RAMELIUS RESOURCES LIMITED ANNUAL REPORT 2007 CONTENTS Chairman s Report Managing Director s Report Review of Operations Native Title Corporate Governance Statement Glossary of Terms Directors Report Auditor s Independence Declaration Income Statement Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements Directors Declaration Independent Audit Report Shareholder Information Corporate Directory 03 06 07 19 20 25 30 41 42 43 44 45 46 67 68 70 Back Cover Ramelius Resources Limited ACN 001 717 540 ABN 51 001 717 540 Annual General Meeting The 2007 Annual General Meeting will be held at Enterprise House 136 Greenhill Road Unley SA 5061 28 November 2007 at 11am. A formal notice is mailed to shareholders with the distribution of this report. Stock Exchange The Company is listed on the Australian Securities Exchange Limited. The Home Exchange is Adelaide. ASX codes: Shares: RMS Options: RMSO / RMSOB Photograph: Wattle Dam Open Pit at completion THE COMPANY HAS CERTAINLY SURPASSED ITS OWN EXPECTATIONS IN NOT ONLY MEETING THE GOALS THAT WERE FORESHADOWED BUT IT IS ALSO MAKING SIGNIFICANT MOVES TOWARDS BEING A MAJOR AUSTRALIAN GOLD PRODUCER. IT IS WORTH REMINDING SHAREHOLDERS OF THE WORDS SET OUT IN THE IPO PROSPECTUS. “AS A FIRST PRIORITY RAMELIUS INTENDS TO CONCENTRATE ON LOW RISK, LOW COST, BUT ADVANCED GOLD PROJECTS TO ESTABLISH A SOLID RESERVES BASE AND AN EARLY REVENUE STREAM”. CHAIRMAN S REPORT Dear Shareholder It is with great pleasure that I present to you the 2007 Annual Report of Ramelius Resources Limited. Whilst the Company was incorporated on 4 May 1979 it did not list as Ramelius until 31 March 2003, therefore this is our 5th Annual Report as a listed Company. Many of our shareholders who participated in the IPO which opened on 13 November 2002 will recall how difficult it was then to raise money in an IPO. In fact, had it not been for Beach Petroleum Ltd ( Beach ) becoming the cornerstone investor the Company would not have met the minimum subscription and none of us would be shareholders today. Beach and all the subscribers to the IPO have had: ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ a deserving approximate 10 fold increase in the offer price; the additional value derived from the initial free attaching option for every two shares subscribed exercisable at 20 cents (which was subsequently reduced to 18.687 cents due to the rights issue in March 2004 and further reduced due to the capital return in September 2007 to 11.187 cents); a rights issue in March 2004 on a 1 for 1 basis at 11.0 cents per share; a share purchase plan in May 2006 which invited shareholders to subscribe for up to $5,000 of shares at 11.5 cents per share; a bonus option issue in July 2006 on a 1 for 2 basis at 17.5 cents per share; a dividend of 0.5 cents fully franked paid on 3 August 2007; a bonus option in August 2007 on a 1 for 10 basis at $1.00 per share exercisable by 30 June 2009; and a return of capital of 7.5 cents per share paid on 28 September 2007. In anybody s language initial subscribers as well as those who have acquired shares along the journey have been rewarded handsomely. > 03 RAMELIUS HAS GONE THROUGH A SIGNIFICANT GROWTH PHASE OVER THE PAST YEAR, HAVING ESTABLISHED ITSELF AS A SUCCESSFUL GOLD PRODUCER AND GOLD AND NICKEL EXPLORER. CHAIRMAN’S REPORT (continued) Our thanks as shareholders is twofold: ¥ to Beach as cornerstone investor together with those brave investors who subscribed to the IPO; and to Joe Houldsworth our determined Managing Director who through his drive and initiative has created a viable mining company. ¥ The company has certainly surpassed its own expectations in not only meeting the goals that were foreshadowed but it is also making significant moves towards being a major Australian gold producer. Specifically, the Company s achievements during the past year were; ¥ making the transition to being a Gold Producer and ¥ ¥ ¥ generating strong revenue streams and profits; acquiring our own Gold Processing Plant; accelerating and expanding exploration programs at Spargoville; acquiring various Nickel rights in the Spargoville Belt; discovering a Super High Grade Gold Zone beneath the Wattle Dam Mine; rewarding the shareholders with a Maiden Dividend, Capital Return and Bonus Option Issue; ¥ maintaining a debt free financial position; and ¥ growing the Company and the shareholders wealth. ¥ ¥ It is worth reminding shareholders of the words set out in the IPO Prospectus. As a first priority Ramelius intends to concentrate on low risk, low cost, but advanced gold projects to establish a solid reserves base and an early revenue stream. Joe has not only achieved that goal but he has provided the early revenue stream that has allowed the payment of a dividend, funding of the operations including what I believe will become an even bigger mine at Wattle Dam let alone the development of the Company s other projects. Excess capital from exercising of options has allowed a return of capital which was not needed for operations due to the generation of a revenue stream to meet operating requirements. I would like to re-emphasise my comments from last year, by reporting that the achievements of the past year now puts Ramelius in an even better position to pursue the wealth of mineral resources which we confidently believe lie hidden within what is undoubtedly one of the most prospective gold and nickel belts in Australia, our Spargoville Belt. The Company continues its exciting growth phase with plans for a cut-back to the Wattle Dam pit, followed very closely with an underground development of the high grade gold resource. I am also confident that the ongoing aggressive exploration at Spargoville will continue to return exiting results and further mining opportunities. Joe would be the first to recognise the support he has had from everyone in the Company but due recognition must be given to him for his leadership. On behalf of the shareholders, thanks Joe. I take this opportunity to sincerely thank our Directors, all our employees and consultants for their untiring efforts throughout the year. I also thank all shareholders for their loyalty and support and I look forward to another exciting year. Bob Kennedy Chairman 05 AT 30 JUNE 2007 THE COMPANY HAD NO DEBT AND HELD CASH ASSETS OF $12.9 MILLION. MANAGING DIRECTOR’S REPORT Dear Shareholder Ramelius has gone through a significant growth phase over the past year, having established itself as a successful gold producer and gold and nickel explorer. We have and continue to consolidate our position in the Spargoville Belt with small strategic acquisitions and an aggressive exploration effort that has begun to pay dividends both literally and figuratively. We have developed a good business with solid foundations which generates revenue capable of funding exploration and development and even acquisitions albeit the potential for organic growth at Spargoville would in my opinion, limit the pursuit of acquisitions elsewhere. Our success with Wattle Dam Gold Mine will, we believe, continue to provide a sustainable source of wealth for the shareholders. This past year has seen Ramelius progress from toll milling its ore to owning and operating its own Gold Processing Plant at Burbanks, which of course was self funded. We have also maintained our aggressive exploration programs both at Wattle Dam where we have delineated super high grade gold mineralisation, and regionally for both gold and nickel, which are now returning some very exciting and promising results. Our plans for the immediate future include: ¥ ¥ ¥ ¥ a cut-back operation at Wattle Dam followed shortly thereafter with an underground development; ongoing improvements to the Burbanks Processing Plant to increase throughout; continuing exploration and evaluation of the Wattle Dam satellite gold prospects; and diamond drilling of the Company s priority nickel targets. We plan to maintain this momentum in the current year and I am confident that the Company will continue its rapid rate of growth. I sincerely thank all the Ramelius Team, Senior Management, Staff, Consultants and Contractors for their outstanding efforts in making it all happen and of course my fellow directors for their tremendous support. Joe Houldsworth Managing Director 06 REVIEW OF OPERATIONS Financial Highlights > Production of 16,963 ounces of gold (including gold nuggets) generating revenue of A$14 million at an average price of A$831 per ounce. > Acquisition of Burbanks gold processing mill at a cost of A$2.8 million. > Maiden consolidated after tax profit of $6.8 million. > Cash at the end of the financial year of $12.9 million. The financial result for the year ended 30 June 2007 reflects the Company s first full year of gold mining and processing operations from Wattle Dam. Consolidated total revenue of $14.8 million was the result of a strong average gold price received for gold sales during the year of A$831 per ounce. The consolidated net profit of $6,878,090 is reflective of the Company s low cost Wattle Dam gold mine. At 30 June 2007 the Company had no debt and held cash assets of $12.9 million. Prior to the end of the financial year, the Company declared a maiden dividend of 0.5 cents per ordinary share, a capital return of 7.5 cents per ordinary share and one (1) free bonus option exercisable at $1.00 by 30 June 2009 for every ten (10) Ramelius shares held on the option Record Date. The Record Date for the dividend was 2 July 2007. The Record Date for the return of capital and bonus option was 3 August 2007. The dividend which totalled $780,739 was fully franked and paid to eligible shareholders on 3 August 2007. The return of capital will be paid on 28 September 2007 utilising available funds of approximately $12 million. the During financial year option-holders exercised 44,388,706 options at $0.175 and 21,129,439 options at $0.18687 generating additional capital of approximately $11.7 million. Operational Highlights > Completed first phase of open pit mining at Wattle Dam. > Discovery of a high grade gold zone below Wattle Dam Mine. > Production of 16,963 ounces of gold (including gold nuggets) from open cut mining at Wattle Dam. Ramelius Resources Limited is a Western Australian focused gold producer with mining operations at Wattle Dam south-west of Kambalda and gold processing facilities at Burbanks, south of Coolgardie. The Company is committed to providing superior returns to its shareholders by focusing its activities on high return assets in established mineral provinces. Mining and Milling Operations The Wattle Dam Gold mine is located approximately 25km south-west of Kambalda in the Eastern Goldfields of Western Australia. The gold resource at Wattle Dam is hosted in sheared ultramafic rocks and has been drilled to a vertical depth of 160 metres. The mine commenced production in March 2006 and open pit mining was suspended at the end of October 2006. 07 REVIEW OF OPERATIONS THIS PAST YEAR HAS SEEN RAMELIUS PROGRESS FROM TOLL MILLING ITS ORE TO OWNING AND OPERATING ITS OWN GOLD PROCESSING PLANT AT BURBANKS, WHICH OF COURSE WAS SELF FUNDED. Mining During the 2007 financial year a total of 135,000 tonnes of ROM ore was mined at Wattle Dam at an average grade of 10.1 grams per tonne. A total of 237,272 BCM s of waste material was moved, giving a waste to ore strip ratio of approximately 3:1. The overall waste to ore strip ratio for the Wattle Dam open pit was approxi- mately 6:1. The pit has been mined to a vertical depth of 54.5 metres below surface. Mining ceased at the end of October 2006 and since then the Company has been milling stock- piled ore. Stockpiles of Wattle Dam ore at 30 June 2007 were 106,362 tonnes of high grade material and 9,408 low grade material with contained gold of approximately 35,000 ounces. tonnes of Production Statistics – 2007 Financial Year Ore Mined High Grade Ore Mined Low Grade Ore processed Recovery Gold Production * Gold Production * * Includes nuggets Gold in Stockpiles 30 June 2007 High Grade Low Grade Contained Gold Contained Gold Grade g/t gold 10.1 11.1 118.36 Unit Mined tonnes tonnes tonnes % oz kg 135,000 1,069 66,221 95.3 16,963 520 Unit Stockpiled Grade g/t gold 10.1 0.9 tonnes tonnes oz kg 106,362 9,408 34,814 1,083 08 REVIEW OF OPERATIONS Burbanks Processing Plant Mill Composite WE PLAN TO MAINTAIN MOMENTUM IN THE CURRENT YEAR AND ARE CONFIDENT THAT THE COMPANY WILL CONTINUE ITS RAPID RATE OF GROWTH. Milling A total of 66,221 tonnes of ore was processed during the 2007 financial year both at Higginsville Mining Pty Ltd s Greenfield Plant at Coolgardie and at the Company s own gold treatment plant at Burbanks. Ramelius completed two parcels of processing through the Greenfields mill during the year in July and December 2006. Both parcels were approximately 28,000 dry tonnes each with head grades of 11 g/t gold and 7 g/t gold respectively. The Burbanks gold treatment plant was purchased in November 2006 for $2.8 million and the Company has expended a further $1.3 million on refurbishing activities. The mill is a conventional CIL circuit and commenced production of Wattle Dam low grade ore in May 2007. By the end of the financial year the plant had processed a total of 10,250 dry tonnes of Wattle Dam ore. The Burbanks processing plant is expected to meet nameplate capacity of 180,000 tonnes p.a. by the end of September 2007. Comment The Wattle Dam Gold mine has performed well beyond the Company s expectations with more than double the tonnes of ore recovered from the open pit at a higher grade than anticipated. The initial mine plan estimated total ore recovery of 70,000 tonnes of ore at a grade of 6 g/t for a total of 13,500 oz. Recovered ore from the open pit is calculated from grade control drilling at 160,000 tonnes at a grade of 10.1 g/t. This overcall on tonnes and grade suggested that the ore zone at Wattle Dam has the potential to persist at depth in economic widths and grades. In late 2006 the Company commenced exploration to test the ore zone below the open pit and in May 2007, the Company announced the discovery of a high grade gold zone below and to the north of the open pit. This discovery indicated that the Wattle Dam ore body has significant potential to be developed as a high grade underground mine. The Company has subsequently planned and commenced further drilling of this high grade gold zone and secured the exclusive use of a diamond drilling rig to test the zone at depth. In conjunction with this drilling Ramelius has begun mining studies focused on developing this resource as a cut back to the open pit and an underground mine. This work will continue during the 2008 financial year and is expected to result in the commencement of further mining in early 2008. 09 REVIEW OF OPERATIONS Exploration Spargoville Regional Project (Various Gold, Nickel and Tantalum Rights) Ramelius controls the gold rights and majority nickel rights over approximately 300 km2 covering the Kunanalling and Spargos Reward Shears. During the year Ramelius secured an option to earn an 80% interest in Pioneer Nickel Limited s nickel rights over the Wattle Dam and Larkinville projects. This option was exercised by the Company subsequent to year end. WE HAVE ALSO MAINTAINED OUR AGGRESSIVE EXPLORATION PROGRAMS BOTH AT WATTLE DAM WHERE WE HAVE DELINEATED SUPER HIGH GRADE GOLD MINERALISATION, AND REGIONALLY FOR BOTH GOLD AND NICKEL, WHICH ARE NOW RETURNING SOME VERY EXCITING AND PROMISING RESULTS. Wattle Dam Gold Project (Gold, Tantalum, Nickel) (100% Gold, Tantalum and earning 80% Nickel Rights; PL’s 15/3767; 3873; 4479; EL 15/718 [ELA 15/959]; [MLA’s 15/1769-1773] ML’s 15/1101; 1263; 1264; MLA’s 15/1323; 1338 [PLA’s 15/4861-4862] 100% PL’s 4651 – 4653 [MLA’s 15/1774- 1776] [PLA’s 15/4859-4860]) Gold exploration continued during the year at the Wattle Dam and Golden Orb projects. A significant high grade gold zone was discovered by the Company during the year beneath and to the north of the Wattle Dam open pit. The zone is characterised by Chlorite/Biotite/Pyrite alteration and zones of visible gold, with outstanding gold assays. The zone has been identified in 10 RC drill holes over a strike length of 80 metres and appears to be a high grade shoot plunging to the north away from the open pit. The top of the shoot is only 40 metres below the open pit floor and it is open at depth. A diamond drilling program commenced subsequent to year end and will target this high grade shoot down plunge to the north of the open pit. Drilling at the Golden Orb prospect during the year returned several ore grade intersections including 7 metres @ 11.4 g/t gold from 90 metres. Further RC drilling is planned in late 2007 to follow-up these encouraging results. 10 RC Drilling Rig at Wattle Dam Pit REVIEW OF OPERATIONS Hole Number Northing (GDA) Easting (GDA) WDRC162 7960 6160 RL (m) 340 Dip Azimuth -60 90 WDRC176 8020 6130 340 -60 WDRC183 8010 6130 340 -60 WDRC189 8010 6120 340 -60 WDRC222 8000 6140 340 -60 WDRC225 8010 6280 340 -60 WDRC226 8020 6280 340 -60 WDRC288 7970 6140 340 -60 WDRC289 7980 6140 340 -60 90 90 90 90 270 270 90 90 WDRC290 7990 6140 340 -60 90 WDRC296 8040 6280 340 -60 270 WDRC299 8000 6288 340 -60 270 Total Depth (m) 220 including and 140 including 180 including 200 including 220 including 178 including 214 including and and and and and 184 including 178 including and 184 including 250 including and 226 including and From (m) 105 106 108 130 131 172 172 145 145 145 145 150 150 148 150 154 161 173 184 190 124 124 123 129 134 132 134 159 159 169 150 150 154 To (m) 111 107 109 136 132 177 173 152 147 149 146 163 152 196 151 155 163 176 186 192 128 126 139 130 135 141 135 170 160 170 159 151 155 Significant Intersections from the Northerly Plunging High Grade Zone Width (m) Grade (g/t) Cut Grade (g/t) 6 1 1 6 1 5 1 7 2 4 1 13 2 48 1 1 2 3 2 2 4 2 16 1 1 9 1 11 1 1 9 1 1 11 34.5 20.9 60.1 333 11.1 25.5 6.9 21.3 10.8 35 31.6 161 154 404 228 457 357 990 1063 14.1 24.2 482 6770 400 454 3687 47.9 196 146 8.5 39.7 15.3 21.2 100 22.3 100 37.2 100 100 100 100 100 100 41.3 100 100 38.5 100 35 100 100 11 REVIEW OF OPERATIONS Logan’s Larkinville Project (Gold, Tantalum, Nickel) (Pioneer Nickel 100%, Ramelius earning 75% Gold and Tantalum, earning 80% Nickel Rights; PL’s 15/4464; 4213 & 4214 [MLA 15/1449]; EL15/689; EL15/742) Larkinville West RAB Drilling Larkinville West is located approximately 5 km west of Wattle Dam and is a regional gold exploration target. A co-incident gold and arsenic anomaly was defined in auger sampling and RAB drilling of the anomaly was completed for a total of 125 RAB holes for 6,329 metres. The drilling intersected predominantly felsic volcaniclastics and sediments with abundant quartz veining. Anomalous intercepts over a strike length of 700 metres were returned from this drilling with the most significant being 32 metres at 2.0g/t Au from 12 metres depth in hole LWRB0051. The intersected mineralisation is interpreted to strike north northwest and dip towards the west southwest at approximately 40 — 50 degrees. Follow-up RC drilling of this gold prospect was completed in September 2007 and results are pending. North Widgiemooltha Blocks (100% Gold Rights) (ML’s 15/97; 15/99; 15/100; 15/101; 15/102; 15/653; 15/1271) Golden Orb East RC Drilling A total of nine RC drill holes for 1,164 metres were completed at this prospect which is located approximately 300 metres to the east of Golden Orb. This drilling followed up anomalous drill intercepts previously obtained by Ramelius and other previous explorers. The mineralisation is associated with ultra- mafic lithologies in contact with felsic intrusives. Previous intercepts recorded by Ramelius drilling includes 5 metres @ 1.6g/t Au from 40 metres, (WDRC084) and 4 metres @ 4.7g/t Au from 49 metres, (WDRC086). The recent RC drilling intersected anomalous values associated with ultramafic/felsic intrusive contacts including 4 metres at 2.3g/t Au from 61 metres (WDRC217) and 8 metres at 1.0g/t Au from 62 metres (WDRC219). Eagles Nest Area (Gold, Tantalum, Nickel) (100% M15/1475) The Eagles Nest Project is located approximately seven kilometres to the south and along strike from the Wattle Dam Gold Mine. The lease was the site of the discovery in 1931 of The Golden Eagle Nugget which weighed in at 78 pounds or 1131 troy ounces, the largest recorded nugget found in WA. Since this time the tenement area has been held continuously by individual miners and prospectors and consequently has had little if any systematic exploration. The Company believes the Golden Eagle and numerous other nuggets located at this location to be a significant indicator of the rich and nuggety trend that it now has proved at Wattle Dam. A detailed auger geochemical sampling program for gold was completed over the Eagles Nest Project (M15/1475) and adjoining North Widgiemooltha Project tenements, (M15/99 and 100). This program has delineated a zone of co-incident gold and arsenic anomalism over a strike length of approximately 500 metres. The gold anomalism is defined by values greater than 100ppb with central values in excess of 250ppb. It lies within ultramafic lithologies bounded by felsic lithologies to the east and west. An RC drilling program comprising approximately 1500 metres commenced in September 2007. 12 REVIEW OF OPERATIONS Spargoville Nickel Exploration Acquisition of Spargoville Nickel Rights During the year Ramelius acquired two options to earn an 80% interest in Pioneer Nickel Limited s nickel exploration tenements covering the Wattle Dam and Logans/Larkinville project areas. Under the option Ramelius may exercise a right to earn 80% by paying Pioneer $700,000 and completing expenditure of not less than $1 million collectively on both project areas. The areas are considered very prospective for Kambalda style sulphide nickel mineralisation and Ramelius has commenced a RAB drilling program to test targets located within the projects. The purchase of these interests extends Ramelius nickel rights to its entire Spargoville project as detailed in the plan below. Diamond drilling by Pioneer Nickel Limited in late 2005 was routinely sampled and assayed and returned an intersection of 0.45m of 2.04% nickel. The Company believes that this intersection represents a significant target, as it is immedi- ately north of the excised 1A nickel deposit owned by Breakaway Resources Limited and there is no further drilling to the north. Ramelius plans to test this target by diamond drilling in the second half of 2007. WE HAVE DEVELOPED A GOOD BUSINESS WITH SOLID FOUNDATIONS WHICH GENERATES REVENUE CAPABLE OF FUNDING EXPLORATION AND DEVELOPMENT AND EVEN ACQUISITIONS ALBEIT THE POTENTIAL FOR ORGANIC GROWTH AT SPARGOVILLE. 13 REVIEW OF OPERATIONS Hilditch Project (Nickel, Gold and Tantalum) (90% PL’s 15/4127 – 4130; [MLA 15/1448] [PLA’s 15/4855 – 4858]) Hilditch North Nickel Prospect – RC Drilling A single RC drill hole (HRC076) was completed during the year to a depth of 250 metres to test the southerly plunge interpretation to the remobilised and magmatic nickel anomalism. This drill hole was collared 100 metres to the south of previous drilling orientated to the west to test the trend at a depth of approximately 175 metres. Up to 5% sulphides associated with the prospective cumulate sequence were logged. The drill hole intersected prospective high Mg ultramafic cumulates however it did not intersect the down plunge extensions of the main interpreted remobilised and magmatic anomalous zones. The drilling did however highlight an extensive zone where the Ni:Cr ratios are indicative of proximal nickel sulphide mineralisation. From this drilling it is interpreted that the prospective zones are located further to the west and at depth to the drilled interval. Significant nickel mineralisation further up plunge, to the north associated with these zones include 2 metres @ 2.4% Ni from 73 metres (HRC025 — remobilised) and 2 metres @ 1.2% Ni from 74 metres (HRC041 - magmatic) and 5 metres @ 1.6% Ni from 25 metres (HRC052). The drill hole was terminated at the maximum depth safely achievable by the drill rig. The drill hole was cased with 50mm PVC and down hole EM to test for any off-hole conductors has now been completed. The results are pending. Further deep RC drilling is planned to test this zone. Hilditch Central Nickel Prospect – RC Drilling A total of three RC drill holes (HRC073, 74 & 75) for 570 metres were completed in order to extend previous RC drilling that followed up anomalous gossans which returned maximum values of 1.3% Ni, 0.15% Cu and 1132ppb Pt+Pd. The previous drilling within the area was located to test for dip extensions to the anomalous gossans while this more recent RC drilling was designed to evaluate possible northern and southern plunges associated with the gossans and assist with the geological understanding of the area. Collar details and significant results returned from the drilling are tabulated below. The drilling intersected one to two metre intervals of 0.4% Ni mineralisation within HRC073 and HRC074 associated with zones of sulphide mineralisation. The drill holes were cased with 50mm PVC and down hole EM to test for any off-hole conductors has now been completed. Hilditch EM Nickel Prospect A single RC drill hole (HRC072) for 237 metres was completed approximately 500 metres west of the Central Zone drilling to evaluate a strongly anomalous electromag- netic conductor, identified several years ago and inferred to lie within ultramafic rocks. The drilling intersected graphitic and sulphidic sediments at a depth of 150 metres, coinciding with the interpreted elec- tromagnetic conductor. No significant results were returned from the drill hole. The drill holes were cased with 50mm PVC and down hole EM to test for any off-hole conductors has now been completed. The results are pending. It is expected that this will determine whether the intersected graphitic and sulphidic sediments is the source of the earlier identified surface EM anomaly. The information in this report that relates to Mineral Resources is based on information compiled by G.J.Dunbar of Dunbar Resource Management, who is a Fellow of the Australasian Institute of Mining and Metallurgy and who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 1999 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves . G.J.Dunbar consents to the inclusion in the report of the matters based on their information in the form and context in which it appears. The Information in this report that relates to Exploration Results is based on information compiled by Matthew Svensson, Gordon Dunbar and Diane Tily-Laurie. Gordon Dunbar who is a Fellow of the Australasian Institute of Mining and Metallurgy, is employed by Rangewest Pty Ltd, trading as Dunbar Resource Management. Gordon Dunbar 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 on Exploration Results. Gordon Dunbar consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Matthew Svensson is a Member of the Australian Institute of Geoscientists and is a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting on Exploration Results. Matthew Svensson is a full-time employee of the company and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Diane Tily-Laurie 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 she is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting on Exploration Results. Diane Tily-Laurie is a full-time employee of the company and consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. 14 REVIEW OF OPERATIONS Interests in Mining Tenements The Company s interests in mining tenements are as follows: Project Location Tenement Status Application Date Grant Date Expiry Date Associated Tenement ID Acquiring % Acquired Registered Beneficial Owner Owner % Black Cat Black Cat Coolgardie M16/34 Granted 15-Sep-86 28-Jan-87 27-Jan-08 Coolgardie M16/115 Granted 29-Sep-88 10-Sep-90 09-Sep-11 Hilditch Coolgardie M15/1448 Application 09-Mar-04 P15/4127 -4130 Hilditch Hilditch Hilditch Hilditch Coolgardie P15/4127 Granted 20-Jul-98 28-Mar-00 27-Mar-04 M15/1448 Coolgardie P15/4128 Granted 22-Jul-98 06-Jun-00 05-Jun-04 M15/1448 Coolgardie P15/4129 Granted 22-Jul-98 28-Mar-00 27-Mar-04 M15/1448 Coolgardie P15/4130 Granted 22-Jul-98 28-Mar-00 27-Mar-04 M15/1448 90% 90% 90% 90% 90% 90% 90% Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Wattle Dam Coolgardie E15/718 Granted 09-Apr-01 13-Oct-03 12-Oct-08 M15/1769 100% Ramelius Ramelius Wattle Dam Coolgardie M15/1101 Granted 26-Mar-97 19-Mar-04 18-Mar-25 Wattle Dam Coolgardie M15/1263 Granted 23-Oct-98 24-Aug-04 23-Aug-25 Wattle Dam Coolgardie M15/1264 Granted 23-Oct-98 24-Aug-04 23-Aug-25 Wattle Dam Coolgardie M15/1323 Application 10-Feb-00 Wattle Dam Coolgardie M15/1338 Application 09-Jun-00 Wattle Dam Coolgardie M15/1769 Application 01-Feb-06 Wattle Dam Coolgardie M15/1770 Application 01-Feb-06 Wattle Dam Coolgardie M15/1771 Application 01-Feb-06 Wattle Dam Coolgardie M15/1772 Application 01-Feb-06 Wattle Dam Coolgardie M15/1773 Application 01-Feb-06 Wattle Dam Coolgardie M15/1774 Application 01-Feb-06 Wattle Dam Coolgardie M15/1775 Application 01-Feb-06 Wattle Dam Coolgardie M15/1776 Application 01-Feb-06 -1776 P15/3767 P15/3873 E15/718 E15/718 E15/718 E15/718 E15/718 P15/4479 P15/4651 P15/4652 Wattle Dam Coolgardie P15/3767 Granted 06-Apr-95 13-Feb-96 12-Feb-00 M15/1323 Wattle Dam Coolgardie P15/3873 Granted 20-Dec-95 18-Jun-96 17-Jun-00 M15/1338 Wattle Dam Coolgardie P15/4479 Granted 15-Aug-01 28-Jul-05 27-Jul-09 Wattle Dam Coolgardie P15/4651 Granted 03-Nov-03 15-Jul-04 14-Jul-08 Wattle Dam Coolgardie P15/4652 Granted 03-Nov-03 15-Jul-04 14-Jul-08 Wattle Dam Coolgardie P15/4653 Granted 03-Nov-03 15-Jul-04 14-Jul-08 North Widgie Coolgardie North Widgie Coolgardie M15/97 M15/99 Granted 09-Dec-83 26-Jul-84 25-Jul-26 Granted 09-Dec-83 26-Jul-84 25-Jul-26 North Widgie Coolgardie M15/100 Granted 09-Dec-83 26-Jul-84 25-Jul-26 North Widgie Coolgardie M15/101 Granted 09-Dec-83 26-Jul-84 25-Jul-26 North Widgie Coolgardie M15/102 Granted 09-Dec-83 11-Apr-85 10-Apr-27 North Widgie Coolgardie M15/653 Granted 20-Nov-92 29-Jan-93 28-Jan-14 North Widgie Coolgardie M15/1271 Granted 07-Dec-98 07-Feb-07 06-Feb-28 was Larkinville Larkinville Larkinville Larkinville Larkinville Larkinville Larkinville Larkinville Larkinville Larkinville Coolgardie Coolgardie E15/689 E15/742 Granted 02-Jun-00 20-Apr-05 19-Apr-10 Granted 26-Oct-01 20-Apr-05 19-Apr-10 Coolgardie M15/1449 Application 09-Mar-04 P15/3666 P15/4213 -4214 Coolgardie P15/4213 Granted 17-Feb-99 28-Mar-00 27-Mar-04 M15/1449 Coolgardie P15/4214 Granted 17-Feb-99 28-Mar-00 27-Mar-04 M15/1449 Coolgardie P15/4464 Granted 22-May-01 02-May-02 01-May-06 Coolgardie P15/4790 Application 19-Apr-06 Coolgardie P15/4904 Application 22-Jan-07 Coolgardie P15/4905 Application 22-Jan-07 Coolgardie P15/5185 Application 25-May-07 Reversion P15/4464 M15/1449 M15/1449 75% 75% 75% 75% 75% 75% 75% 75% 75% Bonnievale Coolgardie M15/70 Granted 24-Nov-83 05-Feb-85 04-Feb-27 Bonnievale Coolgardie M15/220 Granted 12-Aug-86 07-Sep-87 06-Sep-08 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Kiloran Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights ANM ANM ANM ANM ANM ANM ANM Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer 100% Ramelius Ramelius 100% 85% Ramelius Ramelius Ramelius Ramelius Ida Fault Coolgardie E16/269 Granted 15-Jun-01 06-Dec-04 05-Dec-09 75% Pioneer Pioneer 15 REVIEW OF OPERATIONS Interests in Mining Tenements Project Location Tenement Status Application Date Grant Date Expiry Date Associated Tenement ID Acquiring % Acquired Registered Beneficial Owner Owner % Bullabulling Coolgardie P15/4435 Granted 06-Dec-00 13-Sep-04 12-Sep-08 Bullabulling Coolgardie P15/4436 Granted 06-Dec-00 13-Sep-04 12-Sep-08 Bullabulling Coolgardie P15/4437 Granted 06-Dec-00 13-Sep-04 12-Sep-08 Bullabulling Coolgardie P15/4438 Granted 06-Dec-00 21-Mar-05 20-Mar-09 Bullabulling Coolgardie P15/4439 Granted 06-Dec-00 21-Mar-05 20-Mar-09 Bullabulling Coolgardie P15/4440 Granted 06-Dec-00 21-Mar-05 20-Mar-09 75% 75% 75% 75% 75% 75% Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Pioneer Cuddingwarra Murchison M20/79 Granted 08-Jun-87 31-Dec-87 30-Dec-08 80% Ramelius Ramelius Eucalyptus Mt Margaret E39/1268 Application 25-Oct-06 Eucalyptus Mt Margaret M39/803 Application 15-Aug-00 M39/803 -804 E39/1268 50% of NiWest Ramelius Gold Rights 50% of NiWest Ramelius Gold Rights Eucalyptus Mt Margaret M39/804 Application 15-Aug-00 E39/1268 50% of NiWest Ramelius Lake Seabrook Lake Seabrook Yilgarn Yilgarn M77/943 E77/1103 Granted 05-Oct-98 20-Feb-07 19-Feb-28 Granted 30-Jan-02 09-Oct-06 08-Oct-11 Gold Rights 90% 100% Enterprise Ramelius Far Ramelius Corners Groundlark Coolgardie M15/1290 Granted 29-Jun-99 25-Oct-02 24-Oct-23 100% Rand Ramelius Eagles Nest Coolgardie M15/1475 Granted 12-Jul-04 29-Sep-04 28-Sep-25 100% Stacey & Ramelius Parker Range Parker Range Parker Range Parker Range Parker Range Parker Range Yilgarn Yilgarn Yilgarn Yilgarn Yilgarn Yilgarn M77/1085 Application 04-Jun-04 P77/3481 Application 04-Jun-04 P77/3764 Application 29-Jan-07 P77/3765 Application 29-Jan-07 P77/3740 Application 19-Jan-07 E77/1403 Application 23-Jan-07 Jarvis- Vagg 100% 100% 100% 100% 100% 100% Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Burbanks Coolgardie M15/1273 Granted 16-Dec-98 30-Mar-99 29-Mar-20 100% Ramelius Ramelius Burbanks Coolgardie M15/1369 Granted 22-May-01 31-Dec-01 30-Dec-22 100% Ramelius Ramelius MS MS Burbanks Coolgardie M15/1370 Granted 22-May-01 31-Dec-01 30-Dec-22 100% Ramelius Ramelius MS MS Burbanks Coolgardie G15/10 Granted 22-Mar-91 20-May-92 19-May-13 100% Ramelius Ramelius MS MS MS MS Burbanks Coolgardie G15/11 Granted 22-Mar-91 20-May-92 19-May-13 100% Ramelius Ramelius MS MS Burbanks Coolgardie G15/12 Granted 22-Mar-91 20-May-92 19-May-13 100% Ramelius Ramelius Burbanks Coolgardie G15/13 Granted 22-Mar-91 20-May-92 19-May-13 100% Ramelius Ramelius Burbanks Coolgardie L15/109 Granted 03-Jul-89 22-Jun-90 21-Jun-10 100% Ramelius Ramelius MS MS Burbanks Coolgardie L15/110 Granted 03-Jul-89 22-Jun-90 21-Jun-10 100% Ramelius Ramelius MS MS Burbanks Coolgardie L15/189 Granted 10-Mar-94 21-Jun-94 20-Jun-09 100% Ramelius Ramelius Burbanks Coolgardie L15/234 Granted 31-Jan-02 27-Nov-03 26-Nov-24 100% Ramelius Ramelius MS MS MS MS MS MS MS MS 16 REVIEW OF OPERATIONS Royalty Interests The Current status of the Company s Royalty Interests is as follows. PROJECT NAME CURRENT HOLDER NATURE OF RAMELIUS’ ROYALTY COMMENTS SANDSTONE* – Gold Troy Resources NL Production based Royalty Capped at $300,000 No Current Activity by Holder on the Royalty Tenements BULONG* – Gold Yilgarn Gold Ltd Production based Royalty Not Capped SPARGOS REWARD* – Gold Breakaway Resources Ltd 3% Gross Gold Royalty SIBERIA* – Gold/Nickel Siberia Mining Corp Ltd Nickel and Gold Royalty Collectively capped at $100,000 No Current Activity by Holder on the Royalty Tenements No Current Activity by Holder on the Royalty Tenements No Current Activity by Holder on the Royalty Tenements EDJUDINA – Gold Saracen Mineral Holdings Ltd Production based Royalty Capped at $500,000 Currently Subject to Feasibility Study EUCALYPTUS* – Nickel GME Resources Ltd Option to purchase on commencement of mining Nickel Laterites at $0.10/tonne of Proven Ore. No Current Activity by Holder on the Royalty Tenements * These royalty assets have been impaired and their carrying costs written off. 17 REVIEW OF OPERATIONS Changes in interests in mining tenements year ending 2007 Tenement reference Nature of interest Interest at beginning of the year Interest at end of the year Interests in mining tenements relinquished, reduced or lapsed MLA39/464 MLA39/465 MLA39/466 Application withdrawn 28/08/06 Application withdrawn 28/08/06 Application withdrawn 28/08/06 . Interests in mining tenements acquired or increased E39/480 P15/3666 E69/1921 E69/1924 Surrendered 8/12/06 Expired 07/02/07 on grant of M15/1271 Surrendered 19/01/07 Surrendered 19/01/07 P15/4855 to P15/4858 incl. Reversion Applications withdrawn 13/4/07 E15/959 & P15/4859 to P15/4862 incl. Reversion Applications withdrawn 24/4/07 G15/10 G15/11 G15/12 G15/13 L15/9 L15/10 L15/189 L15/234 M15/1273 M15/1369 M15/1370 E39/1268 P15/4855 P15/4856 P15/4857 P15/4858 P15/4859 P15/4860 P15/4861 P15/4862 E15/959 M15/1475 P77/3704 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Purchased 14/12/06 Reversion Application 25/10/06 Reversion Application 18/12/06 Reversion Application 18/12/06 Reversion Application 18/12/06 Reversion Application 18/12/06 Reversion Application 18/12/06 Reversion Application 18/12/06 Reversion Application 18/12/06 Reversion Application 18/12/06 Reversion Application 22/12/06 Purchased 15/03/07 Reversion Application 19/01/07 P15/4904 & P15/4905 Reversion Applications 22/01/07 Earning Interest E77/1403 P77/3764 P77/3765 P15/5185 Reversion Tenement 23/01/07 Reversion Tenement 29/01/07 Reversion Tenement 29/01/07 Application 25/5/07 50% 50% 50% 50% 100% 100% 80% 90% 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 50% 90% 90% 90% 90% 100% 100% 100% 100% 100% 100% 100% 75% 100% 100% 100% 100 18 RAMELIUS LISTENS TO ABORIGINAL COMMUNITY REPRESENTATIVES IN ORDER TO UNDERSTAND THEIR VIEWS AND BELIEFS. NATIVE TITLE STATEMENT Exploration areas held by the Company may be subject to issues associated with Native Title. Whilst it is not appropriate to comment in any detail upon specific negotiations with Native Title parties, the directors of Ramelius believe it is important to state the Company s policy and approach to Native Title and dealings with indigenous communities. The directors believe that the following native title policy statement summarises the Company s desire to develop a spirit of cooperation in its dealings with indigenous people, create goodwill, mutual awareness and understanding and most importantly, respect and commitment. Recognition and Respect Ramelius recognises Aboriginal regard for land and respects their culture, traditions and cultural sites. Understanding and Trust Ramelius listens to Aboriginal community representatives in order to understand their views and beliefs. Recognising that communities may not be fully appreciative of how the Company s business and industry operates, Ramelius works towards increasing their understanding, respect and trust and to promote the Company s obligations and economic constraints amongst indigenous communities. Ramelius ensures that its employees and contractors approach the Company s activities at local sites with respect and a clear understanding of important issues and priorities. Communication and Commitment Ramelius adopts practical measures to develop trust. Acknowledging that community leaders and representatives have an obligation to consult its people in order to determine their opinions and wishes and that this may often not be achieved as quickly as is desired, Ramelius uses its best endeavours to expedite the process and ensure that its commercial interests are not adversely impacted. The company also uses its best endeavours to ensure reasonable rights of consultation and continued access to land are facilitated and the integrity of land is preserved. The Company is committed to taking appropriate steps to identify and reduce the effects of any unforseen impacts from its activities. Achievements During the past year, Ramelius carried out a Heritage Survey in respect of a number of specific tenements with the following parties: ¥ The Widji People The Company also made royalty equivalent payments in respect of a Deferred Production Agreement with the following parties: ¥ ¥ The Widji People The Central West Goldfields People Acknowledgement The directors of Ramelius wish to publicly acknowledge the co-operation and goodwill shown by the Widji and Central West Goldfields People and their representatives in the course of negotiations with the Company during the year. 19 CORPORATE GOVERNANCE STATEMENT The Board s responsibilities are extensive and include the following. ¥ Determining the size and composition of the Board of Directors, remuneration of directors (subject to the maximum aggregate amount as approved from time to time by the company in general meeting) and assessing the effectiveness of individual directors and the Board as a whole; ¥ Establishing committees of the Board and determining terms of reference and reporting requirements; ¥ Selecting and appointing (and where appropriate, removing) the Chief Executive, determining conditions of service including remuneration and reviewing performance against key objectives; ¥ Ratifying the appointment (and where appropriate, removal) of senior management the Chief Financial Officer and Company Secretary and approving conditions of service including remuneration and performance monitoring; including ¥ Reviewing senior management succession planning and development; ¥ Approving strategic directions and performance the Company and monitoring objectives implementation by management; for ¥ Ensuring adequate financial and human resources are available to achieve the Company s objectives; ¥ Delegating appropriate levels of authority to management; ¥ Overseeing the activities of the Company and ensuring effective systems of audit, risk management and internal controls are in place to protect the entity s assets and minimise operations beyond legal and regulatory requirements or acceptable risk thresholds; ¥ Monitoring compliance with legal and other regulatory standards, including requirements continuous disclosure and ASX Listing Rules; accounting ¥ Approving and monitoring financial budgets, capital management, major expenditures and significant acquisitions and divestments; ¥ Approving and monitoring financial and other reporting; ¥ Approving and monitoring appropriate policies, procedures, codes of conduct and ethical standards for directors and employees; ¥ Ensuring effective communication and reporting to shareholders and other key stakeholders of the Company. Board processes and management The Board has an established framework for the management of the entity including a system of internal control, a business risk management process and appropriate ethical standards. To assist in the execution of its responsibilities, the Board has an Audit Committee to deal with internal control; ethical standards and financial reporting. The Audit responsibilities, composition, Committee s structure and membership are set out in a formal Charter. The Board appoints a Managing Director responsible for the day to day management of the Company. The role of the Managing Director is documented in the Board Charter (refer Principle 2 next page). role and rather guidelines designed During 2003 the Australian Securities Exchange Corporate Governance Council ( ASXCGC ) released its best practice recommendations based on ten core principles for corporate governance. These recommendations are not intended to be prescriptions to be followed by all ASX listed companies, but to produce an efficient, quality or integrity outcome. The Corporate Governance Council has recognised that a one size fits all approach to Corporate Governance is not required. Instead, it states aspirations of best practice for optimising corporate performance and accountability in the interests of shareholders and the broader economy. A company may consider that a recommendation is inappropriate to its particular circumstances and has flexibility not to adopt it and explain why. Except for those specifically identified and disclosed below, the Company has not to date adopted all ASXCGC best practice recommendations because the Board believes it cannot justify the necessary cost given the size and early stage of the entity s life as a is, public nevertheless, committed to ensuring that appropriate Corporate Governance practices are in place for the proper direction and management of the Company. This statement outlines the main Corporate Governance practices of the Company disclosed under the principles outlined by the ASXCGC, including those that comply with best practice and which unless otherwise disclosed, were in place during the whole of the financial year ended 30 June 2007. listed exploration company. The Board Principle 1 – Lay solid foundations for management and oversight Role of the Board The Board is governed by the Corporations Act 2001, ASX Listing Rules and a formal constitution adopted by the company in 2002 on its conversion from a proprietary limited company to a public company limited by shares. The Board s primary role is the protection and enhancement of long-term shareholder value. The Board takes responsibility for the overall Corporate Governance of the Company including its strategic direction, management goal setting and monitoring, internal control, risk management and financial reporting. In discharging this responsibility, the Board seeks to take into account the interests of all key stakeholders of the Company, including shareholders, employees, customers and the broader community. In June 2005 the Board adopted a formal Board Charter in accordance with ASXCGC best practice recommendation 1.1. The Board Charter details functions and responsibilities of the Board of Directors. the the The Board of Directors is responsible for the overall Corporate Governance of the Company. The Board overviews and participates in setting objectives for the Company and the establishment of policies to be implemented by management. The Board monitors the activities of the Company and ensures the entity is accountable to external stakeholders. formulation strategies of 20 CORPORATE GOVERNANCE STATEMENT Principle 2 – Structure the Board to add value Composition of the Board The names of the directors of the Company and terms in office at the date of this Statement together with their skills, experience and expertise are set out in the Directors Report section of this report. The directors terms in office are considered appropriate in light of the fact that the Company was a dormant company prior to its ASX listing in March 2003. The composition of the Board consists of three directors of whom two, including the Chairman, are non-executives. Mr Kennedy s role as Chairman of the Board is separate from that of the Managing Director, Mr Houldsworth who is responsible for the day to day management of the Company and is in compliance with the ASXCGC best practice recommendation 2.3 that these roles not be exercised by the same individual. The Company s constitution specifies the number of directors must be at least three and at most ten. The Board may at any time appoint a director to fill a casual vacancy. Directors appointed by the Board are subject to election by shareholders at the following annual general meeting and thereafter directors (other than the Managing Director) are subject to re-election at least every two years. The tenure for executive directors is linked to their holding of executive office. Formal deeds were entered into by the Company with directors whereby all directors are entitled to take such legal advice as they require at any time and from time to time on any matter concerning or in relation to their rights, duties and obligations as directors in relation to the affairs of the Company. The Board Charter details the roles of the Chairman and Managing Director as follows. Role of the Chairman The role of Chairman is non executive and central to the effective corporate governance of the Company. The Chairman leads the Board and General Meetings of the Company and in ensuring effective communications exist between the Board of Directors and senior management. The Chairman is also responsible for the following. instrumental is ¥ Ensuring the Company has an effective Board and that there are appropriate procedures in place to evaluate the performance of the Board as a whole, its individual directors and committees; ¥ Ensuring that meetings of the Board are conducted efficiently and effectively and that the quality of agenda and Board papers properly inform directors on the operations of the Company so as to facilitate effective review, analysis, discussion and decision making by directors; ¥ Promoting high standards of integrity and ethics; ¥ Establishing and maintaining a close working relationship with the Managing Director and providing ongoing support and advice; ¥ Overseeing communications with shareholders and other key stakeholders and representing the Board of Directors as required. Role of the Managing Director The role of the Managing Director is separate from the Chairman and is appointed by the non executive directors of the Board. The responsibilities of the Managing Director include the following. ¥ Recommending strategic directions and implementing business plans approved by the Board; ¥ Managing the day to day operations of the Company including its financial, physical and human resources; implementing ¥ Developing and risk management procedures; ¥ Developing and implementing internal control and ¥ regulatory compliance policies and procedures; Providing timely, accurate and relevant information to the Board. Principle 3 – Promote ethical and responsible decision making Ethical standards The Company aims to a high standard of corporate governance and ethical conduct by directors and employees. All directors have signed deeds with the Company which require them to provide the Company with details of all securities registered in the director s name or an entity in which the director has a relevant interest within the meaning of section 9 of the Corporations Act 2001 and details of all contracts, other than contracts to which the Company is a party to which the director is a party or under which the director is entitled to a benefit, and that confer a right to call for or deliver shares in the Company and the nature of the director s interest under the contract. Directors are required to disclose to the Board any material contract in which they may have an interest. In accordance with Section 195 of the Corporations Act 2001, a director having a material personal interest in any matter to be dealt with by the Board, will not be present when that matter is considered by the Board and will not vote on that matter. Trading in the Company’s Securities Directors, officers and employees are not permitted to trade in securities of the Company at any time whilst in posses- sion of price sensitive information not readily available to the market. Section 1043A of the Corporations Act 2001 also prohibits the acquisition and disposal of securities where a person possess information that is not generally available and which may reasonably be expected to have a material effect on the price of the securities if the information was generally available. 21 CORPORATE GOVERNANCE STATEMENT Principle 4 – Safeguard integrity in financial reporting best ASXCGC accordance with CEO/CFO declarations on financial reports In practice recommendation 4.1 the Chief Executive Officer and Chief Financial Officer are required to provide written declarations to the Board stating that in their opinions the Company s financial reports present a true and fair view, in all material respects, of the Company s financial position and financial performance are in accordance with relevant accounting standards. Audit Committee Ramelius is not a Company required by ASX Listing Rule 12.7 to have an Audit Committee during the year although it is a best practice recommendation of the ASXCGC. Notwithstanding the Listing Rule requirement, the Company has an Audit Committee in accordance with ASXCGC best practice recommendation 4.2 to oversee the Company s internal controls, ethical standards, financial reporting and external accounting and compliance procedures. In June 2005 the Board adopted a formal Charter for the Audit Committee in accordance with ASXCGC best practice recommendation 4.4. The Charter details the Audit Committee s role and responsibilities, composition and membership requirements. The role of the Chairman of the Audit Committee is also detailed in the Charter. The Audit Committee is generally responsible for the integrity of the Company s financial reporting and overseeing the performance and independence of the external auditor. Members of the Audit Committee have full rights to access all information and records of the Company and to discuss any matter with the external auditor and senior management. The Committee also has the right to seek external professional advice at the cost of the Company. The Audit Committee s responsibilities are as follows. ¥ Overseeing establishment, maintenance and reviewing the effectiveness of the Company s internal control and ensuring efficacy and efficiency of operations, reliability of financial reporting and compliance with applicable Accounting Standards, Regulations and ASX Listing Rules; ¥ Reviewing, assessing and making recommendations to the Board on the annual and half year financial reports and other financial information or formal announcements published or released by the Company; ¥ Assessing and ensuring that any significant transactions and related party dealings are properly recognised, recorded and disclosed in the Company s financial reports; ¥ Obtaining and reviewing statements from the Chief Executive Officer and Chief Financial Officer expressing opinions on whether the Company s financial records have been properly maintained and whether financial statements comply with accounting standards and present a true and fair view; 22 ¥ Reviewing the effectiveness of the Company s risk management and internal compliance systems; ¥ ¥ Approving and monitoring appropriate policies, procedures, codes of conduct and ethical standards for directors and employees and receiving and assessing management reports on any deficiencies or weaknesses that may arise; Liaising and discussing any relevant issues with the Chief Executive Officer and Chief Financial Officer; ¥ Assessing the scope of the annual audit and half year review, ensuring emphasis is placed on any areas requiring special attention; Liaising with and reviewing all reports of the external auditor including audit reports, management letters and independence declarations; ¥ ¥ Reviewing performance and assessing independence of the external auditor having regard for the provision of any non audit services and where necessary, making recommendations relating to audit fees, selection process, appointment, and removal of the Company s external auditor; ¥ Obtaining and reviewing statements confirming the external auditor s independence; ¥ Reviewing and monitoring management s response to findings and any significant external auditor recommendations; ¥ Reporting generally to the Board on the activities of the Committee and making any necessary recommendations relating to areas of improvement; ¥ Reviewing the contents of statements to be included in the annual report on the activities of the Committee; ¥ Ensuring effective communication and reporting of the role of the Committee to shareholders and other key stakeholders of the Company; ¥ Reviewing and assessing annually the performance of the Committee and the adequacy of this charter. The Audit Committee currently consists of the two non exec- utive Board directors, Messrs Kennedy & Nelson, and chaired by Mr Nelson. Mr Kennedy is a qualified Chartered Accountant. Details of these directors qualifications and attendance at meetings are set out in the Directors Report section of this report. The role of Chairman is non executive and central to the effectiveness of the Audit Committee and its contribution to the Board s overall responsibility for the Corporate Governance of the Company. The Chairman leads the Committee and its meetings and is instrumental in ensuring effective communications exist between the Committee and the Board of Directors, senior management and external auditor. The Chairman is also responsible for the following. ¥ Ensuring the Audit Committee has appropriate procedures in place to evaluate the performance and effectiveness of the Committee as a whole and its individual Members; ¥ Ensuring that meetings of the Audit Committee are conducted efficiently and effectively and that the quality of agendas and papers properly inform Members on matters before the Committee that facilitates effective review, analysis, discussion and decision making by Members of the Committee; CORPORATE GOVERNANCE STATEMENT ¥ Promoting high standards of integrity and ethics; ¥ Maintaining a close working relationship with the Managing Director, senior management and external auditor so as to facilitate an effective flow of relevant and appropriate information to the Committee; ¥ Ensuring that the Board is kept informed on all matters relating to the activities of the Committee and overseeing any communications concerning its activities with shareholders and other key stakeholders. The Committee meets at least two times per annum and reports to the Board. The Managing Director, Chief Financial Officer and external auditor may by invitation attend meetings at the discretion of the Committee. Principle 5 – Making timely and balanced disclosure Continuous Disclosure The Company operates under the continuous disclosure requirements of the ASX Listing Rules and ensures that all information which may be expected to affect the value of the Company s securities or influence investment decisions is released to the market in order that all investors have equal and timely access to material information concerning the Company. The information is made publicly available on the Company s website following release to the ASX. Principle 6 – Respect the rights of shareholders The Role of Shareholders The Board aims to ensure that shareholders are informed of all major developments affecting the Company s state of affairs. In accordance with the ASXCGC best practice recommendation 6.1, information is communicated to shareholders as follows: ¥ the annual financial report which includes relevant information about the operations of the Company during the year, changes in the state of affairs of the entity and details of future developments, in addition to the other disclosures required by the Corporations Act 2001; the half yearly financial report lodged with the Australian Securities Exchange and thereby the Australian Securities and Investments Commission and sent to all shareholders who request it; notifications relating to any proposed major changes in the Company which may impact on share ownership rights that are submitted to a vote of shareholders; notices of all meetings of shareholders; ¥ ¥ publicly released documents including full text of notices of meetings and explanatory material made available on the Company s internet web-site at www.rameliusresources.com.au and sent by email to shareholders who request to receive such information electronically; and disclosure of the Company s Corporate Governance practices and communications strategy on the entity s internet web-site. ¥ ¥ ¥ The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company s strategy and goals. Important issues are presented to the shareholders as single resolutions. In accordance with ASXCGC best practice recommendation 6.2 the external auditor of the Company is also invited to the Annual General Meeting of shareholders and is available to answer any questions concerning the conduct, preparation and content of the auditor s report. Pursuant to section 249K of the Corporations Act 2001, the external auditor is provided with a copy of the notice of meeting and related communications received by shareholders. Principle 7 – Recognise and manage risks Risk Assessment and Management The Board recognises that there are inherent risks associat- ed with the Company s operations including mineral explo- ration and mining, environmental, title and native title, legal and other operational risks. The Board endeavours to miti- gate such risks by continually reviewing the activities of the Company in order to identify key business and operational risks and ensuring that they are appropriately assessed and managed. Principle 8 – Encourage enhanced performance Performance Evaluation The Board evaluates the performance of the Managing Director and Company Secretary on a regular basis and encourages continuing professional development. The Company s remuneration practices are disclosed in the Remuneration Report section of the Directors Report. Principle 9 – Remunerate fairly and responsibly Remuneration Policy In accordance with ASXCGC best practice recommendation 9.1 the Company s remuneration practices are set out as follows. the non executive directors as The Company s Constitution specifies that the total amount of remuneration of non executive directors shall be fixed from time to time by a general meeting. The current maximum aggregate remuneration of non executive directors has been set at $200,000 per annum. Directors may apportion any amount up to this maximum amount they amongst determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as directors. The remuneration of the Managing Director is determined by the non-executive directors on the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of other executive officers and employees is determined by the Managing Director subject to the approval of the Board. 23 CORPORATE GOVERNANCE STATEMENT and in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on termination benefits allowable under ASX Listing Rule 10.19. Termination payments are not generally payable on resignation or dismissal for serious misconduct. the maximum total Details of directors and executives/officers remuneration, superannuation and retirement payments are set out in the Remuneration Report section of the Directors Report. Employee Share/Option Scheme The Company has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company in accordance with ASXCGC best practice recommendation 9.4. The non-executive directors are not eligible to participate in the Plan. No shares or options were issued to employees during the 2007 financial year. Further details of the terms of the Plan are disclosed in the Remuneration Report section of the Directors Report. Principle 10 – Recognise the legitimate interests of stakeholders Code of Conduct The Company requires all its directors and employees to abide by the highest standards of behaviour, business ethics and in accordance with the law. In discharging their duties, Directors of the Company are required to: ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ act in good faith and in the best interests of the Company; exercise care and diligence that a reasonable person in that role would exercise; exercise their powers in good faith for a proper purpose and in the best interests of the Company; not improperly use their position or information obtained through their position to gain a personal advantage or for the advantage of another person to the detriment of the Company; disclose material personal interests and avoid actual or potential conflicts of interests; keep themselves informed of relevant Company matters; keep confidential the business of all directors meetings; and observe and support the Board s Corporate Governance practices and procedures. In accordance with ASXCGC best practice recommendation 9.3 non-executive director remuneration is by way of fees and statutory superannuation contributions. Non-executive directors do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than salary sacrifice and statutory superannuation. The Company s remuneration structure is based on a number of factors including the particular experience and performance of the individual in meeting key objectives of the Company. The Board is responsible for assessing relevant employment market conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of Ramelius given the nature of the Company s business as a recently listed mineral exploration entity and the current status of its activities. However the Board may pay cash bonuses from time to time in order to reward in achieving key individual executive performance objectives as considered appropriate by the Board. Cash bonuses may be paid to employees including the Managing Director and Company Secretary in accordance with this policy as disclosed in the Remuneration Report section of the Directors Report. The Company also has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms of the Plan, shares and/or options to shares may be offered to the Company s eligible employees by way of interest free loans repayable in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by pro- viding employees of the Company with the opportunity to participate in the equity of the Company as an incentive to achieve greater success and profitability for the Company and to maximise the long term performance of the Company. Details of options issued to employees during or since the end of the financial year are set out in the Remuneration Report section of the Director s Report. The employment conditions of the Managing Director, Mr Houldsworth and specified executives are formalised in contracts of employment commencing 1 July 2005 and expiring on 30 June 2008. The Company may terminate the contracts without cause by providing six months written notice or making a termination payment in lieu of notice of an amount equal to half of the remuneration to be paid for the remainder of the contract with a minimum termination payment equal to twelve months remuneration under the contract. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, 24 GLOSSARY OF TERMS Adsorption: The attraction of molecules (of gold) in solution to the surface of solid bodies (carbon). Aeromagnetics: A geophysical technique measuring changes in the earth’s magnetic field from an airborne craft. Air-Core: Anomalous: Archaean: Auriferous: Auger: ASX: Au: Az: A method of rotary drilling whereby rock chips are recovered by air flow returning inside the drill rods rather than outside, thereby providing usually reliable samples. A departure from the expected norm. In mineral exploration this term is generally applied to either geochemical or geophysical values higher or lower than the norm. The oldest rocks of the Earth’s crust - older than 2,400 million years. Gold bearing material. A screw-like boring or drilling tool for use in clay or soft sediments. The Australian Securities Exchange Limited (ACN 008 629 691) Gold. Azimuth, a surveying term, the angle of horizontal difference, measured clockwise, of a bearing from a standard direction, as from north. Base Metal: Non precious metal, usually referring to copper, zinc and lead. BCM: BERM: Biotite: Bank Cubic Metre. Usually refers to the volume of waste measured in situ. A horizontal bench left in the wall of an open pit to provide stability to the wall. A mineral of the mica group widely distributed in a variety of rock types. Calcrete: Soil and superficial material cemented by calcium carbonate. Carbonate: A common mineral type consisting of carbonates of calcium, iron and/or magnesium. Chlorite: Cil Circuit: Company: Costean: Cu: Cut: Dip: A representative of a group of micaceous greenish minerals which are common in low grade schists and is also a common mineral associated with hydrothermal ore deposits. That part of the gold treatment plant where gold is dissolved from the pulverised rock and subsequently adsorbed onto carbon particles from which the gold is ultimately recovered. Ramelius Resources Limited (ACN 001 717 540) A trench dug through soil to expose the bedrock. Copper A term used when referring to average assays where the grade of a particularly high-grade interval is reduced to a lesser value. The angle at which rock stratum or structure is inclined from the horizontal. Disseminated: Usually referring to minerals of economic interest scattered or diffused through out the host rock. Dyke: EL: ELA: EM: EOH: Fault: F.C.I: Tabular igneous intrusive cutting the bedding or planar features in the country rock. Exploration Licence. Exploration Licence Application. Electromagnetic, a geophysical technique used to detect conductive material in the earth. End of Hole. A fracture in rocks along which rocks on one side have been moved relative to the rocks on the other. Free carried interest. 25 GLOSSARY OF TERMS Felsic: Light coloured rock containing an abundance of any of the following: - feldspars, felspathoids and silica. Ferruginous: Containing iron. Flitch: A Mining Term for the different levels in an open pit. Geochemical Exploration: Geophysical Exploration: g/cc: g/t: Gossan: Grade: Used in this report to describe a prospecting technique, which measures the content of certain metals in soils and rocks and defines anomalies for further testing. The exploration of an area in which physical properties (e.g., Resistivity, gravity, conductivity and magnetic properties) unique to the rocks in the area quantitatively measured by one or more geophysical methods. grams per cubic centimetre. grams per tonne. The oxidised, near surface part of underlying primary sulphide minerals. g/t - grams per tonne, ppb - parts per billion, ppm - parts per million. Graticular Block: With respect to Exploration Licences, that area of land contained within one minute of Latitude and one minute of Longitude. Gravity Circuit: Part of the Gold Treatment Plant where gold particles are accumulated by virtue of their density. Gross Gold Royalty: A royalty payment based on the total amount of product (gold) produced. GSWA: ha: JORC: km: The Geological Survey of Western Australia. Hectare. The Australasian Code for Reporting of Mineral Resources and Ore Reserves. Kilometre. Komatiite: An ultramafic rock with high magnesium content extruded from a volcano. Lag: Laterite: A residual deposit remaining after finer particles have been blown away by wind. Highly weathered residual material rich in secondary oxides or iron and/or aluminium. Leachwell: An analytical method. Lode Deposit: A vein or other tabular mineral deposit with distinct boundaries. Massive: Large in mass, having no stratification. Homogeneous structure. Mineralised: Rock impregnated with minerals of economic importance. M: metre. M Tonnes: million tonnes. ML: MLA: Native Title: Mining Lease. Mining Lease Application. Native Title is the recognition in Australian law of indigenous Australian’s rights and interests in land and waters according to their own traditional laws and customs. In June 1992, the High Court of Australia, in the case of Mabo v Queensland (1992) 175 Commonwealth Law Reports 1, overturned the idea that the Australian continent belonged to no one at the time of European arrival. It recognised for the first time that indigenous Australians may continue to hold native title. Indigenous Australians may now make native title claimant applications seeking recognition under Australian law of their native title rights. Native Title Tribunal: The Native Title Tribunal set up under the Native Title Act 1993. Ni: Nickel. 26 GLOSSARY OF TERMS Open Pit: A mine excavation produced by quarrying or other surface earth-moving equipment. Ore Grade: The grade of material that can be (or has been) mined and treated for an economic return. Overcall: Oxidised: Refers to more metal (gold) being recovered than anticipated. Near surface decomposition by exposure to the atmosphere and groundwater, compare to weathering. oz: Troy ounce = 31.103477 grams. Pedogenic: The development of soil. Pentlandite: An important ore of nickel (FeNi)9S8 Petrological: Pertains to a study of the origin, distribution, structure and history of rocks. Percussion Drilling: Method of drilling where rock is broken by the hammering action of a bit and the cuttings are carried to the surface by pressurised air returning outside the drill pipe. Pd: PL: PLA: Palladium. Prospecting Licence. Prospecting Licence Application. Porphyry: A felsic or sub volcanic rock with larger crystals set in a fine groundmass. ppb: parts per billion. Primary Gold: Gold mineralisation that has not been subject to weathering processes, as opposed to Secondary Gold. Proterozoic: The Precambrian era after Archaean. Pt: Pyrite: Pyrrhotite: Quartz: RAB Drilling: Platinum. A common, pale bronze iron sulphide mineral. An iron sulphide mineral. Mineral species composed of crystalline silica. Rotary Air Blast Drilling: Method of drilling in which the cuttings from the bit are carried to the surface by pressurised air returning outside the drill pipe. Most RAB drills are very mobile and designed for shallow, low-cost drilling of relatively soft rocks. RC Drilling: Reverse Circulation Drilling: A method of drilling whereby rock chips are recovered by air flow returning inside the drill rods rather than outside, thereby providing usually reliable samples. Regolith: A layer of fragmented and unconsolidated material that overlies or covers basement. Reidel Fault: A slip surface that develops during the early stage of shearing. Reserve: The mineable part of a resource to which a tonnage and grade has been assigned according to the JORC code. Resource: Mineralisation to which a tonnage and grade has been assigned according to the JORC code. Rock Chip Sample: A series of rock chips or fragments taken at regular intervals across a rock exposure. Secondary Gold: Gold mineralisation that has been subject to and usually enriched by weathering processes. Sedimentary Rocks: Rocks formed by deposition of particles carried by air, water or ice. Shear Zone: A generally linear zone of stress along which deformation has occurred by translation of one part of a rock body relative to another part. 27 Managing Director Joe Houldsworth at Eagle s Nest GLOSSARY OF TERMS Silicified: Alteration of a rock by introduction of silica. Stratigraphy: The study of formation, composition and correlation of sedimentary rocks. Strike: The direction of bearing of a bed or layer of rock in the horizontal plane. Sulphides: Minerals consisting of a chemical combination of sulphur with a metal. t: TEM: tonnes. Transient Electromagnetic, a geophysical technique used to detect conductive material in the earth. Toll Treatment: The treatment of ores where payment is made to the operator of the treatment plant according to the amount of material being treated. Tonne: Tremolite: 32,125 Troy ounces. A pale coloured amphibole mineral. Ultramafic: An igneous rock comprised chiefly of mafic minerals. Uncut: A term used when referring to average assays where the grade of a particularly high-grade interval is not reduced to a lesser value. Vacuum Drilling: A method of rotary drilling where the drill cuttings are recovered inside the drill rods by a vacuum system. 28 RAMELIUS RESOURCES LIMITED 2007 Financial Report DIRECTORS’ REPORT The directors present their report together with the financial report of Ramelius Resources Limited (“the Company”) and controlled entities for the year ended 30 June 2007 and the auditor’s report thereon. Directors The directors of the Company at any time during or since the end of the financial year are as set out below. Details of directors’ qualifications, experience and special responsibilities are as follows. Joseph Fred Houldsworth Chief Executive Officer and Managing Director. Board member since 18 February 2002. Extensive practical experience in the resource industry having worked in the mining and exploration industry for more than 30 years at both operational and management levels primarily in the Western Australian Goldfields. Instrumental in turning around the troubled Nevoria Gold Mine in 1993. Former consultant for 10 years to insolvency specialists on both mining and exploration and has considerable experience in asset management for various mining entities. Special responsibilities include acquisition of the Ramelius portfolio and directing the Company’s exploration program. Ian James Gordon BCom, MAICD. Alternate Director and Manager Business Development. Alternate Director for Mr JF Houldsworth since 19 July 2007. More than 20 years experience in the resources industry in gold, diamonds and base metals. Previously held management positions with Rio Tinto Exploration Pty Ltd, Gold Fields Australia Pty Ltd and Delta Gold Limited. Other listed company directorships are: Former director of Glengarry Resources Limited (2004 to 2005). Special responsibilities relate to the development of the Company’s business. Robert Michael Kennedy ASAIT, Grad, Dip (Systems Analysis), FCA, ACIS, Life member AIM, FAICD. Non-Executive Chairman Board member since 1 November 1995 as a Non-Executive Chairman. A Chartered Accountant and Consultant to Kennedy & Co, Chartered Accountants, a firm he founded. Special responsibilities include membership of the Audit Committee. Other listed company direc- torships are: Chairman of Beach Petroleum Limited (since 1995 and a director since 1991), Flinders Diamonds Limited (since 2001) Maximus Resources Limited (since 2004), Monax Mining Limited (since 2004) and Eromanga Uranium Limited (since 2006). Reginald George Nelson BSc, Hon Life Member Society of Exploration Geophysicists, FAusIMM, FAICD. Non-Executive Director. Board member since 1 November 1995. An exploration geophysicist with more than 37 years experience in the minerals and petroleum industries, former Chairman and current counsellor of the Australian Petroleum Production and Exploration Association Council. He has wide experience in technical, corporate and government affairs. Experience in gold exploration and mining operations in Western Australia, the Northern Territory and South Australia. Former Chairman of the Nevoria Gold Mine Joint Venture in Western Australia. Special responsibilities include Chairman of the Audit Committee. Other listed company directorships are: Managing Director of Beach Petroleum Limited (since 1992) and director of Anzon Australia Limited (between 2004 to December 2005) and Monax Mining Limited (since 2004). 30 DIRECTORS’ REPORT Directors’ meetings The Company held 16 meetings of directors (including committees of directors) during the financial year. The number of directors’ meetings and number of meetings attended by each of the directors of the Company (including committees of directors) during the financial year were as follows: Directors’ meetings Audit Committee Meetings Number Eligible to Atened Number Attended Number Eligible to Atened Number Atened 14 14 14 N/A 14 14 14 N/A 2 2 N/A N/A 2 2 N/A N/A Director Robert Michael Kennedy Reginald George Nelson Joseph Fred Houldsworth* Ian James Gordon (alternate for Mr Houldsworth)* * Mr Houldsworth is not a member of the Audit Committee. Mr Gordon was appointed an alternate director for Mr Houldsworth in July 2007. Company Secretary The following person held the position of Company Secretary at the end of the financial year. Domenico Antonio Francese – B.Ec., FCA, FFin, ACIS. Appointed Company Secretary on 21 September 2001. A Chartered Accountant with an audit and investigations background and more than 12 years experience in a regulatory and supervisory role with ASX. He has been employed by Ramelius since 1 April 2003 and appointed Chief Financial Officer in June 2005. He is also Company Secretary and formerly Chief Financial Officer of Monax Mining Limited (since December 2005). Principal activities The Company’s principal activity is gold and minerals exploration and production. Review and results of operations A review of operations of the Company during the financial year and the results of those operations is contained elsewhere in the annual report. Results The consolidated net profit after income tax was $6,878,090. Dividends A fully franked maiden dividend of 0.5 cent per share was declared on 9 May 2007 out of 2007 profits and paid on 3 August 2007. 31 DIRECTORS’ REPORT State of affairs Significant changes in the state of affairs of the Company during the year were as follows: • • • • • • • • • The Company carried out open cut mining operations at Wattle Dam to a depth of 53.5 metres extracting 160,123 tonnes of high grade and 14,666 tonnes of low grade gold ore. A total of 16,676 ounces of gold (excluding gold nuggets) was produced during the financial year and sold for $13.8 million. At 30 June 2007 the Company had ore stockpiles estimat- ed to contain approximately 35,000 ounces of gold. In November 2006 a 100% owned subsidiary company; Ramelius Milling Services Pty Ltd was incorporated to acquire the Burbanks gold processing mill at a cost of $2.8 million. The mill was subsequently refurbished at a cost of $1.3 mil- lion and re-commissioned in May 2007 to process the Company’s existing stockpile of Wattle Dam gold ore. During the financial year the Company earned a 75% interest in the gold and tantalum rights on tenements EL15/689, EL15/742, MLA15/1449, PL15/4213, PL15/4214, PL15/4464, PLA15/4790, PLA15/4904, PLA15/4905 and PLA15/5185 having met the $750,000 minimum exploration expenditure set out in the relevant farm-in agreement. In July 2006 the Company entered into two agreements with Pioneer Nickel Limited to acquire 80% of Pioneer’s nickel interests in both the “Wattle Dam tenement group” and the “Logans/Larkinville tenement group”. The agreements give Ramelius a twelve month Option Period, during which it may at anytime exercise its option to acquire an 80% interest in Pioneer’s nickel rights over the two areas of interest (Wattle Dam tenement group and the Logans/Larkinville tenement group). Ramelius will pay Pioneer a fee for the option of $50,000 and $20,000 for the two areas of interest respectively and a consideration of $500,000 and $200,000 respectively to exercise the options. On exercising the option, Ramelius is required to sole fund expenditure of no less than $1,000,000 on nickel exploration collectively on both areas, within four years from the commencement date. The parties will then associate in a nickel joint venture with Pioneer holding a 20% interest, free carried up to the completion of a feasibility study. In March 2007 the Company agreed to purchase Mining Lease 15/1475 (“The Eagles Nest”) at Larkinville in the Spargoville belt of Western Australia. This mining lease is the site where the largest recorded nugget in WA (“The Golden Eagle Nugget”) was found in 1931 weighing 78 pounds or 1,131 troy ounces. Consideration for the purchase was 100,000 ordinary fully paid shares in the Company. In July 2006 the Company issued 45,049,668 options over unissued shares to shareholders on the basis of one free Bonus Option for every two Shares held at 30 June 2006. The options were exercisable at $0.175 each and had an expiry date of 30 June 2007. During the financial year, option-holders exercised 44,388,706 options at $0.175 and 21,129,439 options at $0.18687 generating a total of approximately $11.7 million in additional capital. In September 2006 the Company issued 750,000 incentive options exercisable at $0.18687 by 31 December 2007 to the Wattle Dam Mine Manager. In May 2007 directors announced a repayment of capital of 7.5 cents per share subject to the approval of shareholders and receipt of a favourable ATO class ruling. Shareholders approved the capital repayment on 28 June 2007 and a favourable ATO class ruling was subsequently received in August 2007. The capital repayment amounting to approxi- mately $12 million will be paid on 28 September 2007. 32 DIRECTORS’ REPORT Events subsequent to balance date Since 30 June 2007, the Company; • • • • Exercised its option and acquired 80% of Pioneer’s nickel interests in both the “Wattle Dam tenement group” and the “Logans/Larkinville tenement group” at a cost totalling $700,000 cash. The Wattle Dam Nickel Rights gives Ramelius access to nickel rights on its already 100% held gold and tantalum tenement package at Spargoville which are adja- cent and contiguous to Ramelius’ Hilditch Nickel Project. The Logans/Larkinville Nickel Rights gives Ramelius access to the nickel rights on the western Spargoville belt in which the Company has earned a 75% interest in the gold and tantalum rights. On 3 August 2007 the Company paid a fully franked maiden dividend of 0.5 cent per share to shareholders totalling $780,739. In August 2007 the Company issued 15,925,019 options over unissued shares to shareholders on the basis of one free Bonus Option for every ten Shares held at 30 June 2007. The options are exercisable at $1 each and have an expiry date of 30 June 2009. In August 2007 the Company announced that resource extension drilling at Wattle Dam had identified several zones of visible gold mineralisation adjacent to hole WDRC226 which intersected 48 metres at 154g/t gold from 148 metres depth. The drilling program outlined high grade gold mineralisation in several holes including 16 metres @ 482g/t gold from 123 metres (uncut – WDRC289) and 9 metres @ 454g/t gold from 132 metres (uncut – WDRC290). These results included one metre intercepts of 6,770g/t gold and 3,687g/t gold respectively which coincide with visible gold intervals as previously reported by the Company in July 2007. Apart from the above, there has not arisen in the interval between 30 June 2007 and the date of this report any item, trans- action or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future years. Likely developments In August 2007 consultants were appointed to oversee the further development of the Wattle Dam mine including mine planning; pit optimisation; underground mine development and ore resource/reserve estimation and ore-body modelling. Further information about likely developments in the operations of the Company and the expected results of those opera- tions in future years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Company. 33 DIRECTORS’ REPORT Remuneration Report Remuneration of Directors and Key Management Personnel (a) Directors and Key Management Personnel The names and positions held by directors and key management personnel of the Company during the financial year are: Directors Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Key Management Personnel Mr IJ Gordon* Mr DA Francese Positions Chairman – Non-Executive Director – Non-Executive Managing Director - Executive Manager Business Development Chief Financial Officer / Company Secretary * Mr Gordon was also appointed as an alternate director for Mr Houldsworth on 19 July 2007. (b) Directors’ Remuneration 2007 Primary Benefits Directors Mr RM Kennedy Mr RG Nelson(1) Mr JF Houldsworth(2) 2006 Primary Benefits Directors Mr RM Kennedy(3) Mr RG Nelson Mr JF Houldsworth Directors Fees $ 106,859 21,820 - Salary $ - - 217,125 Cash Bonus $ Super Contributions $ Non Cash Benefits $ - - 130,887 9,617 34,464 106,654 - - - - 128,679 217,125 130,887 150,735 Directors Fees $ 64,167 30,940 - Salary $ - - 161,042 95,107 161,042 Cash Bonus $ Super Contributions $ Non Cash Benefits $ - - - - 13,692 2,785 14,494 30,971 - - - - Total $ 116,476 56,284 454,666 627,426 Total $ 77,859 33,725 175,536 287,120 (1) Super contributions for Mr Nelson for 2007 include directors fees of $29,817 sacrificed for super. (2) Super contributions for Mr Houldsworth for 2007 include a cash bonus of $69,113 sacrificed for super. (3) Super contributions for Mr Kennedy for 2006 include directors fees of $7,263 sacrificed for super. (c) Director’s Service Agreement During the previous financial year the Company entered into a three year employment agreement with Mr Houldsworth in respect to his services as Managing Director commencing 1 July 2005. The initial set salary per annum inclusive of superannuation guarantee contributions is to be reviewed annually. In the event that the Company terminates the agreement without six months notice, Mr Houldsworth is entitled to a termination payment equal to half the remuneration to be paid for the remainder of the employment period with a minimum termination payment equal to twelve months remuneration. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule 10.19. Apart from the potential termination payment referred to above, there are no other post-employment benefits payable to directors. 34 DIRECTORS’ REPORT (d) Key Management Personnel 2007 Primary Benefits Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese* 2006 Primary Benefits Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese* Salary $ Bonus $ Super Contributions $ Non Cash Benefits $ Total $ 12,417 173,930 - 31,000 1,117 18,444 186,347 31,000 19,561 - - - Salary $ Bonus $ Super Contributions $ Non Cash Benefits $ 13,534 223,374 236,908 Total $ - 142,737 142,737 - - - - 12,846 12,846 - - - - 155,583 155,583 * During the 2006 financial year Mr Francese was appointed as a Company Secretary and Chief Financial Officer of another listed entity. Refer to Note 26 for details of payments received from that listed entity in relation to his services. Key Management Personnel Service Contract During the financial year the Company entered into an employment agreement with Mr Gordon in respect of his services as Manager Business Development commencing 15 June 2007. The salary of $190,000 per annum inclusive of superannuation guarantee contributions is to be reviewed periodically. Mr Gordon is entitled to a termination payment equally to six months remuneration where in certain circumstances the employment agreement is terminated. During the previous financial year the Company entered into a three year employment agreement with Mr Francese in respect to his services as Company Secretary commencing 1 July 2005. The initial set salary per annum inclusive of superannuation guarantee contributions is to be reviewed periodically. In the event that the Company terminates the agreement without six months notice, Mr Francese is entitled to a termination payment equal to half the remuneration to be paid for the remainder of the employment period with a minimum termination payment equal to twelve months remuneration. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule 10.19. Apart from the potential termination payment referred to above, there are no other post-employment benefits payable to Key Management Personnel. 35 DIRECTORS’ REPORT (e) Directors and Key Management Personnel Equity Remuneration, Holdings and Transactions Shares Balance 1/7/06 Received as Remuneration Options Exercised Net Change Other3 Balance 30/6/07 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Held by Directors’ Personally Related Entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Total held by Directors Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese Total - 63,478 2,663,478 2,726,956 3,285,556 1,671,205 20,000 7,703,717 - 113,478 7,817,195 - - - - - - - - - - - - 36,739 3,331,739 - - (1,429,899) - 100,217 4,565,318 3,368,478 (1,429,899) 4,665,535 4,349,928 1,740,603 10,000 50,000 - - 7,685,484 3,411,808 30,000 9,469,009 (1,379,899) 15,792,827 - 681,739 - - - 795,217 10,150,748 (1,379,899) 16,588,044 Options Exercisable at $0.18687 by 31 December 2007 Balance 1/7/06 Received as Remuneration Options Exercised Net Change Other1 Balance 30/6/07 Total Vested 30/6/07 Total Exercisable 30/6/07 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth - 5,000 2,000,000 2,005,000 Held by Directors’ Personally Related Entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth2 2,707,150 2,705,000 500,000 Total held by Directors 7,917,150 Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese Total - 625,000 8,542,150 - - - - - - - - - - - - (5,000) (2,000,000) (2,005,000) - - - - - - - - - - - - - - - - (2,707,150) (905,000) - - - (500,000) - 1,800,000 - - 1,800,000 - - 1,800,000 - (5,617,150) (500,000) 1,800,000 1,800,000 1,800,000 - (625,000) - - - - - - - - (6,242,150) (500,000) 1,800,000 1,800,000 1,800,000 36 DIRECTORS’ REPORT Options Exercisable at $0.175 by 30 June 2007 Balance 1/7/06 Received as Remuneration Options Exercised Net Change Other3 Balance 30/6/07 Total Vested 30/6/07 Total Exercisable 30/6/07 - - - - - - - - - - - - - - - - - - - - - - (31,739) (1,331,739) - 31,739 1,331,739 (1,363,478) 1,363,478 (1,642,778) (835,603) (10,000) 1,642,778 835,603 10,000 (3,851,859) 3,851,859 - (56,739) - 56,739 (3,908,598) 3,908,598 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Held by Directors’ Personally Related Entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Total held by Directors Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese Total 1. 2. 3. Net change other in respect of shares and $0.18687 options refers to share and/or options purchased and/or sold during the financial year. 1 July 2006 balance included a personally related entity of Mr Houldsworth which held 26.6% of the capital of a tenement vendor, Far Corners Minerals NL. Mr Houldsworth and his spouse are also directors of that entity. As a consequence Mr Houldsworth had an interest in 500,000 options in the Company through the options held by Far Corners Minerals NL at 1 July 2006. Net change other in respect of $0.175 options refers to options over unissued shares which were issued in July 2006 to all shareholders on the basis of one free Bonus Option for every two Shares held at 30 June 2006. The options were exercisable at $0.175 each and had an expiry date of 30 June 2007. Employee Share/Option Scheme The Company has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms of the Plan, shares and/or options to shares may be offered to the Company’s eligible employees by way of interest free loans repayable in accordance with the terms and conditions of the Plan. No shares or options were issued to employees during or since the end of the financial year under the Employee Share/Option Scheme. 37 DIRECTORS’ REPORT Remuneration Practices The Company’s policy for determining the nature and amounts of emoluments of board members and key management per- sonnel of the Company is as follows. The Company’s Constitution specifies that the total amount of remuneration of non executive directors shall be fixed from time to time by a general meeting. The current maximum aggregate remuneration of non executive directors has been set at $200,000 per annum. Directors may apportion any amount up to this maximum amount amongst the non executive directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as directors. The remuneration of the Managing Director is determined by the non-executive direc- tors on the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of other executive officers and employees is determined by the Managing Director subject to the approval of the Board. Non-executive director remuneration is by way of fees and statutory superannuation contributions. Non-executive directors do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than statutory superannuation. The Company’s remuneration structure is based on a number of factors including the particular experience and performance of the individual in meeting key objectives of the Company. The Board is responsible for assessing relevant employment mar- ket conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of Ramelius. However the Board may pay cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board. Cash bonuses were paid during the financial year as disclosed in the Remuneration Report above. The Company also has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms of the Plan, shares and/or options to shares may be offered to the Company’s eligible employees by way of interest free loans repayable in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by providing employees of the Company with the opportunity to participate in the equity of the Company as an incentive to achieve greater success and profitability for the Company and to maximise the long term performance of the Company. During or since the end of the financial year, a total of 750,000 options with a fair value of $54,750 were issued to a consult- ant. These options were not quoted and were exercisable at $0.18687 by 31 December 2007. The options were exercised during the financial year. The employment conditions of the Managing Director, Mr Houldsworth and key management personnel were formalised in contracts of employment commencing 1 July 2005 and expiring on 30 June 2008. The Company may terminate the contracts without cause by providing six months written notice or making a termination payment in lieu of notice of an amount equal to half of the remuneration to be paid for the remainder of the contract with a minimum termination payment equal to twelve months remuneration under the contract. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule 10.19. Termination payments are not generally payable on resignation or dismissal for serious misconduct. Options Granted as Remuneration Apart from the options granted under the Company’s Employee Share Option Plan as detailed above, no other options were granted to directors or key management personnel of the Company during the financial year. Shares Issued on Exercise of Remuneration Options No shares were issued to directors or key management personnel as result of the exercise of remuneration options during the financial year. 38 DIRECTORS’ REPORT Options At the date of this report unissued ordinary shares of the Company under option are: Expiry date* Exercise price Number of shares 31 December 2007 30 June 2009 $0.11187** $1.00 1,921,249 15,788,662 * All options may be exercised at any time before expiry. Option holders will receive one ordinary share in the capital of the Company for each option exercised. ** As result of a 1 for 1 Rights Issue of ordinary shares in March 2004, the exercise price of the Company’s December 2007 options was reduced from $0.20 to $0.18687 in accordance with the terms of the options. On 24 August 2007, the Company announced that a favourable ATO Class Ruling had been received and a Return of Capital of 7.5 cents per ordinary share will be paid to all eligible shareholders on 28 September 2007. The Record Date for the Return of Capital was 3 August 2007. As a result of the Return of Capital, the exercise price of all issued options on the Return of Capital Record Date was reduced by 7.5 cents in accordance with the ASX Listing Rules. These options do not entitle the holder to participate in any share issue of the Company or any other body corporate. During or since the end of the financial year, the Company issued ordinary shares as result of the exercise of options as follows. There were no amounts unpaid on shares issued. Number of shares Amount paid on each 136,357 24,659,399 44,388,706 4,609,873 73,827,085 $1.00 $0.18687 $0.175 $0.11187 At the end of the financial year a total of 660,962 options with an exercise price of $0.175 expired as they had not been exercised by the 30 June 2007 expiry date. Environmental regulation and performance statement The Consolidated Entity’s operations are subject to significant environmental regulations under both Commonwealth and Western Australian legislation in relation to discharge of hazardous waste and materials arising from any mining activities and development conducted by the Company on any of its tenements. In respect of the Wattle Dam Mine Development, the Consolidated Entity has the necessary licences and permits to carry out these activities and has provided unconditional Performance Bonds to the regulatory authorities to provide for any future rehabilitation requirements. In respect of the Processing Plant, the Consolidated Entity also has all the necessary licences and permits to operate this facility and has pro- vided unconditional Performance Bonds to the regulatory authorities to provide for any future rehabilitation requirements. The Consolidated Entity’s operations have been subjected to Environmental Audits both internally and by the various regulatory authorities and there have been no known breaches of any environmental obligations at either of the Consolidated Entity’s operations. Indemnification and insurance of officers Indemnification The Company is required to indemnify the directors and other officers of the company against any liabilities incurred by the directors and officers that may arise from their position as directors and officers of the Company. No costs were incurred during the year pursuant to this indemnity. Except in the case of alternate director appointments, the Company has entered into deeds of indemnity with each director whereby, to the extent permitted by the Corporations Act 2001, the Company agreed to indemnify each director against all loss and liability incurred as an officer of the Company, including all liability in defending any relevant proceedings. Insurance premiums Since the end of the previous year the Company has paid insurance premiums in respect of directors’ and officers’ liability and legal expenses insurance contracts. The terms of the policies prohibit disclosure of details of the amount of the insurance cover, the nature thereof and the premium paid. 39 DIRECTORS’ REPORT Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. There were no such proceedings brought or interventions on behalf of the Company with leave from the Court under section 237 of the Corporations Act 2001. Auditor of the Company The auditor of the Company for the financial year was Grant Thornton and the audit partner responsible for the audit was Mr Simon Gray. Non-audit Services The Board of directors, in accordance with advice from the Audit Committee, is satisfied that there was no provision of non-audit services during the year compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. No amounts were paid or payable to the Company’s auditor for non-audit services. Auditor’s Independence Declaration A copy of the auditor’s independence declaration as required by section 307C of the Corporations Act 2001 for the year ended 30 June 2007 is set out immediately following the end of the directors’ report. 40 AUDITORS INDEPENDENCE DECLARATION 41 INCOME STATEMENT For the year ended 30 June 2007 Sales Other Revenues from ordinary activities Total revenue Administrative expenses Change in inventories Consultant expenses Depreciation and Amortisation Diminution of investments Employment expenses Exploration costs written off Gain on disposal of listed securities Impairment of exploration assets Listing expenses Loss on disposal of assets Mill operating expenses Mine operating expenses Occupancy expenses Other expenses from ordinary activities Profit/(loss) from ordinary activities before related income tax expense Income tax (expense)/benefit relating to ordinary activities Profit/(loss) from ordinary activities after related income tax expense Total changes in equity other than those resulting from transactions with owners as owners Basic earnings per share (cents) Diluted earnings per share (cents) Note 2 2 Consolidated Group Parent Entity 2007 $ 14,471,128 412,402 14,883,530 (267,401 ) 1,506,676 (66,082 ) (364,144 ) - (717,333 ) (481,450 ) 2,457 (2,702 ) (19,129 ) (215 ) (524,233 ) (5,449,783 ) (49,851 ) (17,672 ) 2006 $ 398,963 57,300 456,263 (165,725) 1,957,060 (35,320) (65,545) (150) (363,184) (140,432) - (275,829) (23,455) - - (2,153,141) (36,614) (17,978) 2007 $ 14,061,088 405,848 14,466,936 (239,953) 1,506,676 (66,082) (364,144) - (717,333) (478,307) 2,457 (2,702) (19,129) (215) - (5,449,783) (49,851) (17,673) 2006 $ 398,963 57,300 456,263 (165,725 ) 1,957,060 (35,320 ) (65,545 ) (150 ) (363,184 ) (140,432 ) - (275,829 ) (23,455 ) - - (2,153,141) (36,614 ) (17,978 ) 8,432,668 (864,050) 8,570,897 (864,050 ) 3 (1,554,578 ) (43,315) (1,594,960) (43,315 ) 6,878,090 (907,365) 6,957,937 (907,365 ) 6,878,090 (907,365) 6,975,937 (907,365 ) 8 8 7.2 4.2 (1.3) n/a 7.3 4.2 (1.3 ) n/a The accompanying notes form part of these financial satements. 42 BALANCE SHEET For the year ended 30 June 2007 Current Assets Cash and cash equivalents Trade and other receivables Inventories Other Financial Assets Other Total current assets Non-current assets Property, Plant and Equipment Exploration and evaluation expenditure Deferred tax asset Total non-current assets Total assets Current liabilities Trade and other payables Short term provisions Total current liabilities Non-current liabilities Long term provisions Deferred tax liability Total non-current liabilities Total liabilities Net assets Equity Issued Capital Share Options Reserve Retained profits/(losses) Total Equity Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 9 10 11 12 13 15 16 17 18 19 19 17 20 21 12,984,706 931,548 3,463,736 120,733 71,860 17,572,583 5,340,750 6,680,152 448,947 12,469,849 1,461,424 282,648 1,957,060 100 37,426 3,738,658 1,210,397 4,117,469 - 5,327,866 12,621,346 5,539,812 3,463,736 120,734 44,526 1,461,424 282,648 1,957,060 100 37,426 21,790,154 3,738,658 1,102,249 6,680,152 408,565 1,210,397 4,117,469 - 8,190,966 5,327,866 30,042,432 9,066,524 29,981,120 9,066,524 1,314,296 914,038 2,228,334 226,035 1,992,046 2,218,081 1,061,661 74,601 1,136,262 216,106 - 216,106 1,168,279 900,896 1,061,661 74,601 2,069,175 1,136,262 226,035 1,992,046 2,218,081 216,106 - 216,106 4,446,415 1,352,368 4,287,256 1,352,368 25,596,017 7,714,156 25,693,864 7,714,156 21,735,396 56,900 3,803,721 10,005,636 2,150 (2,293,630) 21,735,396 56,900 3,901,568 10,005,636 2,150 (2,293,630) 25,596,017 7,714,156 25,693,864 7,714,156 The accompanying notes form part of these financial satements. 43 STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2007 Consolidated $ Note Share Capital Ordinary $ Share Based Payments Reserve $ Retained Profits/ (Losses) $ Total Balance at 1 July 2005 Fair value of incentive options issued to consultants 8,666,666 shares issued during the period at $0.15 1,923,076 shares issued during the period at $0.13 20,883,305 shares issued during the period at $0.115 Transaction costs associated with the issue of shares net of tax 40,100 options exercised during the period at $0.18687 Profit/(loss) attributable to shareholders 6,147,690 - 1,300,000 250,000 2,401,581 (101,069) 7,434 - 1,650 500 - - - (1,386,265) - - - - 4,763,075 500 1,300,000 250,000 2,401,581 - - - - (101,069 ) - (907,365) 7,434 (907,365 ) Balance as at 30 June 2006 10,005,636 2,150 (2,293,630) 7,714,156 Fair value of incentive options issued to consultants Fair value of 100,000 shares issued as consideration for tenement acquisition Transaction costs associated with the issue of shares net of tax 21,129,439 options exercised during the period at $0.18687 44,388,706 options exercised during the period at $0.175 Profit/(loss) attributable to shareholders Dividends provided for 7 40,000 (26,783) 3,948,519 7,768,024 - 21,735,396 - - 54,750 - - - - 54,750 40,000 (26,783 ) 3,948,519 - 6,878,090 7,768,024 6,878,090 - - - - - 56,900 - 4,584,460 (780,739) 26,376,756 (780,739 ) Balance as at 30 June 2007 21,735,396 56,900 3,803,721 25,596,017 The accompanying notes form part of these financial satements. 44 CASH FLOW STATEMENT For the year ended 30 June 2007 Cash Flows from operating activities Cash receipts in the course of operations Cash payments in the course of operations Interest received Net cash provided by/(used in) operating activities Cash Flows from investing activities Payments for Property, Plant and Equipment Proceeds from sale of Investments Payments for Mining Tenements & Exploration Net cash provided by/(used in) investing activities Cash Flows from Financing activities Proceeds from issue of shares Transaction costs from issue of shares Loan to subsidiary Payments for Hedge Option Net cash provided by/(used in) financing activities Net increase/(decrease) in cash held Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 13,656,680 (6,830,138) 259,763 396,706 (2,140,889 ) 53,371 13,655,280 (6,557,049) 254,481 396,706 (2,140,889) 53,371 24 7,086,305 (1,690,812 ) 7,352,712 (1,690,812) (4,283,586) 2,556 (2,797,858) (75,981 ) - (1,072,684 ) (255,310) 2,556 (2,797,858) (75,981) - (1,072,684) (7,078,888) (1,148,665 ) (3,050,612) (1,148,665) 11,716,542 (78,202) - (122,475) 3,959,014 (100,716 ) - - 11,716,542 (78,202) (4,658,043) (122,475) 3,959,014 (100,716) - - 11,515,865 11,523,282 3,858,298 1,018,821 6,857,822 3,858,298 11,159,922 1,018,821 Cash at the beginning of the financial year 1,461,424 442,603 1,461,424 442,603 Cash at the end of the financial year 9 12,984,706 1,461,424 12,621,346 1,461,424 The accompanying notes form part of these financial satements. 45 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 1 Statement of significant accounting policies (a) Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authority’s pronouncements of the Australian Accounting Standard Board and the Corporation Act 2001.The following report covers the consolidated group of Ramelius Resources Limited and controlled entities, and the individual parent entity, Ramelius Resources Limited. Ramelius Resources Limited is a listed public company, incorporated and domiciled in Australia. Compliance with IFRS Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated financial statements and notes of Ramelius Resources Limited comply with International Financial Reporting Standards (IFRS). Historical cost convention These financial statements have been prepared under the historical cost convention. (b) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Ramelius Resources Limited (“parent entity”) as at 30 June 2007 and the result of all subsidiaries for the year then ended. Ramelius Resources Limited and its subsidiaries together are referred to in this financial report as the Group or Consolidated Entity. Subsidiaries are all those entities (including special purpose entities) over which the group has the power to control the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. A list of controlled entities is contained in Note 14 to the financial statements. All controlled entities have a 30 June financial year end. (c) Income Tax The Group adopts the liability method of tax-effect accounting whereby the income tax expense is based on the profit from ordinary activities adjusted for any non-assessable or disallowed items. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. (d) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of mining stocks includes direct materials, direct labour, transportation costs and variable and fixed overhead costs relating to mining activities. (e) Property, Plant & Equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and Equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. 46 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Depreciation The depreciation of all fixed assets is depreciated on a straight line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and equipment 5% – 25% The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. (f) Exploration and Evaluation Expenditure Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are transferred to development assets. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly, the costs are determined on the basis that the restoration will be completed within one year of abandoning the site. (g) Development Assets Development costs are amortised over the estimated recoverable reserves. (h) Leases Leased payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. (i) Financial Instruments Recognition: Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. 47 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Financial assets at fair value through profit and loss: A financial asset is classified in this category if acquired principally for the purpose of selling in the short term, or if so designated by management and within the requirement of AASB139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise. Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. Held-to-maturity investments: These investments have fixed maturities, and it is the group’s intention to hold these investments to maturity. Any held-to-maturity investments are stated at amortised cost using the effective interest rate method. Available-for-sale financial assets: Available for sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity. Financial liabilities: Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation. Derivative instruments: Derivative instruments are measured at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. Gains and losses arising from changes in fair value are taken to the income statement. Fair value: Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Impairment: At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the income statement. (j) Impairment of Assets At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement. (k) Employee Benefits Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year are measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year are measured at the present value of the estimated future cash outflows to be made for those benefits. Superannuation Contributions: Employees may nominate their own superannuation fund into which the Group pays superannuation contributions. The Group currently contributes 9% of employee’s salary to each employee’s nominated fund or where a fund is not nominated by an employee, to a superannuation fund chosen by the Group. 48 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Share-based payments: The Group has an Employee Incentive Plan where employees may be provided with options and/or shares in the Group. The bonus element over the exercise price of the employee services rendered in exchange for the grant of options and/or shares is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares granted. (l) Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. (m) Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. (n) Revenue Revenue from sale of goods or rendering of a service is recognised upon delivery of the goods or service to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of goods and services tax (GST). (o) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated in the Balance Sheet inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Balance Sheet. Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. (p) Transaction costs on the issue of equity instruments Transaction costs arising from the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued. (q) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (r) New Accounting standards and Interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2007 reporting periods. The company’s assessment of the impact of these new standards and interpretations is that there would be no material impact on the reported results of the company for the year ended 30 June 2007. (s) Earnings per share (i) Basic earning per share Basic earnings per share is calculated by dividing the profit attribute to equity holders of the company, excluding any costs of servicing equity other then ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issues during the year. (ii) Diluted Earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account after income tax effect of interest and other financial costs associated with the dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. 49 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 2 Revenue from ordinary activities Revenues: From operating activities Refined Gold Sales Gold Nugget Sales Total Revenue Other Income Interest received from other parties Gain on gold hedge options Other Revenue Total Other Income 3 Income Tax Expense (a) The components of tax expense comprise: Current Tax Deferred Tax Recoupment of prior year tax losses Under provision in respect of prior years (b) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: Prima facie tax payable on profit from ordinary activities before income tax at 30% - Consolidated Group - Parent Entity Add: Tax Effect of: - costs of Capital Raising - other non allowable items Deferred tax asset in respect of tax losses not previously brought to account Less: Tax Effect of: Recognition of timing differences not previously brought to account Income tax attributable to entity The applicable weighted average effective tax rates are as follows: 14,254,602 216,526 395,000 3,963 13,844,562 216,526 14,471,128 398,963 14,061,088 272,329 129,658 10,415 412,402 2,254,696 (448,947) (251,171) - 1,554,578 56,560 - 740 57,300 43,215 - - - 43,215 267,046 129,658 9,144 405,848 2,254,696 (408,565) (251,171) - 1,594,960 395,000 3,963 398,963 56,560 - 740 57,300 43,215 - - - 43,215 2,529,800 - (259,215) - - 2,571,269 - (259,215) 11,479 13,643 - 25,122 43,315 - 259,215 43,315 11,479 12,556 - 24,035 43,315 - 259,215 43,315 1,000,344 1,554,578 - 43,315 1,000,344 1,594,960 - 43,315 30% 30% 30% 30% 50 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 4 Profit from ordinary activities before income tax expense has been determined after; Expenses Depreciation and Amortisation of Non Current Assets Plant and equipment - depreciation Mining Operation - depreciation & amortisation Finance Costs Interest paid to external entities Rental Expense on Operating Leases Minimum lease payments Write off of capitalised Exploration & Evaluation Expenditure Impairment of Exploration & Evaluation assets Impairment of financial assets Provision in employee entitlements Significant Revenue and Expenses Consideration on disposal of listed securities Carrying amount of listed securities sold Net gain on disposal Consideration on disposal of assets Carrying amount of assets disposed Net loss on disposal 10,502 353,642 364,144 831 20,781 481,450 2,702 - 55,484 2,557 100 2,457 215 - 215 5,274 60,271 65,545 81 20,000 140,432 275,829 150 18,099 - - - - - - 10,502 353,642 364,144 831 20,781 478,307 2,702 - 55,484 2,557 100 2,457 215 - 215 5,274 60,271 65,545 81 20,000 140,432 275,829 150 18,099 - - - - - - 5 Directors and Key Management Personnel Remuneration Remuneration of Directors and Key Management Personnel (a) Directors and Key Management Personnel The names and positions held by directors and key management personnel of the Company during the financial year are: Directors Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Positions Chairman – Non-Executive Director – Non-Executive Managing Director - Executive Key Management Personnel Mr IJ Gordon* Mr DA Francese Manager Business Development Chief Financial Officer / Company Secretary * Mr Gordon was also appointed as an alternate director for Mr Houldsworth on 19 July 2007. 51 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 5 Directors and Key Management Personnel Remuneration Remuneration of Directors and Key Management Personnel (a) Directors and Key Management Personnel The names and positions held by directors and key management personnel of the Company during the financial year are: Directors Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Key Management Personnel Mr IJ Gordon* Mr DA Francese Positions Chairman – Non-Executive Director – Non-Executive Managing Director - Executive Manager Business Development Chief Financial Officer / Company Secretary * Mr Gordon was also appointed as an alternate director for Mr Houldsworth on 19 July 2007. (b) Directors’ Remuneration 2007 Primary Benefits Directors Mr RM Kennedy Mr RG Nelson(1) Mr JF Houldsworth(2) 2006 Primary Benefits Directors Mr RM Kennedy(3) Mr RG Nelson Mr JF Houldsworth Directors Fees $ 106,859 21,820 - Salary $ - - 217,125 Cash Bonus $ Super Contributions $ Non Cash Benefits $ - - 130,887 9,617 34,464 106,654 - - - - 128,679 217,125 130,887 150,735 Directors Fees $ 64,167 30,940 - Salary $ - - 161,042 95,107 161,042 Cash Bonus $ Super Contributions $ Non Cash Benefits $ - - - - 13,692 2,785 14,494 30,971 - - - - Total $ 116,476 56,284 454,666 627,426 Total $ 77,859 33,725 175,536 287,120 (1) Super contributions for Mr Nelson for 2007 include directors fees of $29,817 sacrificed for super. (2) Super contributions for Mr Houldsworth for 2007 include a cash bonus of $69,113 sacrificed for super. (3) Super contributions for Mr Kennedy for 2006 include directors fees of $7,263 sacrificed for super. (c) Director’s Service Agreement During the previous financial year the Company entered into a three year employment agreement with Mr Houldsworth in respect to his services as Managing Director commencing 1 July 2005. The initial set salary per annum inclusive of superannuation guarantee contributions is to be reviewed annually. In the event that the Company terminates the agreement without six months notice, Mr Houldsworth is entitled to a termination payment equal to half the remuneration to be paid for the remainder of the employment period with a minimum termination payment equal to twelve months remuneration. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule 10.19. Apart from the potential termination payment referred to above, there are no other post-employment benefits payable to directors. 52 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 (d) Key Management Personnel 2007 Primary Benefits Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese* 2006 Primary Benefits Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese* Salary $ Bonus $ Super Contributions $ Non Cash Benefits $ Total $ 12,417 173,930 - 31,000 1,117 18,444 186,347 31,000 19,561 - - - Salary $ Bonus $ Super Contributions $ Non Cash Benefits $ 13,534 223,374 236,908 Total $ - 142,737 142,737 - - - - 12,846 12,846 - - - - 155,583 155,583 * During the 2006 financial year Mr Francese was appointed as a Company Secretary and Chief Financial Officer of another listed entity. Refer to Note 26 for details of payments received from that listed entity in relation to his services. Key Management Personnel Service Contract During the financial year the Company entered into an employment agreement with Mr Gordon in respect of his services as Manager Business Development commencing 15 June 2007. The salary of $190,000 per annum inclusive of superannuation guarantee contributions is to be reviewed periodically. Mr Gordon is entitled to a termination payment equally to six months remuneration where in certain circumstances the employment agreement is terminated. During the previous financial year the Company entered into a three year employment agreement with Mr Francese in respect to his services as Company Secretary commencing 1 July 2005. The initial set salary per annum inclusive of superannuation guarantee contributions is to be reviewed periodically. In the event that the Company terminates the agreement without six months notice, Mr Francese is entitled to a termination payment equal to half the remuneration to be paid for the remainder of the employment period with a minimum termination payment equal to twelve months remuneration. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule 10.19. Apart from the potential termination payment referred to above, there are no other post-employment benefits payable to Key Management Personnel. 53 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 (e) Directors and Key Management Personnel Equity Remuneration, Holdings and Transactions Shares Balance 1/7/06 Received as Remuneration Options Exercised Net Change Other1 Balance 30/6/07 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Held by Directors’ Personally Related Entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Total held by Directors Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese Total - 63,478 2,663,478 2,726,956 3,285,556 1,671,205 20,000 7,703,717 - 113,478 7,817,195 - - - - - - - - - - - - 36,739 3,331,739 - - (1,429,899 ) - 100,217 4,565,318 3,368,478 (1,429,899 ) 4,665,535 4,349,928 1,740,603 10,000 50,000 - - 7,685,484 3,411,808 30,000 9,469,009 (1,379,899 ) 15,792,827 - 681,739 - - - 795,217 10,150,748 (1,379,899 ) 16,588,044 Options Exercisable at $0.18687 by 31 December 2007 Balance 1/7/06 Received as Remuneration Options Exercised Net Change Other1 Balance 30/6/07 Total Vested 30/6/07 Total Exercisable 30/6/07 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth - 5,000 2,000,000 Held by Directors’ Personally Related Entities Mr RM Kennedy Mr RG Nelson 2 Mr JF Houldsworth Total held by Directors Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese Total 2,005,000 2,707,150 2,705,000 500,000 7,917,150 - 625,000 8,542,150 - - - - - - - - - - - - (5,000 ) (2,000,000 ) (2,005,000 ) - - - - - - - - - - - - - - - - (2,707,150 ) (905,000 ) - - - (500,000) - 1,800,000 - - 1,800,000 - - 1,800,000 - (5,617,150 ) (500,000) 1,800,000 1,800,000 1,800,000 - (625,000 ) - - - - - - - - (6,242,150 ) (500,000) 1,800,000 1,800,000 1,800,000 54 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Options Exercisable at $0.175 by 30 June 2007 Balance 1/7/06 Received as Remuneration Options Exercised Net Change Other3 Balance 30/6/07 Total Vested 30/6/07 Total Exercisable 30/6/07 - - - - - - - - - - - - - - - - - - - - - - (31,739) (1,331,739) - 31,739 1,331,739 (1,363,478) 1,363,478 (1,642,778) (835,603) (10,000) 1,642,778 835,603 10,000 (3,851,859) 3,851,859 - (56,739) - 56,739 (3,908,598) 3,908,598 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Held by Directors’ Personally Related Entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Total held by Directors Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese Total 1. 2. 3. Net change other in respect of shares and $0.18687 options refers to share and/or options purchased and/or sold during the financial year. 1 July 2006 balance included a personally related entity of Mr Houldsworth which held 26.6% of the capital of a tenement vendor, Far Corners Minerals NL. Mr Houldsworth and his spouse are also directors of that entity. As a consequence Mr Houldsworth had an interest in 500,000 options in the Company through the options held by Far Corners Minerals NL at 1 July 2006. Net change other in respect of $0.175 options refers to options over unissued shares which were issued in July 2006 to all shareholders on the basis of one free Bonus Option for every two Shares held at 30 June 2006. The options were exercisable at $0.175 each and had an expiry date of 30 June 2007. Employee Share/Option Scheme The Company has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms of the Plan, shares and/or options to shares may be offered to the Company’s eligible employees by way of interest free loans repayable in accordance with the terms and conditions of the Plan. No shares or options were issued to employees during or since the end of the financial year under the Employee Share/Option Scheme. 55 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Remuneration Practices The Company’s policy for determining the nature and amounts of emoluments of board members and key management per- sonnel of the Company is as follows. The Company’s Constitution specifies that the total amount of remuneration of non executive directors shall be fixed from time to time by a general meeting. The current maximum aggregate remuneration of non executive directors has been set at $200,000 per annum. Directors may apportion any amount up to this maximum amount amongst the non executive directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as directors. The remuneration of the Managing Director is determined by the non-executive direc- tors on the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of other executive officers and employees is determined by the Managing Director subject to the approval of the Board. Non-executive director remuneration is by way of fees and statutory superannuation contributions. Non-executive directors do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than statutory superannuation. The Company’s remuneration structure is based on a number of factors including the particular experience and performance of the individual in meeting key objectives of the Company. The Board is responsible for assessing relevant employment mar- ket conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of Ramelius. However the Board may pay cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board. Cash bonuses were paid during the financial year as disclosed in the Remuneration Report above. The Company also has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms of the Plan, shares and/or options to shares may be offered to the Company’s eligible employees by way of interest free loans repayable in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by providing employees of the Company with the opportunity to participate in the equity of the Company as an incentive to achieve greater success and profitability for the Company and to maximise the long term performance of the Company. During or since the end of the financial year, a total of 750,000 options with a fair value of $54,750 were issued to a consultant. These options were not quoted and were exercisable at $0.18687 by 31 December 2007. The options were exercised during the financial year. The employment conditions of the Managing Director, Mr Houldsworth and key management personnel were formalised in contracts of employment commencing 1 July 2005 and expiring on 30 June 2008. The Company may terminate the contracts without cause by providing six months written notice or making a termination payment in lieu of notice of an amount equal to half of the remuneration to be paid for the remainder of the contract with a minimum termination payment equal to twelve months remuneration under the contract. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule 10.19. Termination payments are not generally payable on resignation or dismissal for serious misconduct. Options Granted as Remuneration Apart from the options granted under the Company’s Employee Share Option Plan as detailed above, no other options were granted to directors or key management personnel of the Company during the financial year. Shares Issued on Exercise of Remuneration Options No shares were issued to directors or key management personnel as result of the exercise of remuneration options during the financial year. 56 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 6 Auditors’ remuneration Audit services: Auditors of the Company – Grant Thornton Audit and review of the financial reports Other regulatory audit services 7 Dividends Maiden dividend of 0.5 cent per share declared on 9 May 2007 out of 2006/7 profits and payable on 3 August 2007 8 Earnings per share 20,000 - 20,000 13,250 - 13,250 20,000 - 20,000 13,250 - 13,250 780,739 - 780,739 - (a) Classification of securities All ordinary shares have been included in basic earnings per share. (b) Classification of securities as potential ordinary shares All options on issue at the end of the financial year exercisable at 18.687 cents by 31 December 2007 are included as potential ordinary shares. (c) Earnings used in the calculation of earnings per share Profit/(loss) from ordinary activities after related income tax expense 6,878,090 (907,365 ) 6,975,937 (907,365 ) (d) Weighted average number of shares used as the denominator Number for basic earnings per share Ordinary shares Number for dilutive earnings per share Ordinary shares Options 95,387,724 70,281,883 95,387,724 70,281,883 95,387,724 69,664,091 165,051,815 n/a n/a n/a 95,387,724 69,664,091 165,051,815 n/a n/a n/a 9 Cash and cash equivalents Cash Deposits at call* 6,557,458 6,427,248 (31,361 ) 1,492,785 6,420,099 6,117,247 (31,361 ) 1,492,785 12,984,706 1,461,424 12,621,346 1,461,424 * Includes deposits of $368,900 for the Consolidated Group ($192,900 for the Parent Entity) provided as security against unconditional bank guarantees in favour of the Western Australian Government in respect of restoration costs required for the Wattle Dam Mine and Burbanks Gold Processing Mill; and in respect of the Burbanks Gold Processing Mill, bank guarantees to secure supply of gas and electricity. 57 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 10 Trade and Other Receivables Current Trade debtors Other debtors Amounts Receivable from Subsidiary Amounts receivable from director related entities 653,732 192,548 - 26,372 233,521 - 653,732 142,770 4,658,042 26,372 233,521 - 26 85,268 22,755 85,268 22,755 931,548 282,648 5,539,812 282,648 11 Inventory Current Gold Nuggets at cost Raw Materials - Unprocessed Gold Ore at cost Finished Goods - Gold Bullion at cost 12 Other Financial Assets Current Gold Hedge Investments in Subsidiary Investments in listed options 13 Other current assets Current Prepayments 14 Controlled Entities (a) Controlled Entities Consolidated 1,757 3,461,979 - 29,109 1,830,471 97,480 1,757 3,461,979 - 29,109 1,830,471 97,480 3,463,736 1,957,060 3,463,736 1,957,060 120,733 - - 120,733 - - 100 100 120,733 1 - 120,734 - - 100 100 71,860 37,426 44,526 37,426 Country of Incorporation Percentage Owned (%)* Parent Entity: Ramelius Resources Limited Australia Subsidiaries of Ramelius Resources Limited: Ramelius Milling Services Pty Ltd Australia * percentage of voting power is in proportion to ownership 2007 2006 - 100 - - (b) Acquisition of Controlled Entities On 16 November 2006 Ramelius Resources Limited incorporated a wholly owned subsidiary, Ramelius Milling Services Pty Ltd, for the purpose of acquiring and operating the Burbanks Gold Processing Mill. 58 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 15 Property, plant and equipment Plant and equipment At cost Accumulated depreciation Net book value Development Expenditure Production Phase at cost Accumulated amortisation Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 4,623,399 (65,598) 4,557,801 98,690 (13,712) 84,978 356,151 (36,851) 98,690 (13,712) 319,300 84,978 1,183,733 (400,784 ) 1,183,733 (58,314) 1,183,733 (400,784) 1,183,733 (58,314) Net book value (ii) 782,949 1,125,419 782,949 1,125,419 Total property, plant and equipment 5,340,750 1,210,397 1,102,249 1,210,397 Reconciliations Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below: (i) Reconciliation Plant and equipment Carrying amount at beginning of year Additions Disposals Depreciation Carrying amount at end of year 84,978 4,525,108 (215 ) (52,070 ) 4,557,801 16,236 75,981 - (7,239) 84,978 84,978 257,861 (215) (23,324) 16,236 75,981 - (7,239) 319,300 84,978 (ii) Reconciliation Development Expenditure Carrying amount at beginning of year Transfer from Exploration and Evaluation Expenditure Provision for restoration costs Amortisation 1,125,419 - - (342,470 ) - 1,000,833 182,900 (58,314) 1,125,419 - - (342,470) - 1,000,833 182,900 (58,314) Carrying amount at end of year 782,949 1,125,419 782,949 1,125,419 16 Exploration and evaluation expenditure Costs carried forward in respect of areas of interest in: Exploration and/or evaluation (i) 6,680,152 4,117,469 6,680,152 4,117,469 Total Exploration and evaluation expenditure 6,680,152 4,117,469 6,680,152 4,117,469 The ultimate recoupment of costs carried forward for exploration phase is dependent on the successful development and commercial exploitation or sale of the respective areas. (i) Reconciliation A reconciliation of the carrying amount of Exploration and/or evaluation phase expenditure is set out below. Carrying amount at beginning of year Additional costs capitalised during the year Exploration costs written off during the year Amounts transferred to Development Expenditure 4,117,469 3,043,692 (481,009 ) 4,482,183 1,052,381 (416,262) 4,117,469 3,043,692 (481,009) 4,482,183 1,052,381 (416,262) - (1,000,833) - (1,000,833) Carrying amount at end of year 6,680,152 4,117,469 6,680,152 4,117,469 59 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 17 Tax Liabilities Current Income Tax Assets and Liabilities Non Current Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ - - - - Opening Balance $ Charged to Income $ Charged directly to Equity $ Closing Balance $ Consolidated Group Deferred tax liability Exploration and evaluation Balance at 30 June 2007 Deferred tax asset Issued Equity Transaction Costs Provisions Future income tax benefits attributable to tax losses Other Balance at 30 June 2007 Parent Entity Deferred tax liability Exploration and evaluation Balance at 30 June 2007 Deferred tax asset Issued Equity Transaction Costs Provisions Future income tax benefits attributable to tax losses Other Balance at 30 June 2007 - - - - - - - - - - - - - - 1,992,046 1,992,046 - 107,801 265,619 22,312 395,732 1,992,046 1,992,046 - 103,858 234,265 17,227 355,350 - - 1,992,046 1,992,046 53,215 - - - 53,215 53,215 107,801 265,619 22,312 448,947 - - 1,992,046 1,992,046 53,215 - - - 53,215 53,215 103,858 234,265 17,227 408,565 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 18 Trade and Other Payables Trade creditors Other creditors and accruals Amounts payable to director related entities 19 Provisions Current Employee entitlements Dividend Declared Non Current Employee entitlements Restoration Costs 1(f) 38,481 1,275,815 - 1,314,296 133,299 780,739 914,038 43,135 182,900 226,035 896,398 151,692 13,571 306 1,167,973 - 896,398 151,692 13,571 1,061,661 1,168,279 1,061,661 74,601 - 74,601 33,206 182,900 216,106 120,157 780,739 900,896 74,601 - 74,601 43,135 182,900 33,206 182,900 226,035 216,106 60 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 19(a) 21,735,396 10,005,636 21,735,396 10,005,636 20 Issued Capital Issued and paid-up share capital 156,147,567 (2006: 90,529,422) ordinary shares, fully paid (a) Ordinary shares Balance at the beginning of year Shares issued during the year 8,666,666 shares issued at $0.15 1,923,076 shares issued at $0.13 20,883,305 shares issued through share purchase plan at $0.115 Less transaction costs arising from share issues for cash net of tax 21,129,439 shares issued to Option- holders on exercise of options at $0.18687 in cash 100,000 shares issued as consideration for tenement acquisition 44,388,706 shares issued to Option- holders on exercise of options at $0.175 in cash 10,005,636 6,147,690 10,005,636 6,147,690 - - - 1,300,000 250,000 2,401,581 - - - 1,300,000 250,000 2,401,581 (26,783) (101,069) (26,783 ) (101,069) 3,948,519 40,000 7,434 - 3,948,519 40,000 7,434 - 7,768,024 - 7,768,024 - Balance at end of year 21,735,396 10,005,636 21,735,396 10,005,636 Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company ordinary shareholders rank after all creditors and are fully entitled to any proceeds of liquidation. (b) Options (i) For information relating to the Ramelius Resources Limited Employee Share / Option Scheme including details of any options issued, exercised and lapsed during the financial year, refer to Note 21. (ii) For information relating to share options issued to executive directors during the financial year refer to Note 5. At 30 June 2007, there were 10,061,082 (30 June 2006: 30,440,521) unissued shares for which options were out standing. All options are exercisable at $0.18687 and have an expiry date of 31 December 2007. 21 Share Based Reserves The following share-based payment arrangements existed: • • • kkk On 8 September 2006, 750,000 incentive share options were granted to a consultant to take up ordinary shares at an exercise price of $0.18687 each by 31 December 2007. The options were non transferable and non quoted securities. The fair value of these options was $54,750. At balance date, all 750,000 share options had been exercised. On 13 March 2006, 500,000 incentive share options were granted to an employee to take up ordinary shares at an exercise price of $0.18687 each by 31 December 2007. The options were non transferable and non quoted securities. kThe fair value of these options was $500. At balance date, all 500,000 share options had been exercised. On 6 October 2004, 1,500,000 incentive share options were granted to consultants to take up ordinary shares at an exercise price of $0.18687 each by December 2007. The options were non transferable and non quoted securities. The fair value of these options was $1,650. At balance date, all 1,500,000 share options had been exercised. Options granted to key management personnel are over ordinary shares in Ramelius Resources Limited, which confer a right of one ordinary share for every option held. 61 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Outstanding at the beginning of the year Granted Forfeited Exercised Expired Outstanding at year-end Exercisable at year-end 2007 2006 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price $ 2,000,000 750,000 - (2,750,000 ) - - - 0.18687 0.18687 - 0.18687 - 1,500,000 500,000 - - - 0.18687 0.18687 - - - - - 2,000,000 0.18687 2,000,000 0.18687 The weighted average fair value of the options granted during the year was $0.073. This price was calculated by using Black Scholes option pricing model applying the following inputs: Weighted average exercise price Weighted average life of the option Underlying share price Expected share price volatility Risk free interest rate $0.18687 479 days $0.25 17.2% 5.0% The life of the options is based on the days remaining until expiry. Included under employee benefits expense in the income statement is $54,750 (2006: $500), and relates, in full, to equity-settled share-based payment transactions.- 22 Financial instruments disclosure (a) Interest rate risk The company has no long term financial assets or liabilities upon which it earns or pays interest. Cash is held in an interest yielding cheque account and on short term call deposit where the interest rate can vary from day to day. The weighted average interest rate achieved was 5.92% (2006: 5.12%). (b) Credit risk exposures Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit risk on financial assets, excluding investments, of the entity which have been recognised in the Balance Sheet, is the carrying amount, net of any provision for doubtful debts. (c) Net fair values of financial assets and liabilities Valuation approach Net fair values of financial assets and liabilities are determined by the entity on the following bases: Recognised financial instruments Monetary financial assets and financial liabilities not readily traded in an organised financial market are carried at book value and where relevant adjusted for any changes in exchange rates. Other than listed investments, the Company did not have any financial assets or liabilities that are readily traded on organised markets in a standardised form. The net fair values of listed investments are valued at the quoted market bid price at balance date. 62 NOTES to the FINANCIAL STATEMENTS For the year ended 30 June 2006 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ 23 Commitments & Contingent liabilities Exploration expenditure commitments In order to maintain current rights of tenure to exploration tenements, the Company is required to perform minimum exploration work to meet the minimum expenditure requirements specified by the State Government of Western Australia. These obligations are subject to renegotiation when application for a mining lease is made and at other times. These obligations are not provided for in the financial report and are payable as follows. Within one year One year or later and no later than five years Later than five years 503,284 1,149,061 2,285,153 451,120 1,069,000 1,394,200 457,865 967,861 1,795,955 451,120 1,069,000 1,394,200 3,937,498 2,914,320 3,221,681 2,914,320 The company sub-leases a serviced office in Adelaide under a non cancellable annual operating lease expiring in October 2007.The Company also leases office accommodation in Perth under a non-cancellable operating lease expiring in March 2008. The lease generally provides the Company with a right of renewal for a further year after which time all terms are renegotiated. Lease payments comprise a base amount plus an incremental contingent rental. Contingent rentals are based on movements in the Consumer Price Index and operating criteria. Non-cancellable operating lease expense commitments Future operating lease commitments not provided for in the financial statements and payable: Within one year One year or later and no later than five years Later than five years 30,040 16,445 - 46,485 25,084 15,000 - 40,084 30,040 16,445 - 46,485 25,084 15,000 - 40,084 The details and estimated maximum amounts of contingent liabilities (excluding unquantifiable royalties) that may become payable are set out below. The contingent liabilities arise from certain agreements for acquisition/earning of interests in mining tenements that are subject to certain precedent conditions being satisfied. At the date of this report there is no certainty that these liabilities will crystallise and therefore no provisions are included in the financial statements in respect of these matters. Exploration / Farm-in obligations may be subject to renegotiation, farm-out or relinquishment. In addition to the contingent liabilities detailed below, the Company is also required under various agreements to maintain tenements in good standing and pay all rates, rents and taxes and do all things necessary to renew tenements during the conditions precedent period. Contingent Liabilities Termination Benefits 22(a) 250,000 - 250,000 - Exploration / Farm-in expenditure to earn interests in tenements in addition to minimum exploration expenditure commitment disclosed above 22(b) - 250,000 544,734 544,734 - 544,734 250,000 544,734 (a) Termination Benefits Service Agreements exist with the Managing Director and executive officers under which termination benefits may, in appropriate circumstances, become payable. The maximum contingent liability at 30 June 2007 under the service agreements is the amount disclosed above. 63 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Consolidated Group Parent Entity Note 2007 $ 2006 $ 2007 $ 2006 $ (b) Exploration/Farm-in expenditure Exploration/Farm-in expenditure relates to periods between 1 and 4 years in accordance with terms set out in relevant agreements. In accordance with the agreements, the Consolidated Entity could elect not to proceed to acquire or earn an interest in the relevant tenements provided it first carried out the minimum exploration expenditure required. Total minimum exploration expenditure specified in an agreement over this period was $150,000 (which had been satisfied at 30 June 2007) with a minimum of $50,000 per year. 24 Notes to the statement of cash flows Reconciliation of profit from ordinary activities after income tax to net cash provided by operating activities Profit/(Loss) from ordinary activities after income tax Add/(less) non cash items Depreciation Amortisation of development expenditure (Increase)/decrease in prepayments (Increase)/decrease in receivables (Increase)/decrease in inventories (Increase)/decrease in non-current assets (Increase)/decrease in other financial assets (Increase)/decrease in investments (Increase)/decrease deferred tax assets (Decrease)/increase in accounts payable (Decrease)/increase in provisions (Decrease)/increase in deferred tax liability Income Tax – Non cash Net cash provided by/(used in) operating activities 25 Employee entitlements Aggregate liability for employee entitlements, including on-costs 6,878,090 (907,365) 6,975,937 (907,365) 51,885 342,470 (39,766) (736,524) (1,506,676) 477,711 1,742 (2,456) (448,947) (58,126) 68,627 1,992,046 66,229 7,239 58,314 (8,956) (236,514) (1,957,060) 416,254 - 150 - 836,897 56,414 - 43,815 23,139 342,470 (12,432) (690,212) (1,506,676) 477,711 1,742 (2,456) (408,565) 38,294 55,485 1,992,046 66,229 7,239 58,314 (8,956) (236,514) (1,957,060) 416,254 - 150 - 836,897 56,414 - 43,815 7,086,305 (1,690,812) 7,352,712 (1,690,812) Current Non-current 19 19 133,299 43,135 176,434 74,601 33,206 107,807 120,157 43,135 163,292 74,601 33,206 107,807 Number of employees Number of employees at year end 26 Related parties 25 6 14 6 Directors’ transactions with the Company A number of directors of the Company, or their director-related entities, held positions in other entities during the financial year that result in them having control or significant influence over the financial or operating policies of those entities. The terms and conditions of the transactions with directors and their director related entities were no more favourable to the directors and their director related entities than those available, or which might reasonably be expected to be available, on similar transactions to non-director related entities on an arm’s length basis. The aggregate amounts recognised during the year (excluding re-imbursement of expenses incurred on behalf of the Company) relating to directors and their director-related entities were as follows: 64 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 Director Transaction Note Consolidated Group Parent Entity 2007 $ 2006 $ 2007 $ 2006 $ RM Kennedy & RG Nelson Amount received from a director related entity for Company Secretarial services and associated costs. JF Houldsworth Payments to an entity of which the director is a director in respect of labour hire. (i) 173,120 50,555 173,120 50,555 79,000 65,311 79,000 65,311 JF Houldsworth Payments to an entity of which the director is a director in respect of vehicle & trailer hire. - 7,998 - 7,998 (i) This amount relates to the services of Mr Francese who was appointed as a Company Secretary and Financial Officer of listed entity, Monax Mining Limited in December 2005 (a company associated with RM Kennedy and R G Nelson). Monax Mining Limited reimbursed the Company 50% of his remuneration, on-costs and associated expenses relating to secretarial and financial services provided to it. Amounts receivable from and payable to directors and their director-related entities at balance date arising from these transactions were as follows: Current receivables Current payables Trade creditors 27 Segment Reporting 85,268 27,455 85,268 27,455 - 13,571 - 13,571 The Company operates in the mineral exploration and mining business segment located in Australia. 28 Interests in Joint Ventures (a) The Company has a direct interest in a number of unincorporated joint ventures, the details of which are disclosed in the Review of Operations section of the Annual Report. (b) The Company’s share of assets in unincorporated joint ventures is as follows: Non Current Assets Exploration and evaluation expenditure (included in Note 16) 3,135,737 2,312,115 3,135,737 2,312,115 Total Assets employed in joint ventures 3,135,737 2,312,115 3,135,737 2,312,115 65 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 29 Events subsequent to balance date Since 30 June 2007, the Company; • Exercised its option and acquired 80% of Pioneer’s nickel interests in both the “Wattle Dam tenement group” and the “Logans/Larkinville tenement group” at a cost totalling $700,000 cash. The Wattle Dam Nickel Rights gives Ramelius access to nickel rights on its already 100% held gold and tantalum tenement package at Spargoville which are adjacent and contiguous to Ramelius’ Hilditch Nickel Project. The Logans/Larkinville Nickel Rights gives Ramelius access to the nickel rights on the western Spargoville belt in which the Company has earned a 75% interest in the gold and tantalum rights. • On 3 August 2007 the Company paid a fully franked maiden dividend of 0.5 cents to shareholders totalling $780,739. • • In August 2007 the Company issued 15,925,019 options over unissued shares to shareholders on the basis of one free Bonus Option for every ten Shares held at 30 June 2007. The options are exercisable at $1 each and have an expiry date of 30 June 2009. In August 2007 the Company announced that resource extension drilling at Wattle Dam had identified several zones of visible gold mineralisation adjacent to hole WDRC226 which intersected 48 metres at 154g/t gold from 148 metres depth. The drilling program outlined high grade gold mineralisation in several holes including 16 metres @ 482g/t gold from 123 metres (uncut – WDRC289) and 9 metres @ 454g/t gold from 132 metres (uncut – WDRC290). These results included one metre intercepts of 6,770 g/t gold and 3,687 g/t gold respectively which coincide with visible gold intervals as previously reported by the Company in July 2007. Apart from the above, there has not arisen in the interval between 30 June 2007 and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future years. 66 DIRECTORS’ DECLARATION 1 In the opinion of the directors of Ramelius Resources Limited: (a) the financial statements and notes, as set out on pages 42 to 66, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the financial position of the Company as at 30 June 2007 and of its performance, as represented by the results of its operations and its cash flows, for the twelve months ended on that date; and (ii) complying with Accounting Standards and the Corporations Regulations 2001; and (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. (c) The remuneration disclosures that are contained in pages 34 to 38 of the directors’ report comply with Accounting Standard AASB 124. 2 The Managing Director and Chief Financial Officer have given the Directors the declarations required by section 295A of the Corporations Act 2001. 67 INDEPENDENT AUDIT REPORT 68 INDEPENDENT AUDIT REPORT 69 SHAREHOLDER INFORMATION Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below. Shareholdings as at 14 September 2007 Substantial shareholders The number of shares held by substantial shareholders and their associates as disclosed in substantial holding notices given to the Company are set out below: Substantial shareholder Number of fully paid ordinary shares held Beach Petroleum Limited Sprott Asset Management Inc. 20,100,003 15,122,999 Voting rights Fully paid ordinary shares Subject to any rights or restrictions attached to any class of shares, at a meeting of members, on a show of hands, each member present (in person, by proxy, attorney or representative) has one vote and on a poll, each member present (in person, by proxy, attorney or representative) has one vote for each fully paid share they hold. Options Details of options on issue by the Company as at 14 September 2007 are as follows. Expiry date 31/12/2007 30/06/2009 Exercise price $0.11187 $1.00 Number of Options 2,157,499 15,925,019 Option holders will be entitled on payment of the exercise price shown above to be allotted one ordinary fully paid share in the Company for each Option exercised. Options are exercisable in whole or in part at any time until the expiry dates. Any Options not exercised before expiry will lapse. Distribution of equity security holders Category Holders of Ordinary shares 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over 440 1,073 573 1,093 202 Total Number of security holders 3,381 Holders of 31 December 2007 $0.11187 Options Holders of 30 June 2009 $1.00 Options 0 58 18 10 4 90 1,607 807 180 181 18 2,793 The number of shareholders holding less than a marketable parcel of ordinary shares is 73. On market buy-back There is no current on-market buy-back. Twenty largest shareholders The names of the 20 largest holders of fully paid ordinary shares constituting a class of quoted equity securities on the Australian Securities Exchange Limited including the number and percentage held by those holders at 14 September 2007 are as follows. 70 SHAREHOLDER INFORMATION Name Number of fully paid ordinary shares held Percentage held Beach Petroleum Limited HSBC Custody Nominees (Australia) Limited Citicorp Nominees Pty Ltd ANZ Nominees Limited Mandurang Pty Ltd Joseph Fred Houldsworth Aurelius Resources Pty Ltd Goldfields Hotels Pty Ltd Mr Stig Hakan Hellsing Mrs Patricia Anne HellsingRosalind Mary Smart Mr Brian Burg Sassey Pty Ltd Mr Stig Hakan Hellsing Mrs Marie Helen Harrex RMK Super Pty Ltd Sassey Pty Ltd Mr Charles Randolph Caskey Mr David Ian Kerr Mrs Cheryl Dorothea Kerr B & J O’Shannassy Management Pty Ltd Warman Investments Pty Ltd 20,100,003 13,787,153 9,746,377 7,173,902 6,415,117 4,565,318 4,312,025 2,802,500 2,000,000 1,500,000 1,474,775 1,418,855 1,400,000 1,270,927 1,130,150 1,110,000 1,000,000 1,000,000 980,926 921,739 84,109,767 12.25 8.40 5.94 4.37 3.91 2.78 2.63 1.71 1.22 0.91 0.90 0.86 0.85 0.77 0.69 0.68 0.61 0.61 0.60 0.56 51.25 Twenty largest RMSOB option holders The names of the 20 largest holders of options exercisable at $1 by 30 June 2009 constituting a class of quoted equity securities on the Australian Securities Exchange Limited including the number and percentage held by those holders as at 14 September 2007 are as follows. Name Number of options held Percentage held Beach Petroleum Limited HSBC Custody Nominees (Australia) Limited ANZ Nominees Limited Citicorp Nominees Pty Ltd Mandurang Pty Ltd Joseph Fred Houldsworth Aurelius Resources Pty Ltd Goldfields Hotels Pty Ltd Mr Stig Hakan Hellsing Mrs Patricia Anne Hellsing Mr Stig Hakan Hellsing Colin John Hough Rosalind Mary Smart Mr Brian Burg Mrs Marie Helen Harrex RMK Super Pty Ltd Mr David Ian Kerr Mrs Cheryl Dorothea Kerr B & J O’Shannassy Management Pty Ltd Mr Charles Randolph Caskey Warman Investments Pty Ltd Mr Shane Francis Kennedy 2,010,001 1,115,487 868,789 828,814 641,512 456,532 431,204 280,250 200,000 150,450 150,000 150,000 147,500 125,893 113,015 104,000 100,093 100,000 92,174 90,141 8,155,855 12.62 7.00 5.46 5.20 4.03 2.87 2.71 1.76 1.26 0.94 0.94 0.94 0.93 0.79 0.71 0.65 0.63 0.63 0.58 0.57 51.22 71 SHAREHOLDER INFORMATION Twenty largest RMSO option holders The names of the 20 largest holders of options exercisable at $0.11187 by 31 December 2007 constituting a class of quoted equity securities on the Australian Securities Exchange Limited including the number and percentage held by those holders as at 14 September 2007 are as follows. Name Number of options held Percentage held 1,000,000 236,250 125,000 100,739 75,000 35,510 25,000 25,000 20,000 20,000 15,000 15,000 12,500 12,500 10,000 10,000 10,000 10,000 10,000 10,000 1,777,499 Aurelius Resources Pty Ltd Dr Richard Kenneth Hart Ms Lynette Mary Hart Togolosh Pty Ltd National Nominees Limited Barminco Pty Ltd Mr Stig Hakan Hellsing Godin Pty Ltd Mr George Vernon Treatt Mrs Marion Bearup Mr Robert John Bowman Bearup Dr Ernest George Rushton Mr Stig Hakan Hellsing Mr Peter Richard Whetters Mr Gregory Robert Brown Mr Simon Peter Moore PA & VJ Malseed Pty Ltd Mr Paul Michael Altschwager Mr Donald Frank Avard David Daley Holdings Pty Ltd Mr Colin Frederick Friezer HSBC Custody Nominees (Australia) Limited Ms Maureen Chloris Jean Lister Unquoted equity securities Fully paid ordinary Shares There are no unquoted fully paid ordinary shares on issue. Options There are no unquoted options on issue. 46.35 10.95 5.79 4.67 3.48 1.65 1.16 1.16 0.93 0.93 0.70 0.70 0.58 0.58 0.46 0.46 0.46 0.46 0.46 0.46 82.39 72 waterhole fire spear kangaroo boomerang creek emu killer boomerang wild turkey didgeridoo clapping boomerangs aboriginal man snake hitting stick goanna tapping sticks story sticks cutting rocks (food preparation) camp water bowls eating bowls dingo FOUR WATERHOLES OF THE DREAMTIME (By Jason Dimer) This painting represents a large waterhole and three smaller waterholes and creeks that were created by the Rainbow Serpent back in the Dreamtime. Around the waterholes are different groups of Aboriginal men doing different activities. The group at the bottom of this painting are playing musical instruments and singing around a fire. They are playing the didgeridoo, the clapping boomerangs, tapping sticks and singing about the waterholes and the different animals that visit there to drink. To the right another group is in their camp telling stories of the Dreamtime with a story stick. To the top right there are hunters hunting kangaroo and emu with their dingo. To the top left there are men playing instruments and dancing in celebration of the springtime season. To the left, Aboriginal men are preparing food to have a feast after their hunting trip. They have caught a goanna, kangaroo and emu. Throughout the painting, different tracks represent animals going to and from the waterholes and creeks. The different colours of the painting represent the land where this story takes place. The snakes and goannas are the protectors of this land, the creeks and waterholes. Australian Securities Exchange Code: RMS: Shares RMSO: Options RMSOB: Options Listed on Australian Securities Exchange Limited Home Exchange: Adelaide 89 King William Street ADELAIDE SA 5000 Share Registrar: Location of Share Register Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street ADELAIDE SA 5000 Telephone: (08) 8236 2300 or 1300 556 161 Facsimile: (08) 8236 2305 Email: info@computershare.com.au Auditors: Grant Thornton Chartered Accountants 67 Greenhill Road WAYVILLE SA 5034 Lawyers: DMAW Lawyers Level 3, 80 King William Street ADELAIDE SA 5000 CORPORATE DIRECTORY Principal Registered Office: Ramelius Resources Limited 140 Greenhill Road UNLEY SA 5061 GPO Box 1373 ADELAIDE SA 5001 Telephone: (08) 8373 6473 / (08) 8373 5588 Facsimile: (08) 83735917 Email: info@rameliusresources.com.au Website: www.rameliusresources.com.au Perth Exploration Office: Suite 3, 14 The Avenue MIDLAND WA 6056 P.O. BOX 1527 MIDLAND WA 6936 Telephone: (08) 9250 6644 Facsimile: (08) 9250 6699 Email: rameliuswa@tpg.com.au Directors, Senior Management and Consultants: ROBERT MICHAEL KENNEDY ASIT, Grad. Dip. (Systems Analysis) FCA, ACIS, FAIM, FAlCD Non-Executive Chairman JOSEPH FRED HOULDSWORTH Chief Executive Officer Managing Director REGINALD GEORGE NELSON BSc (MATHS), FAusIMM, FAICD Non-Executive Director IAN JAMES GORDON BCom, MAICD Manager Business Development DOMENICO ANTONIO FRANCESE BEc, FCA, FFin, ACIS Company Secretary and Chief Financial Officer BRIAN KELTY BSc (Geology) MAusIMM Operations Manager ANTONY WEBB BSc. (Metallurgy) Process Manager GORDON JOHN DUNBAR BSc (Hons), MSc, Dip. lmperial College, FAusIMM, FAIG, AuslMM Chartered Professional (Geology) Consultant Geologist