Cullen Resources Limited
Annual Report 2013

Plain-text annual report

C U L L E N R E S O U R C E S L I M I T E D A N N U A L R E P O R T 2 0 1 3 1 Cullen Resources Limited CORPORATE DIRECTORY CONTENTS Chairman's Report Company Profile Highlights Exploration Review Directors' Report Corporate Governance Statement Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Comprehensive Income Consolidated Statement of Cash Flows Notes to the Financial Statements Directors' Declaration Independent Audit Report Shareholder Information 2 3 4 5 17 26 29 30 31 32 33 60 61 63 ABN: 46 006 045 790 Directors Denis Clarke (Non-executive Chairman) Chris Ringrose (Managing Director) John Horsburgh (Non-executive) Grahame Hamilton (Non-executive) Wayne Kernaghan (Non-executive) Secretary Wayne Kernaghan Registered and Principal Office Unit 4 7 Hardy Street South Perth WA 6151 Telephone +61 (8) 9474 5511 Facsimile +61 (8) 9474 5588 Auditors Ernst & Young 11 Mounts Bay Road Perth WA 6000 Solicitors Lavan Legal 1 William Street Perth WA 6000 Bankers Westpac Sydney NSW 2000 Securities Quoted Australian Securities Exchange Home Exchange - Sydney ASX Code: CUL Share Registry Computershare Investor Services Level 3, 60 Carrington Street Sydney NSW 2000 Telephone (02) 8234 5000 www.computershare.com Email cullen@cullenresources.com.au Company Website www.cullenresources.com.au Chairman’s Report 2 DEAR FELLOW SHAREHOLDER Cullen is a discovery-driven company exploring in a number of prospective terranes: in areas where exploration activity is high, where new discoveries are being made, and in commodities of interest to the market. Our strategy is to seek out multiple opportunities in several commodities, in order to fully exploit our in-house geological experience, and spread risk. We have adopted this strategy both here in Australia, and in other countries with accessible geological databases, good fundamental prospectivity and terranes where limited previous exploration has been completed. These pre- conditions offer the best opportunities for us to make a discovery. Such project generation activities in “greenfields” is a key strategy of Cullen's, and we have been successful in developing an excellent portfolio of prospective projects for our exploration, or for attracting joint venture partners. In what has been a very difficult year for junior explorers, capital management has been a key consideration. Despite this, Cullen has maintained its position as a project generator, undertaken its own exploration, and is “free carried “, albeit with a minority equity position , in a number of active Joint Ventures. Cash conservation has led to a slowing of activities in Finland and on the TL Property in Canada, but the company maintains a watching-brief for opportunities and is seeking Joint Venture partners to maintain momentum in some of its projects. The Company also remains a participant in a potential, major, new iron ore development project in the West Pilbara Region of Western Australia, the West Pilbara Iron Ore Project (WPIOP). As a co-venturer in the Mt Stuart Iron Ore Joint Venture (MSIOJV), Cullen has been contributing funds in anticipation that, in the future, funding and required approvals will be available to allow the development of port and rail infrastructure as planned by the APIJV (Manager of the MSIOJV). However at this time, activities on the MSIOJV the WPIOP have slowed. I thank all shareholders for their continued interest and support, and our small but effective team of staff in Perth, my fellow directors, and our consultants and contractors for their contributions. Dr. Denis Clarke, Chairman 3 Company Profile Company Profile 4 Perth-based minerals explorer with: - iron ore Reserve - multi-commodity portfolio - multiple JV partnerships - active programmes - innovative approaches - motivated management - experienced board - project generation in Namibia and Scandinavia West Pilbara JV Hardey Junction JV Lake Mackay Wyloo JV Paraburdoo JV Kunderong JV Amadeus Mt Eureka Cue Killaloe JV Perth Forrestania JV Minter Uranium Gold Tungsten Nickel Iron Copper, gold SCANDINAVIA: Iron Ore, IOCG, Gold, Graphite NAMIBIA: Copper, REE BC, CANADA: Base Metals, Graphite AUSTRALIA Highlights Highlights 2012/2013 MT EUREKA, WA NICKEL & GOLD 2 650m project area in North Eastern Goldfields - prospective for gold and nickel. VTEM survey completed, ground EM follow-up and four targets drill tested to date. Nineteen nickel targets defined for further exploration. MURCHISON, WA GOLD & BASE METALS Project area approximately 30km east of Cue, covering the northern part of the Tuckabianna – Webbs Patch greenstone sequence. Exploration targets for gold and VMS-style base metal mineralisation in this underexplored area. Some EM anomalies drilled, others remain untested. BRITISH COLUMBIA ZINC HeliTEM survey flown centred on high-grade, greenfields zinc mineralisation at the “TL Property” where trenching exposed +10m wide sulphide mineralization with best channel sample of 3m @ 8.98% Zn. First pass drilling completed; best 2m @ 2.66% Zn for follow-up. LACHLAN , NSW TUNGSTEN Diamond drilling completed at Minter in July 2012 tested for cupola- Interpretation of vein orientation related, tungsten-bearing vein system. indicates further drilling required to more correctly evaluate. CATHO WELL, WA IRON Mineral Resource Estimate for the Catho Well Channel Iron Deposit of 98Mt @ 55.0 % Fe and a Maiden JORC Reserve Estimate of 70Mt @ 54.8% Fe (Cullen 30%) awaits broader project infrastructure solution. WYLOO, WA IRON Maiden Inferred Resource of Bedded Iron of 16.9Mt @ 57.11% Fe (Cullen 20%) further work in 2013/2014 planned by JV Manager, Fortescue Metals Group. SCANDINAVIA IRON, GOLD & COPPER GRAPHITE Tenure in Sweden near Kiruna (iron and copper) and in Finland near Kuusamo (gold), and Rompas (gold) discoveries, being assessed and prioritised. NAMIBIA COPPER Two Exclusive Prospecting Licences in Namibia near Tsumeb have been retained for further review. 4 Highlights Highlights 2012/2013 MT EUREKA, WA NICKEL & GOLD 2 650m project area in North Eastern Goldfields - prospective for gold and nickel. VTEM survey completed, ground EM follow-up and four targets drill tested to date. Nineteen nickel targets defined for further exploration. MURCHISON, WA GOLD & BASE METALS Project area approximately 30km east of Cue, covering the northern part of the Tuckabianna – Webbs Patch greenstone sequence. Exploration targets for gold and VMS-style base metal mineralisation in this underexplored area. Some EM anomalies drilled, others remain untested. BRITISH COLUMBIA ZINC HeliTEM survey flown centred on high-grade, greenfields zinc mineralisation at the “TL Property” where trenching exposed +10m wide sulphide mineralization with best channel sample of 3m @ 8.98% Zn. First pass drilling completed; best 2m @ 2.66% Zn for follow-up. LACHLAN , NSW TUNGSTEN Diamond drilling completed at Minter in July 2012 tested for cupola- related, tungsten-bearing vein system. Interpretation of vein orientation indicates further drilling required to more correctly evaluate. CATHO WELL, WA IRON Mineral Resource Estimate for the Catho Well Channel Iron Deposit of 98Mt @ 55.0 % Fe and a Maiden JORC Reserve Estimate of 70Mt @ 54.8% Fe (Cullen 30%) awaits broader project infrastructure solution. WYLOO, WA IRON Maiden Inferred Resource of Bedded Iron of 16.9Mt @ 57.11% Fe (Cullen 20%) further work in 2013/2014 planned by JV Manager, Fortescue Metals Group. SCANDINAVIA IRON, GOLD & COPPER GRAPHITE Tenure in Sweden near Kiruna (iron and copper) and in Finland near Kuusamo (gold), and Rompas (gold) discoveries, being assessed and prioritised. NAMIBIA COPPER Two Exclusive Prospecting Licences in Namibia near Tsumeb have been retained for further review. 5 Exploration Review Australia Australia ASHBURTON/PILBARA, WA WEST PILBARA MT STUART JV - IRON The Mt Stuart Iron Ore Joint Venture (MSIOJV) is between Cullen - 30%, and the unincorporated joint venture known as the Australian Premium Iron Joint Venture (APIJV) - 70%. The APIJV comprises Aquila Steel Pty Ltd (a subsidiary of Aquila Resources Limited (Aquila, ASX: AQA)) 50%, and AMCI (IO) Pty Ltd 50%. In July 2010, Aquila reported the results of a Feasibility Study (FS) for the APIJV’s proposed 30Mtpa West Pilbara Iron Ore Project (WPIOP) - Stage 1 indicating technical viability. The Catho Well deposit (MSIOJV) is a potential ore component of the WPIOP. Under one scenario, ore derived from the Catho Well deposit would contribute to the main, blended product stream maintaining an average 57.2% Fe throughout the proposed 15 year mine life of the WPIOP - Stage 1 mining operations. During 2012-2013, work to progress the WPIOP from the Feasibility to Development stage was slowed. At present no definitive schedule for the proposed WPIOP rail and port infrastructure exists. Work by the MSIOJV during the year included: maintaining the tenements in good standing, completing heritage surveys in relation to Catho well and progressing negotiations towards Native Title Agreements for the granting of two Mining Lease applications made in October 2011 (Catho Well and Cardo Bore). MINERAL RESOURCE ESTIMATE CATHO WELL CHANNEL IRON DEPOSIT: (CULLEN 30%) Joint Venture Mt Stuart JV JORC Classification Measured Indicated Inferred TOTAL Mt 2 73 23 98 Fe % P % SiO2 % AI O2 3 % S % Mn % MgO % LOI % 55.1 0.041 6.61 3.64 0.020 0.058 0.208 9.99 55.1 0.037 6.91 3.16 0.016 54.6 0.037 7.53 3.10 0.015 0.079 0.102 0.178 0.209 10.26 10.40 55.0 0.037 7.05 3.15 0.016 0.084 0.186 10.29 The Catho Well Mineral Resource estimate is reported at a 53% Fe cut-off. The resource estimate has been compiled in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition). Competent Persons Statement Resource The information in this announcement that relates to Mineral Resources has been supervised by Mr Stuart Tuckey and Mr Richard Gaze who are members of the Australian Institute of Mining and Metallurgy. Mr Tuckey is a full-time employee of API Management Pty Ltd. Mr Gaze is a full time employee of Golder Associates Pty Ltd. Messrs Tuckey and Gaze have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the 'Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Tuckey and Mr Gaze consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. Competent Persons Statement Reserve The information in this release that relates to Ore Reserves is based on information compiled by Mr Steve Craig, Managing Director of ORElogy (Mining Consultants). Mr Craig is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit 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 Craig consents to the inclusion of the matters based on his information in the form and context in which it appears in this release. Exploration Review 6 MT STUART JOINT VENTURE (MSIOJV) ORE RESERVE ESTIMATE (CULLEN 30%) Product Category Product 1 Proved Probable Total Tonnes Mt 1 69 70 Fe % 55.28 54.80 54.81 AI O2 3 % 3.33 3.23 3.23 SiO2 % 6.57 7.23 7.22 P % 0.043 0.037 0.037 LOI % 10.03 10.31 10.30 TUNNEL CREEK JV - URANIUM The Company has a Joint Venture agreement with Element 92 Pty Ltd, a wholly-owned subsidiary of Thundelarra Exploration Ltd (Thundelarra), over its two tenements (ELs 52/1890, 1892) at Tunnel Creek/Kunderong, in the Ashburton Province. In 2011, U3O8 Limited (U3O8) and Thundelarra agreed for U3O8 to farm–in and take over management of these EL’s in this Cullen/Thundelarra JV. U3O8 and Thundelarra can together earn 70%, with Cullen to retain 30%, in what is now called the Saltwater Pool JV. In 2012, U3O8 changed its name to Avocet, and during 2012-2013 merged with Lion One Metals Ltd (ASX: LLO). Avocet Resources completed an RC drilling programme (11 holes for 1050m) in July 2013 to test the down dip extensions of surface high-grade gold and silver assays returned from regional sampling. The regional structure hosting the Monster project has previously had no exploration undertaken along its length. Avocet identified the mineralisation during a helicopter-supported regional assessment of low- to high- order radiometric anomalies throughout its Ashburton project area. Sampling of the quartz vein system in the regional shear zone that transects graphitic black shale in the Proterozoic Wyloo basement complex, returned gold assays to 13g/t, and silver assays to 1660g/t, with anomalous base metals. Most holes intersected sheared graphitic black shales, with variable amounts of quartz veining and sulphides. Samples have been despatched for analysis of a suite of elements including precious and base metals, with results pending at this time. HARDEY JUNCTION JV - GOLD Intrepid Mines Limited sold the Paulsens Gold Mine, located approximately 15km north of the Hardey Junction JV ground, to Northern Star Resources Ltd in a deal which included sale of their beneficial interest in the Hardey Junction JV. Cullen holds a 20% Free Carried Interest to decision to mine based on a Bankable Feasibility study in this Joint Venture. Northern Star Resources has completed first pass soil sampling that defined several geochemical anomalies over prospective geological targets. Infill soil sampling and auger drilling has also been completed, in order to better define targets for follow-up drilling. Catho Well - Channel Iron Deposit 7 Exploration Review WYLOO AND PARABURDOO JVs - IRON The Wyloo Project lies within Fortescue Metals Group Ltd’s (Fortescue) proposed “Western Hub” mining centre, and just south of Cullen's 30%-owned Catho Well Channel Iron Deposit which is part of the West Pilbara Iron Ore Project – Stage 1. Fortescue can earn up to an 80% interest in the iron ore rights on EL08/1393 and ELs 47/1154, 1649 and 1650. Fortescue has provided a maiden Resource Estimate of 16.9Mt @ 57.11% Fe in a Bedded Iron Deposit at Wyloo South, in the Inferred category, and has thereby earned 51%. Fortescue can earn up to an 80% interest in the iron ore rights on Cullen's EL52/1667, located ~ 25km south east of Paraburdoo in the Pilbara Region of Western Australia. The tenement includes potential for bedded iron deposits within the Brockman Iron Formations, along strike from the Paraburdoo and Channar Groups of iron deposits. Fortescue completed a 26 hole RC drilling programme for 2150m with a best intersection of 5m @ 55.36% Fe with follow-up drilling planned. I n d i a n O c e a n Port Hedland API JV's proposed railway and port Dampier Pannawonica ANKETELL POINT Fortescue's Western Hub Marble Bar Solomon Mt MacLeod MT STUART JV CATHO WELL CID Tom Price Hardey Paraburdoo Channar WYLOO JV Cullen/Fortescue PARABURDOO JV Cullen/Fortescue Cloudbreak Christmas Creek Nyudunghu N 50 kilometres Newman Mt Whaleback Iron ore deposits Existing railway Proposed Solomon railway (Fortescue - 23/3/11) Fortescue iron ore deposit Existing Fortescue railway Proposed Central Pilbara railway (Fortescue - 23/3/11) Proposed railway (APIJV) Competent Persons Statement – Wyloo JV - Resource Mr. Stuart Robinson is a full-time employee of Fortescue Metals Group Ltd and Mr. Glassock recently resigned from the company. Both people provided geological interpretations for Mineral Resource calculations and compiled the exploration results. Mr. Robinson, who is a Fellow of The Australian Institute of Mining and Metallurgy, and Mr. Glassock, who is a Member of The Australian Institute of Mining and Metallurgy have sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Robinson and Mr. Glassock consent to the inclusion in this report of the matters based on this information and in the form and context in which it appears. Exploration Review 8 Australia NORTH WEST YILGARN, WA NORTH TUCKABIANNA - GOLD AND BASE METALS The felsic Eelya Complex hosts the high-grade Hollandaire copper discovery of Silver Lake Resources Ltd (ASX: SLR – 10 November 2011) as well as several other EM conductor targets, explored by Silver Lake Resources Ltd, including the Colonel and Mt Eelya prospects . In April 2012, Cullen completed 7 holes, ~1000m, of scout RC drilling at its North Tuckabianna copper/gold project which targeted three conductors (NT1-NT3) identified by a helicopter-borne EM survey (VTEM,100-200m line spacing). The VTEM survey was flown across the Eelya Complex and the northern section of the Tuckabianna greenstone belt in March 2012. This drilling intersected disseminated sulphide (mainly pyrite and pyrrhotite, 1-20% visually identified over intervals of 1-20m downhole) in mafic and felsic rocks at or near the modelled conductor plates from the VTEM survey in all holes drilled. The drill sample assays include a best result of 0.19% Cu and 0.21% Zn from 62-64m depth in drill hole TNRC14 at the target NT3. The best gold result is 0.12g/t from 66-68m in drill hole TNRC11 at target Nt2. However, downhole surveys completed at each VTEM anomaly redefined the position of the conductor plates and showed that the conductive targets had been narrowly missed by the first pass drilling and therefore had not been adequately tested. These redefined conductor plates were tested in August 2012 with four RC holes (TNRC15-18) and intersected zones of disseminated sulphide but with only geochemically anomalous assay results (maximum Cu - 0.20%). Several low-order VTEM anomalies remain to be investigated and tested, initially using A/C and/or RAB drilling. EASTERN GOLDFIELDS, WA . FORRESTANIA - GOLD AND NICKEL Cullen holds a 20% Free Carried Interest in the western portion of Hannans Reward Limited (Hannans) Stormbreaker Prospect, centred ~12km north of the Flying Fox Nickel Mine in the Forrestania Greenstone Belt in Western Australia. Hannans has indicated its intention to divest its interest in this project together with its other nickel exploration assets. KILLALOE - GOLD AND NICKEL Cullen and Matsa Resources Limited (Matsa) signed an agreement to allow Matsa to farm-in to Cullen's Killaloe Project near Norseman in W.A. (EL63/1018, EL63/1199 and PL’s 63/1331-1333 and 1672). Matsa has earned a 70% interest in the Killaloe Project and Cullen has exercised its option to convert its 30% participating interest into a 20% Free Carried Interest (FCI) to a Decision to Mine. Matsa has completed soil sampling, rock chip sampling and a review of past nickel exploration reports and exploration data including ground EM. This has led to a plan to undertake RC drilling, further ground EM and infill ground EM surveys targeting nickel sulphide deposits. Matsa also plans to RC drill test two gold targets. 9 Exploration Review Australia NORTH EASTERN GOLDFIELDS, WA MT EUREKA - GOLD, NICKEL 2 Cullen holds 100% of ~650km of approved tenure in the Mt Eureka Greenstone Belt in the North Eastern Goldfields of Western Australia which includes several targets for nickel sulphides. The high nickel prospectivity of Cullen's ground is confirmed by the discovery of nickel sulphides by Rox Resources Limited (Rox) at Camelwood (Fisher East Project) which is located ~3km on strike to the south of Cullen's tenement boundary (ASX releases by Rox, ASX: RXL, of 19/12/2012 and 14/1/2013). Cullen has been progressively reviewing its extensive database, and has undertaken field assessments of the nickel and gold prospectivity of it's Mt Eureka greenstone belt project. Regional data and models for other minerals discoveries, such as “Rosie” – nickel, and “Garden Well” - gold, in the Duketon greenstone belt, have been taking into consideration when identifying priority target areas for drilling. During the year, Cullen completed a moving loop, ground electromagnetic survey (MLTEM) which confirmed and upgraded several high-quality conductors identified by Cullen's extensive airborne EM (VTEM) survey completed in March, 2013. Interpretation and modellings of the MLTEM anomalies, in combination with geochemical data, has outlined 19 target areas for nickel sulphide exploration, four of which were drill tested in a first pass in July 2013 (4 RC holes for 730m). Of the remaining 15 targets for massive nickel sulphide deposits, some were drill-tested by WMC/BHPB Limited in joint venture with Cullen in 2002-2006, generally by 1 or 2 diamond drill holes. However, several targets have received very limited follow-up, with no ground EM and/or deeper drill testing. These targets include unresolved down hole EM (DHEM) and/or ground EM anomalies, as well as geochemical and lithological targets along strike of known mineralisation. Cullen will continue fieldwork and database review to identify the priorities for drill testing. One of the best targets is Doyles Prospect, where previous percussion drilling has intersected nickel concentrations greater than 0.4% over 400m strike length, with intervals up to 0.9% nickel. Gold exploration review by Cullen during the year culminated in the restart of exploration drilling with a single hole completed (July, 2013) at the Southern prospect which indicated extensive hydrothermal alteration (pyrite, arsenopyrite, carbonate) with a best intersection of 8m @ 1.71g/t Au from 184m. This is part of an extensive gold mineralisation zone, which warrants further evaluation and drilling at depth below total oxidation. Other targets for further work include:  The northern and southern extensions of the Eureka North West mineralisation, where previous intersections of gold in conglomerate include 8m @ 2.92 g/t Au. The conglomerate is interpreted to continue for some 10km to the north under lake cover and has not been tested by systematic drilling to date.  The northern and southern extension of the Taipan shear zone - the Taipan target area has a best drill intercept of 22m @ 2.1 g/t Au, including 6m @ 5.0 g/t Au. It is a robust mineralised system of quartz veining, pyrite and carbonate alteration hosted by sheared mafic schists over a strike length of 700m and up to 100m wide (91m @ 0.3 g/t Au in "DDH1" from 133m) and open to the north and south. 9 10 Exploration Review Exploration Review Australia Australia Australia NORTH EASTERN GOLDFIELDS, WA MT EUREKA - GOLD, NICKEL 2 Cullen holds 100% of ~650km of approved tenure in the Mt Eureka Greenstone Belt in the North Eastern Goldfields of Western Australia which includes several targets for nickel sulphides. The high nickel prospectivity of Cullen's ground is confirmed by the discovery of nickel sulphides by Rox Resources Limited (Rox) at Camelwood (Fisher East Project) which is located ~3km on strike to the south of Cullen's tenement boundary (ASX releases by Rox, ASX: RXL, of 19/12/2012 and 14/1/2013). Cullen has been progressively reviewing the extensive database, and has undertaken field assessments of the nickel and gold prospectivity of it's Mt Eureka greenstone belt project. Regional data and models for other minerals discoveries, such as “Rosie” – nickel, and “Garden Well” - gold, in the Duketon greenstone belt, have been taking into consideration when identifying priority target areas for drilling at Gunbarrel as follows. During the year, Cullen completed a moving loop, ground electromagnetic survey (MLTEM) which confirmed and upgraded several high-quality conductors identified by Cullen's extensive airborne EM (VTEM) survey completed in March, 2013. Interpretation and modeling of the MLTEM anomalies, in combination with geochemical data, has outlined 19 target areas for nickel sulphide exploration, four of which were drill tested in July 2013 ( 4 RC holes for 730m). Of the remaining 15 targets for massive nickel sulphide deposits, some were drill-tested by WMC/BHPB Limited in joint venture with Cullen in 2002-2006, generally by 1 or 2 diamond drill holes. However, several targets have received very limited follow-up, with no ground EM and/or deeper drill testing. These targets include unresolved down hole EM (DHEM) and/or ground EM anomalies, as well as geochemical and lithological targets along strike of known mineralisation. Cullen will continue fieldwork and database review to identify the priorities for drill testing. One of the best targets is Doyles Prospect, where previous percussion drilling has intersected nickel concentrations greater than 0.4% over 400m strike length, with intervals up to 0.9% nickel. Gold exploration by Cullen during the year has included a single hole (July, 2013) at the Southern prospect and review of other targets, including: (cid:2) The northern and southern extensions of the Eureka North West mineralization, where previous intersections of gold in conglomerate include 8m @ 2.92 g/t Au. The conglomerate is interpreted to continue for some 10km to the north under lake cover and has not been tested by systematic drilling to date. (cid:2) The northern and southern extension of the Taipan shear zone - the Taipan target area has a best drill intercept of 22m @ 2.1 g/t Au, including 6m @ 5.0 g/t Au. It is a robust mineralised system of quartz veining, pyrite and carbonate alteration hosted by sheared mafic schists over a strike length of 700m and up to 100m wide (91m @ 0.3 g/t Au in "DDH1" from 133m) and open to the north and south. RC drilling at Southern Prospect indicated extensive hydrothermal alteration (pyrite, arsenopyrite, carbonate) with a best intersection of 8m @ 1.71g/t Au from 184m. This is part of an extensive gold mineralisation zone, which warrants further evaluation and drilling at depth below total oxidation. Wiluna Mt Keith Cliffs Yakabindie Cosmos Horse Well Jundee P r o t e r o z o i c MT EUREKA Mt Fisher Camelwood Collurabbie Mt Mcclure Bronzewing Melrose Rosie Perserverance Darlot Waterloo Yi l g a r n C r a t o n ( A r c h e a n ) Moolart Well Garden Well Mt Windarra Laverton N 40 kilometres Leonora Granitoid rocks Greenstone belt Sediments Ultramafics / Nickel / Gold occurence and prospects Road, town Cullen tenement 11 Exploration Review Australia CENTRAL LACHLAN FOLD BELT, NSW MINTER - TUNGSTEN A combined RC percussion-diamond drilling programme totalling 536.8 metres in three holes was undertaken on the Minter project in June/July 2012 testing selected geological/geochemical targets at the Doyenwae and Orr Trig prospects. Holes were designed to test beneath zones of anomalous tungsten and tin geochemistry outlined by earlier soil sampling and shallow percussion/aircore/RAB drilling. At the Doyenwae Prospect, RC percussion hole MRC005 averaged 0.045% tungsten over the full 111 metre length of the hole with localised two-metre zones of quartz-scheelite veining assaying up to 0.35% tungsten. Diamond drill hole CMDD001, drilled to 258.0 metres at the Doyenwae prospect, intersected significant quartz + sulphide veining throughout much of the hole. Examination of the core with an ultraviolet lamp detected widespread scheelite mineralisation occurring both within quartz veins and as disseminations/aggregates in silica-altered sandstone units; particularly in the interval from 130 metres to the end of the hole. The true width of potential mineralisation in both MRC005 and CMDD001 is uncertain as preliminary observations of vein orientations in the CMDD001 drill core indicate that the holes may have been drilled at a low angle to some of the mineralised quartz veins. At the Orr Trig Prospect, diamond core hole CMDD002; drilled to 267.8 metres, intersected scattered zones of narrow quartz veining and localised silicification over much of the hole with scheelite being observed as disseminations in sandstone and within quartz veins in the interval between 100m and 250m. Although it would appear that hole CMDD002 has been drilled in an appropriate direction with respect to the orientation of the quartz veins, the amount of observable scheelite mineralisation is less than that noted in CMDD001. The results included: 1m @ 0.7% WO (from 131.45m) and 4.05m @ 0.58% WO from 185m in CMDD001. 3 3 Further drilling is required to test the dominant vein orientation as inferred from a mapping programme completed at a quarrying site near the Doyenwae prospect. Scheelite in diamond drill (as seen in ultraviolet and natural light) Exploration Review 12 Scandinavia Scandinavia SWEDEN AND FINLAND GOLD, COPPER , IRON, GRAPHITE Cullen, through wholly-owber subsidiaries, has tenure in Scandinavia including: two exploration licences in Sweden near Kiruna; and two claim reservations in the Kuusamo greenstone belt of far north eastern Finland near the Juomasuo deposit (1.95Mt @ 4.9 g/t Au) of Dragon Mining Limited. (Dragon has announced total resources in its Kuusamo project area of 3.4 Mt @ 4.2 g/t Au (460,700 oz), with historical, bonanza grade drill intersections at Juomasuo including: 57.3m @ 62.56 g/t Au and 5.30m @ 206.85 g/t Au (www.dragon-mining.com.au)). Cullen also has ground in Finland in the greenstone belts that host the Kittila gold deposit (Agnico – Eagle, 5 Moz of Reserves, www.agnico-eagle.com); and the Rompas prospect Mawson Resources Ltd – Rompas is a discovery with bonanza gold grades in surface channel samples including: 0.3m @ 1,866g/t Au and 8.0% U, and 0.26m @ 1,510g/t Au and 3.95% U (www.mawsonresources.com). Cullen has completed field reconnaissance and preliminary geochemical sampling over some of these areas and is prioritising them for further work. Cullen has also reviewed various opportunities for graphite deposits in Finland and retains three licences in northern Finland. SUURIKUUSIKKO NORTHEAST (CR) Kiruna Rovaniemi Kuusamo SUURIKUUSIKKO SOUTH (CR) 250 kms SWEDEN NORWAY FINLAND AITOO (CR) KOLARI (CR) F I N L A N D MISI (CR) TUNTURI (CR) MERIVAARA (EL) ROMPAS WEST (CR) Rovaniemi KUUSAMO WEST (CR) ROMPAS CENTRAL (CR) ROMPAS SOUTH (CR) KANASENVAARA (CR) Kuusamo Applications for Gold Applications for Graphite Claim Reservation Ore Prospecting Licence CR EL N 100 kilometres 13 Exploration Review Canada Canada BRITISH COLUMBIA, TL PROPERTY BASE METALS Early in 2011, Cullen signed an agreement with a Vancouver-based private prospecting syndicate whereby Cullen may earn an 80% interest in the TL Property located in south-east British Columbia, Canada. Cullen has subsequently explored the property primarily for base metals with considerable early success. In May and June 2011, Cullen dug three trenches to test geochemical anomalies which returned a best result of 3m @ 8.98% Zn from channel samples, with highly anomalous molybdenum (maximum 1339 ppm) and rhenium (maximum 580 ppb), copper, bismuth, nickel, tin, and tungsten. The trenches exposed an assemblage of calcsilicate-marble, quartzite, biotite-garnet-schist and paragneiss. During October 2011, Cullen flew a heliTEM (helicopter borne EM) survey across the entire TL project area in order to characterize the known “Trench” mineralisation and prioritise targets. The survey identified a very strong, ~6000m long conductor trending east-west beyond the trench site. Cullen's trenches also exposed graphite-bearing schists and graphitic-sulphidic masses (see photos) including coarse-grained “flake” graphite. Furthermore, a showing of “crystalline flake graphite” is recorded near Mabel Lake ~ 5km west of the TL Property boundary in the “MINFILE” database of the BC Geological Survey. The host lithology to this occurrence near Mabel Lake is interpreted by Cullen to be part of the same stratigraphy that occurs within the TL Property. In Spetember 2012, Cullen completed a small reconnaissance diamond drilling programme (six diamond drill holes totaling 463m) at TL to test the high-grade zinc gossan, and the northern section of a discrete magnetic anomaly and the “C-03” electromagnetic (EM) anomaly of approximately 600m length, surrounding the gossan. The drilling intersected semi-massive, disseminated and interstitial pyrrhotite, pyrite and sphalerite in multiple zones up to ~1m thick, in sections about 5-7m thick, within a calcsilicate - graphitic quartzite rock in holes 3, 4 and 5 . Best intercepts of zinc mineralisation included: 2.16m @ 2.66% Zn and 2.1m @ 2.10% Zn. This drilling has confirmed the presence of zinc mineralisation in massive sulphide beneath the surface gossan zone, but has only tested it to a vertical depth of about 20m. Further drilling to evaluate the down-dip potential of the Zn zone as well as the potential along strike is warranted. Diamond drilling site at the gossan discovery Exploration Review 14 Namibia Namibia TSUMEB COPPER, REE, AND BASE METALS 2 Cullen has reviewed ~8,000km of prospective ground in Namibia targeting large, sediment-hosted, African copper belt-type deposits; Tsumeb-type base metal deposits; and Rare Earth Elements (REEs) in carbonatites. A detailed structural interpretation of aeromagnetic and gravity data has been completed over the Tsumeb project area, and in February 2013, Cullen personnel undertook a further field review of the projects areas. On the basis of these data, Cullen made applications to the Ministry of Mines and Energy in Namibia to surrender certain EPLs; and reduce others to priority target areas. An important factor in selecting key targets for follow-up work, was the depth of Kalahari sands which has been found, from aeromagnetic interpretation, to be a prohibitive factor for further exploration in some of Cullen's EPL's. Cullen's priority is now its two EPLs located just west of the Tsumeb and Tschudi copper deposits where several magnetic anomalies have been outlined. EPL4493 lies across a low magnetic field corridor possibly reflecting deep crustal demagnetization alteration caused by fluid flow, or structural depression of the strongly magnetic, Palaeproterozoic basement is bound by the Tsumeb basement shear zone. These features may have controlled the location of known copper deposits in the region and Cullen considers these EPLs are prospective for carbonatite- hosted rare earths mineralisation or Tsumeb-style base metals mineralisation. N 25 kilometres Sand Cover EPL4495 Tschudi (Cu, Ag) Tsumeb Tsumeb (Cu, Pb, Zn) Abenab (V, Zn, Pb) Tsumeb Windhoek NAMIBIA EPL4493 Khusib Springs (Cu, Pb, Zn, Ag) Tsu m eb B ase m ent S hear Zone Berg Aukas (Zn, Pb, V) Grootfontein Kombat (Cu, Pb, Zn, Ag) Rietfontein Sand cover Cullen EPL’s Prospect and deposit Mineral occurrence (Copper or Base metal) Neoproterozoic platform carbonates - fold and thrust belt of Pan-African Damaran Orogen 15 Exploration Review SCHEDULE OF TENEMENTS (as at 30 June 2013) REGION TENEMENTS WA: ASHBURTON / PILBARA Mt Stuart JV Hardey Junction JV Wyloo JV Paraburdoo JV EL08/1135, 1330, 1341, EL08/1292 EL08/1166, 1189, 1763, 1843, P08/546 EL08/1393, EL47/1154, 1649, 1650, P08/556 EL52/1667 Tunnel Creek JV EL52/1890, 1892 EL08/2227 EL08/2145 Hardey North Wyloo WA: NE GOLDFIELDS Gunbarrel EL53/1299, 1300 +/ * EL53/1630, 1635 EL53/1637 EL53/1209,1637 EL53/1611 Irwin Well Wonganoo WA: ARUNTA Lake Mackay WA: EASTERN GOLDFIELDS Killaloe WA: FORRESTANIA Forrestania JV EL80/4209 EL63/1018, 1199, P63/1672, 1331-1333 EL77/1406, 1327, 1354, M77/0544 P77/3607, 3613, 3762, 3763 P77/3582 - 3588 EL20/714 WA: MURCHISON / NW YILGARN North Tuckabianna NEW SOUTH WALES Minter EL6572 NORTHERN TERRITORY Amadeus NAMIBIA Tsumeb SWEDEN Kiruna area FINLAND EPL 4493, 4495 Holmajarvi 2 and Lavasjakka Aitoo, Kolari, Kuusamo South & West, Misi, Rompas South, West and Central, Suuikuusikko Northeast and South, Tunturi ASSOCIATED TENEMENTS/ APPLICATIONS MLA08/481,482 EL20/808 E25493, 25494 CULLEN INTEREST COMMENTS 30% 20% 49% 100% 100% 100% 100% 100% 100% 100% 100% 20% 20% 100% 100% 100% 100% 100% API has earned 70% of iron ore rights Northern Star 80% FMG can earn up to 80% of iron ore rights FMG can earn up to 80% of iron ore rights Thundelarra Exploration and Lion One can earn up to 70% +2.5% NPI Royalty to Pegasus on Cullen's Rights *1.5% NSR Royalty to Aurora Matsa holds 80% Hannans Reward Ltd - 80% Applications only. No current interest Claim reservations CANADA Mabel Lake TL 1-16 Merivaara EL application Cullen earning 80% Exploration Review y t l a y o r e n n o t / s t n e c 0 5 , V J t r a u t S t M n i % 0 3 t a g n i t u b i r t n o c n e l l u C . s t s e r e t n i l a n o g e r i s t i f o y d u t s y t i l i i b s a e F d e t e p m o c l s a h I P A - - . 0 1 0 2 l y u J n i d t L s e c r u o s e R r a t S n r e h t r o N o t V J n o i t c n u J y e d r a H e h t n i t s e r e t n i s t i i g n d u c n l i i , e n m d o g l ' l s n e s u a P s t i l d o s i d p e r t n I % 2 % 0 2 t n e m m o C i g n n i f e d y b % 1 5 n r a e y a M . t M 0 2 o t d e p p a c y t l a y o R B O F % 5 . 1 . e r u t i d n e p x e M 1 $ r e h t r u f h t i w % 0 8 , e c r u o s e R d e r r e f n I s ’ n e l l u C R S N ) e l b i s s o p ( - r o l a u t c A ) e l b a l i a v A ( ) % 0 2 ( M T D o t I C F d n a d e r i u q e r s ’ n e l l u C e r u t i d n e p x E r e n t r a P V J r e n t r a P V J y t i d o m m o C e r u t n e V i t n o J e m i t - - - i g n n r a E ) d e n r a E ( % 0 8 ) % 0 8 ( l t s a e M e u c s e t r o F d t L s e c r u o s e R t r a S n r e h t r o N d L t p u o r G s u c o F ) t u o - m r a F ( e r O n o r I o o d r u b a r a P l d o G n o i t c n u J y e d r a H % 0 5 , a l i u q A y b )) I C M A ) ∞ % 0 7 ( d e n w o % 0 5 ( V J I P A e r O n o r I t r a u t S . t M . e r u t i d n e p x e M 1 $ r e h t r u f h t i w % 0 8 , e t a m i t s E e c r u o s e R d e r r e f n I h t i w % 1 5 d e n r a e s a H . t M 5 1 o t d e p p a c y t l a y o R B O F % 5 . 1 - ) % 0 2 ( s n a n n a H y b l d e h n o i t i s o p t c e o r p j e g r a l a f o t r a P % 5 . 2 % 2 % 0 2 % 0 2 - - - % 0 8 ) % 1 5 ( d t L p u o r G l t s a e M e u c s e t r o F e r O n o r I l o o y W ) % 0 8 ( d t L d r a w e R s n a n n a H l d o G ) % 0 8 ( s e c r u o s e R a s t a M l d o G d e t i m L i , l e k c N i , l e k c N i i a n a t s e r r o F e o a l l l i K s t n e m e n e t o w t o t n i d e m r a f l ) s a t e M e n O n o L w o n ( i 8 O 3 U % 2 ) % 0 2 ( 5 / M 5 . 1 $ s r a e y r o % 0 7 % 0 8 l s a t e M e n O n o L i / l a r r a e d n u h T i m u n a r U k e e r C l e n n u T t s e r e t n I s t i f o r P t e N = I P N l y n o s t h g i r e r o n o r I = ∞ n r u t e R r e t l e m S t e N = R S N t s e r e t n I d e i r r a C e e r F = I C F d r a o B n o e e r F = B O F i e n M o t n o s c e D i i = M T D t n e m m o C s ’ e e m r a F s ’ e e m r a F R S N I C F e r u t i d n e p x E d n a d e r i u q e r e m i t n e l l u C i g n n r a E ) d e n r a E ( % 2 % 0 1 / K 0 9 6 $ N D C % 0 8 s r a e y 3 r e n t r a P V J y t i d o m m o C e r u t n e V i t n o J s u c o F ) n i - m r a F ( i t e a c d n y S L T l s a t e M e s a B , y t r e p o r P L T a d a n a C d n a g n n M i i f o e t u t i t s n I n a s a a r t s u A e h t i l f o r e b m e M a s i o h w d e t i i m L s e c r u o s e R n e l l u C , r o t c e r i i D g n g a n a M , e s o r g n R s i r h C i r D y b d e l i p m o c n o i t a m r o f n i n o d e s a b s i s t l u s e R n o i t a r o p x E o t s e t a e r l l t a h t t r o p e r s h t n i i n o i t a m r o n f i e h T s t n e m e t a t S n o s r e P t n e t e p m o C i n e e b s a h h c h w y t i v i t c a e h t o t d n a , n o i t a r e d s n o c r e d n u s t i s o p e d f o s e p y t d n a n o i t a s i i l a r e n m i l f o e y t s e h t o t t n a v e e r s l i i h c h w e c n e i r e p x e t n e c i f f u s s a h e H i . d e t i i m L s e c r u o s e R n e l l u C l f o e e y o p m e e m i t - l l u f a s i e s o r g n R i . r D . y g r u l l t a e M d e u s s i i g n e b t r o p e r e h t o t s t n e s n o c e s o r g n R i . r D . ” s e v r e s e R e r O d n a s e c r u o s e R l a r e n M i , s t l u s e R n o i t a r o p x E l f o g n i t r o p e R r o f e d o C n a s a a r t s u A i l “ e h t f o n o i t i d e 4 0 0 2 e h t y b d e n i f e d s a n o s r e P t n e t e p m o C a s a y f i l a u q o t , n e k a t r e d n u . s r a e p p a t i i h c h w n i t x e t n o c d n a m r o f e h t n i , r o t c e r i D , n o t l i m a H e m a h a r G r i M y b d e w e v e r d n a d e t i i m L s e c r u o s e R n e l l u C f o r o t c e r i i D g n g a n a M , e s o r g n R s i r h C i r D y b d e l i p m o c n o i t a m r o f n i i i n o d e s a b s m u n a r u r o f s t l u s e R n o i t a r o p x E o t s e t a e r l l t a h t t r o p e r s h t n i i n o i t a m r o f n i e h T o t t n a v e e r s l i i h c h w e c n e i r e p x e t n e c i f f u s s a h e H i . d e t i i m L s e c r u o s e R n e l l u C o t t n a t l u s n o c l l i a c g o o e g a o s a s l i n o t l i m a H r M . y g r u l l a t e M d n a g n n M i i f o e t u t i t s n I n a s a a r t s u A e h t l i f o s r e b m e M e r a m o h w f o h t o b , . d e t i i m L s e c r u o s e R n e l l u C E L B A T Y R A M M U S - S E R U T N E V T N O J I 16 f o g n i t r o p e R r o f e d o C n a s a a r t s u A i l “ e h t f o n o i t i d e 4 0 0 2 e h t y b d e n i f e d s a n o s r e P t n e t e p m o C a s a y f i l a u q o t , n e k a t r e d n u n e e b s a h h c h w y t i v i t c a e h t o t d n a i , n o i t a r e d s n o c i r e d n u s t i s o p e d f o s e p y t d n a n o i t a s i l a r e n m i l f o e y t s e h t . s r a e p p a t i i h c h w n i t x e t n o c d n a m r o f e h t n i d e u s s i i g n e b t r o p e r e h t o t t n e s n o c n o t l i m a H r M d n a e s o r g n R i . r D . ” s e v r e s e R e r O d n a s e c r u o s e R l a r e n M i , s t l u s e R n o i t l a r o p x E CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  DIRECTORS' REPORT  Your Directors submit their report for the year ended 30 June 2013.  Directors  The names and details of the company’s directors in office during the financial year and until the date of this  report are as follows. Directors were in office for this entire period unless otherwise stated.  Dr Denis Clarke BSc, BA, PhD, FAIMM (Non‐Executive Chairman) (Appointed 1 April 1999)  •  Dr Denis Clarke has more than 40 years’ experience in exploration and mining operations. Over 15 years with  Plutonic  Resources  (“Plutonic”),  he  contributed  significantly  at  the  General  Manager  level  to  its  success  as  it  developed from a small explorer in 1983 to one of Australia’s largest gold miners prior to its take‐over in 1998 in  a transaction which valued Plutonic at $1 billion. Dr Clarke at various times managed the exploration, finance,  administration  and  corporate  divisions.  He  subsequently  was  a  director  and  consultant  to  Troy  Resources  Limited for eleven years as it developed from explorer to a successful international gold miner.  During the past  three years Dr Clarke has been Chairman or Non‐Executive Director of the following listed companies:  ‐ LionGold Corp Ltd (from 1 October 2012 to present)  ‐ Hill End Gold Limited (from 25 February 2010 to present)  ‐ ‐ ‐ ‐ ‐ Signature Metals Limited (from 14 September 2012 to present)  Anglo Australian Resources NL (from 9 April 2004 to 28 November 2011)  BCD Resources NL (from 25 November 2004 to 25 February 2011)  BCD Resources (Operations) NL (from 27 February 2007 to 25 February 2011)  Troy Resources Limited (from 24 March 1999 to 27 November 2010)  •  Dr Chris Ringrose BSc, PhD, MBA, MAIMM, MAICD (Managing Director) (Appointed 19 June 2003)  Dr Chris Ringrose has been an exploration geologist based mainly in Western Australia since he completed his  geology degrees in Scotland in 1982. His career has included experience with EZ, Chevron and Aztec, and prior to  joining  Cullen,  he  was  Exploration  Manager  with  Troy  Resources  Limited  for  nine  years.  Dr  Ringrose  has  also  completed  an  MBA  at  Deakin  University  and  brings  to  the  Company  significant  management,  exploration  and  project evaluation experience gained both in Australia and overseas. Dr Ringrose has had no other directorships  of listed companies in the last three years.  Grahame Hamilton BSc, MSc, MAIG (Non‐Executive Director) (Appointed 1 April 1999)  •  Mr  Grahame  Hamilton,  a  graduate  of  the  University  of  NSW,  has  extensive  experience  over  40  years  in  exploration, corporate and project management. He has wide ranging expertise in project evaluation. Between  1994  and  1996  he  managed  the  Brocks  Creek  exploration,  environmental  impact  statement,  feasibility  study,  mine  development  and  construction  for  Solomon  Pacific  Resources  NL.  Before  Solomon,  Mr  Hamilton  worked  with Getty Oil Development Co. ‐ Minerals Division as Queensland Manager. Mr Hamilton had been a director of  AIM‐listed public company Mariana Resources Limited until his resignation on 28 November 2008.  John Horsburgh BSc, MSc, FAIMM (Non‐Executive Director) (Appointed 1 April 1999)  •  Mr John Horsburgh, a graduate of the Royal School of Mines, has over 40 years’ industry experience including 11  years with Solomon Pacific Resources NL. Prior to this he gained extensive experience in Australia and overseas  with Getty Oil Development Co., Billiton and RTZ Group. Mr Horsburgh is Non‐Executive Chairman of AIM‐listed  public company Mariana Resources Limited.  ‐ 17 ‐                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  •  Wayne John Kernaghan BBus, ACA, FAICD, ACIS (Non‐Executive Director and Company Secretary)  (Appointed 11 November 1997)  Mr Wayne Kernaghan is a member of the Institute of Chartered Accountants in Australia with a number of years  experience  in  various  areas  of  the  mining  industry.  He  is  also  a  Fellow  of  the  Australian  Institute  of  Company  Directors. During the past three years Mr Kernaghan has held, and is currently a director and holds, the following  listed company directorships:  ‐  ‐  ‐  Gulf Industrials Limited (from 30 June 2005) South American Ferro Metals Limited (from 26 June 2012) Farmworks Australia Limited (from 19 February 2010 to 24 August 2011) Principal Activities  The principal activity for the Consolidated Entity comprising Cullen Resources Limited ("the Company") and its  controlled  entities  (together  "the  Consolidated  Entity")  during  the  course  of  the  financial  year  was  mineral  exploration. There was no significant change in the nature of the Consolidated Entity's activities during the year.  Results  The loss attributable to the Consolidated Entity for the financial year was $ 2,078,566 [2012: loss $2,649,846].  No income tax was attributable to this result [2012: Nil].  Dividends  The  directors  do  not  recommend  the  payment  of  a  dividend  for  this  financial  year.  No  dividend  has  been  declared or paid by the Company since the end of the previous financial year.  Significant Changes in the State of Affairs  In the opinion of the directors there were no significant changes in the state of affairs of the Consolidated Entity  that occurred during the financial year under review not otherwise disclosed in this report or the consolidated  financial statements.  Review of Operations  Cullen is a mineral exploration company seeking deposits of gold, nickel, copper, uranium and iron ore either in  its own right, or managed by other partners in Joint Ventures.  During  the  year  under  review,  the  Company  continued  its  mineral  exploration  activities  including:  project  generation,  database  reviews,  field  mapping  and  geochemical  surveying,  and  drilling  programmes.    Company  exploration  activities,  including  Joint  Venture  managed  projects,  were  focused  in  Western  Australia  with  additional activities in New South Wales as follows:   Ashburton  Province,  WA  (Hardey  Junction  JV,  Mt  Stuart  JV,  Wyloo  JV,  Paraburdoo  JV  and  Tunnel  Creek  /Saltwater Pool JV ‐ gold, uranium and /or iron ore projects)  North Eastern Goldfields, WA (Gunbarrel/Mt Eureka and Irwin Bore, gold and nickel projects)  Eastern Goldfields, WA (Killaloe, gold and nickel project)     Murchison (North Tuckabianna , copper and gold project)   Forrestania, WA (Forrestania JV, gold and nickel project)   Central Lachlan Fold Belt, NSW (Minter tungsten project)   Eromanga, Millungera and Galilee Basins, NW Queensland (coal and copper‐gold projects)  Drilling  by  Cullen  or  its  Joint  Venture  partners  during  the  year  to  30  June  2013  included  programmes  for  for  copper  and  gold  at  the  North  Tuckabianna  project;  for  tungsten  at  Minter;  and  for  nickel  deposits  in  the  Mt  Eureka  project  area.  Other  exploration  field  work  has  included:  field  reconnaissance,  geological  mapping,  geochemical surveys, and evaluations of new project opportunities.  The Company continued to market projects  as potential farm‐out opportunities.  ‐ 18 ‐                             CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Also  during  the  year  the  Company  continued  exploration  activities  in  Namibia,  in  south‐west  Africa  with  aeromagnetic data interpretation for copper in two prospective terranes. The company also has an exploration  presence  in  Scandinavia  with  applications  in  Sweden  and  Finland.  The  company  has  applied  for  a  number  of  tenements with graphite prospectivity in Finland.  Also overseas, Cullen progressed work at the “TL Property” project in south‐east British Columbia in a search for  base metals. The first pass trenching programme Cullen conducted discovered high‐grade zinc mineralisation at  surface for further evaluation, a heliTEM survey has been flown and preliminary drill targets was completd.  A total of $ 1,912,358  (2012: $2,619,442) was spent on exploration by Cullen during the year, with Joint Venture  Partners contributing further exploration funds on Cullen tenements.  Cullen will continue to identify and evaluate both advanced and "grass roots" projects throughout Australia and  in selected overseas locations. Cullen’s portfolio is under continual evaluation to focus on projects likely to result  in discovery of an economic mineral deposit.  Corporate  At 30 June 2013 available cash totalled $ 1,884,038 (2012: $2,459,240).  After Balance Date Events  There has not arisen in the interval between the end of the financial year and the date of this report any item,  transaction  or  event  of  a  material  and  unusual  nature  likely,  in  the  opinion  of  the  directors,  to  affect  the  operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated  Entity in the subsequent financial years.  Likely Developments and Future Results  Other than as referred to in this report, further information as to likely developments in the operations of the  Consolidated  Entity  and  the  expected  results  of  those  operations  would,  in  the  opinion  of  the  directors,  be  speculative and not in the best interests of the Consolidated Entity.  Environmental Regulation  The exploration activities of the Consolidated Entity in Australia are subject to environmental regulation under  the  laws  of  the  Commonwealth  and  the  States  in  which  those  exploration  activities  are  conducted.  The  environmental laws and regulations generally address the potential impact of the Consolidated Entity's activities  in  the  areas  of  water  and  air  quality,  noise,  surface  disturbance  and  the  impact  upon  flora  and  fauna.  The  directors  are  not  aware  of  any  environmental  matter  which  would  have  a  materially  adverse  impact  on  the  overall business of the Consolidated Entity.  Options  As at the date of this report the Company has 22,000,000 (2012: 22,000,000) options which were outstanding.  Refer to Note 11 of the financial statements for further details of the options outstanding.  During the year no fully paid ordinary shares were issued by virtue of the exercise of options (2012: Nil). Since  the end of the financial year no shares have been issued by virtue of the exercise of options (2012: Nil).  ‐ 19 ‐                                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Directors’ Interest  At the date of this report, the interest of the directors in the shares and options of the company were:  2013  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan        Direct Fully Paid Shares ‐   950,000 ‐ 2 2,000,000 Options 2,000,000 8,000,000 2,000,000 2,000,000 2,000,000                           Indirect  Fully Paid Shares  5,364,000  ‐  15,891,004  17,452,122  2,373,376  Options ‐ ‐ ‐ ‐ ‐ Directors' Meetings  During the year the Company held thirteen meetings of directors.  The attendance of the directors at meetings  of the Board were:  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Board of Directors Attended  13 13 13 13 13 Maximum possible  eligible to attend  13  13  13  13  13  Indemnification and insurance of Directors and Officers   The  Company  has  entered  into  deeds  of  indemnity  with  the  Directors  indemnifying  them  against  certain  liabilities and costs to the extent permitted by law.  The Company has paid premiums totalling $19,995 (2012:  $19,995)  in  respect  of  Directors  and  Officers  Liability  Insurance  and  Company  reimbursement  policies,  which  covers all Directors and Officers of the Company. The policy conditions preclude the Company from any detailed  disclosures.  Employees  The Consolidated Entity employed three employees as at 30 June 2013 (2012: 3).  Corporate Governance  In  recognising  the  need  for  the  highest  standard  of  corporate  behaviour  and  accountability,  the  directors  of  Cullen  Resources  Limited  support  and  have  adhered  to  the  principles  of  good  corporate  governance.  The  Company’s corporate governance statement is on page 26.  Auditor Independence  The directors have received the auditor’s independence declaration for the year ended 30 June 2013 which is on  page 24 and forms part of this directors’ report.  For the year Ernst & Young have provided non‐audit services to  the Consolidated Entity in the amount of $2,000(2012: $17,650).  The directors are satisfied that non‐audit services are compatible with the independence requirements of the  Corporations  Act  2001.  The  nature  and  scope  of  the  non‐audit  services  provided  has  meant  that  auditor  independence was not compromised.  ‐ 20 ‐                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  REMUNERATION REPORT (AUDITED)  This report details the nature and amount of remuneration for each director of Cullen Resources Limited.  This  remuneration  report  outlines  the  director  and  executive  remuneration  arrangements  of the  Consolidated  Entity in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of  this report, key management personnel (KMP) of the Consolidated Entity are  defined as those persons having  authority and responsibility for planning, directing and controlling the major activities of the Consolidated Entity,  directly  or  indirectly,  including  any  director  (whether  executive  or  otherwise)  of  the  parent  company.  Only  directors of the Consolidated Entity meet the definition of key management personnel as the executive role is  performed by the executive director.  Details of key management personnel:  Directors  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Chairman (Non‐Executive)  Managing Director  Director (Non‐Executive)  Director (Non‐Executive)  Director (Non‐Executive)  Remuneration Policy  The  remuneration  policy  of  Cullen  Resources  Limited  has  been  designed  to  align  director  objectives  with  shareholder  and  business  objectives  by  providing  a  fixed  remuneration  component  and  offering  specific  long‐ term incentives. The board of Cullen Resources Limited believes the remuneration policy to be appropriate and  effective in its ability to attract and retain the best executives and directors to run and manage the Company as  well as create goal congruence between directors and shareholders.  The Board’s policy for determining the nature and amount of remuneration for Board members is as follows.  The  remuneration  policy,  setting  the  terms  and  conditions  for  the  executive  director  was  developed  by  the  Board. The executive receives a base salary on factors such as length of service and experience, superannuation,  options and incentives. The Board reviews executive packages annually by reference to executive performance  and comparable information from industry sectors and other listed companies in similar industries.  The Board policy is to remunerate non‐executive directors at market rates for comparable companies for time,  commitment and responsibilities. The Board determines payments to the non‐executive directors and reviews  their remuneration annually, based on market practice, duties and accountability. Independent external advice is  sought when required. The maximum aggregate amount of fees that can be paid to non‐executive directors is  subject  to  approval  by  shareholders  at  the  Annual  General  Meeting.  Fees  for  non‐executive  directors  are  not  linked  to  either  long  term  or  short  term  performance  of  the  Consolidated  Entity.  However,  to  align  directors’  interest  with  shareholder  interests,  the  directors  are  encouraged  to  hold  shares  in  the  Company.  There  is  a  specified aggregate directors fees of $250,000 for non‐executive directors which was approved by shareholders  at a general meeting of the Company. The $250,000 excludes other services outside of non‐executive directors'  fees.  Remuneration Incentives  Director  and  executive  remuneration  is  currently  not  linked  to  either  long  term  or  short  term  performance  conditions.  The  Board  feels  that  the  expiry  date  and  exercise  price  of  the  options  currently  on  issue  to  the  directors  and  executives  is  sufficient  to  align  the  goals  of  the  directors  and  executives  with  those  of  the  shareholders  to  maximise  shareholder  wealth,  and  as  such,  has  not  set  any  performance  conditions  for  the  directors or the executives of the Company. The Board will continue to monitor this policy to ensure that it is  appropriate for the Company in future years.  ‐ 21 ‐                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Group performance and shareholder wealth  Below is a table summarising key performance and shareholder wealth statistics for the Consolidated Entity over  the last five years.  Financial Year  30 June 2009  30 June 2010  30 June 2011  30 June 2012  30 June 2013  Loss After Tax $    6,307,393   2,161,235 1,640,087 2,649,846 2,078,566 EPS Cents  (1.14) (0.39) (0.27) (0.41) (0.28) Share Price Cents  2.6 3.4 3.0 1.8 0.8 Employment Contract ‐ Managing Director  Pursuant to an agreement Dr Ringrose will provide managing director services to the Company. The term of this  arrangement  is  from  1  November  2006  and  will  continue  thereafter  unless  terminated  on  not  less  than  three  months' notice given at any time. Effective from 1 April 2011 Dr Ringrose’s salary is $265,000pa. The position of  the director will become redundant under this agreement in the limited circumstances where the employment  of the Managing Director is terminated as a result of a takeover or merger of the Company. The Company will  pay the Managing Director the equivalent of four weeks per year of service or part thereof of his base salary as a  redundancy payment.  As part of Dr Ringrose's employment package he was issued with 8,000,000 options on 1 December 2010 with  the following terms. The options will expire on the earlier of the date which is one month after the Director to  whom the options are issued ceases to be a Director of the Company (or such longer period as determined by  the Board of Directors) or at 5.00 pm on 30 November 2013 ("the Expiry Date") with an exercise price of $0.075.  This is contained in the notice of meeting which was approved by shareholders.   During  the  year  the  Board  paid  a  discretionary  bonus  of  Nil  (2012:  $10,000)  to  Dr  Ringrose.  This  bonus  was  discretionary therefore there were no performance conditions attached to this bonus.  Non Executive Directors  The  non  executive  directors  have  been  issued  with  two  million  options  each  on  1  December  2010  with  an  exercise  price  of $0.075  each.  The  options will expire  on the  earlier  of  the date  which  is  one  month  after the  Director  to  whom  the  options  are  issued  ceases  to  be  a  Director  of  the  Company  (or  such  longer  period  as  determined by the Board of Directors) or at 5.00 pm on 30 November 2013 ("the Expiry Date"). This is contained  in the notice of meeting which was approved by shareholders.  Directors’ and Executives’ Remuneration  Details of remuneration provided to directors who include the most highly remunerated executives for the year  ended 30 June 2013 are as follows:  Directors  Short Term  Director  Fees  $  35,000  ‐  30,000  30,000  30,000  125,000  Salary/  Consult‐ ing  $  ‐  265,000  14,850  ‐  38,125  317,975  Bonus  $  Non  Monetary  Benefits  $  ‐ ‐ ‐  ‐ ‐ ‐  ‐ * 6,836 ‐  ‐ ‐ 6,836  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Total  * This relates to the provision of a motor vehicle.  Post  Employ‐ ment  Super‐ annuation  $  3,150 23,850 2,700  2,700 2,700 35,100  Long  Term  Long   Service  Leave  $  ‐ (18,500) ‐  ‐ ‐ (18,500)  Share  Based  Payments  Options  $  ‐  ‐  ‐  ‐  ‐  ‐  Perfor‐ mance  Related  %  ‐ ‐ ‐ ‐ ‐ ‐ Total  $  38,150 277,186 47,550  32,700 70,825 466,411  ‐ 22 ‐                           CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  The  Company  has  no  policy  on  directors  and  executives  entering  into  contracts  to  hedge  their  exposure  to  options or shares granted as part of their remuneration package.  Details of remuneration provided to directors who include the most highly remunerated executives for the year  ended 30 June 2012 are as follows:  Directors  Short Term  Post  Employ‐ ment  Super‐ annuation  $  3,150  Long  Term  Long   Service  Leave  $  ‐  Director  Fees  $  35,000  Salary/  Consult‐ ing  $  ‐  Bonus  $  ‐  Non  Monetary  Benefits  $  ‐  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  ‐  265,000  10,000 * 6,836 24,750 8,208  30,000  30,000  30,000  80,775  ‐  41,000  ‐ ‐  ‐  ‐ ‐  ‐  2,700 2,700  2,700  ‐  ‐  ‐  Total  125,000  386,775  10,000 6,836 36,000 8,208  * This relates to the provision of a motor vehicle.  Share  Based  Payments  Options  $  ‐  ‐  ‐  ‐  ‐  ‐  Perfor‐ mance  Related  %  ‐ ‐ ‐ ‐ ‐ ‐ Total  $  38,150  314,794 113,475 32,700  73,700  572,819 Options granted as part of remuneration for the year ended 30 June 2013  There were nil (2012: nil) options granted as part of director and executive emoluments during the year.  Shares issued on exercise of remunerated options  During  the  financial  year  nil  (2012:  Nil)  remunerated  options  were  exercised.  During  the  financial  year  nil  (2012: nil) options expired. The directors exercised nil (2012: Nil) options during the year.  Directors  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Value of options  granted during the  year  $  ‐  ‐  ‐  ‐  ‐  Value of options  exercised during the  year  $  ‐  ‐ ‐  ‐  ‐ Value of options  expired during the year  $  ‐  ‐ ‐  ‐  ‐ Total value of options  granted, exercised and  expired during the year  $  ‐  ‐  ‐  ‐  ‐  There were no options granted as a part of remuneration for the year ended 30 June 2013.  Options granted as part of remuneration for the year ended 30 June 2012  Directors  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Value of options  granted during the  year  $  ‐  ‐  ‐  ‐  ‐  Value of options  exercised during the  year  $  ‐ ‐ ‐  ‐  ‐ Value of options  expired during the year  $  ‐ ‐ ‐  ‐  ‐ Total value of options  granted, exercised and  expired during the year  $  ‐  ‐  ‐  ‐  ‐  There were no options granted as a part of remuneration for the year ended 30 June 2012.  End of Remuneration Report  ‐ 23 ‐                                   Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s Independence Declaration to the Directors of Cullen Resources Limited In relation to our audit of the financial report of Cullen Resources Limited for the financial year ended 30 June 2013, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Ernst & Young P McIver Partner 16 September 2013 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation PM:DR:CULLEN:017 CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Signed in accordance with a resolution of the directors  C. Ringrose  Director  Perth, WA  16 September 2013             ‐ 25 ‐                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013    CORPORATE GOVERNANCE STATEMENT  In  recognising  the  need  for  the  highest  standards  of  corporate  behaviour  and  accountability,  the  directors  of  Cullen Resources Limited have adhered to the principles of corporate governance and this statement outlines  the main corporate governance practices in place throughout the financial year. The ASX Corporate Governance  Council  released  revised  Corporate  Governance  Principles  and  Recommendations  on  2  August  2007.  Having  regard to the size of the Company and the nature of its enterprise, it is considered that the Company complies  as  far  as  possible  with  the  spirit  and  intentions  of  the  ASX  Corporate  Governance  Council's  Corporate  Governance  Principles  and  Recommendations.  Unless  otherwise  stated,  the  practices  were  in  place  for  the  entire year.  Board of Directors  The Board of Directors of the Company is responsible for the corporate governance of the Company. The Board  guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are  elected and to whom they are accountable.  As  the  Board  acts  on  behalf  of  shareholders,  it  seeks  to  identify  the  expectations  of  shareholders,  as  well  as  other  ethical  expectations  and  obligations.  In  addition,  the  Board  is  responsible  for  identifying  areas  of  significant business risk and ensuing arrangements are in place to adequately manage those risks.  The primary responsibility of the Board includes:   formulation and approval of the strategic direction, objectives and goals of the Company;   monitoring  the  financial  performance  of  the  Company,  including  approval  of  the  Company’s  financial  statements;      ensuring  that  adequate  internal  control  systems  and  procedures  exists  and  that  compliance  with  these  systems and procedures is maintained;  the identification of significant business risks and ensuring that such risks are adequately managed;  the review of performance and remuneration of executive directors; and   the establishment and maintenance of appropriate ethical standards.  The  responsibility  for  the  operation  and  administration  of  the  Company  is  carried  out  by  the  directors,  who  operate  in  an  executive  capacity,  supported  by  senior  professional  staff.  The  Board  ensures  that  this  team  is  suitably  qualified  and  experienced  to  discharge  their  responsibilities,  and  assesses  on  an  ongoing  basis  the  performance of the management team, to ensure that management’s objectives and activities are aligned with  the expectations and risks identified by the Board.  The Directors of the Company are as follows:  Dr Denis Clarke  Dr Chris Ringrose  Grahame Hamilton  John Horsburgh  Wayne Kernaghan  For information in respect to each director refer to the Directors' Report.  ‐ 26 ‐                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Independent Directors  Under ASX guidelines, principle 2.1, two of the current Board of five directors are considered to be independent  directors. Dr Ringrose is the executive director and Mr Horsburgh and Mr Hamilton, who are former executive  directors, are, under the ASX guidelines deemed not to be independent by virtue of their positions or former  positions. The Board is satisfied that the structure of the Board is appropriate for the size of the Company and  the nature of its operations and is a cost effective structure for managing the Company.  Board Composition  When the need for a new director is identified, selection  is based on the skills and experience of prospective  directors, having regard to the present and future needs of the Company. Any director so appointed must then  stand for election at the next Annual General Meeting of the Company.  Terms of Appointment as a Director  The  constitution  of  the  Company  provides  that  a  Director,  other  than  the  Managing  Director,  may  not  retain  office  for  more  than  three  calendar  years  or  beyond  the  third  annual  general  meeting  following  his  or  her  election,  whichever  is  longer,  without  submitting  for  re‐election.  One  third  of  the  Directors  must  retire  each  year and are eligible for re‐election. The Directors who retire by rotation at each annual general meeting are  those with the longest length of time in office since their appointment or last election.  Board Committees  In view of the size of the Company and the nature of its activities, the Board has considered that establishing  formally constituted committees for audit, board nominations and remuneration would contribute little to its  effective management. Accordingly audit matters, the nomination of new Directors and the setting, or review,  of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved  by  resolution  of  the  Board  (with  abstentions  from  relevant  Directors  where  there  is  a  conflict  of  interest).  Where  the  Board  considers  that  particular  expertise  or  information  is  required,  which  is  not  available  from  within  their  number,  appropriate  external  advice  may  be  taken  and  reviewed  prior  to  a  final  decision  being  made by the Board.  Remuneration  Remuneration  and  other  terms  of  employment  of  executives,  including  executive  directors,  are  reviewed  periodically  by  the  Board  having  regard  to  performance,  relevant  comparative  information  and,  where  necessary, independent expert advice. Remuneration packages are set at levels that are intended to attract and  retain executives capable of managing the Company’s operations.  The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with  recommendations  being  made  by  the  non‐executive  directors.  Where  the  remuneration  of  a  particular  executive director is to be considered, the director concerned does not participate in the discussion or decision  making.  Make Timely and Balanced Disclosure  The  board  has  in  place  written  policies  and  procedures  to  ensure  the  Company  complies  with  its  obligations  under the continuous disclosure rule 3.1 and other ASX Listing Rule disclosure requirements.  Independent Professional Advice   Directors have the right, in connection with their duties and responsibilities as directors, to seek independent  professional  advice  at  the  Company’s  expense.  Prior  approval  of  the  Chairman  is  required,  which  will  not  be  unreasonably withheld.  ‐ 27 ‐                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Code of Conduct In view of the size of the Company and the nature of its activities, the Board has considered that an informal  code of conduct is appropriate to guide executives, management and employees in carrying out their duties and  responsibilities.  Diversity Policy  The Company is in the process of establishing a diversity policy.  As  at  30  June  2013,  33.3%  (2012:  33.3%)  of  the  workforce  is  female  with  no  females  at  board  or  senior  management level.  Communication to Market & Shareholders  The Board of directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all  information  necessary  to  assess  the  performance  of  the  directors  and  the  Company.  Information  is  communicated to shareholders and the market through:       the Annual Report which is available to all shareholders;  other periodic reports which are lodged with ASX and available for shareholder scrutiny;  other announcements made in accordance with ASX Listing Rules;  special purpose information memoranda issued to shareholders as appropriate;   the Annual General Meeting and other meetings called to obtain approval for board action as appropriate;  and,   The Company's website.  Share Trading  Dealings  are  not  permitted  at  any  time  whilst  in  the  possession  of  price  sensitive  information  not  already  available to the market. In addition, the Corporations Act 2001 prohibits the purchase or sale of securities whilst  a person is in possession of inside information.  External Auditors  The external auditor is Ernst and Young. The external auditors are invited to attend the annual general meeting  and  be  available  to  answer  shareholder  questions  about  the  conduct  of  the  audit  and  the  preparation  and  content of the auditor's report.  Full details of the company’s corporate governance practices can be viewed at its website  www.cullenresources.com.au.  ‐ 28 ‐                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Consolidated Statement of Financial Position  as at 30 June 2013  Current Assets  Cash and cash equivalents  Receivables  Total Current Assets  Non Current Assets  Other financial assets  Plant & Equipment  Exploration & Evaluation  Total Non Current Assets  Total Assets  Current Liabilities  Trade and other payables  Provisions  Total Current Liabilities  Non Current Liabilities  Provisions  Total Non Current Liabilities  Total Liabilities  Net Assets  Equity  Issued Capital  Share based payment reserve  Available for  sale reserve   Accumulated Losses  Total Equity  Note 22(i) 5 6 7 8 9 10 10 11 12 13 14             Consolidated  2013 $ 1,884,038  38,286  1,922,324  32,400  3,172  4,211,622  4,247,194  6,169,518  108,266  103,917  212,183  26,602  26,602  238,785  2012  $  2,459,240 144,015 2,603,255 32,400 5,974 3,751,958 3,790,332 6,393,587 814,465 143,597 958,062 22,226 22,226 980,288 5,930,733  5,413,299 39,201,266  1,280,125  ‐  (34,550,658)  5,930,733  36,605,266 1,280,125 ‐ (32,472,092) 5,413,299 These financial statements should be read in conjunction with the accompanying notes. ‐ 29 ‐                                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Consolidated Statement of Changes in Equity  for the year ended 30 June 2013  Note  Issued  Capital  $ Share Based  Payment  Reserve  $ Available for  Sale  Reserve  $ Accumulated  Losses  $  Total  Equity  $ At 1 July 2011  34,610,266 1,280,125 (20,000) (29,822,246)  6,048,145 Loss for the year  Other comprehensive income  13  Release of unrealised loss   reserve due to impairment  Total comprehensive   income/(expense) for the year  Issue of share capital  Share issue costs   ‐ ‐ ‐ ‐ 2,100,000 (105,000) Share based payments  12  ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ At 30 June 2012  36,605,266 1,280,125 ‐ ‐ 20,000 (2,649,846)  (2,649,846) ‐  ‐  ‐ 20,000 20,000 (2,649,846)  (2,629,846) ‐ ‐ ‐ ‐ ‐  ‐  ‐  2,100,000 (105,000) ‐ (32,472,092)  5,413,299 Note  Issued  Capital  $  Share Based Payment  Reserve  $  Available for  Sale  Reserve  $  Accumulated  Losses  $  Total Equity  $  At 1 July 2012  36,605,266 1,280,125 Loss for the year  Other comprehensive income  13  Total comprehensive   income/(expense) for the year  Issue of share capital  Share issue costs   ‐ ‐ ‐ 2,706,000 (110,000) Share based payments  12  ‐ ‐ ‐ ‐ ‐ ‐ ‐ At 30 June 2013  39,201,266 1,280,125 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ (32,472,092)  5,413,299 (2,078,566)  (2,078,566) ‐  ‐ (2,078,566)  (2,078,566) ‐  ‐  ‐  2,706,000 (110,000) ‐ (34,550,658)  5,930,733 These financial statements should be read in conjunction with the accompanying notes. ‐ 30 ‐                                                                                                                                                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Consolidated Statement of Comprehensive Income  for the year ended 30 June 2013  Note 3 8 12 4 Revenues  Rent  Salaries and Consultants' fees  Compliance expenses  Impairment of exploration expenditure Share based payments  Impairment of available for sale investments Depreciation  Other expenses  Loss before income tax  Income tax benefit  Net Loss attributable to members of   Cullen Resources Limited after tax  Other Comprehensive Income:  2013 $ 49,708 (42,810) (408,234) (179,679) (1,452,694) ‐ ‐ (5,421)  (195,627) Consolidated  2012 $ 168,990 (38,336) (416,959) (188,479) (2,009,986) ‐ (6,845) (5,634)  (152,597) (2,234,757) (2,649,846) 156,191 ‐ (2,078,566)  (2,649,846)  Net change in fair value of available for sale assets    13   Release of unrealised loss reserve due to impairment  13 ‐  ‐  ‐  20,000  Total comprehensive income/(loss)   for the period  Basic (loss) per share   (cents per share)  Diluted (loss) per share   (cents per share)  (2,078,566)  (2,629,846)  23  23  (0.28)  (0.41)  (0.28)  (0.41)  These financial statements should be read in conjunction with the accompanying notes. ‐ 31 ‐                                                             CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Consolidated Statement of Cash Flows  for the year ended 30 June 2013  Note Consolidated  2013  $ 2012 $ Cash flows from operating activities  Research and development grant  Cash payments in the course of operations GST refunded  Interest received  156,191  (1,597,202)  144,305  40,481  ‐ (358,177) 124,895 71,982 Net operating cash flows  22(ii) (1,256,225)  (161,300) Cash flows from investing activities  Security deposits  Proceeds from sale of investment  Payment for plant & equipment  Payments for exploration & evaluation Net investing cash flows  Cash flows from financing activities  Proceeds from issue of shares  Share issue costs  Net financing cash flows  Net increase/(decrease) in cash   and cash equivalents  Cash  and cash equivalents at the   beginning of the financial year  Cash and cash equivalents at the end   of the financial year  ‐  ‐  (2,619)  (1,912,358)  (22,400) 635,125 ‐ (2,619,442) (1,914,977)  (2,006,717) 2,706,000  (110,000)  2,100,000 (105,000)  2,596,000  1,995,000  (575,202)  (173,017)  2,459,240  2,632,257  22(i)  1,884,038  2,459,240  These financial statements should be read in conjunction with the accompanying notes. ‐ 32 ‐                                                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Notes to the Financial Statements  1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES  Basis of preparation  (a)  The financial statements are general purpose financial statements, which have been prepared in accordance with the requirements  of  the  Corporations  Act  2001,  and  Australian  Accounting  Standards.  The  financial  statements  have  also  been  prepared  in  accordance with the historical cost convention using the accounting policies described below and do not take account of changes in  either the general purchasing power of the dollar or in prices of specific assets.   Statement of compliance  (b)  The financial statements comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and  International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.  Accounting policies and disclosures  (c)  The Group has adopted all new and amended Australian Accounting Standards and AASB interpretations which were applicable as of  1 July 2012. Adoption of these new and amended Australian Accounting Standards and ASSB interpretations did not have any effect  on the financial position or performance of the Group.  The Group has not elected to early adopt any new standards or amendments.  Going Concern  The accounts have been prepared on the going concern basis, which contemplates continuity of normal business activities and the  realisation of assets and liabilities in the normal course of business.  The consolidated group had cash assets of $1,884,038 at 30 June 2013. The directors acknowledge that continued exploration and  development of the consolidated group’s mineral exploration projects will necessitate further capital raisings.  The consolidated group remains dependent on its ability to raise funding in volatile capital markets. However, the directors  continue to believe that the going concern basis of accounting by the consolidated group is appropriate as the company and  consolidated group have successfully completed a capital raising during the year to 30 June 2013, notwithstanding the challenging  conditions in equity markets.  In consideration of the above matters, the directors have determined that it is reasonably foreseeable that the consolidated group will  continue as going concern and that it is appropriate that the going concern method of accounting be adopted in the preparation of the  financial statements. In the event that the consolidated group is unable to continue as a going concern (due to inability to raise future  funding requirements), it may be required to realise its assets at amounts different to those currently recognised, settle liabilities other  than in the ordinary course of business and make provisions for other costs which may arise as a result of cessation or curtailment of  normal business operations.    Accordingly, the financial statements do not include adjustments relating to the recoverability and classification of assets amount  or to the amounts and classification of liabilities that might be necessary if the consolidated group does not continue a going  concern.  Principles of consolidation  (d)  The  consolidated  financial  statements  include  the  financial  statements  of  Cullen  Resources  Limited  and  the  results  of  all  of  its  controlled entities which are referred to collectively throughout these financial statements as the “Consolidated Entity”. The results  of controlled entities are prepared for the same reporting period as the parent, using consistent accounting policies. All inter‐entity  balances and transactions, and unrealised profits arising from intra‐economic entity transactions, have been eliminated in full.  Taxes  (e)  Income tax  Deferred  income  tax  is  provided  on  all  temporary  differences  at  the  balance  sheet  date  between  the  tax  bases  of  assets  and  liabilities and their carrying amounts for financial reporting purposes.  Deferred income tax liabilities are recognised for all taxable temporary differences, except:   where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction  that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or  loss; or  33                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013   in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint venture,  where  the  timing  of  the  reversal  of  the  temporary  differences  can  be  controlled  and  it  is  probable  that  the  temporary  differences will not reverse in the foreseeable future.  Deferred income tax assets are recognised for all deductible temporary differences, carry‐forward of unused tax assets and unused  tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,  and the carry‐forward of unused tax credits and unused tax losses can be utilised, except:    where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an  asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the  accounting profit nor taxable profit or loss; or  in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint  ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse  in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.  The  carrying  amount  of  deferred  income  tax  assets  is  reviewed  at  each  reporting  date  and  reduced  to  the  extent  that  it  is  no  longer  probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.  Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is  realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance  sheet date.  Income  taxes  relating  to  items  recognised  directly  in  equity  are  recognised  in  equity  and  not  in  the  Consolidated  Statement  of  Comprehensive Income.  Goods and Services Tax (GST)  Revenues, expenses and assets are recognised net of the amount of GST except:   where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST  is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and  receivables and payables are stated with the amount of GST included.   The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the  Consolidated Statement of Financial Position. Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis  and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the  taxation authority are classified as operating cash flows.  Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.  Provision for employee benefits  (f)  Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave and long service  leave. Annual leave provisions expected to be settled within twelve months are measured at their nominal amounts. Long service  leave provisions are measured at the present value of the estimated future cash outflow to be made in respect of services provided  by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to  national government bond securities which have terms to maturity approximating the terms of the related liabilities are used.  Investments in controlled entities  (g)  Investments in controlled entities are carried in the company’s financial statements at the lower of cost and recoverable amount.  Dividends and distributions are brought to account when they are proposed by the controlled entities.  Exploration and Evaluation Expenditure  Expenditure is deferred  (h)  (i)  Expenditure  on  exploration  and  evaluation  is  accounted  for  in  accordance  with  the  'area  of  interest'  method.  Exploration  and  evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current and either:    the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the  area of interest or, alternatively, by its sale; or  exploration  and  evaluation  activities  in  the  area  of  interest  have  not  at  the  reporting  date  reached  a  stage  that  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.  34                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  When  the  technical  feasibility  and  commercial  viability  of  extracting  a  mineral  resource  have  been  demonstrated  then  any  capitalised  exploration  and  evaluation  expenditure  is  reclassified  as  capitalised  mine  development.  Prior  to  reclassification,  capitalised exploration and evaluation expenditure is assessed for impairment.  Impairment  The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the area of interest level  whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.  An  impairment  exists  when  the  carrying  amount  of  an  area  of  interest  exceeds  its  estimated  recoverable  amount.  The  area  of  interest is then written down to its recoverable amount. Any impairment losses are recognised in the Consolidated Statement of  Comprehensive Income.  (i)  Both the functional and presentation currency of Cullen Resources Limited and its Australian subsidiaries is Australian dollars ($A).  Foreign currency  Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the date of the transactions.  Monetary items in foreign currencies at balance date are translated at the rates of exchange ruling on that date.  Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account in the Consolidated  Statement of Comprehensive Income in the financial year in which the exchange rates change, as exchange gains or losses.  (j)  Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.   Plant and equipment  Depreciation is calculated on a straight‐line basis over the estimated useful life of the assets as follows:  Plant and equipment – over 3 to 8 years.  The assets residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate at each financial year  end.  Revenue  (k)  Other  revenue  includes  interest  revenue  on  short  term  deposit  received  from  other  persons.  It  is  brought  to  account  using  the  effective interest rate method. This is a method of calculating the amortised cost  of a  financial asset and allocating the interest  income  over  the  relevant period using the  effective interest rate, which is the  rate that exactly discounts estimated future cash  receipts through the expected life of the financial asset to the net carrying amount of the financial asset.  Joint ventures  (l)  The Consolidated Entity’s interests in jointly controlled assets  are accounted  for by recognising its proportionate share in assets  and liabilities from joint ventures.  Joint  venture  expenses  are  recognised  on  a  proportionate  basis  according  to  Cullen’s  joint  venture  interest.  The  Consolidated  Entity does not currently receive any income from its joint venture assets.  The Consolidated Entity does not hold any interests in jointly controlled entities.  Payables  (m)  Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the  future for goods and services received, whether or not billed to the Consolidated Entity.  Cash and cash equivalents  (n)  Cash  and  cash  equivalents  in  the  balance  sheet  comprise  cash  at  bank  and  in  hand  and  short‐term  deposits  with  an  original  maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant  risk of changes in value. For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand and in banks,  and money market investments readily convertible to cash within 2 working days.  Leases  (o)  The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an  assessment  of  whether  the  fulfilment  of  the  arrangement  is  dependent  on  the  use  of  a  specific  asset  or  assets  and  the  arrangement conveys a right to use the asset.  Operating lease payments are recognised as an expense in the Consolidated Statement of Comprehensive Income on a straight‐line  basis over the lease term.  35                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Issued capital  (p)  Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity. Any transaction  costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.  Earnings per share (EPS)  (q)  Basic EPS is  calculated as net  profit/(loss) attributable to  members, adjusted to exclude costs of servicing equity, divided by the  weighted  average  number  of  ordinary  shares,  adjusted  for  any  bonus  element.  Diluted  EPS  is  calculated  as  net  profit/  (loss)  attributable to members, adjusted for:      costs of servicing equity;  the after  tax effect of interest associated with dilutive potential  ordinary shares that have been recognised as  expenses;  and  other non‐discretionary changes in revenues or expenses during the period that would result from the dilution of potential  ordinary shares;  divided by the weighted average number of ordinary shares, adjusted for any bonus element.  (r)  The accounting policies adopted are consistent with those of the previous year, except as noted at Note 1(c).  Change in accounting policies  Share based payments  (s)  At each subsequent reporting date until vesting, the cumulative charge to the Consolidated Statement of Comprehensive Income is  the product of:   (i)  (ii)  (iii)  The grant date fair value of the option.   The  current  best  estimate  of  the  number  of  options  that  will  vest,  taking  into  account  such  factors  as  the  likelihood  of  employee turnover during the vesting period and the likelihood of non‐market performance conditions being met.  The expired portion of the vesting period.  The charge to the Consolidated Statement of Comprehensive Income for the period is the cumulative amount as calculated above  less the amounts already charged in previous periods. There is a corresponding entry to equity.  The company may also issue options that do not have any vesting conditions.  Until  an  option  has  vested,  any  amounts  recorded  are  contingent  and  will  be  adjusted  if  more  or  fewer  options  vest  than  were  originally anticipated to do so. Any option subject to a market condition is considered to vest irrespective of whether or not that  market condition is fulfilled, provided that all other conditions are satisfied.   If  the  terms  of  an  equity‐settled  option  are  modified,  as  a  minimum  an  expense  is  recognised  as  if  the  terms  had  not  been  modified. An additional expense is recognised for any modification that increases the total fair value of the share‐based payment  arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.   If  an  equity‐settled  option  is  cancelled,  it  is  treated  as  if  it  had  vested  on  the  date  of  cancellation,  and  any  expense  not  yet  recognised  for  the  option  is  recognised  immediately.  However,  if  a  new  option  is  substituted  for  the  cancelled  option  and  designated  as  a  replacement  option  on  the  date  that  it  is  granted,  the  cancelled  and  new  option  are  treated  as  if  they  were  a  modification of the original option, as described in the previous paragraph.   The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per  share.  Investment and other financial assets  (t)  Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets  at  fair  value  through  profit  or  loss,  loans  and  receivables,  held‐to‐maturity  investments,  or  available‐for‐sale  investments,  as  appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair  value  through  profit  or  loss,  directly  attributable  transactions  costs.  The  Consolidated  Entity  determines  the  classification  of  its  financial assets after initial recognition and, when allowed and appropriate, re‐evaluates this designation at each financial year‐end.  Subsequent measurement of available‐for‐sale financial assets  Available‐for‐sale  financial  assets  are  non‐derivative  financial  assets  that  are  designated  as  available‐for‐sale.  After  initial  measurement,  available–for‐sale  financial  assets  are  measured  at  fair  value  with  unrealised  gains  or  losses  recognised  as  other  comprehensive income in the available‐for‐sale reserve until the investment is derecognised, at which time the cumulative gain or  loss recorded is recognised in the income statement, or determined to be impaired, at which time the cumulative loss recorded is  recognised in the income statement.  36                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Impairment of non‐financial assets  (u)  Non‐financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may  not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable  amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing  impairment,  assets  are  grouped  at  the  lowest  levels  for  which  there  are  separately  identifiable  cash  inflows  that  are  largely  independent  of  the  cash  inflows  from  other  assets  or  groups  of  assets  (cash‐generating  units).  Non‐financial  assets  other  than  goodwill  that  suffered  an  impairment  are  tested  for  possible  reversal  of  the  impairment  whenever  events  or  changes  in  circumstances indicate that the impairment may have reversed.  New accounting standards and interpretations   (v)  The  financial  report  complies  with  Australian  Accounting  Standards  and  International  Financial  Reporting  Standards  (“IFRS”)  as  issued by the International Accounting Standards Board (“IASB”).  International Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have  not been adopted by the Group for the annual reporting period ended 30 June 2013.  These are outlined in the table below.  37                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Application  date of  standard*  Application  date for  Group*  1 January  2013  1 July 2013 1 January  2014  1 July 2014  1 January  2013   1 July 2013  Reference  Title  Summary  AASB 2012‐2   AASB 2012‐3  AASB 2012‐5   Amendments to  Australian  Accounting  Standards ‐  Disclosures ‐  Offsetting  Financial Assets  and Financial  Liabilities  Amendments to  Australian  Accounting  Standards ‐  Offsetting  Financial Assets  and Financial  Liabilities   Amendments to  Australian  Accounting  Standards arising  from Annual  Improvements  2009‐2011 Cycle   AASB 2012‐2 principally amends AASB 7 Financial  Instruments: Disclosures to require disclosure of  the effect or potential effect of netting  arrangements. This includes rights of set‐off  associated with the entity's recognised financial  assets and liabilities on the entity's financial  position, when the offsetting criteria of AASB 132  are not all met.   AASB 2012‐3 adds application guidance to AASB  132 Financial Instruments: Presentation to address  inconsistencies identified in applying some of the  offsetting criteria of AASB 132, including clarifying  the meaning of "currently has a legally enforceable  right of set‐off" and that some gross settlement  systems may be considered equivalent to net  settlement.  AASB 2012‐5 makes amendments resulting from  the 2009‐2011 Annual Improvements Cycle. The  standard addresses a range of improvements,  including the following:    Repeat application of AASB 1 is permitted  (AASB 1).    Clarification of the comparative information  requirements when an entity provides a third  balance sheet (AASB 101 Presentation of  Financial Statements).   Interpretation  21   Levies^   This Interpretation confirms that a liability to pay a  levy is only recognised when the activity that  triggers the payment occurs. Applying the going  concern assumption does not create a constructive  obligation.   1 January  2014   1 July 2014  AASB 2012‐9  Amendment to  AASB 1048  arising from the  withdrawal of  Australian  Interpretation  1039  AASB 2012‐9 amends AASB 1048 Interpretation of  Standards to evidence the withdrawal of Australian  Interpretation 1039 Substantive Enactment of  Major Tax Bills in Australia.  1 January  2013  1 July 2013  ‐ 38 ‐   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Application  date of  standard*  Application  date for  Group*  1 January  2015  1 July 2015 Reference  Title  Summary  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.  If this approach creates or enlarges an  accounting mismatch in the profit or loss, the  effect of the changes in credit risk are also  presented in profit or loss.  Consequential amendments were also made to  other standards as a result of AASB 9, introduced  by AASB 2009‐11 and superseded by AASB 2010‐7  and 2010‐10.  ‐ 39 ‐     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Application  date of  standard*  Application  date for  Group*  1 January  2013  1 July 2013  1 January  2013  1 July 2013  1 January  2013  1 July 2013  Reference  Title  Summary  AASB 10  Consolidated  Financial  Statements   AASB 11  Joint  Arrangements  AASB 12  Disclosure of  Interests in Other  Entities  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.   Consequential amendments were also made to  other standards via AASB 2012‐7.  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.    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  judgments 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.  ‐ 40 ‐   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Application  date of  standard*  Application  date for  Group*  1 January  2013  1 July 2013  1 January  2013  1 July 2013  Reference  Title  Summary  AASB 13  Fair Value  Measurement  AASB 119  Employee  Benefits  AASB 13 establishes a single source of guidance 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 2012‐8.  The main change introduced by this standard is to  revise the accounting for defined benefit plans.   The amendment removes the options for  accounting for the liability, and requires that the  liabilities arising from such plans is recognized in  full with actuarial gains and losses being  recognized in other comprehensive income.  It also  revised the method of calculating the return on  plan assets.    The revised standard changes the definition of  short‐term employee benefits. The distinction  between short‐term and other long‐term  employee benefits is now based on whether the  benefits are expected to be settled wholly within  12 months after the reporting date.  Consequential amendments were also made to  other standards via AASB 2012‐10.  ‐ 41 ‐   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Application  date of  standard*  Application  date for  Group*  1 January  2013  1 July 2013 1 July 2013  1 July 2013  Reference  Title  Summary  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.   Consequential amendments were also made to  other standards via AASB 2012‐12.  This Amendment deletes from AASB 124 individual  key management personnel disclosure  requirements for disclosing entities that are not  companies.  Interpretation  20  Stripping Costs in  the Production  Phase of a  Surface Mine  AASB 2011‐4  Amendments to  Australian  Accounting  Standards to  Remove  Individual Key  Management  Personnel  Disclosure  Requirements  [AASB 124]  ‐ 42 ‐     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Reference  Title  Summary  Application  date of  standard*  Application  date for  Group*  Annual  Improvements   2009–2012  Cycle ****  Annual  Improvements to  IFRSs 2009–2012  Cycle  This standard sets out amendments to  International Financial Reporting  1 January  2013  1 July 2013 Standards (IFRSs) and the related bases for  conclusions and guidance made during the  International Accounting Standards Board’s Annual  Improvements process. These amendments have  not yet been adopted by the AASB.  The following items are addressed by this  standard:  AASB 1 First‐time Adoption of International  Financial Reporting Standards    Repeated application of IFRS 1   Borrowing costs  AASB 101 Presentation of Financial Statements   Clarification of the requirements for  comparative information  AASB 116 Property, Plant and Equipment    Classification of servicing equipment  AASB 132 Financial Instruments: Presentation   Tax effect of distribution to holders of equity  instruments  AASB 134 Interim Financial Reporting    Interim financial reporting and segment  information for total assets and liabilities  ‐ 43 ‐       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Application  date of  standard*  Application  date for  Group*  1 July 2013  1 July 2013 Reference  Title  Summary  AASB 1053  Application of  Tiers of  Australian  Accounting  Standards  This Standard establishes a differential financial  reporting framework consisting of two Tiers of  reporting requirements for preparing general  purpose financial statements:  a) Tier 1: Australian Accounting Standards  b) Tier 2: Australian Accounting Standards –  Reduced Disclosure Requirements  Tier 2 comprises the recognition, measurement  and presentation requirements of Tier 1 and  substantially reduced disclosures corresponding to  those requirements.  The following entities apply Tier 1 requirements in  preparing general purpose financial statements:  a) For‐profit entities in the private sector that  have public accountability (as defined in this  Standard)  b) The Australian Government and State,  Territory and Local Governments  The following entities apply either Tier 2 or Tier 1  requirements in preparing general purpose  financial statements:  a) For‐profit private sector entities that do not  have public accountability  b) All not‐for‐profit private sector entities  c) Public sector entities other than the  Australian Government and State, Territory  and Local Governments.  Consequential amendments to other standards to  implement the regime were introduced by AASB  2010‐2, 2012‐2, 2012‐6, 2012‐11 and 2013‐1.  The  adoption  of  these  new  and  revised  Standards  and  Interpretations  will  not  have  an  impact  on  the  financial position  or  performance of the Group.  ‐ 44 ‐                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  2.  SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS  In  applying  the  Consolidated  Entity’s  accounting  policies  management  continually  evaluates  estimates  and  assumptions  based on experience and other factors, including expectations of future events that may have an impact on the Consolidated  Entity. All estimates and assumptions made are believed to be reasonable based on the most current set of circumstances  available  to  management.  Actual  results  may  differ  from  the  estimates  and  assumptions.  Significant  estimates  and  assumptions made by the management in the preparation of these financial statements are outlined below:  Significant accounting estimates and assumptions  The  carrying  amounts  of  certain  assets  and  liabilities  are  often  determined  based  on  estimates  and  assumptions  of  future  events.  The  key  estimates  and  assumptions  that  have  a  significant  risk  of  causing  a  material  adjustment  to  the  carrying  amounts of certain assets and liabilities within the next annual reporting period are:   Impairment of capitalised exploration and evaluation expenditure  (a)  The future recoverability of capitalised exploration expenditure is dependent on a number of factors, including whether the  Consolidated  Entity  decides  to  exploit  the  related  lease  itself  or,  if  not,  whether  it  successfully  recovers  the  related  exploration  and  evaluation  asset  through  sale.  Factors  that  could  impact  the  future  recoverability  include  the  level  of  reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including  changes  to  environmental  restoration  obligations)  and  changes  to  commodity  prices.  To  the  extent  that  capitalised  exploration  and  evaluation  expenditure  is  determined  not  to  be  recoverable  in  the  future,  profits  and  net  assets  will  be  reduced in the period in which this determination is made. In addition, exploration and evaluation is capitalised if activities in  the  area  of  interest  have  not  yet  reached  a  stage  that  permits  a  reasonable  assessment  of  the  existence  or  otherwise  of  economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be  written off, profits and net assets will be reduced in the period in which this determination is made.  Share‐based payment transactions  (b)  The Consolidated Entity measures the cost of equity‐settled transactions with employees by reference to the fair value of the  equity instruments at the date at which they are granted. The fair value is determined by an external valuer using either a  binomial  or  Black‐Scholes  model,  with  the  assumption  detailed  in  Note  17.  The  accounting  estimates  and  assumptions  relating to equity‐settled share‐based payments would have no impact on the carrying amount of assets and liabilities within  the next annual reporting period but may impact expenses and equity.  ‐ 45 ‐                 CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  3.  REVENUE AND EXPENSES  (Loss) after crediting the following revenues: Other Revenues  Interest received  Foreign exchange gain  Profit on sale of investments  Loss after charging the following expenses:  Consolidated 2013  $  2012 $ 40,481  9,227  ‐  49,708  71,160 ‐ 97,830 168,990 Auditors remuneration in respect of the Audit of the financial statements          54,250  49,698  Provision for employee benefits  Operating lease payments  Superannuation  4.  INCOME TAX  The  major  components  of  income  tax  expenses are:  Income Statement  Current Income Tax  Current income tax charge/(benefit)  Deferred Income Tax  Relating  temporary differences  Income  tax  expense/(benefit)  reported  in  the statement of comprehensive income  to  origination  and  reversal  of Operating loss before income tax  Prima facie income tax (benefit)   calculated at 30% (2012: 30%)   Non‐deductible expenses  Income tax losses carried forward/(utilised)  Research and development grant  Total income tax (expense)/benefit  (35,304)  12,811 42,560  36,501 80,898  89,416 (156,191)  ‐  (156,191)  ‐ ‐  ‐  (2,078,566)  (2,649,846)  (623,570)  (794,953)  3,328  2,387 620,247  792,566  156,191  156,191  ‐  ‐  Cullen Resources Limited and its 100% owned subsidiaries have entered the tax consolidation regime from 1 July  2002. The head entity of the tax consolidation group is Cullen Resources Limited.  The  entity  has  adopted  the  stand  alone  taxpayer method for measuring  current  and  deferred  tax  amounts.  The  members of the income tax consolidated group have entered into a tax funding agreement.  ‐ 46 ‐                                                                                                 CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Consolidated  Deferred Tax Liabilities Statement of Financial  Position  Statement of Comprehensive  Income  2013 $  2012 $  2013  $  2012 $  Exploration  (1,263,486) (1,125,587) 137,899  182,836 Deferred Tax Assets  Provisions  Accruals  Deferred tax assets used to  offset deferred tax liabilities  Net Deferred Tax Recognised   in the Statement of Financial Position  39,155  10,500 49,747  10,500 (10,592)  ‐  3,843  ‐ 1,213,831  1,065,340  (148,491)  (178,993)  ‐  ‐  ‐  ‐  As at 30 June 2013 future income tax benefits were available to the Consolidated Entity in respect  of operating  losses  and  prospecting  and  exploration  expenditure  incurred.  The  directors  estimate  the  potential  income  tax  benefit  at  30  June  2013  in  respect  of  tax  losses  not  brought  to  account  is  $13,466,335  (2012: $12,846,089)  and  there  is  no  expiry  date.  The  benefit  of  these  losses  has  only  been  brought  to  account  to  the  extent  needed  to  offset deferred tax liabilities. The remaining benefit will only be obtained if:  (a)  (b)  (c)  the Consolidated Entity derives future assessable income of a nature and of sufficient amount to enable  the benefit to be realised.  the Consolidated Entity continues to comply with the conditions for deductibility imposed by the law;  and   no changes in tax legislation adversely affect the Consolidated Entity in realising the benefit.  5.   RECEIVABLES  Current  Other debtors  Other debtors includes GST receivable which is non‐interest bearing.  6.   OTHER FINANCIAL ASSETS  Non current  Security deposits  The security deposits are non‐interest bearing and relate to mining tenements.  Consolidated 2013  $  2012 $ 38,286  144,015 32,400  32,400  32,400 32,400 ‐ 47 ‐                                                                                                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  7.     PLANT & EQUIPMENT  Plant & Equipment at cost  Accumulated depreciation  Total written down amount  (a)  Reconciliation  Plant & Equipment   Carrying amount at beginning  Additions  Depreciation expense  8.  EXPLORATION & EVALUATION  Costs carried forward in respect of   areas of interest in the exploration   and evaluation phase  Opening balance  Expenditure incurred during the year  Less  Impairment (a)  Closing balance net of impairment  Consolidated 2013  $  2012 $ 164,153  (160,981)  3,172  161,533 (155,559) 5,974 5,974  2,619  (5,421)  3,172  11,608 ‐ (5,634) 5,974 3,751,958  1,912,358  5,664,316  3,142,502 2,619,442 5,761,944 (1,452,694)  (2,009,986)  4,211,622  3,751,958  Mining tenements are carried forward in accordance with the accounting policy set out in Note 1.  The  ultimate  recoupment  of  the  book  value  of  deferred  costs  relating  to  areas  of  interest  in  the  exploration  and  evaluation phase is dependent upon the successful development and commercial exploitation or, alternatively, sale  of the respective areas of interest and the Consolidated Entity’s ability to continue to meet its financial obligations to  maintain the areas of interest.  (a)  Impairment  The  directors  have  reviewed  all  exploration  projects  for  indicators  of  impairment  in  light  of  approved  budgets.   Where substantive expenditure is neither budgeted nor planned the area of interest has been written down to its  fair value less costs to sell.  In determining fair value less costs to sell the directors had regard to the best evidence of  what a willing participant would pay in an arms length transaction.  Where no such evidence was available, areas of  interest  were  written  down  to  nil  pending  the  outcome  of  any  future  farm‐out  arrangement.    The  Company  will  continue to look to attract farm‐in partners and/or recommence exploration should circumstances change.  9.  TRADE AND OTHER PAYABLES  Current  Trade creditors ‐ unsecured  108,266  814,465 Trade creditors are non‐interest bearing and are normally settled on 30 day terms.  ‐ 48 ‐                                                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  10.  PROVISIONS  Current  Employee benefits  Non Current  Employee benefits  11.   CONTRIBUTED EQUITY  Issued capital   818,389,431 ordinary shares   (2012: 693,089,431)  Movement in issued shares for the year:  Beginning of the financial year:  Issued at 3.00 cents each (i)  Issued at 2.0 cents each (ii)  Issued at 2.20 cents each (i)  Less share issue expenses  End of financial year:  Consolidated 2013  $  2012 $ 103,917  143,597 26,602  22,226 39,201,266  36,605,266            2013            2012  Number of  Shares  693,089,431 ‐ 25,300,000  100,000,000 ‐ 818,389,431 $ Number of       $ 36,605,266 ‐ 506,000  2,200,000 (110,000) 39,201,266 Shares  623,089,431  70,000,000  ‐  ‐  ‐  693,089,431  34,610,266 2,100,000 ‐  ‐ (105,000) 36,605,266 Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to  participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid  upon shares held.  Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.  (i) Issued under a placement.  (ii) Issued under a Share Purchase Plan.   Options  As at 30 June 2013 there are 22,000,000 (2012: 22,000,000) unissued shares in respect of which options were  outstanding and the details of these are as follows:          Number  Grant Date      Vesting Date   16,000,000    6,000,000    22,000,000  1/12/10  14/03/11  1/12/10 14/03/11       Exercise  Price  0.075 0.060 Expiry Date 30 November 2013 13 March 2014 The options have no rights until they are exercised and become ordinary shares.  During the year nil (2012: nil) options lapsed.  During the year Nil (2012: nil) options were issued.  Since the end of the financial year no shares have been issued by virtue of the exercise of options.  ‐ 49 ‐                                                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  12.  SHARE BASED PAYMENT RESERVE  The  share  based  payment  reserve  represents  the  cost  of  share‐based  payments  to  directors,  employees  and  third parties.  Share based payment reserve  There was no movement during the year  13.   AVAILABLE FOR SALE RESERVE  This relates to the movement in the fair valuation of available For sale financial assets.  Beginning of the financial year  Release of unrealised loss reserve due to impairment  End of financial year  14.  ACCUMULATED LOSSES  Accumulated losses at the beginning of the year  Net (loss)  Accumulated losses at the end of the year  Consolidated 2013  $  1,280,125  2012 $ 1,280,125  ‐  ‐  ‐  (20,000)  20,000  ‐  (32,472,092)  (2,078,566)  (34,550,658)  (29,822,246)  (2,649,846)  (32,472,092)  15.  PARTICULARS IN RELATION TO CONTROLLED ENTITIES  The  consolidated  financial  statements  at  30  June  2013  include  the  following  controlled  entities.  The  financial  years of all controlled entities are the same as that of the parent entity.  Place of Incorporation  Interest %  Investment $  Name  June 2013  June 2012  Cullen Minerals Pty Limited  Cullen Exploration Pty Ltd  Montrose Resources Pty Limited  Red Dirt Resources Pty Ltd   Bearmark Investments  Pty Ltd   Cullen Resources Namibia Pty Ltd  Cullen Exploration Inc. ARCTEX OY  ARCTEX AB   Australia Australia Australia Australia Botswana  Namibia Canada Finland Sweden 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 June  2013  ‐  ‐  1  1  ‐  15  1  4,072  7,915  June 2012  ‐ ‐ 1 1 ‐ 15 1 4,072 7,915 ‐ 50 ‐                                                                                        CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  16.  KEY MANAGEMENT PERSONNEL  (a)  Compensation for key management personnel  Short‐term employee benefits  Post‐employment benefits  Other long‐term benefits  Termination benefits  Share‐based payments  Total compensation  (b)  Option holdings of directors  Consolidated 2013  $  2012 $ 449,811  35,100  (18,500)  ‐  ‐  466,411  528,611 36,000 8,208 ‐ ‐ 572,819 Balance at  beginning of  year 1 July 2012  Number  Options  issued  Number  Options  lapsed  Number  2,000,000  8,000,000  2,000,000  2,000,000  2,000,000  16,000,000  ‐  ‐ ‐ ‐ ‐ ‐  Balance at end  of year  30 June 2013  Number  2,000,000  8,000,000 2,000,000 2,000,000 2,000,000 Vested and  exercisable at  30 June 2013  Number  2,000,000  8,000,000 2,000,000 2,000,000 2,000,000 Total  Number  2,000,000  8,000,000  2,000,000  2,000,000  2,000,000  16,000,000  16,000,000  16,000,000  ‐  ‐ ‐ ‐ ‐ ‐  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  The outstanding options are exercisable at $0.075 and have an expiry date of 30 November 2013.  These options had a weighted average exercise price of $0.075 and a weighted average remaining contractual  life of 0.42 years.  Balance at  beginning of  year  1 July 2011  Number  2,000,000  8,000,000  2,000,000  2,000,000  2,000,000  16,000,000  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  Options  issued  Number  Options  lapsed  Number  ‐  ‐ ‐  ‐  ‐ ‐  ‐  ‐ ‐  ‐  ‐ ‐  Balance at end  of year  30 June 2012  Number  2,000,000  8,000,000 2,000,000  2,000,000  2,000,000 16,000,000  Vested and  exercisable at  30 June 2012  Number  2,000,000  8,000,000 2,000,000  2,000,000  2,000,000 16,000,000  Total  Number  2,000,000  8,000,000  2,000,000  2,000,000  2,000,000  16,000,000  The outstanding options are exercisable at $0.075 and have an expiry date of 30 November 2013.  These options had a weighted average exercise price of $0.075 and a weighted average remaining contractual  life of 1.42 years.  ‐ 51 ‐                                                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  (c)  Shareholdings of directors  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  Balance  1 July 2012  Number  4,614,000  200,000  15,141,004  16,702,124  3,623,376  40,280,504  Balance  1 July 2011  Number  3,383,000  200,000  15,141,004  16,103,124  3,333,000  38,160,128  Options Exercised  Number  ‐ ‐ ‐ ‐ ‐ ‐ Options Exercised  Number  ‐ ‐ ‐ ‐ ‐ ‐ Net Change Purchase  Number  750,000 750,000 750,000 750,000 750,000 3,750,000 Net Change Purchase  Number  1,231,000 ‐ ‐ 599,000 290,376 2,120,376 Balance 30 June 2013  Number  5,364,000 950,000 15,891,004 17,452,124 4,373,376 44,030,504 Balance 30 June 2012  Number  4,614,000 200,000 15,141,004 16,702,124 3,623,376 40,280,504 The directors' shareholdings are held directly and indirectly. Refer to the Directors' Report on page 20 for the  breakdown.  17. SHARE BASED PAYMENTS  (a)  Recognised share based payment expenses  Director options  Employee options  (b)  (i) Employee Options  Options held at the beginning of the reporting period  Number  Grant Date Vest Date Expiry Date 2013  $  2012  $               ‐                     ‐                     ‐     ‐                  ‐                     ‐     Weighted  Average  Exercise Price  6,000,000  14/3/11  14/3/11 13/3/14 $0.06  (ii)  Options lapsed / exercised during the year  Number  Grant Date ‐  ‐  Exercise Date  ‐ Exercise Price  ‐ Number  Lapsed  ‐  ‐ 52 ‐                                                                                           CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  (iii)  Options issued during the year  Number  Grant Date  Vest Date Expiry Date ‐  ‐  ‐ ‐ (iv)  Options held at the end of the reporting period  Number  Grant Date  Vest Date Expiry Date Weighted Average  Exercise  Price  ‐ Exercise  Price  6,000,000  14/3/11  14/3/11 13/3/14 $0.06 Weighted  Average  Share Price  ‐  Weighted Average Fair Value  of Options  $0.0216  These options had a weighted average exercise price of $0.06 and a weighted average remaining contractual  life of 0.75 years.  The  fair  value  of  the  equity  settled  share  options  granted  are  estimated  as  at  the  date  of  allocation  using  a  Binomial Model taking into account the terms and conditions upon which they were granted.   (v)  Valuation of options issued during the year  Number  Grant Date  Vest Date Expiry Date Exercise  Price  ‐  ‐  ‐ ‐ ‐ Weighted Average Fair Value  of Options  ‐  (c) Weighted average remaining contractual life  Options  ‐ Employee  Options  ‐ Directors  (d) Range of exercise prices  Options  ‐ Employee  Options  ‐ Directors  (e) Weighted average fair value at date of issue  2013  Years  0.75  0.42  2013  $  0.06  0.075  2013  $  2012  Years  1.75  1.42  2012  $  0.06  0.075  2012  $  Options  ‐ Employee  Options  ‐ Directors  0.0216  0.0277  0.0216  0.0277  ‐ 53 ‐                                                                                                                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Option pricing model  (f) The fair value  of the equity settled share options granted are estimated as at the date of allocation using a  Binomial Model taking into account the terms and conditions upon which they were granted.  The following table lists the inputs to the models used at the date of allocation for employee options:  Dividend yield  Expected volatility  Risk free interest rate  Exercise price  Share price at measurement date  2013  2012  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  The following table lists the inputs used at the date of allocation for directors’ options:  Dividend yield  Expected volatility  Risk free interest rate  Exercise price  Share price at measurement date  18.  JOINT VENTURES    2013  2012  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  The Consolidated Entity has interests in the following jointly controlled assets:   Principal Activity  Other Participant  (a)  Hardey Junction  Exploration  Northern Star Resources Ltd (Northern Star)  (b)  Mt Stuart   Exploration  Australian Premium Iron Management Pty Limited (API)  (c)  Wyloo  Exploration  Fortescue Mining Group Limited (Fortescue)  (d)  Tunnel Creek/Saltwater Pool    Exploration Avocet Resources Limited now Lion One Metals Limited (e)  Paraburdoo  Exploration Fortescue Mining Group Limited (Fortescue)  (f)  Forrestania  Exploration Hannans Reward Limited (Hannans)  (g)  Killaloe  Exploration  Matsa Resources Limited (Matsa)  (h)  TL Property, Canada  Exploration  TL Syndicate  a) b) c) d) e) f) Northern Star has an 80% interest, Cullen is 20% free carried.  API has earned a 70% interest in the iron ore rights and Cullen is contributing at 30% for its interest.  Fortescue can earn up to 80% in the iron ore rights.  Avocet/ Lion Ore Metals can earn 70%.  Fortescue can earn up to 80% in the iron ore rights.  Hannans has an 80% interest; Cullen is 20% free carried.  g) Matsa has earned a 80% interest; Cullen is 20% free carried.  h) Cullen can earn 80%.  ‐ 54 ‐                                                                                                                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  The joint venture assets are not separate legal entities. They are contractual arrangements between the participants for the  sharing of costs and any outputs and do not, in themselves, generate revenue and profit.  The net contribution of any joint  venture activities to the operating profit before income tax is $Nil (2012: $Nil). The Consolidated Entity’s assets employed in  the joint ventures, are included in the balance sheet of the Consolidated Entity as follows:  Current Assets  Receivables  Non‐Current Assets  Exploration and expenditure  Current Liabilities  Trade and other payables  19.  COMMITMENTS  (a) Minimum exploration work  Consolidated  2013  $  2012  $  233  83,331 4,211,349  3,655,754  14,510  55,518  The  Consolidated  Entity  has  certain  obligations  to  perform  minimum  exploration  work  and  expend  minimum  amounts  of  money  on  mineral  exploration  tenements.  The  Consolidated  Entity  has  committed  to  expend  a  minimum  of  $1,878,980  (2012: $2,302,380) over the next year to keep its current tenements in good standing.  Approximately 68% (2012: 68%) of  this expenditure will be met by our Joint Venture partners.  (b) Joint Venture commitment  The Consolidated Entity has certain obligations in respect to the Mt Stuart JV and maybe required to expend further funds  over the next year being its share of the joint venture expenditure.  (c) Lease expenditure commitments  Lease expenditure commitment  Operating leases (non‐cancellable) for premises  Minimum lease payments  ‐  ‐  not later than one year  later than one year and not later than five years  Aggregate lease expenditure contracted for at reporting  date but not provided for  Consolidated  2013  $  2012  $  25,137  ‐  41,616  24,276  25,137  65,892  This lease for the premises is for the period 1 February 2010 to 31 January 2014 with an option for a further five years.   There are no contingent rentals or restrictions imposed by the lease arrangements.  ‐ 55 ‐                                                                                                                                                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  20.  RELATED PARTIES  Payments to director related companies  Transactions  between  related  parties  are  on  normal  commercial  terms  and  conditions  no  more  favourable  than  those  available to other parties unless otherwise stated.  Geological payments were made to Weeroona Investments Pty Ltd totalling $14,850 (2012: $80,775) which is a company  controlled by Mr G Hamilton. There were no amounts outstanding at 30 June 2013. Consultancy payments were made to  Mosman Corporate Services Pty Ltd totalling $38,125 (2012: $41,000) which is a company controlled by Mr W Kernaghan.  There was $2,220 outstanding at 30 June 2013.  21.  OPERATING SEGMENTS  Identification of Reportable Segments  The Consolidated Entity has based its operating segment on the internal reports that are reviewed and used by the executive  management team in assessing performance and in determining the allocation of resources.  The Consolidated Entity currently does not have production and is only involved in exploration. As a consequence, activities  in the operating segment are identified by management based on the manner in which resources are allocated, the nature of  the  resources  provided  and  the  identity  of  the  manager  and  country  of  expenditure.  Discrete  financial  information  about  each of these areas is reported to the executive management team on a monthly basis.  Based  on  this  criteria,  the  Consolidated  Entity  has  only  one  operating  segment,  being  exploration,  and  the  segment  operations and results are the same as the Consolidated Entity’s results.  Non Current Assets by Geographical regions:  Australia  Namibia  Canada   22.  STATEMENT OF CASH FLOWS  Consolidated  2013  $  2012 $ 4,244,794  ‐  2,400  4,247,194  3,718,044  ‐  72,288 3,790,332  (i)  Reconciliation of cash  For the purposes of the Consolidated Statement of Cash Flows, cash includes cash at bank and short term deposits at call.   Cash at the end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled to the related items  in the Consolidated Statement of Financial Position as follows:  Cash on hand  (ii)  Reconciliation of operating (loss)          after income tax to net cash used in operating activities  Operating (loss) after income tax  Add/(less) non cash items  Profit on sale of investment  Impairment of available for sale assets  Depreciation  Share based payments  Provisions for employee benefits  Impairment exploration expenditure  (Decrease) / Increase in trade and other payables  Decrease / (Increase) in receivables  Net operating cashflows  ‐ 56 ‐ Consolidated  2013  $  2012  $  1,884,038  2,459,240  (2,078,566)  (2,649,846)  ‐  ‐  5,421  ‐  (35,304)  1,452,694  (706,199)  105,729  (97,830) 13,155  5,634  ‐  12,811 2,009,986 619,649  (74,859)  (1,256,225)  (161,300)                                                                                                                        CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  Share based payments  During the year the Consolidated Entity made share based payments of $Nil (2012: $Nil) to directors and employees of  the Consolidated Entity.  23.  EARNINGS/(LOSS)PER SHARE  Basic (loss) per share (cents per share)  Diluted (loss) per share (cents per share)  The following reflects the income and share data used   in the calculations of basic and diluted (loss) per share  Net (loss)  Weighted average number of ordinary shares used in  the calculation of basic and diluted earnings per share  Options on issue at year end are not dilutive and hence  not used in the calculation of diluted EPS                             Consolidated  2013  2012  (0.28)  (0.28)  (0.41) (0.41) (2,078,566)  (2,649,846)  739,383,404  642,459,294  22,000,000  22,000,000  There  are  no  instruments  (e.g.  share  options)  excluded  from  the  calculation  of  diluted  earnings  per  share  that  could  potentially dilute basic earnings per share in the future because they are antidilutive for either of the periods presented.  24.  FINANCIAL INSTRUMENTS  The Group's financial instruments comprise receivables, payables, and cash and short‐term deposits.  The Group manages its exposure to key financial risks, including interest rate risk in accordance with the Group's financial risk  management policy. The objective of the policy is to support the delivery of the Group's financial targets whilst protecting  future financial security.  The Board reviews and agrees policies for managing each of these risks as summarised below.  Primary responsibility for identification and control of financial risks rests with the Board of Directors. Due to the size and  nature of the company's operations, and as the company does not use derivative instruments or debt, the directors do not  believe the establishment of a risk management committee is warranted.  Interest Rate Risk  (a)  The Group's exposure to market interest rates relates primarily to the Group's cash and cash equivalents.  The Group's exposure to interest rate risk for each class of financial assets and financial liabilities is set out below.  Consolidated  Floating  interest rate  Floating  interest rate  2013 $ 2012 $  1,884,038  2,459,240  1,884,038  2,459,240  Financial Instruments  Financial Assets  Cash and cash equivalents  Total Financial Assets  Cash gives rise to interest rate risk because the interest rate is variable.  ‐ 57 ‐                                                                                                                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  The  following  summarises  the  effect  on  loss  and  equity  of  financial  instruments  held  at  balance  date  as  a  result  of  a  1%  movement in interest rates, with all other variables remaining constant.  Interest rate +1%  Interest rate ‐1%  Consolidated  2013  $  (18,840)  18,840 2012  $  (24,592)  24,592 The selection of 1% sensitivity check was based on recent interest rate adjustments.  (b)  Currency Risk  The  Consolidated  Entity  has  limited  exposure  to  foreign  currency  risk  as  it  pays  for  its  overseas  exploration  activities  from  Australia in various overseas currencies.  (c)  Credit Risk  Credit  risk  arises  from  the  financial  assets  of  the  Consolidated  Entity,  namely  trade  and  other  receivables.  The  Consolidated  Entity's  exposure  to  credit  risk  arises  from  potential  default  of  the  counter  party,  with  a  maximum  exposure  equal  to  its  carrying amount.  Exposure at balance date is addressed in each applicable note.  The Consolidated Entity does not hold any credit derivatives to offset its credit exposure.  Receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity's exposure to bad debts is  not significant.  There are no significant concentrations of credit risk within the Consolidated Entity and cash and cash equivalents are spread  amongst two of the big four Australian Banks.  (d)  Liquidity Risk  The  liquidity  position  of  the  Consolidated  Entity  is  managed  to  ensure  sufficient  liquid  funds  are  available  to  meet  the  Consolidated Entity's financial commitments in a timely and cost‐effective manner. The Consolidated Entity funds its activities  through capital raisings in order to limit its liquidity risk which is monitored on a monthly basis.  Contractual maturity of the trade payables is within 30 day terms.  The Consolidate Entity manages its liquidity risk by monitoring the total cash inflows and outflows expected on a monthly basis.  The  Consolidated  entity  has  established  comprehensive  risk  reporting  covering  its  business  units  that  reflect  expectations  of  management of the expected statement of financial assets and liabilities.  (e)    Capital Management  Management controls the capital of the Consolidated Entity in order to provide the shareholders with adequate returns and  ensure that the group can fund its operations and continue as a going concern.  There are no externally imposed capital requirements.  Management  effectively  manages  the  group's  capital  by  assessing  the  Consolidated  Entity's  financial  risks  and  adjusting  its  capital structure in responses to include the management of debt levels, distributions to shareholders and share issues.  The Consolidated Entity uses cash flow forecasts to manage and adjust its capital management.  There have been no changes in the strategy adopted by management to control the capital of the Consolidated Entity since the  prior year.  Capital managed by the Consolidated Entity consists of shareholders equity.  Shareholders equity  ‐ 58 ‐ Consolidated  2013  $  2012  $  5,930,733  5,413,299                                                                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  25.  AUDITOR'S REMUNERATION  Amounts received or due and receivable  by Ernst and Young  ‐ ‐ an audit or review of the financial report  of the entity and any other entity in the  Consolidated Entity  taxation services provided to the Consolidated Entity 26.  PARENT ENTITY INFORMATION   Information relating to Cullen Resources Limited.  Current assets  Total assets  Current liabilities  Total liabilities  Issued capital  Accumulated losses  Share based payment reserve  Total shareholders' equity  Loss of the parent entity  Total comprehensive income of the parent entity       Consolidated  2013  $  2012 $  54,250  2,000    49,698  17,650  2013  $  2012 $  1,609,295  5,995,280  52,660  52,660  39,201,266  34,538,771  1,280,125  5,942,620  2,324,315  2,324,315  1,653,281  5,735,616 64,681 64,681 36,605,266  32,214,456  1,280,125  5,670,935 2,446,207 2,446,207  The parent entity has no contingent liabilities, nor does it have any contractual commitments for the acquisition of property,  plant or equipment.  27.  SUBSEQUENT EVENTS  There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or  event of a material and unusual nature likely,  in the opinion of the directors, to affect the operations of the Consolidated  Entity, the results of those operations or the state of affairs of the Consolidated Entity in the subsequent financial years.  28.  CORPORATE INFORMATION  The financial report of Cullen Resources Limited for the year ended 30 June 2013 was authorised for issue in accordance with  a resolution of the directors on 13 September 2013.  Cullen Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the  Australian Stock Exchange.  ‐ 59 ‐                                                                                                           CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  DIRECTORS' DECLARATION  In accordance with a resolution of the directors of Cullen Resources Limited, I state that:  In the opinion of the directors:  (a) the  financial  statements  and  notes  of  the  Consolidated  Entity  are  in  accordance  with  the  Corporations Act 2001, including:  (i) giving  a  true  and  fair  view  of  the  Consolidated  Entity’s  financial  position  as  at  30 June  2013  and of its performance for the year ended on that date; and  (ii) complying  with  Australian  Accounting  Standards  (including  the  Australian  Accounting  Interpretations) and the Corporations Regulations 2001; and  the financial statements and notes also comply with International Financial Reporting Standards as  disclosed in Note 1(b).  there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts  as and when they become due and payable.  this  declaration  has  been  made  after  receiving  the  declaration  required  to  be  made  to  the  directors  in  accordance  with  section  295A  of  the  Corporations  Act  2001  for  the  financial  year  ending 30 June 2013.  (b) (c) (d) On behalf of the Board  C. Ringrose  Director  Perth, WA  16 September 2013  ‐ 60 ‐                                                 Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent audit report to members of Cullen Resources Limited We have audited the accompanying financial report of Cullen Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2013, 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. Directors' responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor's responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's 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 controls 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 controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation PM:DR:CULLEN:016 Opinion In our opinion: a. the financial report of Cullen Resources Limited is in accordance with the Corporations Act 2001, including: i ii giving a true and fair view of the consolidated entity's financial position as at 30 June 2013 and of its performance for the year ended on that date; and complying with Australian Accounting Standards and the Corporations Regulations 2001; and b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1. Material Uncertainty Regarding Continuation as a Going Concern Without qualifying our opinion, we draw attention to the basis of preparation paragraph in Note 1 to the financial report. As a result of these matters there is significant uncertainty whether the consolidated entity will continue as a going concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern. Report on the remuneration report We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2013. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion, the Remuneration Report of Cullen Resources Limited for the year ended 30 June 2013, complies with section 300A of the Corporations Act 2001. Ernst & Young P McIver Partner Perth 16 September 2013 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation PM:DR:CULLEN:016 CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013    SHAREHOLDER INFORMATION  CAPITAL STRUCTURE  As at 13 September 2013, the company had the following securities on issue:  Issued Capital  Top 20 Shareholders  Total holding of twenty largest shareholders % of total shares on issue  Distribution of shareholders  1 ‐ 1,000 shares  1,001 ‐ 5,000 shares  5,001 ‐ 10,000 shares  10,001 ‐ 100,000 shares  100,001 and over  Total  Unmarketable Parcels as at 13 September 2013 Minimum $500.00  Fully paid Ordinary shares  818,389,431 338,920,221 41.41% 160 190 404 1,686 690 3,130 1,100  OPTIONS   As at 13 September 2013, 22,000,000 unissued shares in respect of options were outstanding.  These are as follows:  Number    16,000,000    6,000,000  Exercise Price  Expiry Date  $0.075  $0.06  30 November 2013  13 March 2014  SUBSTANTIAL SHAREHOLDERS  The company has three Substantial Shareholders as at 13 September 2013  Name  Brisbane Investments I and II  Mende and Kundrun   Aquila Resources Ltd  Wythenshawe & Associates  Pty Ltd  %  6.22  12.81  11.52  No. of shares  50,822,699  104,843,426  94,253,538  ‐ 63 ‐                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2013  TWENTY LARGEST SHAREHOLDERS   The names of the twenty holders of the fully paid shares at 13 September 2013 are listed below:  Name  Penoir Pty Ltd  Glyde Street Nominees Pty Ltd   Wythenshawe Pty Ltd  Brisbane Investments  I Ltd  Brisbane Investments II Ltd  Kitchsmith Pty Ltd  Warramboo Holdings Pty Ltd  Wythenshawe Pty Ltd  Innerleithen Pty Ltd  Bellarine Gold Pty Ltd  HSBC Custody Nominees (Australia) Limited  Aquila Resources Limited  Chiatta Pty Ltd  A N Superannuation Pty Ltd  BT X Pty Ltd  Adrian Darby Investments Pty Ltd  First Farley Pty Ltd  Mr Parmjit Singh  Penoir Pty Ltd  Lindglade Enterprises Pty Ltd  Total  No. of Shares % Held  Rank  72,000,000  33,000,000 28,137,000  25,411,350  25,411,349  15,438,002  15,250,000  14,757,698  14,034,120  12,142,200  12,027,776  11,846,603  11,360,000  9,000,000  8,500,000  7,750,000  6,000,000  5,800,000  5,690,123  5,364,000  8.80  4.03  3.44  3.11  3.11  1.89  1.86  1.80  1.71  1.48  1.47  1.45  1.39  1.10  1.04  0.95  0.73  0.71  0.70  0.66  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  338,920,221  41.41  VOTING RIGHTS  Every  member  present  in  person  or  by  representative  shall  on  a  show  of  hands  have  one  vote,  and  on  a  poll  every member present in person or by representative, proxy or attorney shall have one vote in respect of each  fully paid share held by him.  ‐ 64 ‐                                                   C U L L E N R E S O U R C E S L I M I T E D Registered and Principal Office Unit 4 7 Hardy Street South Perth WA 6151 Telephone (08) 9474 5511 Facsimile (08) 9474 5588 Website: www.cullenresources.com.au Email: cullen@cullenresources.com.au 

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