UNION STAR METALS LTD - Annual Report 2012

==> picture [334 x 96] intentionally omitted <==

LIMITED

AND CONTROLLED ENTITIES

ACN 36 124 541 466

Annual Report Year ended 30 June 2012

1 | P a g e

CONTENTS PAGE

CORPORATE DIRECTORY ......................................................................................................... 3 DIRECTORS' REPORT ......................................................................................................... 4-26 CORPORATE GOVERNANCE STATEMENT ..................................................................... 27-33 AUDITOR'S INDEPENDENCE DECLARATION ........................................................................34 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ............................................35 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................................36 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .......................................................37 CONSOLIDATED STATEMENT OF CASH FLOWS ...................................................................38 NOTES TO THE FINANCIAL REPORT ................................................................................ 39-68 DIRECTORS' DECLARATION ...................................................................................................69 INDEPENDENT AUDITOR'S REPORT ............................................................................... 70-71 ADDITIONAL INFORMATION FOR LISTED COMPANIES .................................................. 72-75

2 | P a g e

CORPORATE DIRECTORY

This annual report covers Promesa Limited and its controlled entity (―Consolidated Group‖ or ―Group‖) during the year ended 30 June 2012. The Companies functional and presentation currency is AUD ($).

OFFICERS	Mr Hersh Solomon Majteles	(Non-Executive Chairman)
	Mr Ananda Kathiravelu	(Executive Director)
	Mr Michael Sebbag	(Executive Technical Director)
	Mr Alejandro Calderon Chatet	(Executive Director- Country Manager)
	Mr Mario Enrique Camacho Bolivar	(Non - Executive Director)
	Mr Timothy Wise	(Non- Executive Alternate Director)
	Mr Philip Re	(Company Secretary)
REGISTERED OFFICERS	C/Regency Corporate Pty Ltd
	Suite 1 GF, 437 Roberts Road,
	SUBIACO WA 6008
AUSTRALIAN SOLICITORS	Steinepreis Paganin
	Lawyers and Consultants
	Level 4, Next Building
	16 Milligan Streets
PERUVIAN SOLICITORS	Carrera, Pinatte and Baca-Alvarez
	Abogados
	Calle Monterrey No 341 piso 6,
	Centro Empresarial Chacarilla Sur
	Santiago de Surco, Lima – Perú
AUDITORS	Bentleys
	Level 1, 12 Kings Park Road
	WEST PERTH WA 6005
SHARE REGISTRY	Advanced Share Registry Ltd
	Unit 2 150 Stirling Highway
	NEDLANDS WA 6009
	Telephone: (08) 9389 8033
	Facsimile: (08) 9389 7871
PRINCIPAL PLACE OF	Level 28, 140 St Georges Terrace
BUSINESS	PERTH WA 6000
	Telephone:(08) 9278 2766
	Facsimile: (08) 9278 2525
ASX CODE	PRA
WEBSITE	www.promesa.com.au

3 | P a g e

PROMESA LIMITED DIRECTORS‘ REPORT

DIRECTORS‘ REPORT

Your Directors present their report on the Company and its controlled entities for the financial year ended 30 June 2012.

Directors

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

Hersh Solomon Majteles	Non-Executive Chairman
Ananda Kathiravelu	Executive Director
Michael Sebbag	Executive Technical Director (Appointed 10 July 2012)
Alejandro Calderon Chatet	Executive Director – Country Manager
Mario Enrique Camacho Bolivar	Non-Executive Director
Timothy Wise	Non-Executive Alternate Director (Appointed 23 August 2012)

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

Company Secretary

Philip Re held the position of Company Secretary at the end of the financial year.

PRINCIPAL ACTIVITIES

CORPORATE ACTIVITY

Capital Raising

Promesa issued a Prospectus dated 24 May 2011 for the offer of 20,000,000 Shares at an issue price of $0.60 each and 8,000,000 free attaching Options with an exercise price of $0.20 each to raise up to $12,000,000. A Supplementary Prospectus dated 2 June 2011 was subsequently issued amending the term of the Prospectus (together the Prospectus).

On 12 July 2011 the Prospectus was closed raising $7,515,000 which was more than the minimum subscription of $6,000,000.

Atocha Project

The Company received USD $53,302.75 in cash from the divestment of leases associated with the Atocha Prospect in Louisiana, USA during June 2012 quarter. The buyer was Midstates Petroleum Company LLC based in Houston, Texas. The divestment includes an overriding royalty interest of 0.25% in the leases.

Appointment of Exploration Manager

A review of its activities in Peru has led to a number of changes including the appointment of a full-time Peruvian based exploration manager to oversee exploration activity Mr. Yvan Hurtado will fulfil the role as Chief Geologist in Peru. Mr. Hurtado is member of the AusIMM and has over 16 year experience as a Senior Geologist in major mining companies (including Newmont, Buenaventura, Volcan, CIA Minerals and Zincore Metals) in Peru and South America.

4 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

REVIEW OF OPERATIONS

BACKGROUND

Promesa Ltd (―Promesa‖, ―the Company‖) is an ASX listed Company domiciled in Perth with a substantial portfolio of exploration properties in Peru. The Company is focused on precious and base metal commodities.

The Company has recently completed the acquisition of four concessions which were held by Kirio Mining S.A.C. They comprise the Alumbre and Quinual prospects located in the La Libertad department, the Yarpun prospect located in Ancash department and the Huajoropampa prospect located in Huancavelica department. The concessions cover 2,300 ha. A further ten contiguous concessions (7,800ha), are located approximately 50 km north-east of Trujillo. These concessions host the Cerro Curunday and the Santa Rosita prospects also in the La Libertad department. Figure 1 illustrates that the Company‘s concessions in Peru.

==> picture [244 x 309] intentionally omitted <==

Figure 1 – Map detailing Promesa prospects

CERRO CURUNDAY PROSPECT

Drilling commenced at Cerro Curunday in August 2011. The aim of the drilling program was to test a series of gold-bearing zones identified by channel sampling and rock chip sampling along a 2.1km strike length of epithermal gold mineralisation. All drilling was undertaken using diamond drilling from the surface to enable detailed logging and sampling. Figure 2 illustrates that the Company‘s concessions are adjacent to concessions held by Barrick Gold Corporation (NYSE:ABX) and Vale (NYSE:VALE) in the La Libertad region.

5 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

==> picture [432 x 278] intentionally omitted <==

Figure 2 - Cerro Curunday and La Libertad District concessions

The Company drilled a total of 2,276.8 metres which was completed in mid-January 2012.The results of the drill program concluded that the high-sulfidation epithermal system, with structural control of veins and veinlets, revealed no significant anomalies of gold or other elements at depth.

A technical review was undertaken by the Company to determine the next stage of exploration within the concession. An extensive field level exploration works program, which included Bulk Leach Extractable Gold (BLEG), field samples and surface mapping was undertaken and is expected to be completed by the end of the calendar 2012 year within the other 10 contiguous concessions (referred to as the La Libertad District Concessions).

LA LIBERTAD DISTRICT CONCESSIONS

The field work exploration program has generated a better understanding of the geology within the region so as to determine the next stage of exploration.

The structural features of the environment in the study areas are comprised of Andean regional faults of NW-SE direction and local faults of NE-SW direction. These structural configurations serve as conduits for hydrothermal fluids for potential mineralisation in the area.

Field work covered the majority of the concessions and found several areas of mineral occurrence. The only area that was not evaluated was the Santa Rosita concession, due to local communities restricting access during exploration field activity.

A total of 332 samples were taken, including 196 rock samples (soils, outcrops and boulders) and 68 BLEG sediment samples. This was followed up by regional mapping of structure and geology.

The Cerro Curunday prospect displayed occurrences of alteration in the concession area with argillic alteration with silica-clay assembly of iron-oxides with silica veinlet‘s - iron oxides and cut by quartz veins - oxides of iron, hosted in sedimentary rocks (sandstone and siltstone). The results conclude that Curunday Project is a high sulphidation epithermal system with predominance of structural control systems of veins and veinlet‘s filling. A further 423 rock samples were taken and the results are abnormal only in vein zones and have values between 1.0 and> 1.0 ppm Au in specific areas.

6 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

The Las Huacas prospect, which adjoins Cerro Curunday hill, has shown an anomaly within an area of 2000 x 1000m. It has metasomatic alteration with disseminated pyrite mineralisation and very thin veins, a regional metasomatic zone arising from contact with intrusive rocks and sedimentary rocks (siltstone). The area has limited rock outcrops, with mostly weathered soil cover. There is a disintegration of rock with abundance of iron oxides which illustrates the potential of a supergene environment. A further 58 geochemical samples were taken (rock outcrops, boulders and soil) and the geochemical results show limited prospective mineralisation.

The field work exploration program has shown evidence of hydrothermal alteration and filling systems, hosted in sequences of sedimentary rocks, volcanic and intrusive. These occurrences are in epithermal systems and veins. As a result of this activity, several areas of significance were identified- refer to Figure 3. The next stage of work for La Libertad district is currently being evaluated and ranked against the Company‘s other exploration prospects within Peru.

==> picture [302 x 216] intentionally omitted <==

Figure 3 – La Libertad Region – Sediment Sampling for Au and Areas of Interest

KIRIO CONCESSIONS

Due diligence on the Kirio concessions was completed during the financial year. The results have been followed up by further detailed mapping and sampling within the Alumbre and Quinual prospects. Exploration teams have been focused on determining which prospects will have priority for exploration potential. Currently, Alumbre and Quinual will be the two lead projects based on current information.

Alumbre Prospect

The Alumbre prospect has become the primary focus and has the potential for a large epithermal system linked to porphyry with Au-Cu and Mo mineralisation. The alteration is mineralized over a 2.0 x 1.0 km area of influence.

The regional geology lies within the Coastal Batholith and consists mainly of Upper Cretaceous, granodiorite and tonalite rocks in the central area of the concession (Alumbre Hill) with pervasive alteration textures, with a local chloritic alteration overprint.

7 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

The alteration is propylitic, phyllic, silica and argillic in nature, with typical pervasive alterations with vuggy silica, quartz-alunite and stockwork. Locally hydrothermal breccias and hematite-jarosite are present. Predominant oxidation in the tuffs, characterising the epithermal environment as a high sulphidation type are illustrated in Figures 4, 5 and 6.

There are disseminated oxides and stockwork containing Au-Cu and Mo mineralisation. Acid leaching and supergene weathering has led to the development of a ―leach cap" lithology where primary textures have been destroyed and are now dominated by clay, quartz and jarosite + goethite lithology after the pyritic event.

==> picture [406 x 208] intentionally omitted <==

Figure 4 - Panoramic view of Alumbre prospect.

==> picture [405 x 247] intentionally omitted <==

Figure 5 –Plan view of the Alumbre Lithology and Geology Model

8 | P a g e

PROMESA LIMITED

==> picture [99 x 9] intentionally omitted <==

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

DIRECTORS‘ REPORT
----- End of picture text -----

==> picture [339 x 220] intentionally omitted <==

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

Epithermal System
Au-Ag Mineralization
----- End of picture text -----

Figure 6 –Cross-section view of the Alumbre Lithology and Geology Model

Field samples have confirmed historical geochemical results of Au values up to 4.11 g/t and with anomalous Cu 1900 ppm undertaken by Savage Resources in 1997 and Pasminco in 2000 (refer to Figures 7, 8 and 9).

==> picture [449 x 226] intentionally omitted <==

Figure 7 – Geochemical Result for Alumbre – Au

A systematic field program of 50 by 50 m field sampling with 187 samples collected, was completed during the financial year. Geological mapping and geochemical sampling is 75% complete. Petrographic samples were taken for assessment in order to determine the mineralogical and paragenetic associations.

Hydrothermal alterations present in the epithermal system have demonstrated the silicification (with occasional extension up to 70 x 30m within the concession), advanced argillic (pyrophyllite, quartz, kaolinite), chloritization at its greatest extent and propylitisation.

9 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

==> picture [448 x 227] intentionally omitted <==

Figure 8 – Geochemical Result for Alumbre - Cu

The system of mineralisation and alteration present corresponds to the important characteristics of a potential Gold and Copper deposit. They are present in surface outcrops that correspond to the roots of an epithermal system. These surface characteristics is currently being followed up by an induced polarisation (IP) geophysical program which is currently being progressed to determine the possibility of the existence of porphyry and epithermal systems. The Company is hopeful that the combination of the field sampling (geochemistry) and geophysics work will lead to a drilling program in late 2012 to early 2013.

Quinual Prospect

Hydrothermal alteration, geometry, extension and geochemical anomalies indicate the presence of a high sulphidation Au-Ag deposit related to a Cu-Au-Mo porphyry deposit at depth. The alteration covers an area of 2.5 x 1.0km. Historical data shows high geochemical values for As, Sb, Hg, Te and detectable low levels of Au and Ag. Potential mineralisation exists for Au-Ag in the oxides. Early stage work has shown characteristics analogous with the Marte-Lobo 5.8 M oz Au (Maricunga-Chile) and El Galeno 486 Mt @ 0.57% Cu deposits (Peru).

The geological setting consists of tertiary volcanic sequences composed of volcanic rocks belonging to the Calipuy Group, with of tuffs of dacitic to rhyolitic, the presence of dacitic lapilli tuff with pumice stone, dacitic tuff and crystal lithic dacitic ash tuff, textured acresional in sequences.

The alteration present is a large epithermal hydrothermal centre, with advanced argillic alteration assemblages of silica-alunite-FeOx (Hem.), abundant disseminated veinlets with silica-FeOx (Hem.) and zone boulders found in hydrothermal breccias with silicification with vuggy texture. The sulphides are pyrite disseminated in veins, the oxides are disseminated hematite (box work), and in veins (stockwork). Field samples shows high values in As (30,200 ppm), Sb (428 ppm), Hg (6.38 ppm) and outlier values of Au (28ppb), Ag (1.7 ppm), Cu (53.7ppm) and Mo (7 ppm), which are all significant pathfinder minerals.

Systematic sampling and trenching is progressing well along a set grid. The geological mapping (lithology, hydrothermal alteration and structural) and sampling is about 75% complete. The peak of the Quinual prospect is shown in Figure 9 . A panoramic view of the central area of the concession showing argillic alteration (bordered in red) and an area of propylitic alteration (bordered in green) are shown in Figure 10.

10 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

==> picture [380 x 248] intentionally omitted <==

Figure 9 - Quinual Project Area.

==> picture [377 x 209] intentionally omitted <==

Figure 10 – Panoramic View of Quinual Prospect.

Future work includes a PIMA testing program of field samples and IP geophysics program over the high geochemical anomalies (i.e. Sb, Hg and Pb) is currently underway. This will assist in the development of the geological model for the prospect.

NEW PROJECTS

Promesa continues to be active in evaluating potential new projects in order to complement existing exploration activity within Peru. The Company has also applied for several concessions within Peru and is awaiting registration from Ingemmet (The Peruvian Government Ministry of Energy and Minerals). The Olleros prospect, which is located in the central Andes of Peru near major cities of Huaraz and Recuay at Ancash Department, is under application as illustrated in Figure 11.

11 | P a g e

PROMESA LIMITED

==> picture [99 x 9] intentionally omitted <==

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

DIRECTORS‘ REPORT
----- End of picture text -----

==> picture [387 x 296] intentionally omitted <==

Figure 11 – Olleros Project Area

Olleros is in the same geological, structural and metallogenic corridor as Barrick‘s Pierina Gold Mine, which is a low cost and multimillion ounce production operation. The Olleros concession of 3,600 ha, has been applied for, based on the geological assessment of 5 alteration zones found in an area of 12 x 6 km. The areas are Parianan, Antacocha, Pariapata, Huantume and Aco as illustrated in Figure 12. Each area demonstrates alteration zones with the potential for epithermal and porphyry occurrences, pyroclastic rocks hosted in Calipuy Group and dacitic porphyry of Tertiary age that are an excellent host of potential Au-Ag and Cu deposits. The concession holding as illustrated surrounds the concessions held by Barrick Gold Corporation.

Olleros was the subject of exploration in the early 1990's. Work conducted included geochemical, geophysical and diamond drilling by mining companies including Barrick, IRL Peru, Teck and Meridian. The area has a strong argillic alteration and oxidation identified by satellite images. The mineralisation is hosted in volcanic rocks of the Calipuy Group, intruded by porphyritic bodies composed of dacites and riodacitas acid. Geochemical results for gold, copper and molybdenum anomalies show encouraging values.

The concessions are within the corridor of Au and Cu deposits of the Cordillera Blanca. Geologically, these are hosted within volcanic rocks of Tertiary age and are represented by the Calipuy Group and pyroclastic rocks composed of rhyodacitic tuffs. They are intruded by porphyritic dacites and riodacitas composed of acid to intermediate composition, structural stage and throughout the Andes are controlled by regional faults in a NW-SE direction and local faults NE-SW direction. The combination of these two fault systems generate favourable environments where hydrothermal fluids were replaced with mineral solutions that formed mineral deposits in the area. The best known deposit of this corridor is Barrick‘s Pierina Mine. This prospect will increase the Company concession base to 13,700 ha and will further strengthen the Company‘s exploration footprint in Peru.

12 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

==> picture [261 x 335] intentionally omitted <==

Figure 12– A map of the Olleros concessions surround a Barrick concession. Five areas of interest have been identified.

The Company is currently assessing social and community issues within the concession area and is undertaking further samples and high level mapping of the concession. Olleros is a district of high exploration activity within Peru, due to surrounding projects and historical activity.

COMMUNITY

The company is committed to fostering good social welfare and community relationships, as well as ensuring continuing social licence to develop projects in Peru. The Company recognises its responsibilities to the local communities around the project areas and has moved to increase its commitment to social welfare and community programs. The company has people and resources engaged to support community and social initiatives. Figure 13 and Figure 14 illustrate community projects and activity in the La Libertad region in Peru.

13 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

==> picture [379 x 267] intentionally omitted <==

Figure 13 - Local workers prepare seedlings for Environmental Programs.

==> picture [381 x 263] intentionally omitted <==

Figure 14 - Training for Local Workers on Environmental Programs.

Social welfare and community engagement programs were commenced during the year. Several meetings were held with local and surrounding communities and community leaders.

Local Community Labour has been employed to assist with the construction of facilities and infrastructure and to assist with exploration program activities. The Company‘s community engagement team has also

14 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

evaluated and assessed potential social welfare and environmental programmes that may be implemented. The aim of these programmes is to improve community welfare and ensure continuing social licence to develop projects in this area. The Company is also evaluating the use of community and environmental consultants to support this process.

Competent Persons Statement

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Yvan Hurtado, a Member of The Australasian Institute of Mining and Metallurgy. Mr. Hurtado is a full-time employee of Peru Mineral S.A.C. Mr. Hurtado has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Hurtado consents to the inclusion in this report of the matters based on his information in the form and context in which it appears

Operating Results

The Loss of the Consolidated Group after providing for income tax and eliminating minority equity interests amounted to $3,183,172 (2011 Profit of $1,836,914).

Dividends Paid or Recommended

No Dividends were paid or declared for payment.

Financial Position

The net assets of the Consolidated Group have increased by $4,948,935 from $2,896,366 on 30 June 2011 to $7,845,301 on 30 June 2012. This increase has largely resulted from the capital raising in July 2011.

Significant Changes in State of Affairs

The significant changes in the state of affairs of the Consolidated Group which occurred during the financial year are outlined in the section headed Corporate Activity above.

After Balance Date Events

There were no significant post balance date event.

Future Developments, Prospects and Business Strategies

Likely future developments in the operations of the Group are referred to elsewhere in the Annual Report. Other than as referred to in this report, further information as to likely developments in the operations of the Group and expected results of those operations would, in the opinion of the Directors, be speculative and prejudicial to the interests of the Group and its shareholders.

Environmental Issues

The Consolidated Group's activities are subject to the environmental risks inherent in the exploration industry. The Consolidated Group will be subject to environmental laws and regulations in connection with operations it may pursue in the mining and exploration industry, which operations are currently in Peru. The Consolidated Group intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the Consolidated Group may be the subject of accidents or unforeseen circumstances that could potentially subject the Consolidated Group to extensive liability.

15 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

Further, the Consolidated Group may require approval from the relevant authorities before it can undertake activities that are likely to impact the environment. Failure to obtain such approvals will prevent the Consolidated Group from undertaking its desired activities. The Consolidated Group is unable to predict the effect of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially increase the Consolidated Group's cost of doing business or affect its operations in any area.

The Consolidated Group considered the NGER Act and based on the current position is satisfied that it will not impact on the Consolidated Group‘s compliance.

16 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

INFORMATION ON DIRECTORS

	INFORMATION ON DIRECTORS
Ananda Kathiravelu	Managing Director
Qualifications	Mr Kathiravelu holds a Bachelor of Business and a Graduate Diploma of
	Applied Finance and Investment, and is an associate of the Securities
	Institute of Australia.
Experience	Ananda Kathiravelu has been in the financial services funds
	management and stockbroking industries for over 20 years.
	Mr Kathiravelu is the Managing Director of Armada Capital Limited, and
	was a Non-Executive Director of Pryme Oil and Gas Limited from 1
	December 2005 until 14 October 2009. Mr Kathiravelu is also the Non-
	Executive Chairman of Potash Minerals Ltd and a Non-Executive Director
	of Radar Iron Ltd. His areas of expertise include corporate advice, capital
	raising, mergers and acquisitions. His focus is in the junior resource
	sector.
Interest in Shares and Options	546,672 Ordinary Shares
	233,336 Options expiring 8 December 2012 exercisable at $0.20 (PRAO)
	1,500,000 Directors Options expiring 31 December 2013 exercisable at
	$0.20
Directorships held in other	Ananda Kathiravelu is the Non-Executive Chairman of Potash Minerals
listed entities	Ltd (Appointed 10 August 2006) and Non-Executive Director of Radar Iron
	Ltd (Appointed 21 September 2010)

Hersh Solomon Majteles	Non Executive Director/Chairman
Qualifications	Mr Majteles is a commercial lawyer and has been in private legal practice
	since 1972.
Experience	He has over 35 years‘ experience in business, corporate, property and
	commercial law and practice.
	Since 1983 he has been a Director of a number of publicly listed
	companies involved in the mining and exploration for gold, base metals,
	coal, uranium, oil and gas and in the bio tech sector.
Interest in Shares and Options	506,667 Ordinary Shares
	253,334 Options expiring 8 December 2012 exercisable at $0.20 (PRAO)
	1,000,000 Directors Options expiring 31 December 2013 exercisable at
	$0.20
Directorships held in other	Mr Majteles is Non-Executive Chairman of Metals Australia Limited
listed entities	(ASX:MLS) and a Non-Executive Director of Blaze International Limited
	(ASX:BLZ), Prime Minerals Limited (ASX:PIM) and Power Resources
	Limited (ASX:PWW).
	He was until 5 November 2009, a Non-Executive Director of Equatorial
	Resources Limited (ASX:EQX).

17 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

Michael Sebbag Executive Technical Director (Appointed 10 July 2012) Qualifications Mr. Sebbag qualified as a Mining Engineer from University of New South Wales in 1996 and has also completed a Master‘s Degree in Mineral Economics from Curtin University in 2000. Experience Mr. Sebbag has over 15 years global experience in the mining industry. Mr. Sebbag‘s resource disciplines include coal, precious and base metals. Most recently he was employed by Barrick Gold Corporation (NYSE: ABX, TSX: ABX) over an 11 year period where he held senior management and operational roles. Mr. Sebbag has been responsible for several major studies, expansion projects, technical expertise and operational management in the resource sector over several continents. His roles have included all aspects of the project life cycle from exploration to project development, community and government engagement, due diligence and operations. Currently Mr. Sebbag is an Independent Mining Consultant who provides specialist advice and peer review on project development, technical expertise and mentoring, as well as merger and acquisition assistance for international mining and exploration companies.

Interest in Shares and 285,000 Ordinary Shares Options Directorships held in other Nil listed entities

Alejandro Calderon Chatet	Executive-Director – Country Manager
Qualifications	Having completed courses in Business Economics at Université
	Montesquieu de Bordeaux IV in Bordeaux, France (1998-2003), a graduate
	coursework degree in Business-Economics at the University of California
	Santa Barbara (2002-2003), and a Masters degree in Management and
	Finance from Harvard University (2005-2006), Alejandro brings to the
	Board extensive skills as a results oriented professional with broad
	international experience in management, business development and
	financial analysis.
Experience	Mr Calderon has senior management roles with Companies in South
	America involved in coal trading and the supply to domestic and
	international markets, the production of bio-fuels and crude oil derivatives
	and an investment firm targeting emerging markets in the oil, energy and
	mining sectors.
Interest in Shares and	Nil
Options
Directorships held in other	Nil
listed entities

18 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

Mario Enrique Camacho	Non-Executive Director
Bolivar
Qualifications	Mr Bolivar qualified as a Mechanical Engineer in 1995 and has over 15
	years experience in all aspects of project engineering, including technical
	and administrative project coordination, engineering consulting, inspection,
	quality control and assurance.
Experience	He is based in Colombia and since February 2009 has been President of
	Grupo Pegasus Colombia SA. In this role, he is responsible for business
	analysis, defining strategic direction, approving application of resources,
	identifying and approving investment decisions, reviewing the Integrated
	Management System to ensure compliance with legal and financial
	obligations of the business, and overseeing its policies and strategic
	objectives.
Interest in Shares and	20,000,000 Ordinary shares
Options	10,000,000 Unlisted Options to acquire ordinary shares are exercisable at
	20 cents on or about 31 January 2013 (For each Option that vests and is
	exercised, a new Option will be issued for no consideration to the
	Optionholder at the time of exercise, exercisable at a price of $0.20 within
	1 year from the date of issue).
Directorships held in other	Nil
listed entities
Timothy Wise	Non-Executive Alternate Director(Appointed 23 August 2012)
Qualifications	Bachelor of Science (University of Western Australia)
Experience	Mr Wise is the founder of Wisepeak international which delivers coaching
	mentoring and speaking services to a range of individuals and companies
	predominantly in Australia.
	He was joint founder and CEO of Wasabi Energy Limited, an ASX listed
	energy Company with substantial investments in renewable energy
	technology and production. Mr Wise was the joint founder of The Tap
	Doctor, a successful Australia wide plumbing franchise. He has numerous
	private business interests and is an active investor in public listed
	companies. He previously worked as a stock broker for Patersons
	Securities Limited. Mr Wise was previously a Non-Executive Director on the
	Boards of Transerv Energy and Valdera Resources.
Interest in Shares and	Nil
Options
Directorships held in other	Nil
listed entities

19 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

Information on Company Secretary

Philip Re	Company Secretary
Qualifications	Mr Re holds a Bachelor of Business, is a Chartered Accountant, a Chartered
	Secretary and holds a Certificate of Public Practice. Mr Re has also
	completed a Graduate Diploma in Company Secretarial Practice.
Experience	Mr Re is a Director of Regency Corporate Pty Ltd where he provides
	corporate and Company secretarial services.Mr Re is currently the
	Company Secretary for Firestrike Minerals Limited (ASX: FIE).
	In recent years Mr Re has been involved as a Director and Company
	Secretary for a number of public companies involving transactions in the
	mineral exploration industry. Recently Mr Re was a Director and the
	Company Secretary for ASX Listed Meridian Minerals Limited, Transit
	Holdings Limited and South American Ferro Metals Limited.

20 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

REMUNERATION REPORT – AUDITED

The information provided in the remuneration report includes remuneration disclosures that are required under Accounting Standard AASB 124 Related Party Disclosures. These disclosures have been transferred from the financial report and have been audited.

Principles used to determine the nature and amount of remuneration

The Board determines the appropriate nature and amount of remuneration. The Board ensures that the executive reward satisfies the following criteria for good reward governance practice:

competitiveness and reasonableness;
acceptability to shareholders;
alignment of executive remuneration to performance;
transparency; and
capital management.

The framework provides a mix of fixed and variable pay.

Non-Executive Directors and executive Director

Fees and payments to Non-Executive Directors and the Executive Director reflect the demands which are made on, and the responsibilities of, the Directors. Non executive Directors‘ fees and payments are reviewed annually by the Board.

Directors‘ fees

Non-Executive Directors‘ fees are determined within an aggregate Directors‘ fee pool limit, which is periodically recommended for approval by shareholders. The maximum pool limit currently stands at $300,000 per annum and will be approved at the next Annual General Meeting.

Retirement allowances

Superannuation contributions required under the Australian superannuation guarantee Legislation are deducted from the Directors‘ overall fee entitlements

Key Management Personnel Remuneration Policy

The Board‘s policy for determining the nature and amount of remuneration of key management for the Consolidated Group is as follows:

The remuneration structure for key management personnel is based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the Consolidated Group The contracts for service between the Consolidated Group and key management personnel are on a continuing basis, the terms of which are not expected to change in the immediate future.

There is no requirements in regards to period of notice or termination amount payable stipulated in the contracts.

21 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

Performance income as a proportion of total remuneration

Executive Directors and Executives were not paid performance based bonuses.

Options issued as part of remuneration for the year ended 30 June 2012

No Options issued to Directors and Executives as part of their remuneration in 2012.

The following options were issued to consultant, Mr. Michael Sebbag, prior to his appointment as a Director. The options were subsequently cancelled on the 10 July 2012.

Consultant	Number of options	Terms
Michael Sebbag	1,000,000 Class 1 Consulting Options	Options to acquire ordinary shares are exercisable at 65 cents on or before 9 December 2013.
	1,000,000 Class 2 Consulting Options	Options to acquire ordinary shares are exercisable at 75 cents at a date no earlier than 6 months from date of issue and will expire twoyears from the vestingdate.
	1,000,000 Class 3 Consulting Options	Options to acquire ordinary shares are exercisable at 85 cents at a date no earlier than 12 months from date of issue and will expire twoyears from the vestingdate.

The remuneration paid to key management personnel are as follows:

		Fixed	Fixed		STI	LTI	Total
	Year	Salary fees and leave	Other fees	Superan nuation	Incentive Payments	Fair value of option Rights (equity settled)		Fixed	STI	LTI
		$	$			$	$	%	%	%
Ananda Kathiravelu	2011	162,419	-	14,618	-	312,965	490,002	-	-	-

	2012	180,000	-	16,200	-	-	196,200	-	-	-
Hersh Solomon Majteles	2011	40,000	-	3,600	-	208,643	252,243	-	-	-

	2012	40,000	-	3,600	-	-	43,600	-	-	-
Alejandro Calderon	2011	10,000	-	-	-	-	10,000	-	-	-

	2012	80,606	-	-	-	-	80,606	-	-	-
Mario Bolivar	2011	10,000	-	-	-	-	-	-	-	-

	2012	24,000	-		-	-	24,000	-		-
John Pritchett	2011	11,816	-	900	-	104,321	117,037	-	-	-

	2012	-	-	-	-	-	-	-	-	-
Philip Rodionoff	2011	11,667	-	1,050	-	104,321	117,038	-	-	-

	2012	-	-	-	-	-	-	-	-	-

22 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

	Year	Salary fees and leave	Other fees	Superan nuation	Incentive Payments	Fair value of option Rights (equity settled)		Fixed	STI	LTI




Philip Re(*)	2011	-	-	-	-	-	-	-	-	-
	2012	-	-	-	-	-	-	-	-	-
Total	2011	245,902	-	20,168	-	730,250	996,320	-	-	-
Total	2012	324,606	-	19,800	-	-	344,406	-	-	-

(*) Corporate and accounting fees disclosed under note 21: Related party transactions and includes company secretarial fees paid to Mr Philip Re.

END OF REMUNERATION REPORT

23 | P a g e

PROMESA LIMITED

DIRECTORS’ REPORT

Meetings of Directors

During the financial year, 4 meetings of Directors (including committees of Directors) were held. Attendances by each Director during the year were as follows:

	Directors’	Meetings
	Number eligible to attend	Number attended
Ananda Kathiravelu	4	4
Hersh Solomon Majteles	4	4
Alejandro Calderon	4	4
Mario Bolivar	4	4

Indemnification and Insurance of Directors and Officers

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

The Consolidated Group has paid premiums to insure each of the following current and former Directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Consolidated Group, other than conduct involving a wilful breach of duty in relation to the Consolidated Group. The amount of the premium was $18,000 for all Directors.

Ananda Kathiravelu
Hersh Solomon Majteles
Alejandro Calderon
Mario Bolivar
Michael Sebbag
Timothy Wise

Options

At the end of the financial year the unissued ordinary shares of Promesa Limited under option were as follows:

Options	Grant Date	Date of expiry	Exercise	Number under
			price	options
Listed Options (PRAO)	8 December 2010	8 December 2012	$0.20	20,871,916
Listed Options (PRAO)	20 January 2011	8 December 2012	$0.20	17,569,951
Listed Options (PRAO)	31 January 2011	8 December 2012	$0.20	5,000,000
Unlisted Directors Options	13 December 2010	31 December 2012	$0.20	3,300,000
Unlisted Vendor Options	31 January 2011	31 January 2013	$0.20	20,000,000
Unlisted Caldwell Options	31 January 2011	31 January 2013	$0.20	20,000,000
Listed Options (PRAO)	8 August 2011	8 December 2012	$0.20	5,010,000
Unlisted Class 1 Consulting	9 December 2011	9 December 2013	$0.65	1,000,000
Options(*)
Unlisted Class 2 Consulting	9 December 2011	9 June 2013	$0.75	1,000,000
Options(*)

24 | P a g e

PROMESA LIMITED

DIRECTORS’ REPORT

Options	Grant Date	Date of expiry	Exercise	Number under
			price	options
Unlisted Class 3 Consulting	9 December 2011	9 December 2014	$0.85	1,000,000
Options(*)
Listed Options (PRAO)	22 November 2011	8 December 2012	$0.20	3,500,000
				98,251,867

During the year ended 30 June 2012, 18,134 ordinary shares of Promesa Limited were issued on the exercise of options (PRAO).

(*)Since the end of the financial year class 1, 2 and 3 Consulting Options were cancelled on 10 July 2012.

Partly paid shares

As at the date of this report there are no partly paid shares outstanding.

Proceedings on Behalf of Consolidated Group

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

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

25 | P a g e

PROMESA LIMITED

DIRECTORS‘ REPORT

Non-audit Services

The Board of Directors, in accordance is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The Directors are satisfied that the services disclosed below did not compromise the external auditor‘s independence for the following reasons:

all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

No fees were paid/payable to the external auditors for non-audit services during the year ended 30 June 2012:

The lead auditor‘s independence declaration for the year ended 30 June 2012 has been received and can be found on page 34 of the Directors‘ report.

This report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors.

==> picture [182 x 64] intentionally omitted <==

Ananda Kathiravelu, Director Dated this 28 day of September 2012

26 | P a g e

PROMESA LIMITED CORPORATE GOVERNANCE

CORPORATE GOVERNANCE STATEMENT

The Board of Directors is responsible for the corporate governance of the Consolidated Group. The Board guides and monitors business activities and affairs of the Consolidated Group on behalf of the shareholders by whom they are elected and to whom they are accountable. The Consolidated Group has adopted systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with Consolidated Group‘s needs. The Corporate Governance Statement has been structured with reference to ASX Corporate Governance Council‘s (―council‖) ―Principles of Good Corporate Governance and Best Practise Recommendations‖ to the extent that they are applicable to the Consolidated Group.

Information about the Consolidated Group‘s corporate governance practises are set out below.

Board of Directors

Role of the Board

The Board‘s primary role is the protection and enhancement of long-term shareholder value.

To fulfil this role, the Board is responsible for the overall corporate governance of the entity including formulating its strategic direction, approving and monitoring capital expenditure, setting remuneration, appointing, removing and creating succession policies for Directors and senior executives, establishing and monitoring the achievement of management‘s goals and ensuring the integrity of internal control and management information systems. It is also responsible for approving and monitoring financial and other reporting.

Board Processes

The Board has established a framework for the management of the entity including a system of internal control, a business risk management process and appropriate ethical standards.

The full Board schedules meetings, including strategy meetings and any extraordinary meetings, as necessary to address any specific significant matters that may arise. The agenda for meetings is prepared in conjunction with the Chairman and Company Secretary. Standing items include the management report, financial reports, strategic matters, governance and compliance. Submissions are circulated in advance.

The entity is not currently considered to be of a size, nor is its affairs of such complexity to justify the establishment of separate Board committees, including a Nomination Committee, Remuneration Committee or an Audit Committee. Accordingly, all matters that may be considered by such committees are dealt with by the full Board. Details of the Board‘s procedures in respect to each of these areas are further outlined within the Corporate Governance Statement below – see Nomination Committee, Remuneration Committee and Audit committee respectively.

Director Education

The Consolidated Group has a formal process to educate new Directors about the nature of the business, current issues, the corporate strategy and the expectations of the entity concerning performance of Directors. Directors also have the opportunity to visit entity facilities and meet with management to gain a better understanding of business operations. Directors are given access to continuing education opportunities to update and enhance their skills and knowledge.

27 | P a g e

PROMESA LIMITED

CORPORATE GOVERNANCE

Independent Professional Advice and Access to Consolidated Group Information

Each Director has the right of access to all relevant Consolidated Group information and to the Consolidated Group‘s executives and, subject to prior consultation with the Chairman, may seek independent professional advice from a suitably qualified adviser at the entity‘s expense. The Director must consult with an advisor suitably qualified in the relevant field, and obtain the Chairman‘s approval of the fee payable for the advice before proceeding with the consultation. A copy of the advice received by the Director is made available to all other members of the Board.

Composition of the Board

The names of the Directors of the Consolidated Group in office at the date of this report are set out in the Directors‘ Report on page 4.

The composition of the Board is determined using the following principles:

A minimum of three Directors, with a broad range of expertise both nationally and internationally
Directors having extensive knowledge of the Consolidated Group‘s industries, and those which do not, have extensive expertise in significant aspects of auditing and financial reporting, or risk management and financing of public companies
The roles of Chairman and Managing Director are not to be exercised by the same individual.

Board members have experience in the management of public companies. The Board currently does not have a majority of independent Directors as recommended by the ASX Corporate Governance Council. The Directors consider that, given the current size and stage of development of the Consolidated Group, the current number of independent Directors in the Consolidated Group is appropriate for the effective execution of the Board‘s responsibilities. The Directors periodically monitor the need to appoint additional independent Directors.

During the year, Mr Hersh Solomon Majteles was considered an ―Independent Director‖ in terms of ASX Recommendations as he did not hold a substantial amount of shares in the Consolidated Group. Since the end of the financial year, two additional independent Directors Mr Michael Sebbag and the Alternate Director Mr Timothy Wise joined the Board .

Chairman

The Chairman is an Independent Director and has been selected to bring specific skills and industry experience relevant to the Consolidated Group.

Nomination Committee

The Board considers that a formally constituted Nomination Committee is not appropriate as the Board, as part of its usual role, oversees the appointment and induction process for Directors, and the selection, appointment and succession planning process of the Consolidated Group‘s executive officers. The Board considers the appropriate skill mix, personal qualities, expertise and diversity of each position. When a vacancy exists or there is a need for particular skills, the Board determines the selection criteria based on the skills deemed necessary. The Board identifies potential candidates and may take advice from an external consultant. The Board then appoints the most suitable candidate. Board candidates must stand for election at the next general meeting of shareholders.

28 | P a g e

PROMESA LIMITED

CORPORATE GOVERNANCE

The Chairman of the Board continually reviews the effectiveness of the Board, individual Directors, and senior executives. The other Directors have an opportunity to contribute to the review process. The reviews generate recommendations to the Board, which votes on them. Directors displaying unsatisfactory performance are required to retire.

Remuneration Committee

The Board considered that a formally constituted Remuneration Committee is not appropriate as the Board, as part of its usual role, oversees the appointment and remuneration of Directors and the Consolidated Group‘s executive officers. Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and senior executives. The Board may seek independent advice on the appropriateness of remuneration packages, given trends in comparative companies both locally and internationally. Remuneration packages include a mix of fixed remuneration, performance-based remuneration, and equity-based remuneration.

The remuneration structures explained below are designed to attract suitably qualified candidates, and to affect the broader outcome of maximising the Consolidated Group‘s profitability. The remuneration structures take into account:

Overall level of remuneration for each Director and executive;
The executive‘s ability to control the performance of the relevant area; and
The amount of incentives within each executive‘s remuneration.

Shares and options can only be issued to Consolidated Group Directors under a resolution at a general meeting of shareholders.

Non Executive Directors may receive a base fee and can be remunerated by way of share and option issues approved under a resolution at a general meeting of shareholders.

The Board has no established retirement or redundancy schemes.

Audit Committee

The Consolidated Group is not currently considered to be of a size, nor is its affairs of such complexity to justify the establishment of a separate Audit Committee. Whilst the Consolidated Group does not have a formally constituted Audit Committee, the Board, as part of its usual role, undertakes audit related responsibilities including:

Reviewing the annual and interim financial reports and other financial information distributed externally. This includes approving new accounting policies to ensure compliance with Australian Accounting Standards and generally accepted accounting principles, and assessing whether the financial information is adequate for shareholders needs;
Assessing corporate risk assessment processes;
Assessing whether non-audit services provided by the external auditor are consistent with maintaining the external auditor‘s independence. The external auditor provides an annual declaration of independence which is consistent with Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board;
Addressing any matters outstanding with auditors, Australian Taxation Office, Australian Securities and Investments Commission, Australian Securities Exchange and financial institutions;

29 | P a g e

PROMESA LIMITED

CORPORATE GOVERNANCE

Reviewing the nomination and performance of the external auditor. The external audit engagement partner will be rotated every five years;
Assessing the adequacy of the internal control framework and the Consolidated Group‘s code of ethical standards;
Monitoring the procedures to ensure compliance with the Corporations Act 2001 and the ASX Listing Rules and all other regulatory requirements.

The Directors review the performance of the external auditors on an annual basis and normally meet with them during the year to:

Discuss the external audit plans, identify any significant changes in structure, operations, internal controls or accounting policies likely to impact the financial statements and to review the fees proposed for the audit work to be performed;
Review the annual and half-year reports prior to lodgement with the ASX, and any significant adjustments required as a result of the auditor‘s findings, prior to announcement of the result.
The Board monitors the need to form an Audit Committee on a periodic basis.

Risk Management

Overview of the Risk Management System

The Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in accordance with the Consolidated Group‘s risk profile. This includes assessing, monitoring and managing operational, financial reporting and compliance risks for the Consolidated Group. The Consolidated Group is not of a size nor is its affairs of such complexity to justify the establishment of a formal system for reporting risk management and associated compliance and controls. Instead, a Director, in accordance with Consolidated Group policy, approves all expenditure, is intimately acquainted with all operations and reports all relevant issues to the other Directors at the Directors‘ meetings. The company secretary has declared to the Board, that the aforementioned system is working efficiently and effectively. The operational and other compliance risk management have also been assessed and found to be operating efficiently and effectively. All risk assessments covered the entire part of the financial year that the Consolidated Group operated and the period up to the signing of the annual financial report for all material operations in the Consolidated Group.

Risk Profile

The Consolidated Group is not currently considered to be of a size, nor is its affairs of such complexity to justify the establishment of a separate Risk Management Committee. Instead, the Board, as part of its usual role and through direct involvement in the management of the Consolidated Group‘s operations ensures risks are identified, assessed and appropriately managed. Where necessary, the Board draws on the expertise of appropriate external consultants to assist in dealing with or mitigating risk.

Major risks arise from such matters as actions by competitors, government policy changes, difficulties in sourcing raw materials, the robustness of the technologies being used or proposed to be used, environment, occupational health and safety, financial reporting and the purchase, development and use of information systems.

Risk Management, Compliance and Control

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities.

30 | P a g e

PROMESA LIMITED

CORPORATE GOVERNANCE

Practices have been established to ensure:

Capital expenditure and revenue commitments above a certain size obtain prior Board approval;
Financial exposures are controlled, including the potential use of derivatives;
Occupational health & safety standards and management systems are monitored and reviewed to achieve high standards of performance and compliance with regulations;
Business transactions are properly authorised and executed;
The quality and integrity of personnel (see below);
Financial reporting accuracy and compliance with the financial reporting regulatory framework (see below); and
Environmental regulation compliance (see below).

Quality and Integrity of Personnel

The Consolidated Group conducts a comprehensive review of the ability and experience of potential employees prior to appointment. Informal appraisals will be conducted regularly with continuous feedback and on the job monitoring and training for all employees. Formal appraisals will be conducted at least annually for all employees. Training and development and appropriate remuneration and incentives with regular performance reviews will create an environment of co-operation and constructive dialogue with employees and senior management.

Financial Reporting

The Consolidated Group‘s financial reports are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board.

Environmental Regulation

The Consolidated Group‘s operations are subject to significant environmental regulation in relation to its operational activities. The Consolidated Group is committed to achieving a high standard of environmental performance. The Board is responsible for the regular monitoring of environmental exposures and compliance with environmental regulations.

Internal Audit

The Consolidated Group does not have a formally established internal audit function. The Board ensures compliance with the internal controls and risk management procedures previously mentioned.

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 Consolidated Group.

Conflict of Interest

Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Consolidated Group. The Board has developed procedures to assist Directors to disclose potential conflicts of interest.

Where the Board believes that a significant conflict exists for a Director on a Board matter, the Director concerned is not present at the meeting whilst the item is considered.

31 | P a g e

PROMESA LIMITED

CORPORATE GOVERNANCE

Code of Conduct

The Consolidated Group has established a Code of Conduct (Code) which aims to develop a consistent understanding of, and approach to, the desired standards of conduct and behaviour of the Directors, officers, employees and contractors (collectively, the employees) in carrying out their roles for the Consolidated Group. Through this Code, the Consolidated Group seeks to encourage and develop a culture of professionalism, honesty and responsibility in order to maintain and enhance our reputation as a valued employer, business operator and ―corporate citizen‖. The Code is designed to broadly outline the ways in which the Consolidated Group wishes to conduct its business. The Code does not cover every possible situation that employees may face, but is intended to provide employees with a guide to taking a commonsense approach to any given situation, within an overall framework.

Trading in the Consolidated Group’s securities by Directors and employees

The Consolidated Group has established a Security Trading Policy that is provided to all Directors and employees on commencement.

The constitution permits Directors to acquire shares in the Consolidated Group. Consolidated Group policy prohibits Directors from dealing in shares whilst in possession of price sensitive information. Directors must notify the company secretary once they have bought or sold shares in the Consolidated Group or exercised options over ordinary shares.

The Trading Policy also covers a ―Block Out Period‖ of 5 days prior to the release of the following:

Company Annual Financial Report
Consolidated Interim Financial Report
Company‘s Quarterly Report

The full Securities Trading Policy can be viewed on the ASX platform.

In accordance with the provisions of the Corporations Act 2001 and the Listing Rules of the Australian Securities Exchange, the Consolidated Group on behalf of the Directors must advise the Australian Securities Exchange of any transactions conducted by them in shares and / or options in the Consolidated Group.

Diversity

The Company believes that the promotion of diversity on Boards, in senior management and within the organisation generally:

broadens the pool for recruitment of high quality Directors and employees;
is likely to support employee retention;
through the inclusion of different perspectives, is likely to encourage greater innovation; and
is socially and economically responsible governance practice.

Currently there are no women employed by the organisation, in senior executive positions, or on the Board. Given the present size of the Consolidated Group, there are no plans to establish measurable objectives for achieving gender diversity at this time. The need for establishing and assessing measurable objectives for achieving gender diversity will be re-assessed as the size of the Consolidated Group increases.

32 | P a g e

PROMESA LIMITED

CORPORATE GOVERNANCE

Communication with Shareholders

The Board has formally documented the Consolidated Group‘s continuous disclosure procedures and established a Compliance policy. The Board, as part of its usual role, provides shareholders with information using comprehensive continuous disclosure processes which includes identifying matters that may have a material effect on the price of the Consolidated Group‘s securities, notifying them to the ASX and issuing media releases.

In summary, the continuous disclosure processes operate as follows:

The Chairman and the company secretary are responsible for all communications with the ASX. Matters that may have an effect on the price of the Consolidated Group‘s securities are advised to the ASX on the day they are discovered. Senior executives monitor all areas of the Consolidated Group‘s internal and external environment;
The full annual financial report is made available to all shareholders, and includes relevant information about the operations of the Consolidated Group during the year, changes in the state of affairs and details of future developments;
The half-yearly report contains summarised financial information and a review of the operations of the Consolidated Group during the period. The half-year reviewed financial report is lodged with the Australian Securities and Investments Commission and the ASX, and sent to any shareholder who requests it;
Proposed major changes in the Consolidated Group which may impact on share ownership rights are submitted to a vote of shareholders;
All announcements made to the market, and related information (including information provided to analysts and the media), are released to the ASX; and
The external auditor attends the Annual General Meeting to answer any questions concerning the audit and the content of the Auditor‘s Report.

The Board encourages full participation of shareholders at the Annual General Meeting, to ensure a high level of accountability and identification with the Consolidated Group‘s strategy and goals. Important issues are presented to the shareholders as single resolutions.

The shareholders are requested to vote on the appointment and aggregate remuneration of Directors, the granting of options and shares to Directors and changes to the constitution. Copies of the constitution are available to any shareholder on request

Other Information

Further information relating to the Consolidated Group‘s corporate governance practices and policies has been made publicly available on the Consolidated Group‘s website at www.promesa.com.au

33 | P a g e

��

==> picture [336 x 14] intentionally omitted <==

==> picture [124 x 14] intentionally omitted <==

��

==> picture [6 x 10] intentionally omitted <==

�� �� ��

==> picture [6 x 10] intentionally omitted <==

��

��

==> picture [67 x 32] intentionally omitted <==

�� 

==> picture [68 x 38] intentionally omitted <==

�� 

��[��] ��

PROMESA LIMITED FINANCIAL REPORT

FINANCIAL REPORT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 30 JUNE 2012

Note

		2012	2011
		$	$
Revenue
Other revenue	2	275,985	3,492,250
Administration Expense		(89,750)	(73,132)
Consultancy Costs		(1,347,060)	-
Employee Benefit Expense		(247,929)	(1,019,684)
Exploration Expenditure Impairment		(1,157,548)	-
Financial Administration and Compliance Expenses		(231,234)	(154,832)
Legal Expense		(15,479)	(168,423)
Travel and Accommodation Expense		(368,446)	(238,779)
Other Expense		(1,711)	(486)
Profit / (Loss) before income tax	3	(3,183,172)	1,836,914
Income tax expense	4	-	-
Profit / (Loss) for the Year		(3,183,172)	1,836,914
Other Comprehensive income
Exchange difference on translating foreign controlled entities		20,634	(79,782)
Total Comprehensive income for the Year		(3,162,538)	1,757,132
Basic earnings / (Loss) per share (cents per share)	7	(3.00)	2.83
Diluted earning per share (cents per share)	7	-	1.72

The accompanying notes form part of this financial report.

35 | P a g e

PROMESA LIMITED FINANCIAL REPORT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

	Note
		2012	2011
		$	$
CURRENT ASSETS
Cash and cash equivalents	8	2,393,361	1,206,768
Trade and other receivables	9	641,559	85,573
Other assets	10	-	125,559
TOTAL CURRENT ASSETS		3,034,920	1,417,900
NON-CURRENT ASSETS
Property plant and equipment	11	176,418	79,028
Financial assets	12	2,000	2,000
Exploration expenditure	13	4,960,257	2,187,563
TOTAL NON-CURRENT ASSETS		5,138,675	2,268,591
TOTAL ASSETS		8,173,595	3,686,491
CURRENT LIABILITIES
Trade and other payables	14	328,294	316,123
Other liability	15	-	474,002
TOTAL CURRENT LIABILITIES		328,294	790,125
TOTAL LIABILITIES		328,294	790,125
NET ASSETS		7,845,301	2,896,366
EQUITY
Issued capital	16	7,027,521	106,480
Foreign currency translation reserve		(59,148)	(79,782)
Options reserve		1,190,432	-
Retained profits / (Accumulated losses)		(313,504)	2,869,668
TOTAL EQUITY		7,845,301	2,896,366

The accompanying notes form part of this financial report.

36 | P a g e

��

	�	��	��	��	��	��	��
			��	��	��	��
				��		��
				��		�
						��
��			��	�	�	��	��
��			�			��	��
��			�	��	�	�	��
��			�	��	�	��	��
��
��
��		��	��	�	�	�	��
��			��	�	�	�	��
�� ��		��		�	�	��
��			�	�	��	�	��
�� ��			�	�	��	�	��
�� ��			��	�	�	�	��
�� ��			�	�	�	��	��
��			��	��	�	��	��

	�	��	��	��	��	��	��
			��	��	��	��
				��		��
				��		��
						��
��			��	��	�	��	��
��			�	�	�	��	��
�� ��			�	��	�	�	��
��			�	��	�	��	��
��
��
�� ��		��	��	�	�	�	��
��			��	�	�	�	��
�� ��			�	�	��	�	��
��			��	��	��	��	��

��

�� � ��

PROMESA LIMITED FINANCIAL REPORT

CONSOLIDATED STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 JUNE 2012

Note

		2012	2011
		$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees		(1,560,856)	(767,474)
Payments for exploration expenditure		(3,930,242)	(1,304,996)
Interest received		218,040	65,216
Net cash used in operating activities	17	(5,273,058)	(2,007,254)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceed from disposal of Atocha		53,415	-
Purchase of exploration asset		-	(1,041,932)
Purchase of plant and equipment		(97,390)	-
Net cash used in investing activities		(43,975)	(1,041,932)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares		7,044,626	2,337,368
Proceed from application money received		-	474,002
Capital raising costs		(541,000)	(114,559)
Net cash provided by financing activities		6,503,626	2,696,811
Net increase in cash held		1,186,593	(352,375)
Cash at beginning of financial year	8	1,206,768	1,559,143
Cash at end of financial year	8	2,393,361	1,206,768

The accompanying notes form part of this financial report.

38 | P a g e

PROMESA LIMITED NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

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

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

This financial report includes the consolidated financial statements and notes of Promesa Limited an Australian listed Public Company incorporated in Western Australia and its controlled entities (‗Consolidated Group‘ or ‗Group‘).

Basis of Preparation

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

The financial report has been prepared in Australian Dollars, the currency of the legal parent entity.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

On 31 January 2011 Promesa Limited acquired all the shares in a Company incorporated in Peru by the name of Peru Minerals SAC (―Peru‖). The acquisition met the requirements of reverse acquisition accounting and has been accounted for in accordance with AASB 3 Business Combinations. The legal subsidiary, Peru is treated as the acquirer, in accordance with reverse acquisition accounting principles, as it has obtained control over the operations of the legal parent, Promesa Limited. Based on this, the consolidated financial statements represent the share capital of Peru prior to the business combination plus the fair value of Promesa Limited determined under AASB 3. The retained earnings and other reserves reflect Peru.

Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Principles of Consolidation

A controlled entity is any entity over which Promesa Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered.

A list of controlled entities is contained in Note 19 to the financial statements.

As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. Where controlled entities have entered (left) the Consolidated Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).

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

Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the group, are shown separately within the Equity section of the consolidated Balance Sheet and in the consolidated Income Statement.

39 | P a g e

PROMESA LIMITED NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Business Combinations

Business combinations occur where control over another business is obtained and results in the consolidation of its assets and liabilities. All business combinations, including those involving entities under common control, are accounted for by applying the purchase method. The purchase method requires an acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent liabilities to be determined as at acquisition date, being the date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and liabilities assumed in exchange for control together with costs directly attributable to the business combination. Any deferred consideration payable is discounted to present value using the entity‘s incremental borrowing rate. Goodwill is recognised initially at the excess of cost over the acquirer‘s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If the fair value of the acquirer‘s interest is greater than cost, the surplus is immediately recognised in profit or loss.

Income Tax

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

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

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

Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

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

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

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

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

40 | P a g e

PROMESA LIMITED NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Exploration and Development Expenditure

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

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

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

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

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

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

Financial Instruments

Recognition and Initial Measurement

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.

Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Derecognition

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

Classification and Subsequent Measurement

i. Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and unrealised gains and losses arising from changes in fair value are included in profit or loss in the period in which they arise.

41 | P a g e

PROMESA LIMITED

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

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

iii. Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Consolidated Group‘s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method. iv. Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

v. Financial Liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Impairment of Assets

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

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

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

Provisions

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

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 12 months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

Revenue and Other Income

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established.

Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

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

42 | P a g e

PROMESA LIMITED

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

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in income in the period in which they are incurred.

Goods and Services Tax (GST)

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

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

Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. Comparative balances represent the balances of the legal parent.

Critical Accounting Estimates and Judgments

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

Key Estimates — Impairment

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

Key Judgement – Exploration and evaluation costs

Acquisition, exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area that has not at balance sheet date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in or relating to, the area of interest are continuing.

Key Estimates – Income tax

Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best estimates of Directors. These estimates take into account both the financial performance and position of the Consolidated Group as they pertain to current income taxation legislation, and the Directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents that Directors‘ best estimate, pending an assessment by the Australian and Peruvian Tax authorities.

43 | P a g e

PROMESA LIMITED NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Key Judgement – Environmental issues

Balances disclosed in the financial statements and notes thereto not adjusted for any pending or enacted environmental legislation, and the Directors understanding thereof. At the current stage of the Consolidated Group‘s development and its current environmental impact the Directors believe such treatment is reasonable and appropriate.

Key Judgement – Business Combination

As disclosed in Note 26 the Company acquired Peru Minerals SAC. The Directors have made the assessment based on the structure of the combination that it be treated for accounting purposes as a reverse acquisition. Furthermore in determining the value of the consideration the Directors employed the black scholes option pricing model to determine the value of the options component.

Accounting standards issued but not yet effective

The following standards and interpretations have been issued by the AASB but are not yet effective for the period ending 30 June 2012:

		Effective date (i.e. annual reporting periods ending on or after)
AASB Reference	Title and Description

AASB 2011-9	Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income [AASB 101] This standard requires entities to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments).	30 June 2013
AASB 2011-4	Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements [AASB 124] This standard makes amendments to remove individual key management personnel disclosure requirements from AASB 124.	30 June 2014
AASB 9	Financial instruments AASB 9 includes requirements for the classification and measurement of financial assets. It was further amended by AASB 2010-7 to reflect amendments to the accounting for financial liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are described below. (a) Financial assets that are debt instruments will be classified based on (1) the objective of the entity‘s business model for managing the financial assets; (2) the characteristics of the contractual cash flows. (b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument. (c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases. (d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows: - The change attributable to changes in credit risk are presented in other comprehensive income (OCI) - The remaining change is presented in profit or loss	31 December 2013

44 | P a g e

PROMESA LIMITED NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)	NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)	NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)	NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
			Effective date (i.e. annual reporting periods ending on or after)
AASB Reference	Title and Description

AASB 9 (cont)	Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11	31 December 2013
AASB 10	Consolidated Financial Statements AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and UIG-112 Consolidation – Special Purpose Entities. The new control model broadens the situations when an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control. This is likely to lead to more entities being consolidated into the group. Consequential amendments were also made to other standards via AASB 2011-7 and amendments to AASB 127.	31 December 2013
AASB 11	Joint Arrangements AASB 11 replaces AASB 131 Interests in Joint Ventures and UIG- 113 Jointly- controlled Entities – Non-monetary Contributions by Ventures. AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore the determination of whether joint control exists may change. In addition it removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations themselves is accounted for by recognising the share of those assets and obligations. Joint ventures that give the venturers a right to the net assets is accounted for using the equity method. This may result in a change in the accounting for the joint arrangements held by the group. Consequential amendments were also made to other standards via AASB 2011-7 and amendments to AASB128.	31 December 2013
AASB 12	Disclosure of Interests in Other Entities AASB 12 includes all disclosures relating to an entity‘s interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures have been introduced about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.	31 December 2013
AASB 13	Fair Value Measurement AASB 13 establishes a single source of guidance under AASB for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted. Application of this definition may result in different fair values being determined for the relevant assets. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined. Consequential amendments were also made to other standards via AASB 2011-8.	31 December 2013

45 | P a g e

PROMESA LIMITED

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

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
		Effective date (i.e. annual reporting periods ending on or after)
AASB Reference	Title and Description

Interpretation 20	Stripping Costs in the Production Phase of a Surface Mine This interpretation applies to stripping costs incurred during the production phase of a surface mine. Production stripping costs are to be capitalised as part of an asset, if an entity can demonstrate that it is probable future economic benefits will be realised, the costs can be reliably measured and the entity can identify the component of an ore body for which access has been improved. This asset is to be called the ―stripping activity asset‖. The stripping activity asset shall be depreciated or amortised on a systematic basis, over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. The units of production method shall be applied unless another method is more appropriate.	1 January 2013

The financial report was authorised for issue on 28 September 2012 by the Board of Directors

46 | P a g e

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

PROMESA LIMITED

NOTE 2: REVENUE

Other revenue — Interest revenue — Gain on acquisition of subsidiary — Gain on Disposal of Atocha Lease	2012 $ 2011 $ 222,570 50,338 - 3,441,912 53,415 -
Total Revenue	275,985 3,492,250

NOTE 3: LOSS FOR THE YEAR

NOTE 3: LOSS FOR THE YEAR
	2012	2011
	$	$
Significant expenses :
Accounting and Secretarial	90,811	90,000
Consulting fees	156,628	46,170
Directors fees	247,929	269,266
Share based payment	1,190,432	730,250
Legal	15,479	168,423
Travel	357,313	228,486

NOTE 4 INCOME TAX

E 4 INCOME TAX
Income tax expense Current tax Deferred tax Note	2012 $ 2011 $ - - - -
	- -

(a) Income tax expense

Deferred income tax expense included in income tax expense comprises:

(Increase) in deferred tax assets


- (Increase) in deferred tax assets 4(c) - Increase in deferred tax liabilities 4(d)	- 322,562 - (322,562)
	- -

47 | P a g e

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

PROMESA LIMITED

NOTE 4 INCOME TAX (CONTINUED)

OTE 4 INCOME TAX (CONTINUED)
		2012	2011
		$	$
(b) Reconciliation of income tax expense to prima
facie tax payable
The prima facie tax payable on profit from ordinary	activities before income tax is		reconciled to the
income tax expense as follows:
Prima facie tax on operating profit at 30% (2011:		(954,952)	527,140
30%),
Add / (Less)		-	-
Tax effect of:		-	-
Share based payments		357,130	219,075
Other non deductible expenses		347,264	42,383
Gain on acquisition		-	(1,032,574)
Other deductible expenses		-	(50,684)
Deferred tax asset not brought to account		250,558	294,659
Income tax attributable to operating profit		-	-
The applicable weighted average effective tax
rates are as follows:		30 %	30 %
Balance of franking account at year end		Nil	Nil
(c) Deferred tax assets
Tax losses		1,063,811	667,095
Provisions and accruals		34,345	27,438
Share issue costs		360,038	144,952
		1,458,194	839,485
Set-off deferred tax liabilities	4(d)	-	-
Net deferred tax assets		1,458,194	839,485
Less deferred tax assets not recognised		(1,458,194)	839,485
Net tax assets		-	-
(d) Deferred tax liabilities
Interest accrual		-	-
Exploration expenditure		-	-
		-	-
Set-off deferred tax assets	4(d)	-	-
Net deferred tax liabilities		-	-

48 | P a g e

PROMESA LIMITED

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

NOTE 4 INCOME TAX (CONTINUED)

OTE 4 INCOME TAX (CONTINUED)
	2012	2011
	$	$
(e) Tax losses
Unused tax losses for which no deferred tax asset	3,546,035	2,223,650
has been recognised

Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been brought to account at 30 June 2012 because the Directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if:

i. The Consolidated Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the loss and exploration expenditure to be realised;
ii. The Consolidated Group continues to comply with conditions for deductibility imposed by law; and
iii. no changes in tax legislation adversely affect the Consolidated Group in realising the benefit from the deductions for the loss and exploration expenditure.

NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION

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

during the financial year are:
Key Management Person	Position
Hersh Solomon Majteles (Appointed 18/01/2008)	Non Executive Director/Chairman
Ananda Kathiravelu (Appointed 30/07/2008)	Executive Director
Alejandro Calderon (Appointed 31/01/11)	Executive Director – Country Manager
Mario Enrique Camacho Bolivar (Appointed 31/01/11)	Non Executive Director
Michael Sebbag (Appointed 10/07/2012)	Executive Technical Director

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

The totals of remuneration paid to Key Management Personnel of the Company and the Group during the year are as follows:

Number of Options Held by Key Management Personnel

	Opening	Granted as part of	Exercised during	Other changes
	1.07.11	remuneration	the year	during the year
Hersh Solomon Majteles	1,253,334	-	-	-
Ananda Kathiravelu	1,733,336	-	-	-
Alejandro Calderon	-	-	-	-
Mario Enrique Bolivar	10,000,000	-	-	-
Michael Sebbag	-	3,000,000(*)	-	-
Total	12,986,670	3,000,000	-	-

49 | P a g e

��

��

	��	��	��	��
	��	��	��	��
				��
��	��	�	��	�
��	��	�	��	�
��	�	�	�	�
��	��	�	��	�
��	��	�	��	�
��	��	�	��	�

��

	��	��	��	��	��
	��	��	��	��	��
��	��	�	�	�	��
��	��	�	�	�	��
��	�	�	�	�	�
��	��	�	�	�	��
��	�	�	�	�	�
��	��	�	�	�	��

��

��	��
		��	��
		�	�
��
�	��	��	��
�	��	�	��
�	��	��	�
	��	��	��

��

		��	��
		�	�
��	��
	��	��	��
		��	��
��	��	��	��
	��
��	��	��	��
	��

�� � ��

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

PROMESA LIMITED

NOTE 8: CASH AND CASH EQUIVALENTS

2012 $ 2011 $ Cash at bank and in hand 158,608 1,093,655 Short-term bank deposits 2,234,753 113,113 2,393,361 1,206,768 The effective interest rate on short-term bank deposits was varying between 4.14 to 5.75%. (2011: 3.5 to 5.45%). Reconciliation of cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: 2,393,361 1,206,768 Cash and cash equivalents 2,393,361 1,206,768 NOTE 9 : TRADE AND OTHER RECEIVABLES	2012 $ 2011 $ 158,608 1,093,655 2,234,753 113,113
	2,393,361 1,206,768
	2,393,361 1,206,768

CURRENT GST Receivable Interest Receivable Other Debtor Prepayments Receivables - Other Peru NOTE 10: OTHER ASSETS	2012 $ 2011 $ 18,232 12,594 4,181 - 1,138 - 7,288 4,910 610,720 68,069
	641,559 85,573

CURRENT Deferred expenses	2012 $ 2011 $ - 125,559
	- 125,559

NOTE 11: PROPERTY PLANT AND EQUIPMENT

NOTE 11: PROPERTY PLANT AND EQUIPMENT
NON CURRENT Plant and Equipment Accumulated Depreciation	2012 $ 2011 $ 196,285 80,021 (19,867) (993)
	176,418 79,028

51 | P a g e

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

PROMESA LIMITED

NOTE 12: FINANCIAL ASSET

NOTE 12: FINANCIAL ASSET
Financial Assets available for sale	2012 $ 2011 $ 2,000 2,000
	2,000 2,000

The financial instrument recognised at cost in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. Financial assets are classified as level 2.

NOTE 13: EXPLORATION AND EVALUATION EXPENDITURE

NOTE 13: EXPLORATION AND EVALUATION EXPENDITURE
Exploration expenditure capitalised Exploration and evaluation phases – Atocha Exploration and evaluation phases – Peru Mineral	2012 $ 2011 $ - 1,151,021 4,960,257 1,036,542
	4,960,257 2,187,563

The value of the Consolidated Group‘s interest in exploration expenditure is dependent upon:

the continuance of the Consolidated Group‘s rights to tenure of the areas of interest;
the results of future exploration; and

 the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale.

The Consolidated Group‘s exploration properties may be subjected to claim(s) under native title, or contain sacred sites, or sites of significance to native people. As a result, exploration properties or areas within the tenements may be subject to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum of such claims.

NOTE 14: TRADE AND OTHER PAYABLES

NOTE 14: TRADE AND OTHER PAYABLES
CURRENT Trade payables Sundry payables and accrued expenses Accounts payable and accrued expenses to related parties	2012 $ 2011 $ 205,559 216,526 36,465 - 86,270 99,597
	328,294 316,123

Trade and other payables are non interest bearing and usually settled within 30 to 60 days terms.

NOTE 15: OTHER LIABILITIES

NOTE 15: OTHER LIABILITIES
CURRENT Application money received	2012 $ 2011 $ - 474,002
	- 474,002

52 | P a g e

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

PROMESA LIMITED

NOTE 16: ISSUED CAPITAL

		2012	2011
		$	$
Issued Capital		7,027,521	106,480
The Consolidated Group has 106,583,133 fully paid ordinary shares of no par value, reflecting			the structure
of issued capital of the legal parent.
		2012	2011
		No.	No.
a.	Ordinary shares
	At the beginning of reporting period	94,039,999	37,000,000
	Fully paid shares issued during the year
	08 December 2010	-	11,136,436
	20 January 2011	-	1,196,897
	20 January 2011	-	4,200,000
	31 January 2011	-	40,000,000
	24 February 2011	-	100,000
	28 February 2011	-	20,001
	02 March 2011	-	200,000
	11 March 2011	-	4,998
	03 May 2011	-	66,667
	10 May 2011	-	115,000
	08 August 2011	12,525,000	-
	28 September 2011	4,800	-
	05 December 2011	13,334	-
	At reporting date	106,583,133	94,039,999

At the shareholders‘ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Options PRAO
At the beginning of reporting period	43,460,001	-
08 December 2010	-	21,196,716
20 January 2011	-	3,469,951
20 January 2011	-	14,100,000
31 January 2011	-	5,000,000
24 February 2011 – Exercised	-	(100,000)
28 February 2011 – Exercised	-	(20,001)
11 March 2011 – Exercised	-	(4,998)
03 May 2011 – Exercised	-	(66,667)
10 May 2011 – Exercised	-	(115,000)
08 August 2011	5,010,000	-
28 September 2011	(4,800)	-
28 November 2011	3,500,000	-

53 | P a g e

PROMESA LIMITED

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

NOTE 16: ISSUED CAPITAL (CONTINUED)

NOTE 16:	ISSUED CAPITAL (CONTINUED)
c. d. e.	2012 No. 2011 No. 05 December 2011 (13,334) -
	At reporting date 51,951,867 43,460,001
	Director Options At the beginning of reporting period 3,300,000 - 13 December 2010 - 3,500,000 02 March 2011 – Exercised - (200,000)
	At reporting date 3,300,000 3,300,000
	Vendor and Caldwell Options At the beginning of reporting period 40,000,000 - 31 January 2011 - 20,000,000 31 January 2011 - 20,000,000
	At reporting date 40,000,000 40,000,000
	Class 1,2 and 3 Consulting Options 09 December 2011 (*) 3,000,000 -
	At reporting date 3,000,000 -

(*) 1,000,000 Class 1, 1,000,000 Class 2 and 1,000,000 Class 3 (cancelled 10 July 2012)

f. Capital management

The Consolidated Group‘s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders.

Due to the nature of the Consolidated Group‘s activities, being oil and gas exploration and gold exploration, the Consolidated Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Consolidated Group‘s capital risk management is the current working capital position against the requirements of the Consolidated Group to meet exploration programmes and corporate overheads. The Consolidated Group‘s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the Consolidated Group at 30 June 2012 and 30 June 2011 are as follows

2011 are as follows
Cash and cash equivalents Trade and other receivables Other assets Trade and other payables Working capital position	2012 2011 $ $ 2,393,361 1,206,768 641,559 85,573 - 125,559 (328,294) (316,123)
	2,706,626 1,101,777

54 | P a g e

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

PROMESA LIMITED

NOTE 17: CASH FLOW INFORMATION

NOTE 17: CASH FLOW INFORMATION
	2012	2011
	$	$
a. Reconciliation of Cash Flow from Operations with Loss after
Income Tax
Profit / (Loss) after income tax	(3,162,538)	1,757,132
Cash flows excluded from loss attributable to operating activities
Non-cash flows in loss
Valuation of Options issued	1,190,432	730,250
Gain on acquisition of subsidiary	-	(3,441,912)
Changes in assets and liabilities
(Increase )/ decrease in prepayment and receivables	(555,985)	34,562
Increase/(decrease) in trade payables and accruals	81,142	217,710
(Increase) in Capital Proceeds	(53,415)	-
(Increase) in exploration cost capitalised	(2,772,694)	(1,304,996)
Cashflow from operations	(5,273,058)	(2,007,254)
NOTE 18: PARENT ENTITY DISCLOSURES
The balances shown below are that of the legal parent Promesa Limited.
a. Financial Position	2012	2011
	$	$
Assets
Current assets	2,398,597	994,987
Non-current assets	25,922,770	22,986,293
Total assets	28,321,367	23,981,280
Liabilities
Current liabilities	177,827	765,929
Non-current liabilities	-	-
Total liabilities	177,827	765,929
Equity
Issued capital	24,469,370	17,548,440
Option reserve	9,513,553	8,323,121
Accumulated Profit (losses)	(5,839,383)	(2,656,210)
Total equity	28,143,540	23,215,351
b. Financial Performance
Profit (Loss) for the year	(3,183,172)	(330,907)
Other comprehensive income	-	-
Total comprehensive income	(3,183,172)	(330,907)

55 | P a g e

PROMESA LIMITED

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

NOTE 18: PARENT ENTITY DISCLOSURES (CONTINUED)

c. Guarantees Entered into by the Parent Entity in relation to the debts of its Subsidiaries

The wholly owned subsidiary does not have any debts as at 30 June 2012.

d. Contingent liabilities of the Parent Entity

The parent entity does not have any contingent liabilities as at 30 June 2012.

e. Commitments for the Acquisition of Property, Plant and Equipment by the Parent Entity

The parent entity does not have any commitments for the acquisition of property, plant and equipment.

f. Loans to and from investments in Controlled Entities

Loans are provided by the Parent Entity to its controlled entities for their respective operating activities. Amounts receivable from controlled entities are non-interest bearing with no fixed term of repayment. The carrying value of investments in controlled entities are recognised as an asset in the Parent Entity. The future successful commercial application of these projects or the sale to third parties supports the recognition and recoverability of these assets held in the Parent Entity. Details of loans provided are listed below:

below:
Loan to Subsidiary Total value of loans provided to subsidiaries Details of investments are listed below: Investment in Subsidiary Total value of investments in subsidiaries	2012 $ 2011 $ 5,128,081 1,587,552
	5,128,081 1,587,552
	2012 $ 2011 $ 19,200,000 19,200,000
	19,200,000 19,200,000

NOTE 19 : INTEREST IN CONTROLLLED ENTITIES

The legal entity had the following subsidiaries

Name of the subsidiary	Place of Incorporation	Class of shares	Percentage held
Promesa Inc	United States	ORDINARY	100%
Peru Mineral SAC	Peru	ORDINARY	100%

NOTE 20: EVENTS AFTER THE BALANCE SHEET DATE

There were no significant events post balance date.

56 | P a g e

PROMESA LIMITED

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

NOTE 21: RELATED PARTY TRANSACTIONS

2012 2011 $ $

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

Transactions with related parties:

a. Other Related Parties

Accounting and company secretarial fees paid to

Accounting and company secretarial fees paid to
Regency Corporate Pty Ltd. Philip Re was a Director and	90,000	90,000
had an interest in the company during the year

NOTE 22: SEGMENT REPORTING

Segment Information

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The Group is managed primarily on the basis of mining exploration and treasury activities. Operating segments are therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics.

Types of reportable segments:

(i) Tenement exploration and evaluation:

The exploration of current project and the evaluation of new ones are reported in this segment. Segment assets, including acquisition costs of exploration licences and all expenses related to the tenements are reported in this segment.

(ii) Treasury

The reporting relating to income from cash holdings is reported in this segment.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial Report of the Group.

Segment assets

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets have not been allocated to operating segments.

Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated.

Unallocated items

57 | P a g e

PROMESA LIMITED

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

NOTE 22: SEGMENT REPORTING (CONTINUED)

The following items of revenue, expense, assets and liabilities are not allocated to operating segments, as they are not considered part of the core operations of any segment:

net gains on disposal of available-for-sale investments;
impairment of assets excluding exploration assets and other non-recurring items of revenue or expense;
income tax expense;
deferred tax assets and liabilities;
trade payable and other payables;
intangible assets.

(i) Segment performance –

Year ended 30 June 2012

 deferred tax assets and liabilities;  trade payable and other payables;  intangible assets. (i) Segment performance – Year ended 30 June 2012
	Exploration and	Treasury	Total
	Evaluation
	$	$	$
Gain on Disposal of Atocha Leases	53,415	-	53,415
Interest Revenue	-	222,570	222,570
Total segment revenue	53,415	222,570	275,985
Reconciliation of segment revenue to group revenue
Exchange difference on translating foreign controlled entities		-	20,634
Total segment revenue	53,415	222,570	296,619
Segment net Profit /(Loss) before tax	53,415	222,570	296,619
Reconciliation of segment result to group	net profit ( loss) before tax:
Administration Expense			(89,750)
Consultancy			(1,347,060)
Employees Benefits Expenses			(247,929)
Exploration			(1,157,548)
Financial Administration and Compliance	Expense		(231,234)
Legal Expense			(15,479)
Travel and Accommodation Expense			(368,446)
Other Expense			(1,711)
Group Profit (net loss) before tax			(3,162,538)

58 | P a g e

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

PROMESA LIMITED

NOTE 22: SEGMENT REPORTING (CONTINUED)

Year ended 30 June 2011

	Exploration and	Treasury	Total
	Evaluation
	$	$	$
Interest Revenue	-	50,338	50,338
Total segment revenue	-	50,338	50,338
Reconciliation of segment revenue to group revenue
Gain on acquisition of subsidiary		-	3,441,912
Total segment revenue	-	50,338	3,441,912
Segment net Profit /(Loss) before tax	-	50,338	3,492,250
Reconciliation of segment result to group net profit (	loss) before tax:
Administration Expense			(73,132)
Employees Benefits Expenses			(1,019,684)
Financial Administration and Compliance Expense			(154,832)
Legal Expense			(168,423)
Travel and Accommodation Expense			(238,779)
Other Expense			(80,268)
Group Profit (net loss) before tax			1,757,132

59 | P a g e

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

PROMESA LIMITED

NOTE 22: SEGMENT REPORTING (CONTINUED)

(ii) Segment assets 30 June 2012 Exploration and Evaluation $ Treasury $ Segments assets 4,960,257 2,367,759 Segment asset increases for the period: Capital Expenditure 2,772,694 - Increase/ (decrease) in cash - 1,186,593 2,772,694 1,183,593 Reconciliation of segment assets to group assets: Inter-segment elimination Unallocated assets Total group assets from continuing operations (ii) Segment assets 30 June 2011 Exploration and Evaluation $ Treasury $ Segments assets 2,187,563 1,206,768 Segment asset increases for the period: Capital Expenditure 1,157,899 - Increase/ (decrease) in cash - (352,375) 1,157,899 (352,375) Reconciliation of segment assets to group assets: Inter-segment elimination Unallocated assets Total group assets from continuing operations	Exploration and Evaluation $ Treasury $ 4,960,257 2,367,759 2,772,694 - - 1,186,593	Total $ 7,328,016 2,772,694 1,186,593
	2,772,694 1,183,593	3,959,287
		845,579
		8,173,595
		Total $ 3,394,331 1,157,899 (352,375)
	1,157,899 (352,375)	805,524
		292,160
		3,686,491

60 | P a g e

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

PROMESA LIMITED

NOTE 22: SEGMENT REPORTING (CONTINUED)

(iii) Segment liabilities 30 June 2012 Exploration and Evaluation $ Treasury $ Total $ Segments liabilities - - - Reconciliation of segment assets to group assets: Inter-segment elimination - Unallocated liabilities Trade and other payables 328,294 Total group liabilities from continuing operations 328,294 (iii) Segment liabilities 30 June 2011 Exploration and Evaluation $ Treasury $ Total $ Segments liabilities - - - Reconciliation of segment assets to group assets: Inter-segment elimination - Unallocated liabilities Trade and other payables - 790,125 Total group liabilities from continuing operations 790,125 (iv) Revenue by geographical region Revenue attributable to external customers is disclosed below, based on the location of the external customer: 30 June 2012 $ 30 June 2011 $ Australia 222,570 50,338 United States of America 53,415 - South America - - Total revenue 275,985 50,338	(iii) Segment liabilities 30 June 2012 Exploration and Evaluation $ Treasury $ Total $ Segments liabilities - - - Reconciliation of segment assets to group assets: Inter-segment elimination - Unallocated liabilities Trade and other payables 328,294 Total group liabilities from continuing operations 328,294 (iii) Segment liabilities 30 June 2011 Exploration and Evaluation $ Treasury $ Total $ Segments liabilities - - - Reconciliation of segment assets to group assets: Inter-segment elimination - Unallocated liabilities Trade and other payables - 790,125 Total group liabilities from continuing operations 790,125 (iv) Revenue by geographical region Revenue attributable to external customers is disclosed below, based on the location of the external customer: 30 June 2012 $ 30 June 2011 $ Australia 222,570 50,338 United States of America 53,415 - South America - - Total revenue 275,985 50,338		Total $ - - 328,294
			328,294
			Total $ - - - 790,125
			790,125
	275,985 50,338

61 | P a g e

PROMESA LIMITED

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

NOTE 22: SEGMENT REPORTING (CONTINUED)

(v) Assets by geographical region

The location of segment assets is disclosed below by geographical location of the assets:

(v) Assets by geographical region The location of segment assets is disclosed below by geographical location of the assets:
Australia United States of America South America Total Assets	30 June 2012 $ 30 June 2011 $ 2,400,598 996,987 - 1,151,021 5,772,997 1,538,483
	8,173,595 3,686,491

NOTE 23: COMMITMENTS

There were no tenement expenditure commitments or other expenditure commitments as at 30 June 2012.

NOTE 24: CONTINGENT LIABILITIES

In the opinion of the Directors there were no contingent liabilities at 30 June 2012, and the interval between 30 June 2012 and the date of this report.

NOTE 25: FINANCIAL RISK MANAGEMENT

a. Financial Risk Management Policies

The Consolidated Group financial instruments consist mainly of deposits with banks.

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

The Consolidated Group does not speculate in the trading of derivative instruments.

i. Treasury Risk Management The Board meets on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

The Board‘s overall risk management strategy seeks to assist the Consolidated Group in meeting its financial targets, whilst minimising potential adverse effects on financial performance.

Risk management policies are approved and reviewed by the Board on a regular basis.

iii. Financial Risk Exposures and Management

Interest rate risk

The Consolidated Group exposure to financial risk is limited to interest rate risk arising from assets and liabilities bearing variable interest rates. The weighted average interest rate on cash holdings is 4.80% at the 30 June 2012. All other assets and liabilities are non interest bearing. The net fair value of the Consolidated Group‗s financial assets and liabilities approximate their carrying value.

The Consolidated Group holds cash deposits with Australian banking financial institutions, namely the Westpac bank. Westpac has an AA rating with Standard & Poors.

62 | P a g e

PROMESA LIMITED

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

NOTE 25: FINANCIAL RISK MANAGEMENT (CONTINUED)

Liquidity risk

Liquidity risk arises from the possibility that the Consolidated Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities.

The Consolidated Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and marketable securities are available to meet the current and future commitments of the Consolidated Group. Due to the nature of the Consolidated Group‘s activities, being mineral exploration, the Consolidated Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. The Board of Directors constantly monitor the state of equity markets in conjunction with the Consolidated Group‘s current and future funding requirements, with a view to initiating appropriate capital raisings as required.

The financial liabilities of the Consolidated Group and the parent entity are confined to trade and other payables as disclosed in the Statement of financial position. All trade and other payables are noninterest bearing and due within 12 months of the reporting date.

Credit risk

There no material amounts of collateral held as security at balance date.

Credit risk is reviewed regularly by the Board. It arises through deposits with financial institutions.

The Board monitors credit risk by actively assessing the rating quality and liquidity of counter parties: only banks and financial institutions with an ‗A‘ rating are utilised;

The Consolidated Group only invests in listed available-for-sale financial assets that have a minimum ‗A‘ credit rating. Unlisted available-for-sale financial assets are not rated by external credit agencies. These are reviewed regularly by the Consolidated Group to ensure that credit exposure is minimised.

The credit risk for counterparties included in trade and other receivables at balance date is nil.

The Consolidated Group holds cash deposits with Australian banking financial institutions, namely the Westpac bank. Westpac has an AA rating with Standard & Poors.

Price risk

The Consolidated Group is not exposed to commodity price risk as it is still operating at the exploration level.

b. Financial Instruments

i. Derivative Financial Instruments

Derivative financial instruments are not used by the Consolidated Group.

The Consolidated Group does not enter into swap contracts.

ii. Financial instrument composition and maturity analysis:

The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity. The Financial instruments are all classified as current.

As such, the amounts may not reconcile to the balance sheet.

63 | P a g e

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

PROMESA LIMITED

NOTE 25: FINANCIAL RISK MANAGEMENT (CONTINUED)

		Fixed Interest Rate	Maturing
	Weighted Average Effective Interest		Floating Interest Rate
	Rate
	2012	2011	2012	2011
	%	%	$	$
Financial Assets:
Cash and cash equivalents	4.80%	3.87%	(1)2,393,361	1,206,768
Trade and other receivables	-	-	641,559	85,573
Financial asset available for sale	-	-	2,000	2,000
Total Financial Assets			3,036,920	1,294,341
Financial Liabilities:
Trade and sundry payables	-	-	328,294	316,123
Total Financial Liabilities			328,294	316,123

1) As at the 30 June 2012 Promesa Limited had $2,234,753 in fixed term deposits at 5.00%.

iii. Net Fair Values

The carrying amounts and estimated fair values of financial assets and financial liabilities are as follows:

— Other assets and other liabilities approximate their carrying value.

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

Financial Assets Cash and cash equivalents Trade and other receivables Available for sale Financial Liabilities Trade and sundry payables	2012 2011 Carrying Amount $ Net Fair Value $ Carrying Amount $ Net Fair Value $ 2,393,361 2,393,361 1,206,768 1,206,768 641,559 641,559 85,573 85,573 2,000 2,000 2,000 2,000
	3,036,920 3,036,920 1,294,341 1,294,341
	2012 2011 Carrying Amount $ Net Fair Value $ Carrying Amount $ Net Fair Value $ 328,294 328,294 316,123 316,123
	328,294 328,294 316,123 316,123

Fair values are materially in line with carrying values due to the liquid nature of these assets.

64 | P a g e

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

PROMESA LIMITED

NOTE 25: FINANCIAL RISK MANAGEMENT (CONTINUED)

Foreign Currency Risk

The Consolidated Group will be exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies other than the Group‘s measurement currency, however there is currently no material effect of foreign currency risk.

is currently no material effect of foreign currency risk.
Profit and loss Equity	American Currency impact 2012 2011
	$ $ 20,635 79,782 59,147 79,782

The variation is due to the exposure on asset and liabilities in the subsidiary.

NOTE 26:BUSINESS COMBINATION

On 31 January 2011, Promesa settled on the acquisition of Peru Minerals SAC. The acquisition price included the issue of ordinary shares and unlisted options to the shareholders of Peru Minerals SAC as follows:

a. The payment of a deposit to the vendors of USD200,000.
b. The issue of 40,000,000 ordinary shares at 30 cents each to acquire Peru Minerals pursuant to the terms of the share agreement.
c. The issue of 20,000,000 unlisted options to the vendor and 20,000,000 unlisted options to Caldwell to acquire Peru Minerals pursuant to the term of the Share Sale Agreement. The options are exercisable at $0.20 per share. The options will be issued for nil consideration and are valued under the black and scholes model at $0.18 per option.
d. the payment of USD800,000 on completion of the due diligence.

The total number of issued shares of Promesa Limited, prior to the Peru Minerals SAC acquisition was 53,533,333 ordinary shares. Following the acquisition, the shareholders of Peru Minerals SAC held 43% of this issued ordinary share capital of the Company, and thus obtaining effective control over its operations.

Due to the material nature of the acquisition, the acquisition of Peru Minerals is deemed a reverse acquisition for accounting purposes.

Therefore the following represents the net assets of Promesa and the consideration paid by Peru Minerals. The major classes of assets and liabilities comprising the acquisition of the Company as at the date of acquisition were as follows:

cquisition were as follows:
Cash and cash equivalents Other assets Financial asset at fair value through profit and loss Deferred exploration expenditure Trade and other payables Net assets acquired Consideration paid Ordinary shares	$
	2,287,298 63,504 2,000 1,234,199 (141,257)
	3,445,744
	3,832

65 | P a g e

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

PROMESA LIMITED

NOTE 27 : SHARE BASED PAYMENTS

	Number of	Vesting	Contractual
Grant date/consultant entitled	Instruments	Conditions	life of options
Share Options granted to key management on 9	1,000,000 Class 1	Nil	2
December 2011	Consulting Options
Share Options granted to key management on 9	1,000,000 Class 2	6 months	2
December 2011	Consulting Options	from date of
		issue
Share Options granted to key management on 9	1,000,000 Class 3	12 months	2
December 2011	Consulting Options	from date of
		issue
All options granted to key management personnel are ordinary shares in		Promesa Limited,	which confer a
right of one ordinary share for every option held.
The consulting options were subsequently cancelled on 10 July 2012.

The number and weighted average exercise prices of share options are as follows:

	Weighted average	Number of options
Consolidated	exercise price
Options outstanding as at 30 June 2009	-	-
Granted	-	-
Forfeited	-	-
Exercised	-	-
Expired	-	-
Options outstanding as at 30 June 2010	-	-
Granted	20.00c	3,500,000
Forfeited	-	-
Exercised	20.00c	200,000
Expired	-	-
Options outstanding as at 30 June 2011	20.00c	3,300,000
Granted	65.00c	1,000,000
Granted	75.00c	1,000,000
Granted	85.00c	1,000,000
Forfeited	-	-
Exercised	-	-
Expired	-	-

66 | P a g e

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

PROMESA LIMITED

NOTE 27 : SHARE BASED PAYMENTS (CONTINUED)

NOTE 27 : SHARE BASED PAYMENTS (CONTINUED)
Options outstanding as at 30 June 2012
Director options	20.00c	3,300,000
Class 1 Consulting Options	65.00c	1,000,000
Class 2 Consulting Options	75.00c	1,000,000
Class 3 Consulting Options	85.00c	1,000,000
Options exercisable as at 30 June 2012
Director options	20.00c	3,300,000
Class 1 Consulting Options	65.00c	1,000,000
Class 2 Consulting Options	75.00c	1,000,000
Class 3 Consulting Options	85.00c	1,000,000
Options exercisable as at 30 June 2011:	20.00c	3,300,000
Options exercisable as at 30 June 2010:	-	-

Included under consultancy cost in the income statement is $420,432 which relates to equity-settled sharebased payment transactions (2011:$730,250).

The fair value of services received in return for share options granted is based on the fair value of share options granted, measured using the Black-Scholes option pricing model, with the following inputs:

2012 Grant date – Consulting Options Class 1 Granted to Fair value of options and assumptions Fair value at grant date Share price Exercise price Expected volatility (weighted average volatility) Option life (expected weighted average life) Risk-free interest rate	09/12/11
	Consultant
	19.60c
	41.00c 65.00c 110% 2 3.12%

67 | P a g e

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

PROMESA LIMITED

NOTE 27 : SHARE BASED PAYMENTS (CONTINUED)

2012 Grant date – Consulting Options Class 2 Granted to Fair value of options and assumptions Fair value at grant date Share price Exercise price Expected volatility (weighted average volatility) Option life (expected weighted average life) Risk-free interest rate 2012 Grant date – Consulting Options Class 3 Granted to Fair value of options and assumptions Fair value at grant date Share price Exercise price Expected volatility (weighted average volatility) Option life (expected weighted average life) Risk-free interest rate	09/12/11
	Consultant
	21.10c
	41.00c 75.00c 110% 2 3.12% 09/12/11
	Consultant
	22.50c
	41.00c 85.00c 110% 2 3.12%

68 | P a g e

PROMESA LIMITED AUDITORS INDEPENDENCE DECLARATION

DIRECTORS‘ DECLARATION

The Directors of the Consolidated Group declare that:

The financial Report and notes, as set out on pages 35 to 68 are in accordance with the Corporations Act 2001 and:
a. comply with Accounting Standards and the Corporations Regulations 2001;
b. are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, as stated in note 1 to the financial statements; and
c. give a true and fair view of the financial position as at 30 June 2012 and of the performance for the year ended on that date of the Consolidated Group.
The Chief Executive Officer and Chief Finance Officer have each declared that:
a. the financial records of the Consolidated Group for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001 ;
b. the financial Report and notes for the financial year comply with the Accounting Standards; and
c. the financial Report and notes for the financial year give a true and fair view
In the Directors‘ opinion there are reasonable grounds to believe that the Consolidated Group will be able to pay its debts as and when they become due and payable.

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

==> picture [104 x 37] intentionally omitted <==

Director

Ananda Kathiravelu

Dated this 28 day of September 2012

69 | P a g e

==> picture [204 x 17] intentionally omitted <==

==> picture [118 x 15] intentionally omitted <==

==> picture [103 x 15] intentionally omitted <==

We have audited the accompanying financial report of Promesa Limited (“the Company”) and Controlled Entities (“the Consolidated Entity”), which comprises the consolidated statement of financial position as at 30 June 2012, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the Consolidated Entity, comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

==> picture [235 x 13] intentionally omitted <==

The directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standards AASB 101: Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

==> picture [117 x 13] intentionally omitted <==

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. 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 financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial 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 control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

==> picture [204 x 18] intentionally omitted <==

==> picture [93 x 13] intentionally omitted <==

==> picture [82 x 13] intentionally omitted <==

==> picture [57 x 13] intentionally omitted <==

==> picture [87 x 35] intentionally omitted <==

==> picture [74 x 12] intentionally omitted <==

�� �� ��

==> picture [88 x 12] intentionally omitted <==

��

�� ��  ��
��
�� �� ��
�� �� ��

==> picture [175 x 12] intentionally omitted <==

�� �� ��

==> picture [88 x 12] intentionally omitted <==

�� �� ��

==> picture [67 x 32] intentionally omitted <==

�� 

==> picture [68 x 37] intentionally omitted <==

�� 

��[��] ��

PROMESA LIMITED ADDITIONAL INFORMATION FOR LISTED COMPANIES

ADDITIONAL INFORMATION FOR LISTED COMPANIES

The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public companies only.

1. Shareholding

Shareholding
a. Distribution of Shareholders Category (size of holding) 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over	Number Number Holders Ordinary 24 11,685 59 198,183 100 871,305 321 12,071,348 134 93,430,612
	638 106,583,133

b. The number of shareholdings held in less than marketable parcels is 193.
c. The names of the substantial shareholders listed in the holding Company‘s register as at 24 September 2012 are:

	September 2012 are:
		Number
	Shareholder	Ordinary	%
1	GRUPO PEGASUS SA	20,000,000	18.77
2	MINEROIL ENERGY SAC	17,200,000	16.14

d. Voting Rights

The voting rights attached to each class of equity security are as follows: Ordinary shares

Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.
e. 20 Largest Shareholders — Ordinary Shares

e.	20 Largest Shareholders — Ordinary Shares
	Name	Number of	% Held of Issued
		Ordinary Fully	Ordinary Capital
		Paid Shares
		Held
1	GRUPO PEGASUS SA	20,000,000	18.76
2	MINEROIL ENERGY SAC	17,200,000	16.14
3	BT PORTFOLIO SERVICES LIMITED	7,004,650	6.57
4	BT PORTFOLIO SERVICES < TWIN PINES BTML A/C>	2,843,201	2.67
5	VALERIE KATHIRAVELU & TAMARA KATHIRAVELU <SUPAVAL	2,100,000	1.97
	SUPER FUND A/C>
6	RINGSFORD PTY LTD	2,000,000	1.88
7	PAREMEA PTY LTD	1,893,334	1.78
8	LIBERTINE INVESTMENTS PTY LTD	1,817,277	1.71
9	MEGATOP NOMINEES PTY LTD	1,400,000	1.31
10	BARK (NSW) PTY LTD	1,245,000	1.17

72 | P a g e

PROMESA LIMITED ADDITIONAL INFORMATION FOR LISTED COMPANIES

11 CITICORP NOMINEES PTY LIMITED 12 MR MARK HAMBOUR 13 CHIFLEY PORTFOLIOS PTY LTD A/C> 14 WENRO HOLDINGS PTY LTD 15 UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD 16 8 ONYXX INVESTMENTS PTY LTD 17 ZEBON TWO PTY LTD 18 CINQUE TERRA PTY LTD 19 PARAMEA PTY LTD 20 DR VIKRAM PUTTSWAMY f. 20 Largest options holders — PRAO Name 1 LIBERTINE INVESTMENTS PTY LTD 2 BT PORTFOLIO SERVICES LIMITED 3 MR BRETT GRAEME WALKER 4 KOBIA HOLDINGS PTY LTD 5 VALERIE KATHIRAVELU + TAMARA KATHIRAVELU SUPER FUND A/C> 6 BT PORTFOLIO SERVICES LIMITED 7 CITICORP NOMINEES PTY LIMITED 8 WENRO HOLDINGS PTY LTD 9 PAREMEA PTY LTD 10 MR ANTHONY JOHN VETTER + MRS JEANNETTE VETTER 11 JINDABYNE CAPITAL PTY LTD 12 MR DANIEL HENRY MARCOLINA + MRS MELANIE ANNE MARCOLINA		1,070,193 1.00 1,050,000 0.99 1,000,000 0.94 1,000,000 0.94 792,834 0.74 773,678 0.72 730,001 0.68 693,334 0.65 666,667 0.62 666,667 0.63 65,946,836 61.87 Number of PRAO options held % Held of Issued Ordinary Capital 3,946,668 7.60 2,516,663 4.84 2,000,000 3.85 1,660,000 3.20 1,050,000 2.02 1,000,000 1.92 1,000,000 1.92 1,000,000 1.92 946,667 1.82 900,000 1.73 750,000 1.44 710,000 1.37 700,000 1.35 700,000 1.35 690,000 1.33 650,000 1.25 621,667 1.20 600,000 1.15 567,333 1.09 525,000 1.01 22,533,998 43.36
13 MR RICHARD WILLIAM JOHNSTON
14 JOHN WINTER SUPER PTY LTD
15 BARK (NSW) PTY LTD
16 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
17 UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
18 DREAMPT PTY LTD
19 MR MARK HAMBOUR
20 DANIEL PAUL WISE

73 | P a g e

PROMESA LIMITED ADDITIONAL INFORMATION FOR LISTED COMPANIES

g. Option holders - Director options Name 1 ANANDA KATHIRAVELU 2 HERSH SOLOMON MAJTELES 3 PHILIP ALEXANDER RODIONOFF 4 JOHN ANTHONY PRITCHETT	Number of Options Held % Held of Director Options 1,500,000 0.45 1,000,000 0.30 500,000 0.15 300,000 0.10 3,300,000 100

h. Option holders - Vendor and Caldwell options Name 1 MINEROIL ENERGY SAC 2 GRUPO PEGASUS SA 3 CALDWELL MANAGEMENT AG	Number of Options Held % Held of Vendor Options 10,000,000 0.25 10,000,000 0.25 20,000,000 0.50 40,000,000 100

The name of the company secretary is Mr Philip Re .
The address of the principal registered office in Australia is.

C/- Regency Corporate Pty Ltd Suite 1 GF, 437 Roberts Road SUBIACO WA 6008 Telephone 08 6380 2555

Registers of securities are held at the following addresses Advanced Shares Registry Unit 2 150 Stirling Hwy NEDLANDS WA 6009 Australia

5. Securities Exchange Listing

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

6. Unquoted Securities

There are no unquoted shares. There are 43,300,000 unquoted options.

74 | P a g e

PROMESA LIMITED

ADDITIONAL INFORMATION FOR LISTED COMPANIES

Farmout Agreements and tenements

Tenements for Gold, Copper and associated ore bodies

Tenements	Location	Resource	Interest
Bacata Agreement	La Libertad , Peru	Gold , copper and associated ore bodies	100% upon approval of the environmental survey
Victoadal Agreement	La Libertad , Peru	Gold , copper and associated ore bodies	100% upon issue of a CIRA
Santa Rosita 2008	La Libertad , Peru	Gold , copper and associated ore bodies	100 % upon issue of requests and authorisation of relevant permits
Alumbre	La Libertad , Peru	Gold , copper and associated ore bodies	100%
Quinual	La Libertad, Peru	Gold , copper , Zinc and associated ore bodies	100%
Huajoropampa	Huajoropampa, Peru	Gold, Zinc and lead	100%
Yarpun	Ancash , Peru	Gold, Zinc , lead and silver	100%

In accordance with ASX Listing Rule 4.10.19, the Company advises that, since listing, it has used its cash in a way consistent with its business objectives.

75 | P a g e

AI assistant

UNION STAR METALS LTD — Annual Report 2012

65987_rns_2012-09-27_262c3c67-e6c6-4f1a-b55a-436312eabb92.pdf

LIMITED

AND CONTROLLED ENTITIES

CONTENTS PAGE

CORPORATE DIRECTORY

DIRECTORS‘ REPORT

Directors

Company Secretary

PRINCIPAL ACTIVITIES

CORPORATE ACTIVITY

Capital Raising

Atocha Project

Appointment of Exploration Manager

DIRECTORS‘ REPORT

REVIEW OF OPERATIONS

BACKGROUND

CERRO CURUNDAY PROSPECT

PROMESA LIMITED

DIRECTORS‘ REPORT

LA LIBERTAD DISTRICT CONCESSIONS

PROMESA LIMITED

DIRECTORS‘ REPORT

KIRIO CONCESSIONS

Alumbre Prospect

PROMESA LIMITED

DIRECTORS‘ REPORT

DIRECTORS‘ REPORT

Quinual Prospect

PROMESA LIMITED

DIRECTORS‘ REPORT

NEW PROJECTS

DIRECTORS‘ REPORT

COMMUNITY

PROMESA LIMITED

DIRECTORS‘ REPORT

PROMESA LIMITED

DIRECTORS‘ REPORT

Competent Persons Statement

Operating Results

Dividends Paid or Recommended

Financial Position

Significant Changes in State of Affairs

After Balance Date Events

Future Developments, Prospects and Business Strategies

Environmental Issues

PROMESA LIMITED

DIRECTORS‘ REPORT

DIRECTORS‘ REPORT

INFORMATION ON DIRECTORS

DIRECTORS‘ REPORT

PROMESA LIMITED

DIRECTORS‘ REPORT

DIRECTORS‘ REPORT

Information on Company Secretary

PROMESA LIMITED

DIRECTORS‘ REPORT

REMUNERATION REPORT – AUDITED

Principles used to determine the nature and amount of remuneration

Non-Executive Directors and executive Director

Directors‘ fees

Retirement allowances

Key Management Personnel Remuneration Policy

DIRECTORS‘ REPORT

Performance income as a proportion of total remuneration

Options issued as part of remuneration for the year ended 30 June 2012

The remuneration paid to key management personnel are as follows:

PROMESA LIMITED

DIRECTORS‘ REPORT

END OF REMUNERATION REPORT

PROMESA LIMITED

DIRECTORS’ REPORT

Meetings of Directors

Indemnification and Insurance of Directors and Officers

Options

PROMESA LIMITED

DIRECTORS’ REPORT

Partly paid shares

Proceedings on Behalf of Consolidated Group

UNION STAR METALS LTD Annual Report 2012

��

��

��