities
Net proceeds on issue of shares and options
Proceeds from loan
Finance lease payments
	13,248,912 3,761,619 12,768,912 3,761,619 6,553,505 1,776,430 6,449,783 2,014,918 3,327,132 1,550,702 3,323,556 1,308,638
Net cash received from f nancing activities
Net increase in cash held
Cash at the beginning of the f nancial year
	9,880,637 3,327,132 9,773,339 3,323,556
Cash at the end of the f nancial year 10

The statements of cash fl ows are to be read in conjunction with the notes to the fi nancial statements.

A N N U A L R E P O R T 2 0 0 7

32 S T A T E M E N T S O F C H A N G E S I N E Q U I T Y For the year ended 30 June 2007

Note Consolidated	Issued Capital Retained Earnings Foreign currency translation Reserves Option Reserve Total $ $ $ $ 6,581,394 1,576,879 ~~-~~ ~~-~~ 8,158,273 ~~-~~ 67,298 ~~-~~ ~~-~~ 67,298
At 1 July 2005
Correction of error 33
	6,581,394 1,644,177 ~~-~~ ~~-~~ 8,225,571 ~~-~~ 620,323 ~~-~~ ~~-~~ 620,323 ~~-~~ ~~-~~ 34,214 ~~-~~ 34,214 ~~-~~ 549,317 ~~-~~ ~~-~~ 549,317 2,852,606 ~~-~~ ~~-~~ ~~-~~ 2,852,606 ~~-~~ ~~-~~ ~~-~~ 1,003,370 1,003,370 (87,978) ~~-~~ ~~-~~ ~~-~~ (87,978)
At 1 July 2005 (restated)

Prof t for the period (restated) 33

Foreign currency translation reserve

Share based payments expense
Shares issued
Pro rata option issue
Share issue costs At 30 June 2006 (restated)
	9,346,022 2,813,817 34,214 1,003,370 13,197,423
	9,346,022 2,813,817 34,214 1,003,370 13,197,423 ~~-~~ (5,652,091) ~~-~~ ~~-~~ (5,652,091) ~~-~~ ~~-~~ (34,214) ~~-~~ (34,214) ~~-~~ 7,064,073 ~~-~~ ~~-~~ 7,064,073 ~~-~~ 395,852 ~~-~~ ~~-~~ 395,852 12,179,513 ~~-~~ ~~-~~ ~~-~~ 12,179,513 2,340,000 ~~-~~ ~~-~~ ~~-~~ 2,340,000 (9,076,593) ~~-~~ ~~-~~ ~~-~~ (9,076,593) 1,003,370 ~~-~~ ~~-~~ (1,003,370) ~~-~~ (301,673) ~~-~~ ~~-~~ ~~-~~ (301,673)
At 1 July 2006 (restated)

Loss for the period

Foreign currency translation reserve

Share based payments expense
Net change in available-for-sale f nancial assets Shares issued
Share placement

In specie distribution

Options exercised
Share issue costs At 30 June 2007
	15,490,639 4,621,651 ~~-~~ ~~-~~ 20,112,290

The amounts recognised directly in equity are disclosed net of tax.

The statements of changes in equity are to read in conjunction with the notes to the fi nancial statements.

S T A T E M E N T S O F C H A N G E S I N E Q U I T Y ( C O N T I N U E D ) For the year ended 30 June 2007

Note Company	Issued Capital Retained Earnings Foreign currency translation Reserves Option Reserve Total $ $ $ $ 6,581,394 (2,104,458) ~~-~~ ~~-~~ 4,476,936 ~~-~~ 319,800 ~~-~~ ~~-~~ 319,800
As at 1 July 2005
Correction of error 33
	6,581,394 (1,784,658) ~~-~~ ~~-~~ 4,796,736 ~~-~~ 327,585 ~~-~~ ~~-~~ 327,585 ~~-~~ 549,317 ~~-~~ ~~-~~ 549,317 2,852,606 ~~-~~ ~~-~~ ~~-~~ 2,852,606 ~~-~~ ~~-~~ ~~-~~ 1,003,370 1,003,370 (87,978) ~~-~~ ~~-~~ ~~-~~ (87,978)
As at July 2005 (restated)

Prof t for the period (restated) 33

Share based payments expense
Share issued
Pro rata option issue
Share issue costs At 30 June 2006 (restated) Company
	9,346,022 (907,756) ~~-~~ 1,003,370 9,441,636
	9,346,022 (907,756) ~~-~~ 1,003,370 9,441,636 ~~-~~ (5,674,788) ~~-~~ ~~-~~ (5,674,788)
At 1 July 2006 (restated)

Loss for the period
	~~-~~ 7,064,073 ~~-~~ ~~-~~ 7,064,073 ~~-~~ 340,782 ~~-~~ ~~-~~ 340,782 12,179,513 ~~-~~ ~~-~~ ~~-~~ 12,179,513 2,340,000 ~~-~~ ~~-~~ ~~-~~ 2,340,000 (9,076,593) ~~-~~ ~~-~~ ~~-~~ (9,076,593) 1,003,370 ~~-~~ ~~-~~ (1,003,370) ~~-~~ (301,673) ~~-~~ ~~-~~ ~~-~~ (301,673)
Share based payments expense
Net change in available-for-sale f nancial assets Shares issued
Share placement

In specie distribution

Options exercised
Share issue costs At 30 June 2007
	15,490,639 822,311 ~~-~~ ~~-~~ 16,312,950

The amounts recognised directly in equity are disclosed net of tax.

The statements of changes in equity are to read in conjunction with the notes to the fi nancial statements.

A N N U A L R E P O R T 2 0 0 7

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

1 REPORTING ENTITY

TNG Limited (the ‘Company’) is a company domiciled in Australia. The consolidated fi nancial report of the Company as at and for the year ended 30 June 2007 comprise the Company and its subsidiaries (together referred to as the ‘Group’) and the Group’s interest in associates. The fi nancial report was authorised for issue by the Directors on 25 September 2007.

The Group is primarily involved in the signifi cant exploration of its Manbarrum Project; the review of advanced exploration projects for acquisition; the management of its other exploration properties and management of its interest in the Cawse Extended Project.

2 BASIS OF PREPARATION

(a) Statement of compliance

The fi nancial report is a general purpose fi nancial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated fi nancial report of the Group also complies with the IFRSs and interpretations adopted by the International Accounting Standards Board. The Company’s fi nancial report does not comply with IFRSs as the Company has elected to apply the relief provided to parent entities by AASB 132 Financial Instruments: Presentation and Disclosure in respect of certain disclosure requirements.

(b) Basis of measurement

The consolidated fi nancial statements have been prepared on the historical cost basis except for the following:

derivative fi nancial instruments are measured at fair value
• fi nancial instruments at fair value through profi t or loss are measured at fair value • available-for-sale fi nancial assets are measured at fair value

The methods used to measure fair values are discussed further in Note 4.

(c) Functional and presentation currency

These consolidated fi nancial statements are presented in Australian dollars, which is the Company’s functional currency and the functional currency of all entities in the Group.

(d) Use of estimates and judgements

The preparation of fi nancial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about signifi cant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most signifi cant effect on the amount recognised in the fi nancial statements are described in the following notes:

Note 16 – lease classifi cation
Notes 17 & 24 – provisions and contingencies
Note 22 – valuation of fi nancial instruments
Note 29 – measurement of share-based payments

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated fi nancial statements, and have been applied consistently by Group entities.

The entity has elected to early adopt the following accounting standards and amendments.

AASB 101 Presentation of Financial Statements (October 2006)

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The fi nancial statements of subsidiaries are included in the consolidated fi nancial report from the date that control commences until the date that control ceases. Investments in subsidiaries are carried at their cost of acquisition in the Company’s fi nancial statements less impairment losses.

(ii) Associates

Associates are those entities over which the Group has signifi cant infl uence, but not control, over the fi nancial and operating policies. Associates are accounted for using the equity method. The consolidated fi nancial statements include the Group’s share of income and expenses of associates, from the date that signifi cant infl uence commences until the date that signifi cant infl uence ceases.

When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an associate.

In the Company’s fi nancial statements investment in associates are carried at cost of acquisition.

(iii) Transactions eliminated on consolidation

Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated fi nancial statements.

Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the entity.

Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Gains and losses are recognised as the contributed assets are consumed or sold by the associates, if not consumed or sold by the associate, when the Group’s interest in such entities is disposed of.

(b) Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amounts are those that are enacted or substantively enacted at the balance sheet date.

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

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

(i) Except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and at the time of transaction, affects neither the accounting profi t nor taxable profi t or loss; and

A N N U A L R E P O R T 2 0 0 7

36 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

(ii) In respect of taxable temporary differences associated with investments in subsidiaries and associates except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

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

(iii) When the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profi t nor taxable profi t or loss; or
(iv) When the deductible temporary difference is associated with investments in subsidiaries and associates in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profi t will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profi t will allow the deferred tax asset to be recovered.

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

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

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(c) Other taxes

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

(i) Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
(ii) Receivables and payables are stated with the amount of GST included;
(iii) The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet;
(iv) Cash fl ows are included in the Cash Flow Statement on a gross basis and the GST component of cash fl ows arising from investing and fi nancing activities, which is recoverable from, or payable to, the taxation authority, are classifi ed as operating cash fl ows; and
(v) Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

(d) Plant and equipment

(i) Recognition and measurement

Items of plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. The cost of self-constructed assets includes the cost of materials, direct labour, and an appropriate proportion of production overheads. The cost of self-constructed assets and acquired assets includes (i) the initial estimate at the time of installation and during the period of use, when relevant, of the costs of dismantling and removing the items and restoring the site on which they are located, and (ii) changes in the measurement of existing liabilities recognised for these costs resulting from changes in the timing or outfl ow of resources required to settle the obligation or from changes in the discount rate.

Where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of plant and equipment.

(ii) Leased assets

Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classifi ed as fi nance leases. Lease payments are accounted for as described in note 3(n).

(iii) Subsequent costs

The Group recognises in the carrying amount of an item of plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefi ts embodied within the item will fl ow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred.

(iv) Depreciation

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of plant and equipment. The estimated useful lives in the current and comparative periods are as follows:

Leasehold improvements Over the leased term Plant and equipment 3 to 8 years Fixtures and fi ttings 3 to 8 years Buildings 40 years

The residual value, the useful life and the depreciation method applied to an asset are reassessed annually.

(e) Foreign currency translation

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.

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38 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

(f) Financial instruments

(i) Non-derivative fi nancial instruments

Non-derivative fi nancial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative fi nancial instruments are recognised initially at fair value plus, for instruments not at fair value through profi t or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition non-derivative fi nancial instruments are measured as described below.

A fi nancial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash fl ows from the fi nancial assets expire or if the Group transfers the fi nancial assets to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of fi nancial assets are accounted for at trade dates, i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specifi ed in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and call deposits. Accounting for fi nance income and expense is discussed in note 3(n).

Available-for-sale fi nancial assets

The Group’s investments in equity securities and certain debt securities are classifi ed as available-for-sale fi nancial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (see note 3(h) and foreign exchange gains and losses on available-for-sale monetary items (see note 3(e)), are recognised as a separate component of equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profi t and loss.

Investments at fair value through profi t and loss

An instrument is classifi ed as at fair value through profi t or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through profi t or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management or investment strategy. Upon initial recognition, attributable transaction costs are recognised in profi t or loss when incurred. Financial instruments at fair value through profi t or loss are measured at fair value, and changes therein are recognised in profi t or loss.

Other

Other non-derivative fi nancial instruments are measured at amortised cost using the effective interest method, less any impairment loss.

(ii) Share capital

Ordinary shares

Incremental costs directly attributable to issue of ordinary shares and share options are recognised as a deduction from equity, net of any related income tax benefi t.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

(g) Exploration and evaluation expenditure

Exploration and evaluation expenditure is stated at cost and is accumulated in respect of each identifi able area of interest.

Mining tenements that had been revalued to fair value on or prior to 1 July 2004, the date of transition to Australian Accounting Standards – AIFRS, are measured on the basis of deemed cost, being the revalued amount at the date of that revaluation.

Such costs are only carried forward when the rights to tenure of that area of interest are current and either such expenditure is expected to be recouped through the successful development and commercial exploitation of the area of interest (or alternatively by its sale), or where activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and signifi cant operations are continuing.

Accumulated costs in relation to an abandoned area are written off to the income statement in the period in which the decision to abandon the area is made.

The Directors review the carrying value of each area of interest at balance date and exploration expenditure which no longer satisfi es the above policy is written off.

AASB 6 Exploration for and Evaluation of Mineral Resources has been applied effective 1 July 2004.

(h) Impairment

(i) Financial assets

A fi nancial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash fl ows of that asset.

An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash fl ows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale fi nancial asset is calculated by reference to its current fair value.

Individually signifi cant fi nancial assets are tested for impairment on an individual basis. The remaining fi nancial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in profi t or loss. Any cumulative loss in respect of an available-for-sale fi nancial asset recognised previously in equity is transferred to profi t or loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For fi nancial assets measured at amortised cost and available-for-sale fi nancial assets that are debt securities, the reversal is recognised in profi t or loss. For available-for-sale fi nancial assets that are equity securities, the reversal is recognised directly in equity.

(ii) Non-fi nancial assets

The carrying amounts of the Group’s non-fi nancial assets, other than biological assets, investment property, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefi nite lives or that are not yet available for use, recoverable amount is estimated at each reporting date.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifi able asset group that generates cash fl ows that largely are independent from other assets and groups. Impairment losses are recognised in profi t or loss. Impairment losses recognised in respect of cash-generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

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40 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

(h) Impairment (continued)

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation of amortisation, if no impairment loss had been recognised.

(i) Issued capital

Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefi t.

(j) Loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs associated with the borrowing.

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

Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the amortisation process.

(k) Employee benefi ts

(i) Share based payments

The Group provides benefi ts to employees (including Directors) of the Group in the form of share-based payment transactions, whereby employees render services in exchange for share’s or rights over shares (‘equity-settled transactions’).

The fair value of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black-Scholes model.

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

The fair value of equity-settled transactions are recognised, together with a corresponding increase in equity over the period, ending on the date on which the relevant employees become fully entitled to the award (the ‘vesting date’).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date refl ects (i) the extent to which the vesting period has expired and (ii) TNG’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of the period.

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

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

If the terms of an equity-settled award are modifi ed, as a minimum, an expense is recognised as if the terms had not been modifi ed. In addition, an expense is recognised for any modifi cation that increases the total fair value of the share-based payment arrangement, or is otherwise benefi cial to the employee as measured at the date of modifi cation.

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

The dilutive effect, if any, of outstanding options is refl ected as additional share dilution in the computation of earnings per share.

(ii) Short term benefi t

Liabilities for employee benefi ts for wages, salaries, annual leave and sick leave represent present obligations resulting from employees’ services provided to reporting date, calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at reporting date including related on-costs, such as, workers compensation insurance and payroll tax.

(iii) Defi ned contribution funds

Obligations for contributions to defi ned contribution superannuation funds are recognised as an expense in the income statement as incurred.

(l) Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash fl ows at a pre-tax rate that refl ects current market assessments of the time value of money and, when appropriate, the risks specifi c to the liability.

(m) Revenue

Revenue is recognised to the extent that it is probable that economic benefi ts will fl ow to the Group and the revenue can be reliably measured.

(i) Sale of goods

Income from the sale of tenements and assets held for trading are recognised when signifi cant risk and rewards of ownership of the goods passes to the customer provided that the amount of revenue and the costs incurred or to be incurred can be measured reliably.

(ii) Interest revenue

Interest revenue is recognised as it accrues using the effective interest rate method.

(iii) Dividends

Revenue from dividends from controlled entities is recognised by the Company when they are declared by the controlled entities.

Revenue from dividends from associates and other investments is recognised when the Group’s right to receive the dividend is established.

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42 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

(n) Expenses

(i) Operating lease payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense and spread over the term of lease.

(ii) Finance lease payments

Minimum lease payments are apportioned between the fi nance charge and the reduction of the outstanding liability. The fi nance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(iii) Net fi nancing costs

Interest income is recognised in the income statement as it accrues, using the effective interest method.

(iv) Finance income and expenses

Finance income comprises interest income on funds invested, dividend income, gains on the disposal of available-for-sale fi nancial assets, changes in the fair value of fi nancial assets at fair value through profi t or loss, foreign currency gains, and gains on hedging instruments that are recognised in profi t or loss. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, foreign currency losses, changes in the fair value of fi nancial assets at fair value through profi t or loss, impairment losses recognised on fi nancial assets, and losses on hedging instruments that are recognised in profi t or loss. All borrowing costs are recognised in profi t or loss using the effective interest method.

(o) Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

(p) Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all diluted potential ordinary shares, which comprise convertible notes and share options granted to employees.

(q) New standards and interpretations not yet adopted

The following standards, amendments to standards and interpretations have been identitied as those which may impact the entity in the period of initial application. They are available for early adoption at 30 June 2007, but have not been applied in preparing this fi nancial report:

AASB 7 Financial Instruments: Disclosures (August 2005) replaces the presentation requirements of fi nancial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after 1 January 2007, and will require extensive additional disclosures with respect to the Group’s fi nancial instruments and share capital.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

AASB 2005-10 Amendments to Australian Accounting Standards (September 2005) makes consequential amendments to AASB 132 Financial Instruments: Disclosure and Presentation, AASB 101 Presentation of Financial Statements, AASB 114 Segment Reporting, AASB 117 Leases, AASB 133 Earnings Per Share, AASB 139 Financial Instruments: Recognition and Measurement, AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards, AASB 4 Insurance Contracts, AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts arising from the release of AASB 7. AASB 2005-10 is applicable for annual reporting periods beginning on or after 1 January 2007 and is expected to only impact disclosures contained within the consolidated fi nancial report.
AASB 8 Operating Segments replaces the presentation requirements of segment reporting in AASB 114 Segment Reporting. AASB 8 is applicable for annual reporting periods beginning on or after 1 January 2009 and is not expected to have an impact on the fi nancial results of the Company and the Group as the standard is only concerned with disclosures.
AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 makes amendments to AASB 5 Non-current Assets Held for Sale and Discontinued Operations, AASB 6 Exploration for and Evaluation of Mineral Resources, AASB 102 Consolidated and Separate Financial Statements, AASB 119 Employee Benefi ts, AASB 127 Consolidated and Separate Financial Statements, AASB 134 Interim Financial Reporting, AASB 136 Impairment Assets, AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts. AASB 2007-3 is applicable for annual reporting periods beginning on or after 1 January 2009 and must be adopted in conjunction with AASB 8 Operating Segments. This standard is only expected to impact disclosures contained within the fi nancial report.
Interpretation 10 Interim Financial Reporting and Impairment prohibits the reversal of an impairment loss recognised in a previous interim period in respect of goodwill, an investment in an equity instrument or a fi nancial asset carried at cost. Interpretation 10 will become mandatory for the Group’s 2008 fi nancial statements, and will apply to goodwill, investments in equity instruments, and fi nancial assets carried at cost prospectively from the date that the Group fi rst applied the measurement criteria of AASB 136 and AASB 139 respectively (i.e. 1 July 2004 and 1 July 2005, respectively).
Interpretation 11 AASB 2 Share-based Payment – Group and Treasury Share Transactions addresses the classifi cation of a share-based payment transaction (as equity or cash settled), in which equity instruments of the parent or another group entity are transferred, in the fi nancial statements of the entity receiving the services. Interpretation 11 will become mandatory for the Group’s 2008 fi nancial report. Interpretation 11 is not expected to have any impact on the fi nancial report. The potential effect of the Interpretation on the Company’s fi nancial report has not yet been determined.
AASB 2007-1 Amendments to Australian Accounting Standards arising from AASB Interpretation II amends AASB 2 Share-based Payments to insert the transitional provisions of IFRS 2, previously contained in AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards. AASB 2007-1 is applicable for annual reporting periods beginning on or after 1 March 2007 and is not expected to have any impact on the consolidated fi nancial report. The potential impact on the Company has not yet been determined.
Interpretation 12 Service Concession Arrangements addresses the accounting for service concession operators, but not grantors, for public to private service concession arrangements. Interpretation 12 will apply for the Group’s 2009 fi nancial report. The potential effect of the interpretation on the fi nancial report has not been determined. At this time an entity must adopt the revised Interpretation 4 Determining when an arrangement contains a lease and Interpretation 129 Service Concession Arrangements: Disclosures.

A N N U A L R E P O R T 2 0 0 7

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

• AASB 2007-2 Amendments to Australian Accounting Standards arising from AASB Interpretation 12 makes amendments to AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards, AASB 117 Leases, AASB 118 Revenue, AASB 120 Accounting for Government Grants and Disclosure of Government Assistance, AASB 121 The Effects of Changes in Foreign Exchange Rates, AASB 127 Consolidated and Separate Financial Statements, AASB 131 Interest in Joint Ventures, and AASB 139 Financial Instruments: Recognition and Measurement. AASB 2007-2 is applicable for annual reporting periods beginning on or after 1 January 2008 and must be applied at the same time as Interpretation 12 Service Concession Arrangements.

AASB 2007-2 Amendments to Australian Accounting Standards also amends references to “UIG Interpretation” to interpretations. This amending standard is applicable to annual reporting periods ending on or after 28 February 2007.

4 DETERMINATION OF FAIR VALUES

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both fi nancial and non-fi nancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specifi c to that asset or liability.

(i) Property, plant and equipment

The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing where in the parties had each acted knowledgeably, prudently and without compulsion. The market value of items of plant, equipment, fi xtures and fi ttings is based on the quoted market prices for similar items.

(ii) Investments in equity

The fair value of fi nancial assets at fair value through profi t or loss and available-for-sale fi nancial assets is determined by reference to their quoted bid price at the reporting date.

(iii) Trade and other receivables

The fair value of trade and other receivables estimated as the present value of future cash fl ows, discounted at the market rate of interest at the reporting date.

(iv) Share-based payment transactions

The fair value of employee options is measured using the Black-Scholes formula. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

5 INCOME AND EXPENSES

Note (a) Income Gain on sale of tenements	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ ~~-~~ 648,072 ~~-~~ ~~-~~ ~~-~~ 58,604 ~~-~~ ~~-~~ 109,759 63,846 9,759 63,846
Royalties
Other income Total Income (b) Financial income Gain on sale of investments 27 Interest income Change in fair value of investments 33
	109,759 770,522 9,759 63,846
	5,365,674 305,349 4,363,672 264,166 160,615 92,856 163,418 92,762 1,762,500 849,408 1,762,500 466,931
held-for-trading 27
Total Financial income (c) Depreciation and amortisation Depreciation of:	7,288,789 1,247,613 6,289,590 823,859
	127,858 34,771 47,296 33,507 60,326 7,174 4,916 7,174 61,154 2,170 61,154 2,170 14,152 ~~-~~ ~~-~~ ~~-~~
Plant and equipment 13
Motor vehicle 13
Leasehold improvements 13

Buildings 13
	263,490 44,115 113,366 42,851
Total depreciation

6 AUDITORS’ REMUNERATION

	Consolidated 2007 2006	Consolidated 2007 2006	The Company 2007 2006	The Company 2007 2006
	$	$	$	$
Auditors of the Company
KPMG Australia: Audit and review of f nancial reports	79,472	65,310	79,472	65,310

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46 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

7 INCOME TAX

The major components of income tax expense are: Income statement	Consolidated The Company 2007 2006 2007 2006 $’000 $’000 $’000 $’000 (799,092) (363,285) 439,561 (530,106) 1,411,433 217,678 5,865 (2,400) (612,341) 145,607 (445,426) 532,506
Current income tax (credit)/expense
Deferred tax
Tax losses not brought to account
Income tax expense reported in the income statement A reconciliation between tax expense and pre-tax loss: Accounting loss before income tax At the Group’s statutory income rate of 30% (2006: 30%) Expenditure not allowable for income tax purposes: Share-based payments Gain on distribution and sale of assets Exploration, evaluation and development expenditure Sundry expenses Tax losses not brought to account Income tax expense reported in the income statement Tax losses Unused tax losses for which no deferred tax asset has	~~-~~ ~~-~~ ~~-~~ ~~-~~
	(5,652,091) 620,323 (5,674,788) 327,585
	(1,695,627) 186,097 (1,702,436) 98,276 2,119,222 164,795 2,119,222 164,795 (156,207) (705,902) 13,697 (589,112) 329,165 32,416 20 (211,662) 15,788 176,987 14,923 5,197 (612,341) 145,607 (445,426) 532,506
	~~-~~ ~~-~~ ~~-~~ ~~-~~
	7,458,189 4,794,550 3,993,983 5,459,185
been recognized
Potential tax benef t @ 30%	2,237,457 1,438,365 1,198,195 1,637,756

(i) future assessable income is derived of a nature and of an amount suffi cient to enable the benefi t to be realised;

(ii) the conditions for deductibility imposed by tax legislation continue to be complied with; and

(iii) no changes in tax legislation adversely affect the Company in realising the benefi t.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

Deferred income tax Balance Sheet Deferred income tax relates to the following: Deferred Tax Liabilities Exploration and evaluation assets Available-for-sale f nancial assets Accelerated depreciation for tax purposes Deferred tax assets used to offset deferred tax liabilities Deferred Tax Assets Tax losses presumed from wholly-owned tax consolidated entities Accrued expenditure Employee benef ts Deferred tax liabilities used to offset deferred tax assets	Consolidated Company 2007 $ 2006 $ 2007 $ 2006 $ 2,062,666 656,982 117 ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ (2,062,666) (656,982) (117) ~~-~~
	~~-~~ ~~-~~ ~~-~~ ~~-~~
	~~-~~ ~~-~~ (1,039,262) (1,877,926) ~~-~~ (9,000) ~~-~~ (9,000) (9,855) (6,604) (9,855) (6,604) 2,062,666 656,982 117 ~~-~~ ~~-~~ ~~-~~ 1,049,000 1,893,530
Future income tax benef t not brought to account
Tax losses not brought to account	(2,052,811) (641,378) ~~-~~ ~~-~~
	~~-~~ ~~-~~ ~~-~~ ~~-~~

Income Statement

Deferred income tax relates to the following: Deferred Tax Liabilities

Deferred Tax Liabilities
Exploration and evaluation assets Deferred Tax Assets Accrued expenditure Other Employee benef ts	1,405,685 220,078 117 ~~-~~
	1,405,685 220,078 117 ~~-~~
	9,000 (750) 9,000 (750) ~~-~~ (218) ~~-~~ (218) (3,252) (1,432) (3,252) (1,432)
	5,748 (2,400) 5,748 (2,400)

	1,411,433 217,678 5,865 (2,400)
Deferred tax expense

Tax Consolidation Legislation

TNG Limited and its wholly-owned Australian controlled entities implemented the tax consolidation legislation from 1 July 2003. The accounting policy in relation to this legislation is set out in note 2(b).

The entities have not entered into a fax funding agreement

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48 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

8 EARNINGS PER SHARE

The calculation of basic earnings per share for the year ended 30 June 2007 was based on the loss attributable to ordinary shareholders of $5,652,091 (2006: profi t $620,323) and a weighted average number of ordinary shares on issue during the year ended 30 June 2007 of 117,287,857 (2006: 89,998,277).

Loss attributable to ordinary shareholders

Loss attributable to ordinary shareholders
	2007 $ 2006 $ (5,652,091) 620,323
(Loss)/Prof t for the period
	(5,652,091) 620,323
(Loss)/Prof t attributable to ordinary shareholders
Weighted average number of ordinary shares	2007 Numbers 2006 Numbers 100,628,983 82,978,270 16,658,874 7,020,007
Number of ordinary shares at 1 July
Effect of shares issued
	117,287,857 89,998,277
Weighted average number of ordinary shares at 30 June

At balance sheet date the following options were not yet exercised:

Options	Exercise Date	Exercise Price1
1,500,000 (unlisted)		$0.23
	30 Nov 2007
5,100,000 (unlisted)		$0.38
	31 Dec 2011
12,500,000 (unlisted)		$0.50
	31 Mar 2010

1 Subsequent to the balance sheet date the exercise prices have been adjusted in accordance with ASX Listing Rule 7.22.3 due to the capital reduction as a result of the distribution of the investments in Batavia Mining Ltd, Thor Mining PLC and Western Desert Resources Ltd.

Potential ordinary shares are not considered dilutive as their conversion does not show an inferior view of the earnings performance of the Company. Accordingly diluted earnings per share is the same as the basic earnings per share.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

9 SEGMENT REPORTING

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise corporate assets and expenses.

Business segments

The Group comprises the following main business segments, based on the Group’s management reporting system.

Exploration Exploration and development of tenements. Investments Investments in publicly listed and other companies.

Geographical segments

The Group’s business segments all operate in Australia.

Primary Reporting	Exploration Investments	Total $ 5,636,048
Business Segments	$ $
2007 Revenue
External segment revenue	97,197 5,538,851
Total revenue Result		5,636,048
		(3,599,167)
Segment result	(631,305) (2,967,862)
Gain of associates		498,660 (2,551,584)
Unallocated corporate expenses
		(5,652,091) ~~-~~
Loss from ordinary activities before income tax
Income tax expense
		(5,652,091)
Net prof t/(loss)
Depreciation and amortisation		150,124 113,366
Depreciation	150,124 ~~-~~

Corporate depreciation	~~-~~ ~~-~~
Assets		263,490
		12,183,579
Segment assets	11,566,052 617,527
		9,492,711
Corporate assets
Consolidated total assets Liabilities		21,676,290
		(6,060,187)
Segment liabilities	(6,060,187) ~~-~~
		4,496,187
Corporate liabilities
Consolidated total liabilities		(1,564,000)

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

9 SEGMENT REPORTING (CONTINUED)

Primary Reporting	Exploration Investments	Total $ 1,012,119
Business Segments	$ $
2006 Revenue
External segment revenue	688,704 323,415
		1,012,119 156,608
Total segment revenue	688,704 323,415
Other unallocated revenue Total revenue Result
		1,168,727
		711,513
Segment result	631,430 80,083
Loss of associate		(650,682) 559,492
Unallocated corporate expenses
		620,323 ~~-~~
Loss from ordinary activities before income tax
Income tax expense
		620,323
Net prof t/(loss)
Depreciation and amortisation		44,115 1,103,347
Unallocated corporate depreciation and amortisation	~~-~~ ~~-~~
Reversal of loss of associate Assets	~~-~~ 1,103,347
		9,859,032
Segment assets	5,694,168 4,164,864
		3,549,189
Unallocated corporate assets
Consolidated total assets Liabilities		13,408,221
		(1,361,903)
Segment liabilities	313,027 (1,674,930)
		1,151,105
Unallocated corporate liabilities
Consolidated total liabilities		(210,798)

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

10 CASH AND CASH EQUIVALENTS

Note Cash	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 9,763,637 3,257,132 9,688,339 3,253,556 117,000 70,000 85,000 70,000
Bank short term deposits
	9,880,637 3,327,132 9,773,339 3,323,556

The bank short term deposits, maturing within 90 days and paying interest at a weighted average interest rate of 6.4% at 30 June 2007 (2006: 5.40%).

11 TRADE AND OTHER RECEIVABLES

Note Current Trade and other receivables GST receivables Non-current Trade and other receivables Loans to controlled entities	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 84,413 81,598 70,022 71,721 196,968 62,864 55,270 43,278
	281,381 144,462 125,292 114,999
	~~-~~ 14,451 4,559,064 ~~-~~ ~~-~~ ~~-~~ 1,626,203 1,626,203 ~~-~~ ~~-~~ (1,626,203) (1,626,203)
Impairment loss
	~~-~~ 14,451 4,559,064 ~~-~~

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

12 OTHER FINANCIAL ASSETS

Note (a) Non-current Investments in controlled entities 26 Unlisted shares at cost	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ Restated Restated ~~-~~ ~~-~~ 2,492,261 2,492,261 ~~-~~ ~~-~~ (835,938) (835,938)
Less: impairment
Investments in other entities Investments available for sale 27 Associated entities at cost 27 (b) Non-current Investments accounted for using the equity method	~~-~~ ~~-~~ 1,656,323 1,656,323
	617,527 ~~-~~ 617,527 ~~-~~ ~~-~~ ~~-~~ ~~-~~ 4,631,857
	617,527 ~~-~~ 617,527 4,631,857
	617,527 ~~-~~ 2,273,850 6,288,180
	~~-~~ 3,603,587 ~~-~~ ~~-~~ ~~-~~ 681,959 ~~-~~ ~~-~~
Batavia Mining Ltd 27

Thor Mining PLC 27
	~~-~~ 4,285,546 ~~-~~ ~~-~~

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

13 PLANT & EQUIPMENT Cost Leasehold improvements	Consolidated The Company 2007 $ 2006 $ 2007 $ 2006 $ 22,736 22,736 22,736 22,736 244,617 ~~-~~ 244,617 ~~-~~ (22,736) ~~-~~ (22,736) ~~-~~
Balance at 1 July
Additions
Disposals
Balance at 30 June Plant and equipment	244,617 22,736 244,617 22,736
	286,763 229,688 278,813 221,738 409,206 57,075 90,806 57,075 ~~-~~ ~~-~~ ~~-~~ ~~-~~
Balance at 1 July
Additions Disposals Balance at 30 June Motor vehicle
	695,969 286,763 369,619 278,813
	38,259 38,259 38,259 38,259 221,641 ~~-~~ ~~-~~ (38,259) ~~-~~ (38,259) ~~-~~
Balance at 1 July
Additions
Disposals
Balance at 30 June Land and buildings Balance at 1 July Additions Disposals Balance at 30 June Accumulated Depreciation Leasehold improvements	221,641 38,259 ~~-~~ 38,259
	~~-~~ ~~-~~ ~~-~~ ~~-~~ 715,958 ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~
	715,958 ~~-~~ ~~-~~ ~~-~~
	22,736 20,566 22,736 20,566 61,154 2,170 61,154 2,170 (22,736) ~~-~~ (22,736) ~~-~~
Balance at 1 July

Depreciation charge for the year

Adjusted Depreciation
Balance at 30 June Plant and equipment	61,154 22,736 61,154 22,736
	182,805 148,034 178,708 145,201 127,858 34,771 47,296 33,507
Balance at 1 July

Depreciation charge for the year
Balance at 30 June Motor vehicle	310,663 182,805 226,004 178,708
	16,049 8,875 16,049 8,875 60,326 7,174 4,916 7,174 (20,965) ~~-~~ (20,965) ~~-~~
Balance at 1 July

Depreciation charge for the year

Adjustment for disposal
Balance at 30 June Buildings Balance at 1 July	55,410 16,049 ~~-~~ 16,049
	~~-~~ ~~-~~ ~~-~~ ~~-~~ 14,152 ~~-~~ ~~-~~ ~~-~~
Depreciation charge for the year
Balance at 30 June	14,152 ~~-~~ ~~-~~ ~~-~~

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

13 PLANT & EQUIPMENT (CONTINUED)

Carrying amounts Leasehold improvements	Consolidated The Company 2007 $ 2006 $ 2007 $ 2006 $ ~~-~~ 2,170 ~~-~~ 2,170
At 1 July
At 30 June Plant and equipment	183,463 ~~-~~ 183,463 ~~-~~
	103,958 81,654 100,105 76,537
At 1 July
At 30 June Motor vehicle	385,306 103,958 143,615 100,105
	22,210 29,384 22,210 29,384
At 1 July
At 30 June Land and buildings At 1 July At 30 June Total	166,231 22,210 ~~-~~ 22,210
	~~-~~ ~~-~~ ~~-~~ ~~-~~
	701,806 ~~-~~ ~~-~~ ~~-~~
	1,436,806 126,168 327,078 122,315

14 EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE

Cost	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 5,098,914 4,393,373 ~~-~~ ~~-~~ 4,334,539 705,541 ~~-~~ ~~-~~
Balance At 1 July

Exploration expenditure
Balance at 30 June Carrying value	9,433,453 5,098,914 ~~-~~ ~~-~~ 5,098,914 4,393,373 ~~-~~ ~~-~~
At 1 July
At 30 June	9,433,453 5,098,914 ~~-~~ ~~-~~

The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas. At balance date the carrying amount of exploration and evaluation expenditure was $9,433,453 of which $5,496,807 is attributable to the signifi cant exploration of the consolidated entities Manbarrum project, the balance of the carrying value is a result of the Cawse Extended project.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

Valuation Cawse Extended project

An independent valuation was carried out in January 2000 by Continental Resource Management Pty Ltd (“CRM”) using the Prospectivity Enhancement Multiplier method, which is based on previous exploration expenditure. In the case of Cawse Extended this is the yardstick or the comparative deal method. The Cawse Extended valuation was also cross checked against the discounted in situ contained metal value of the tenement. The Directors are of the opinion that this basis provides a reasonable estimate of recoverable amount.

In June 2002 CRM provided an updated valuation of Cawse Extended. CRM concluded that the value of Cawse Extended falls within the range of $4,800,000 to $8,600,000, with a preferred value of $7,200,000.

In June 2006 the Company commissioned CRM to provide a further updated valuation report. This updated report takes into consideration the mining that has occurred at Unicorn, additional drilling at Cawse Extended and changes to the price of nickel. The in situ contained metal method has been used to estimate the value of the contained metal within the pit shells and forms the range of values for the valuation. An alternate method of valuation was to calculate the potential royalty due based on the same arrangement as for the Unicorn pit. CRM’s preferred value for the Company’s 20% interest in Cawse Extended is $4,200,000, which is in excess of its carrying value of $3,936,646.

15 TRADE AND OTHER PAYABLES

Note Current	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 600,523 58,166 104,820 55,363 450,627 101,121 174,772 30,000
Trade payables
Other 16 LOANS AND BORROWINGS Current
	1,051,150 159,287 279,592 85,363
	~~-~~ 6,846 ~~-~~ 6,846
Lease liability
Non-current	~~-~~ 22,652 ~~-~~ 22,652 480,000 ~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~ 456,876 630,080
Lease liability

Interest Bearing Loan
Other loans – controlled entities 31(a)
	480,000 22,652 456,876 652,732

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56 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

16 LOANS AND BORROWINGS (CONTINUED)

Terms and debt repayment schedule

Terms and conditions of outstanding loans were as follows:

Interest only loan		Consolidated

	Nominal Interest Rate Year of Maturity	30 June 2007 30 June 2006 Face Value Carrying Amount Face Value Carrying Amount 480,000 480,000 ~~-~~ ~~-~~ Consolidated The Company 2007 $ 2006 $ 2007 $ 2006 $ 22,013 17,241 22,013 17,241 10,837 4,772 10,837 4,772 32,850 22,013 32,850 22,013 15,490,639 9,346,022 15,490,639 9,346,022 2007 2006 Number $ Number $ 100,628,983 9,346,022 82,978,270 6,581,394 6,000,000 2,340,000 4,000,000 1,000,000 ~~-~~ (9,076,593) ~~-~~ ~~-~~ 72,463,422 11,742,883 13,650,713 1,852,606 3,000,000 1,440,000 ~~-~~ ~~-~~ ~~-~~ (301,673) ~~-~~ (87,978) 182,092,405 15,490,639 100,628,983 9,346,022
- Kununurra logistics base	7.35% 2010
17 PROVISIONS Employee provisions Current
Balance at 1 July

Provisions made during the year
Balance at 30 June 18 CAPITAL Issued and paid-up share capital 182,092,405 (2006:100,628,983) ordinary shares,
fully paid
(a) Movements in shares on issue
Balance at the beginning of year
Share placement In specie distribution Options Exercised Shares issued to consultants Share issue costs
Balance at end of year

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

Terms and conditions of contributed equity

Holders of ordinary shares are entitled to receive dividends that may be declared from time to time and are entitled to one vote per share at shareholders’ meetings.

In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds from liquidation.

Effective 1 July 1998, the Company Law Review Act abolished the concept of par value shares and authorised capital. Accordingly, the Company does not have authorised capital or par value in respect of its issued shares.

In specie distribution

At a general meeting in May 2007 TNG received shareholder approval for a capital reduction in the form of a distribution in specie of its holdings in Batavia Mining Ltd and Thor Mining PLC.

The distribution was to those shareholders on the share register at the record date of 5 July 2007. The shareholders approved the distribution on 17 May 2007. The effective date of the capital reduction was 29 June 2007, as the TNG shares traded ex distribution from that date.

19 OPTIONS

Options on issue

Exercise Date	Exercise Price1	Number at end of year	Number at end of year
		2007	2006
30 November 2007 (unlisted)	$0.23	1,500,000	~~-~~
31 December 2011 (unlisted)	$0.38	5,100,000	~~-~~
31 March 2010 (unlisted)	$0.50	12,500,000	~~-~~

1 Subsequent to the balance sheet date the exercise prices have been adjusted in accordance with ASX Listing Rule 7.22.3 due to the capital reduction as a result of the distribution of the investments in Batavia Mining Ltd, Thor Mining PLC and Western Desert Resources Ltd.

Terms and conditions of options

Share options carry no rights to dividends and no voting rights.

20 RESERVES

20 RESERVES
	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ ~~-~~ 34,214 ~~-~~ ~~-~~ ~~-~~ 1,003,370 ~~-~~ 1,003,370
Foreign currency translation reserve

Option reserve
Balance at 30 June	~~-~~ 1,037,584 ~~-~~ 1,003,370

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the fi nancial statements of foreign investments as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.

Option reserve

The reserve relates to a rights options issue of a pro-rata offer of 2007 Options which expired 31 May 2007 and was exercisable at $0.15, the options were available at an issue price of $0.02 per option to eligible shareholders on the basis of one 2007 Option for every two shares held. At 31 May 2007 all options were exercised and this reserve was reversed against share capital.

A N N U A L R E P O R T 2 0 0 7

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

21 DIVIDENDS

No dividends were declared or paid during the 2007 fi nancial year.

Dividend franking account	The Company 2007 2006	The Company 2007 2006
	$	$
30% franking credits available to shareholders of TNG for subsequent
f nancial years.	1,008,568 1,008,568

The above available amounts are based on the balance of the dividend franking account at year end adjusted for franking credits that the entity may be prevented from distributing in subsequent years.

The ability to utilise the franking credits is dependent upon there being suffi cient available profi ts to declare the dividends.

22 FINANCIAL INSTRUMENTS

(a) Signifi cant accounting policies

The Group’s principal fi nancial instruments comprise, cash and short-term deposits and a mortgage over a property owned by the Group.

The main purpose of these fi nancial instruments is to fund capital expenditure for the Group’s operations. The Group has various other fi nancial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and has been throughout the period under review, the Group’s policy that no trading in fi nancial instruments shall be undertaken.

Details of the signifi cant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of fi nancial asset, fi nancial liability and equity instrument are disclosed in note 2 & 3 to the fi nancial statements.

(b) Interest rate risk

Interest rate risk exposures

The Group’s exposure to interest rate risk and the effective weighted average interest rate for classes of interest bearing fi nancial assets and fi nancial liabilities is set out below:

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30 June 2007 Maturing Total
CONSOLIDATED
Effective Interest Rate < 1 year >1 Year
% $ $ $
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30 June 2007 CONSOLIDATED	Effective Interest Rate %	Maturing	Maturing	Total
		< 1 year $	>1 Year $	$


Fixed Rate
Term deposits				117,000
	6.40	117,000	~~-~~
Floating Rate
Cash	6.10	9,763,637	~~-~~	9,763,637
Financial Liabilities
Fixed Rate
Interest bearing liabilities				(480,000)
	7.35	~~-~~	(480,000)

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

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30 June 2006 Maturing Total
CONSOLIDATED
Effective Interest Rate < 1 year >1 Year
% $ $ $
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30 June 2006 CONSOLIDATED	Effective Interest Rate %	Maturing	Maturing	Total
		< 1 year $	>1 Year $	$


Fixed Rate
Term deposits				70,000
	5.40	70,000	~~-~~
Floating Rate
Cash	5.40	3,257,132	~~-~~	3,257,132
Financial Liabilities
Fixed Rate
Interest bearing liabilities				(29,498)
	7.09	(6,846)	(22,652)

(c) Net fair values of fi nancial assets and liabilities

Recognised f nancial instruments The carrying amounts and net fair values of f nancial assets and liabilities as at the reporting date are as follows: Financial assets Cash assets	Consolidated
	2007 2006 Carrying amount $ Fair value $ Carrying amount $ Fair value $ 9,763,637 9,763,637 3,257,132 3,257,132 117,000 117,000 70,000 70,000 281,381 281,381 144,462 144,462 ~~-~~ ~~-~~ 3,739,790 7,052,808 1,051,150 1,051,150 159,285 159,285 ~~-~~ ~~-~~ 29,498 29,498 480,000 480,000 ~~-~~ ~~-~~
Interest bearing deposits
Trade receivables Other f nancial assets:
Investments in associated companies – listed
Financial liabilities
Trade payables

Lease liability

Interest bearing loan

Valuation approach

Net fair values of fi nancial assets and liabilities are determined by the Group on the following basis: Recognised fi nancial instruments

The net fair value of listed shares are determined by valuing them at the current quoted market bid price adjusted for transaction costs necessary to realise the asset.

Interest bearing loan and fi nance lease liability

The fair value estimated as the present value of future cash fl ows, discounted at market interest rates for homogeneous loans and lease agreements. The estimated fair value refl ects change in interest rates.

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60 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

22 FINANCIAL INSTRUMENTS (CONTINUED)

(d) Liquidity risk management

At the balance sheet date the Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash fl ows and matching the maturity profi les of fi nancial assets and liabilities.

(e) Credit risk

At the balance sheet date there were no signifi cant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset, including derivative fi nancial instruments, in the balance sheet.

23 COMMITMENTS

Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Company and the Group are required to perform minimum exploration work to meet the minimum expenditure requirements specifi ed by various State governments. These obligations are subject to renegotiation when application for a mining lease is made and at other times. These obligations are not provided for in the fi nancial report.

	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 3,298,500 52,527 ~~-~~ ~~-~~
Exploration commitments payable not provided for in the
f nancial report:
Within one year
Finance lease commitments Finance lease commitments are payable as follows:	~~-~~ 8,719 ~~-~~ 8,719 ~~-~~ 41,461 ~~-~~ 41,461
Within one year

One year or later and no later than 5 years
	~~-~~ 50,180 ~~-~~ 50,180 ~~-~~ (20,682) ~~-~~ (20,682)
Total minimum lease payments

Less: future lease f nancial changes
	~~-~~ 29,498 ~~-~~ 29,498
Present value of minimum lease payments
Lease liabilities provided for in the f nancial statements: Current Non-current	~~-~~ 6,846 ~~-~~ 6,846 ~~-~~ 22,652 ~~-~~ 22,652
	~~-~~ 29,498 ~~-~~ 29,498
Total lease liability

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

24 CONTINGENT LIABILITIES

The details and estimated maximum amounts of contingent liabilities that may become payable are set out below. The Directors are not aware of any circumstance or information which could lead them to believe that these liabilities will crystallise and consequently no provisions are included in the fi nancial statements in respect of these matters.

Litigation Constructive trust claim over the Kanowna Securities. Refer below. Guarantees A guarantee has been provided to support unconditional	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 277,000 277,000 277,000 277,000 117,000 70,000 117,000 70,000 ~~-~~ ~~-~~ ~~-~~ ~~-~~
environmental performance bonds
Indemnities 1
	394,000 347,000 394,000 347,000
Total estimated contingent liabilities

1 Indemnities have been provided to Directors and certain executive offi cers of the Company in respect of liabilities to third parties arising from their positions, except where the liability arises out of conduct involving a lack of good faith. No monetary limit applies to these agreements and there are no known obligations outstanding at 30 June 2007.

Constructive Trust Claim

Resolution of matters arising from 1998

In the period September to December 1998 management control of TNG was held by interests associated with Davis Samuel Pty Ltd (Davis Samuel). The Davis Samuel nominee Directors committed TNG to a series of transactions involving expenditure totalling $1,526,000. The Australian Securities Exchange Ltd (ASX) ruled that the transactions required shareholder approval. Shareholders subsequently voted against approving the transactions.

In December 1998, TNG entered into a settlement agreement with Davis Samuel and its Directors which effectively provided for the repayment of the funds expended, and TNG would in turn transfer its shares and options in Kanowna Lights Limited (the Kanowna Securities) to Davis Samuel.

The Commonwealth of Australia (the Commonwealth) in proceedings in the Supreme Court of the Australian Capital Territory claimed that it was entitled to a constructive trust over the Kanowna Securities and obtained an injunction preventing TNG from selling or otherwise disposing of them. The Commonwealth has claimed that as constructive trustee, the Commonwealth claims TNG is liable to account for the market value of the shares at the time they were acquired. The Commonwealth gave an undertaking as to damages.

Subsequently, in September 1999, Davis Samuel purported to rescind the December 1998 Settlement Agreement.

The Commonwealth is on notice that if TNG suffers damages as a result of the Commonwealth’s injunction, and the Commonwealth ultimately fails to prove its constructive trust claim, TNG will claim the damages from the Commonwealth.

Legal action against Davis Samuel

TNG, as a party to the proceedings instituted by the Commonwealth, issued cross-claims against Davis Samuel and several other parties including Messrs Allan Endresz, Peter Cain, William Forge, David Muir and Peter Clark.

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62 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

25 DEED OF CROSS GUARANTEE

Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998 the wholly owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of fi nancial reports and Directors reports.

It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor, payment in full, in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act 2001, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.

The subsidiaries subject to the Deed are Connaught Mining NL and Enigma Mining Limited. In accordance with the terms of the Class Order a consolidated income statement and consolidated balance sheet comprising the entities that are party to the Deed as set out below.

Income Statement Loss before income tax Income tax benef t	Consolidated 2007 2006 $ $ (5,224,623) (186,393) ~~-~~ ~~-~~
	(5,224,623) (186,393)
Loss after related income tax expense
Loss	(5,224,623) (186,393) 2,022,024 1,659,100 7,730,436 549,317
Retained earnings at beginning of year
Other reserves
	4,527,837 2,022,024
Retained earnings at end of year
Balance Sheet Cash assets Trade and other receivables Other assets Total current assets Other f nancial assets	9,774,434 3,323,629 125,482 125,376 23,645 39,740
	9,923,561 3,488,745
	6,381,887 5,608,092 327,078 122,315 3,997,090 3,677,459
Plant & equipment

Exploration and evaluation expenditure
Total non-current assets Total assets	10,706,055 9,407,866
	20,629,616 12,896,611
	578,290 85,467 ~~-~~ 6,846 32,850 22,013
Trade and other payables

Interest-bearing liabilities
Provisions Total current liabilities
	611,140 114,326

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

	Consolidated 2007 2006 $ $ ~~-~~ 22,652 ~~-~~ 388,217
Interest-bearing liabilities

Amounts owing to controlled entity
Total non-current liabilities Total liabilities Net assets	~~-~~ 410,869
	611,140 525,195
	20,018,476 12,371,416
	15,490,639 9,346,022 ~~-~~ 1,003,370 4,527,837 2,022,024
Issued capital
Reserves
Retained earnings
	20,018,476 12,371,416
Total equity

26 CONSOLIDATED ENTITIES

Country of Incorporation 2007 % of Ownership 2006 % of Ownership (a) Consolidated - TNG Limited *Subsidiaries* Connaught Mining NL Australia 100 100 Enigma Mining Limited Australia 100 100 Tennant Creek Gold (NT) Pty Ltd Australia 100 100 Manbarrum Mining Pty Ltd Australia 100 100 TNG Energy Pty Ltd¹ Australia 100 ~~-~~ ¹ Direct subsidiary of Enigma Limited 2007 2006 $ $ *Acquisitions of entities* During the year, the Company incorporated a new 100% owned subsidiary and acquired all the ordinary shares of TNG Energy Pty Ltd. Details of the acquisitions are as follows (in aggregate): Consideration (cash) 100 ~~-~~ Consideration (non cash) ~~-~~ ~~-~~ Total consideration 100 ~~-~~ Fair value of assets of entities acquired: Loan 100 - Total 100 ~~-~~	Country of Incorporation 2007 % of Ownership 2006 % of Ownership (a) Consolidated - TNG Limited *Subsidiaries* Connaught Mining NL Australia 100 100 Enigma Mining Limited Australia 100 100 Tennant Creek Gold (NT) Pty Ltd Australia 100 100 Manbarrum Mining Pty Ltd Australia 100 100 TNG Energy Pty Ltd¹ Australia 100 ~~-~~ ¹ Direct subsidiary of Enigma Limited 2007 2006 $ $ *Acquisitions of entities* During the year, the Company incorporated a new 100% owned subsidiary and acquired all the ordinary shares of TNG Energy Pty Ltd. Details of the acquisitions are as follows (in aggregate): Consideration (cash) 100 ~~-~~ Consideration (non cash) ~~-~~ ~~-~~ Total consideration 100 ~~-~~ Fair value of assets of entities acquired: Loan 100 - Total 100 ~~-~~
Consideration (cash)
Consideration (non cash) Total consideration Fair value of assets of entities acquired: Loan Total
	100 ~~-~~
	100 -
	100 ~~-~~

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64 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

27 AVAILABLE-FOR-SALE INVESTMENTS

Thor Mining PLC

Available-for-sale investments consist of an investment in Thor, a company listed on the Australian Securities Exchange (“ASX”) and the Alternative Investment Market (“AIM”) and which operates in mineral exploration.

Prior to 27 September 2006, the company equity accounted for its investment in Thor. A share issue by Thor on this date resulted in dilution of the company’s ownership interest and as a result it has been determined that the company no longer exerts signifi cant infl uence over Thor and that equity accounting for the investment is no longer appropriate.

At 31 December 2006, the company held an 11.63% ownership interest in Thor (15,100,000 shares). On 29 June 2007 TNG distributed its holding in Thor Mining PLC in the form of a capital reduction. At the time of the in specie distribution TNG held 15,100,000 Thor shares and 7,500,000 warrants. The change in the fair value of the warrants up to the in specie distribution was $1,762,500 recognised as fi nancial income in the Income Statement. After the distribution of 29 June 2007 TNG held 1,093,817 shares, the listed share price of Thor on this date was $0.385 per share which equated to a market value of $421,120. Thor warrants after distribution was 216,445 with a listed warrant price of $0.235 equating to a value of $50,865. The total market value of the company’s interest in Thor Mining PLC at 29 June 2007 is $471,984.

Thor is classifi ed as an available-for-sale fi nancial asset. Subsequent to initial recognition Thor was measured at fair value and changes therein is recognised as a component of equity. When the available-for-sale asset is derecognised, the cumulative gain or loss is transferred to profi t and loss. For Thor the changes in fair value that has now been recognised in the profi t and loss is $5,365,674.

Batavia Mining Limited

Prior to 29 June 2007 TNG accounted for its investment in Batavia using the equity method. This was a result of two directors of TNG, Messrs Smith and Biddle, were on the Board throughout the period and in addition, the Company Secretary and CFO of TNG, Mr Delaney, was elected to the Batavia Board on 29 November 2006. As a result it was determined that TNG exercised signifi cant infl uence over Batavia, accordingly the Company applied the equity method of accounting in accordance with AASB 128.

On 29 June 2007, TNG also distributed its holding in Batavia. At the time of the distribution TNG had 16,293,232 Batavia shares. After the distribution TNG held 1,119,564, the listed price of Batavia on this date was $0.13 which equated to a total market value of $145,543.

	Ownership	Ownership
	30 June 2007	30 June 2006

Thor Mining PLC Mining exploration and development in Australia UK 30 June	0.01% 23.48%
Batavia Mining Ltd Mining exploration and development Aust 30 June	0.01% 13.04%

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

2007 Consolidated	Batavia Mining Limited $ 3,603,587 980,964 498,660 (2,965,091) (1,972,577)
Net book value at 1 July
Additional investment
Share of prof t

Impairment

In-specie distribution
	145,543

2006	Thor Mining PLC $ Batavia Mining Limited $ Restated Total $ Restated ~~-~~ 185,017 185,017 (1,626,831) (1,678,940) (3,305,771)
Consolidated (restated)
Revenue (100%) Loss (100%) Share of associate loss Total assets (100%) Total liabilities (100%) Net assets
	(381,980) (268,702) (650,682)
	4,912,324 20,052,543 24,964,867 (217,338) (1,140,408) (1,357,746)
	4,694,986 18,912,135 23,607,121
	681,959 3,603,587 4,285,546
Share of associates net assets-equity accounted

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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

28 NOTES TO THE STATEMENTS OF CASH FLOWS

(a) Reconciliation of cash fl ows from operating activities

	Consolidated The Company 2007 $ 2006 $ 2007 $ 2006 $ Restated Restated (5,652,091) 620,323 (5,674,788) 327,585 ~~-~~ (941,844) ~~-~~ (557,837) (7,128,174) (305,349) (6,126,172) (264,166) (63,846) (63,847) (50,000) ~~-~~ ~~-~~ ~~-~~ 263,489 44,115 113,367 42,851 ~~-~~ 690 ~~-~~ 690 8,504,073 549,317 8,504,073 549,317 ~~-~~ (1,103,347) ~~-~~ (1,103,347) 2,965,091 ~~-~~ 1,981,926 ~~-~~ (498,660) 650,682 ~~-~~ ~~-~~ 12,936 ~~-~~ ~~-~~ ~~-~~ ~~-~~ (1,542) ~~-~~ (1,542) ~~-~~ (849,408) ~~-~~ (202,765)
(Loss)/prof t from ordinary activities after income tax
Add/(less) items classif ed as investing/f nancing activities: Gain on sale of tenements Gain on sale of investments Investing fees received Non-refundable deposit on sale of tenements Add/(less) non-cash items: Depreciation and amortisation Write off of plant and equipment Share based payments Reversal of associate diminution Impairment in investments Share of (prof t)/loss in associates Write down in exploration costs Foreign exchange gain Adjustment to investment Change in assets and liabilities: Increase/(decrease) in current payables, borrowing
	(1,583,336) (1,400,209) (1,201,594) (1,273,061) 458,622 (110,535) 299,915 (184,459) (96,575) 343,337 11,207 220,561
and provisions
(Increase)/decrease in current receivables
	(1,221,289) (1,167,407) (890,472) (1,236,959)
Net cash used in operating activities
29 EMPLOYEE BENEFITS Note Aggregate liability for employee benef ts, including on-costs Current	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 32,850 22,013 32,850 22,013
Employee benef ts provision 17

Defi ned contribution superannuation funds

The Group made contributions to the employees’ nominated superannuation funds. The amount recognised as an expense was $59,182 for the fi nancial year ended 30 June 2007 (2006: $14,782).

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

Share-based payments

Summary of options over unissued ordinary shares granted.

The following share-based payment arrangements are in existence:

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Exercise Fair
Options Not Grant Expiry price value Vesting
series Number vested date date $ $ date
----- End of picture text -----

Options series	Number	Not vested	Grant date	Expiry date	Exercise price $	Fair value $	Vesting date

1 1,400,000 ~~-~~ 30 Nov 2006 30 Nov 2007 $0.230 $0.281 ~~-~~
2 1,500,000 500,000 5 April 2007 31 Dec 2011 $0.380 $0.289 31 May 2008
500,000 31 May 2009
3 3,600,000 1,200,000 5 April 2007 31 Dec 2011 $0.380 $0.289 31 Dec 2007
1,200,000 31 Dec 2008
1,200,000 31 Dec 2009
4 10,000,000 ~~-~~ 19 June 2007 31 May 2010 $0.500 $0.394 ~~-~~
5 2,500,000 ~~-~~ 27 June 2007 31 May 2010 $0.500 $0.740 ~~-~~

The fair value of equity share options granted is estimated at the issue date using the Black-Scholes model, taking into account the terms and conditions upon which the options are granted. The following table lists the inputs to the model used for the years ended 30 June 2007.

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Grant date 30 Nov 2006 5 April 2007 19 June 2007 27 June 2007
----- End of picture text -----

Grant date	30 Nov 2006	5 April 2007	19 June 2007	27 June 2007

Dividend yield ~~-~~ ~~-~~ ~~-~~ ~~-~~
Underlying security spot price $0.49 $0.42 $0.65 $1.05
Exercise price $0.23 $0.38 $0.50 $0.50
Standard deviation of returns 60.00% 80.00% 80.00% 80.00%
Risk free rate 6.02% 6.09% 6.48% 6.42%
Expiration period 1 year 4-7 years 2-8 years 2-8 years
Black Scholes valuation $0.281 $0.289 $0.394 $0.740

Share-based payments	Consolidated Company 2007 2006 2007 2006 4,749,871 99,317 4,749,871 99,317 2,314,202 450,000 2,314,202 450,000
Employee Options granted

Consultant Options granted
	7,064,073 549,317 7,064,073 549,317
Total share-based payment

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68 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

Reconciliation of movement in employee share-based options in issue:

Consolidated and Company 2007	Consolidated and Company 2007	Consolidated and Company 2007	Consolidated and Company 2007	Consolidated and Company 2007	Consolidated and Company 2007
Options series	Number of options at beginning of year	Options granted	Options lapsed	Options exercised	Number of options at end of year on issue

1 4,250,000 ~~-~~ ~~-~~ (4,250,000) ~~-~~
2 4,700,000 ~~-~~ ~~-~~ (4,700,000) ~~-~~
3 2,950,000 ~~-~~ ~~-~~ (2,950,000) ~~-~~
4 3,000,000 ~~-~~ ~~-~~ (3,000,000) ~~-~~
5 ~~-~~ 2,500,000 ~~-~~ (1,000,000) 1,500,000
6 ~~-~~ 5,100,000 ~~-~~ ~~-~~ 5,100,000
7 ~~-~~ 10,000,000 ~~-~~ ~~-~~ 10,000,000
8 ~~-~~ 2,500,000 ~~-~~ ~~-~~ 2,500,000

Options granted to Directors are disclosed under Note 31.

30 KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Details of key management personnel

Directors

John W Barr (Chairman) Neil G Biddle Michael P Bowen Edward J Fry Terence N Smith

(Managing Director) (Non-Executive Director) (Non-Executive Director, appointed 28 November 2006) (Non-Executive Director)

Executives

Damian P Delaney (Company Secretary) Paul E Burton (Exploration Manager, appointed 22 January 2007)

(b) Compensation of key management personnel

Compensation by category

Compensation by category
Key Management Personnel Short-term	Consolidated The Company 2007 2006 2007 2006 $ $ $ $ 842,500 462,905 842,500 462,905 23,932 14,416 23,932 14,416 4,600,267 47,133 4,600,267 47,133
Post-employment

Share-based payments
	5,466,699 524,454 5,466,699 524,454

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

Information regarding individual Directors and executives compensation and some equity disclosure as permitted by Corporations Regulation 2M.3.03 and 2M.6.04 is provided in the Remuneration Report section of the Directors Report on pages 17 to 29.

(c) Equity instruments

All options refer to options over ordinary shares of TNG, which are exercisable on a one for one basis as approved by shareholders.

Options and rights over equity instruments

During the reporting period, the following options over ordinary shares were granted to Directors and executives and approved by shareholders.

The movement during the reporting period in the number of options over ordinary shares in TNG held, directly, indirectly or benefi cially, by each key management personnel, including their personally-related entities, is as follows:

Movements in Options

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----- Start of picture text -----

Vested and
Held at Held at exercisable
1 July Granted as Other 30 June at 30 June
2006 remuneration Changes [3] Exercised 2007 2007
----- End of picture text -----

	Held at 1 July 2006	Granted as remuneration	Other Changes3	Exercised	Held at 30 June 2007	Vested and exercisable at 30 June 2007
Directors
John W Barr 5,099,999 3,000,000 (1,830,999) (3,269,000) 3,000,000 3,000,000
Neil G Biddle 7,669,642 3,000,000 (1,140,000) (6,529,642) 3,000,000 3,000,000
Michael P Bowen 2,185,088 2,000,000 ~~-~~ (2,185,088) 2,000,000 2,000,000
Edward J Fry 1 ~~-~~ 1,500,000 ~~-~~ ~~-~~ 1,500,000 1,500,000
Terence N Smith 3,510,087 2,000,000 (260,087) (3,250,000) 2,000,000 2,000,000
Executives
Damian P Delaney 1,400,000 1,500,000 ~~-~~ (1,400,000) 1,500,000 ~~-~~
Paul E Burton 2 ~~-~~ 1,500,000 ~~-~~ ~~-~~ 1,500,000 500,000

1 Appointed 28 November 2006

2 Appointed Exploration Manager 22 January 2007 3

All other changes during the year were disposals off market at published market rates at the date of the transaction

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70 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

30 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)

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----- Start of picture text -----

Held at Vested and
Held at Granted as Other 30 June exercisable at
1 July 2005 remuneration Changes [4] Exercised 2006 30 June 2006
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Directors
John W Barr	3,000,000		~~-~~	3,799,999	(1,700,000)		5,099,999	5,099,999
Neil G Biddle	5,000,000		~~-~~	4,169,642	(1,500,000)		7,669,642	7,669,642
Michael P Bowen	1,750,000		~~-~~	1,085,088	(650,000)		2,185,088	2,185,088
Terence N Smith	2,000,000		~~-~~	1,510,087		~~-~~	3,510,087	3,510,087
Executives
Damian P Delaney 3		~~-~~	1,400,000	~~-~~		~~-~~	1,400,000	466,667
Chris Bath 1	2,000,000		~~-~~	(800,000)	(1,200,000)		~~-~~		~~-~~
Pedro Kastellorizos 2	200,000		~~-~~	~~-~~	(200,000)		~~-~~		~~-~~

1 Resigned 30 September 2005

2 Resigned 3 January 2006

3 Appointed Company Secretary 4 November 2005

4 Acquired as a result of participation in capital raising during the year

2,500,000 options issued April 2007 are held by executives are granted but not vested.

No amounts remain unpaid on the options exercised during the fi nancial year at year end.

Equity holdings and transactions

The movement during the reporting period in the number of ordinary shares of TNG held, directly, indirectly or benefi cially, by each key management personnel, including their personally-related entities is as follows:

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----- Start of picture text -----

Received
Held at on exercise Held at 30
1 July 2006 Purchases of options Sales Other June 2007
----- End of picture text -----

Directors
John W Barr	8,700,000		500,000		3,269,000	(1,469,000)		120,000	11,120,000
Neil G Biddle	5,761,868		2,790,250		6,529,642	(5,125,135)		400,000	10,356,625
Michael P Bowen	750,002			~~-~~	2,185,088		~~-~~	330,000	3,265,090
Edward J Fry 1		~~-~~	26,785		~~-~~		~~-~~	400,000	426,785
Terence N Smith	1,600,000		22,710		3,250,000		~~-~~	400,000	5,272,710
Executives
Damian P Delaney		~~-~~		~~-~~	1,400,000		~~-~~	70,000	1,470,000
Paul E Burton 2		~~-~~		~~-~~	~~-~~		~~-~~	~~-~~		~~-~~

1 Appointed 28 November 2006 2

Appointed Exploration Manager 22 January 2007

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

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----- Start of picture text -----

Received
Held at on exercise Held at 30
1 July 2005 Purchases of options Sales Other June 2006
----- End of picture text -----

Directors
John W Barr	9,000,000		~~-~~	1,700,000		(2,000,000)			~~-~~	8,700,000
Neil G Biddle	6,263,372		25,000	1,500,000		(2,026,504)			~~-~~	5,761,868
Michael P Bowen		793,747	~~-~~	650,000		(693,745)			~~-~~	750,002
Terence N Smith	1,647,016		~~-~~		~~-~~		(47,016)		~~-~~	1,600,000
Executives
Damian P Delaney 3		~~-~~	~~-~~		~~-~~			~~-~~	~~-~~		~~-~~
Chris Bath 1	649,985		~~-~~	1,200,000		(852,635)			(997,350)		~~-~~
Pedro Kastellorizos 2		~~-~~	~~-~~	200,000		(200,000)			~~-~~		~~-~~

1 Resigned 30 September 2005

2 Resigned 3 January 2006

3 Appointed Company Secretary 4 November 2005

(d) Other transactions with key management personnel

A number of key management personnel, or their personally-related entities, hold positions in other entities that result in them having control or signifi cant infl uence over the fi nancial or operating policies of those entities.

A number of these entities transacted with the Company or its subsidiaries in the reporting period. Their terms and conditions of those transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arm’s length basis.

The aggregate amounts recognised during the year relating to specifi ed key management personnel and their personally-related entities, were total revenue of $Nil and total net expense after reimbursement of offi ce costs of $93,958 (2006: $120,892). Details of the transactions are as follows:

	2007	2006
Specif ed Directors	$	$
Neil G.Biddle Corporate charters (i) 31,700 38,820
Michael P.Bowen Legal fees (ii) 62,258 81,602

(i) The Company used the services of Hannan Street Corporate Charters, an entity of which Mr Neil G Biddle is a related party.

(ii) The Company used the legal services of Hardy Bowen Lawyers, a legal fi rm of which Mr Michael P Bowen is a partner.

Amounts were billed based on normal market rates for such services and were due and payable under normal payment terms.

A N N U A L R E P O R T 2 0 0 7

72 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

31 NON KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Wholly owned Group transactions

Details of interests in wholly owned controlled entities are set out in Note 25. Details of these dealings are set out below.

Loans

Loans between entities in the wholly owned Group are non-interest bearing, unsecured and are repayable upon reasonable notice having regard to the fi nancial stability of the Company.

Transactions

*Transactions*
Balances with entities in the wholly-owned Group Receivable – non current	The Company 2007 $ 2006 $ 1,626,203 1,626,203 (1,626,203) (1,626,203)
Provision for non recovery
	~~-~~ ~~-~~
	(456,876) (630,080)
Payables – non current

(b) Other related party transactions

Associates

The Company invoiced to associated entities $759,929 (2006:$542,452) for the reimbursement of offi ce and administration costs during the year.

Joint venture operations

The joint venture makes the results of its research and development activities available to the Group as well as to one of the other joint venturers. No amount is paid by any of the venturers. From time to time, to support the activities of the joint venture, the venturers increase their investment in the joint venture.

			Consolidated	Consolidated	Consolidated	Consolidated
Joint venture party	Joint venture	Principal activities	Interest		Exploration expenditure
			2007 %	2006 %	2007 $	2006 $
Norilsk Nickel Cawse Extended Nickel/Cobalt			20% 20% ~~-~~ ~~-~~
Mines and Resources Australia Pty Ltd Kintore East Gold			23.75% 23.75% ~~-~~ ~~-~~

Exploration expenditure represents direct expenditure incurred by the Group.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

32 EVENTS SUBSEQUENT TO BALANCE DATE

WDR Distribution

In February 2007, TNG executed an agreement with WDR Pty Ltd to dispose of a number of TNG’s non-core tenements for a consideration of 10 million WDR shares upon a successful listing. On 19 July 2007, WDR was successfully listed on the ASX and the sale was completed.

Proposed IPO of Subsidiary

The Board has approved to proceed with a further restructuring of the Company’s non-core assets, including the potential sale of other tenements and the transfer of its nickel assets in Western Australia to a separate, nickelfocused listed Company. This should result in further distributions to shareholders.

Major Expenditure

Exploration expenditure since 1 July 2007 to the date of this report is $3.2m with a further commitment of $1.4m to November 2007.

Capital Changes

Since 1 July 2007 a director, Mr Edward J Fry, has exercised 100,000 options.

33 PRIOR PERIOD RESTATEMENT

The comparative fi nancial information in the half year fi nancial report was restated in order to correctly account for the Company’s derivative fi nancial assets, being its investments in listed options in Batavia Mining Limited. These investments were not recognised in the fi nancial reports for the half year ended 31 December 2005 and the year ended 30 June 2006.

This omission had the effect of understating the derivative fi nancial assets by $144,867 at 31 December 2005 and the derivative fi nancial assets by $370,950 and the equity accounted investment in Batavia by $545,756 at 30 June 2006. In addition, the impact of changes in the fair values of the derivative fi nancial assets was not recognised in the income statement in either reporting period.

A N N U A L R E P O R T 2 0 0 7

74 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

33 PRIOR PERIOD RESTATEMENT (CONTINUED)

The prior period comparatives impacted by the omission, including earnings per share, have been restated as shown below:

Consolidated	Consolidated	Consolidated		30 June 2006 $	Adjustment 30 June 2006 (restated) $ $	Adjustment 30 June 2006 (restated) $ $	Adjustment 30 June 2006 (restated) $ $	Adjustment 30 June 2006 (restated) $ $	Adjustment 30 June 2006 (restated) $ $
Income Statement
Change in fair value of investments held for trading Prof t/(loss) after tax				~~-~~ (229,085)	849,408 849,408			849,408 620,323
Balance Sheet
Financial assets held for trading Investments accounted for using the Opening retained earnings			equity method	~~-~~ 3,739,790 1,576,881		370,950 545,756 67,298	370,950 4,285,546 1,644,179
Basic earnings per share (cents) Diluted earnings per share (cents)				(0.255) (0.255)		0.944 0.944			0.689 0.689
Company
Income Statement
Change in	fair	value of investments held for trading		~~-~~	466,931			466,931
Prof t/(loss) after tax				(139,346)	466,931				327,585
Balance Sheet
Financial assets held for trading				~~-~~	319,800			319,800
Available-for-sale investment Opening retained earnings			4,164,864 (2,104,458)		466,931 319,800		4,631,857 (1,784,658)

D I R E C T O R S ’ D E C L A R A T I O N

1 In accordance with a resolution of the Directors of TNG Limited I state that the fi nancial statements and notes and the additional disclosures included in the remuneration report in the Directors’ report, which are designated as audited remuneration and are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s and Group’s fi nancial position as at 30 June 2007 and of their performance, for the fi nancial year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001; and
(iii) the remuneration disclosures that are contained in sections 1 to 5 of the Remuneration report in the Directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures ~~.~~
2 There are reasonable grounds to believe that the Company and the controlled entities identifi ed in note 26 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and the controlled entities pursuant to ASIC Class Order 98/1418.
3 This declaration is made after receiving the declarations required to be made to Directors by the chief executive offi cer and the chief fi nancial offi cer in accordance with section 295A of the Corporations Act 2001 for the fi nancial year ended 30 June 2007.

On behalf of the Board.

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John W Barr

Chairman

Dated at Perth 25 September 2007

A N N U A L R E P O R T 2 0 0 7

76 I N D E P E N D E N T A U D I T R E P O R T to members of TNG Limited

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Independent auditor’s report to the members of TNG Limited

Report on the fi nancial report and AASB 124 remuneration disclosures contained in the directors’ report

We have audited the accompanying fi nancial report of TNG Limited (the Company), which comprises the balance sheets as at 30 June 2007, and the income statements, statements of changes in equity and cash fl ow statements for the year ended on that date, a summary of signifi cant accounting policies and other explanatory notes 1 to 33 and the directors’ declaration of the Group comprising the Company and the entities it controlled at the year’s end or from time to time during the fi nancial year.

As permitted by the Corporations Regulations 2001 , the Company has disclosed information about the remuneration of directors and executives (remuneration disclosures), required by Australian Accounting Standard AASB 124 Related Party Disclosures , under the heading “Remuneration report” in sections 1 to 4 of the directors’ report and not in the fi nancial report. We have audited these remuneration disclosures.

Directors’ responsibility for the fi nancial report and the AASB 124 remuneration disclosures contained in the directors’ report

The directors of the Company are responsible for the preparation and fair presentation of the fi nancial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the fi nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 2, the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements , that the fi nancial report of the Group, comprising the fi nancial statements and notes, complies with International Financial Reporting Standards but that the fi nancial report of the Company does not comply. The directors of the Company are also responsible for the remuneration disclosures contained in the directors’ report.

Auditor’s responsibility

Our responsibility is to express an opinion on the fi nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial report is free from material misstatement. Our responsibility is also to express an opinion on the remuneration disclosures contained in the directors’ report based on our audit.

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

We performed the procedures to assess whether in all material respects the fi nancial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australian

I N D E P E N D E N T A U D I T R E P O R T to members of TNG Limited

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Accounting Interpretations), a view which is consistent with our understanding of the Company’s and the Group’s fi nancial position and of their performance and whether the remuneration disclosures are in accordance with Australian Accounting Standard AASB 124.

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

Statement of continued independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confi rm that the independence declaration required by the Corporations Act 2001 , provided to the directors of TNG Limited on 25 September 2007, would be unchanged if provided to the directors as at the date of this auditor’s report.

Auditor’s opinion on the fi nancial report

In our opinion:

(a) the fi nancial report of TNG Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s and the Group’s fi nancial position as at 30 June 2007 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
(b) the consolidated fi nancial report also complies with International Financial Reporting Standards as disclosed in note 2.

Auditor’s opinion on AASB 124 remuneration disclosures contained in the directors’ report

In our opinion the remuneration disclosures that are contained in sections 1 to 4 of the Remuneration report of the directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures .

KPMG

J G Robinson Partner

Perth 28 September 2007

A N N U A L R E P O R T 2 0 0 7

78 A S X A D D I T I O N A L I N F O R M A T I O N

Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below.

Shareholdings (as at 21 September 2007)

Substantial shareholders

Substantial holders in the Company are set out below:

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Shareholder Number Percentage
----- End of picture text -----

Shareholder	Number	Percentage
RAB Special Situations (Master) Fund Limited 18,370,869 10.08%
CBH Resources Limited 16,194,065 8.89%
Mr J W Barr 11,120,000 6.10%
Mr N G Biddle 10,356,625 5.68%

Class of shares and voting rights

(a) at meetings of members or classes of members each member entitled to vote may vote in person or by proxy or attorney; and

(b) on a show of hands every person present who is a member has one vote, and on a poll every person present in person or by proxy or attorney has one vote for each ordinary share held.

On-market buy-back

There is no current on-market buy-back.

Distribution of equity securities as at 21 September 2007

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Category Ordinary Shares
----- End of picture text -----

		116
1,001 – 5,000		570
5,001 – 10,000		417
10,001 –	100,000	709
100,001 and over		186
		1,998

The number of shareholders holding less than a marketable parcel is 65.

A S X A D D I T I O N A L I N F O R M A T I O N

Twenty largest shareholders as at 21 September 2007

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----- Start of picture text -----

Number of Percentage of
Name shares held shares held
----- End of picture text -----

ANZ Nominees	ANZ Nominees	Limited	Limited	Limited	Limited		24,426,673	13.41%
HSBC Custody Nominees (Australia) Limited -
A/C 3 (RAB SS Master					Fund)		18,370,869	10.08%
CBH Resources		Limited					16,194,065	8.89%
Biddle Partners		Pty Ltd					9,806,625	5.38%
Kensington Consulting Pty Ltd							7,050,000	3.87%
Mr Terry Lillis							3,330,607	1.83%
Kensington Capital Pty					Ltd		3,300,000	1.81%
Bouchi Pty Ltd							3,265,090	1.79%
Mr Alistair W	Mackie						3,250,000	1.78%
Teas Nominees		Pty Ltd					3,022,710	1.66%
Penfold Developments					Pty Ltd		3,000,000	1.65%
Ashton Drilling Services Pty Ltd							2,500,000	1.37%
Khumbu Pty Ltd							2,465,000	1.35%
Cornerstone Advisors Pty Ltd							2,000,000	1.10%
Citicorp Nominees Pty					Ltd		1,540,173	0.85%
Bonsmith Pty Ltd							1,550,000	0.85%
Willvest Pty Ltd							1,483,500	0.81%
Cape Birchington			Pty Ltd				1,400,000	0.77%
Mr Micheal K	Ashton						1,300,000	0.71%
Megamin Resources				Pty		Ltd	1,100,000	0.60%

A N N U A L R E P O R T 2 0 0 7

80 A S X A D D I T I O N A L I N F O R M A T I O N

The Group holds an interest in the following tenements or tenement applications:

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----- Start of picture text -----

Prospect Tenements Equity
----- End of picture text -----

Warramunga Project	Warramunga Project	Warramunga Project	ELA25581, ELA25582, ELA25587, EL24471, MLC647	ELA25581, ELA25582, ELA25587, EL24471, MLC647	100%	100%
Burt Range		Shelf	E80/3772 (Application)		100%
Carlton Shelf			E80/3816 (Application)		100%
Cawse	Extended		M24/547, M24/548, M24/549, M24/550		20% free carried to production, or can be converted to a 2% net smelter return on ore mined. Unicorn Pit is now excised and
					a wet	tonne royalty applies.
Croker	Island Project		ELA24640, ELA26049		100%
Goddard’s Copper Prospect			ELA24260		100%
			M16/281, M16/282		Diluting from 49%		to 2% gold return
Kintore East					interest on production. Current interest is 23.75%.			percentage
Manbarrum			A24518, EL24395, EL25470	EL25646,	100%
McTavish			M40/77, M40/119, M40/157, M40/194, P40/1001, P40/1002		3% gross royalty (third party retains a 25% interest in TNG’s interest)
Melville Island Bauxite Project			ELA24628		100%
Mt Peake			EL23271, EL23074		100%
Peterman Ranges			ELA26383, ELA25564, ELA26384, ELA25562, ELA26382		100%

Legand:

A: Authorisation (equivalent or Exploration Licence) E: Exploration

EL: Exploration Licence ELA: Exploration Licence Application M: Mining MLC: Mineral Land Council P: Prospecting

A S X A D D I T I O N A L I N F O R M A T I O N

Unlisted Options Unlisted options exercisable @ $0.50 expiring 31 March 2010 Total on issue Number of holders Holders with 20% or more: Kensington Consulting Pty Ltd Hatched Creek Pty Ltd

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----- Start of picture text -----

Unlisted options exercisable @ $0.38 expiring 31 December 2011
Total on issue
Number of holders
Holders with 20% or more:
Paul E Burton
Cape Birchington Pty Ltd
Simon Dorling
Unlisted options exercisable @ $0.23 expiring 30 November 2007
Total on issue
Number of holders
Holder with 20% or more:
----- End of picture text -----

12,500,000 7 3,000,000 3,000,000

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----- Start of picture text -----

5,100,000
5
1,500,000
1,500,000
1,500,000
----- End of picture text -----

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AI assistant

TIVAN LIMITED — Annual Report 2007

65967_rns_2007-10-14_996d9499-9bd8-49e0-8716-0c8e529e45d6.pdf

Contents

C o n Review of Operationst e n t s

Overview

Projects

Manbarrum Project: Zinc-Lead-Silver.

GEOLOGY and MINERALISATION

EXPLORATION MODEL

2006 EXPLORATION PROGRAM

2007 EXPLORATION PROGRAM

SANDY CREEK DEPOSIT

RESULTS

OTHER PROSPECTS

NEIP ANOMALY

WARRAMUNGA PROJECT NT: Gold – Copper – Bismuth EXPLORER, ROVER, McLAREN CREEK and GOSSE RIVER

MELVILLE ISLAND: Bauxite

CROKER ISLAND: Bauxite

MOUNT PEAKE: Nickel

OTHER NORTHERN TERRITORY TENEMENTS

WESTERN AUSTRALIAN TENEMENTS –

Carlton Shelf Project : Zinc-Lead-Silver

Burt Range Shelf Project: Zinc-Lead-Silver

Qualifying statement

OTHER WESTERN AUSTRALIAN TENEMENTS

ENVIRONMENTAL POLICY

TRADITIONAL OWNER POLICY

CORPORATE ACTIVITIES

THOR MINING PLC & BATAVIA MINING LIMITED

SALE OF NON-CORE ASSETS

SALE OF NICKEL ASSETS

CHANGE OF NAME

PLACEMENT AND UNDERWRITING

Corporate Governance

Introduction

CORPORATE GOVERNANCE DISCLOSURE

Recommendation 2.1, 2.2

2.1 Majority of the Board should be Independent Directors.

Recommendation 2.4

Recommendation 4.3

Recommendation 8.1

Recommendation 9.2

Identifi cation of Independent Directors

Statement concerning availability of independent professional advice

Names of Nomination Committee members and their attendance at committee meetings

Names and qualifi cations of Audit Committee members

Names of Remuneration Committee members and their attendance at committee meetings

Existence and terms of any schemes for retirement benefi ts for non-executive Directors

Directors Report

Directors

John W Barr CA, FAICD

Chairman

Neil G Biddle B.App.Sc(Geology), M.Aus.IMM

Managing Director

Michael P Bowen B.Juris, LLB, B.Com

Non-Executive Director

Edward J Fry

Non-Executive Director

Terence N Smith Dip.Bus Non-Executive Director

Damian P Delaney

Chief Financial Offi cer and Company Secretary

DIRECTORS MEETINGS

DIVIDENDS

STATE OF AFFAIRS

REMUNERATION REPORT

1. Principles of Remuneration

PRINCIPAL ACTIVITIES

REVIEW AND RESULTS OF OPERATIONS

Remuneration Policy – audited

Options

3. Options granted as part of remuneration – audited

4. Exercise of options granted as compensation – audited

C o n t e n t s

5. Analysis of options and rights over equity instruments granted as compensation – unaudited.

6. Analysis of movements in options – unaudited

DIRECTORS’ INTERESTS

Unissued shares under option

ETHICAL STANDARDS

Code of Conduct

TIVAN LIMITED Annual Report 2007