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Annual Report 2008

Plain-text annual report

Ramelius Resources Limited.Annual Report.2008. 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 01 02 03 17 18 28 34 46 47 48 49 51 52 81 82 85 Back Cover Stock Exchange The Company is listed on the Australian Securities Exchange Limited. The Home Exchange is Adelaide. ASX Codes Shares: RMS Options: RMSOB / RMSOC Ramelius Resources Limited ACN 001 717 540 ABN 51 001 717 540 Annual General Meeting The Annual General Meeting of Ramelius Resources Limited will be held at Enterprise House, 136 Greenhill Road, Unley, South Australia on Thursday 27 November 2008 at 11.00 am Adelaide time. Cover & Above: “The Wattle Dam Waltz” Recommencement of Mining at Wattle Dam RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 01 Chairman’s Report Dear Shareholder, It is with pleasure that I present to you the 2008 Annual Report of Ramelius Resources Limited. The past year has been a year of consolidation for Ramelius as it moves from the initial open pit mine to underground mining at Wattle Dam. There have also been significant challenges in terms of share market volatility and weaker sentiment towards smaller miners. During the year the gold price has fluctuated significantly but remains at an attractive price in Australian dollar terms. During the year the Company achieved a number of significant milestones such as: • Confirmation of the high grade zone identified in May 2007 • Completion of an initial resources statement in less than 6 months from discovery • Design, permitting and commencement of the underground development at Wattle Dam • A dividend of 0.5 cents per share paid on 3 August 2007 • A capital return of 7.5 cents per share paid on 28 September 2008 • 1 for 10 Bonus options issued at a strike price of $1.00 and $1.50 Ramelius is now poised to reap the benefits of its exploration efforts at Wattle Dam through the development of a high grade underground mine, which is expected to produce significant cash flows over the next 12 months. In May 2008, the Company commenced a cutback to the open pit, which is the first step in developing the underground mine, and which will produce significant cash flow in its own right. Wattle Dam is unique amongst Australian gold projects due its extremely high grade. Your Company has taken a conservative approach to resource estimations at Wattle Dam and expects a high level of operating performance from the underground development, similar to that which occurred in the original open pit. Ramelius is confident that the Wattle Dam project can become the cornerstone on which to grow the Company through exploration success and acquisitions. Recent drilling results from Golden Orb suggest that significant potential remains in the Spargoville project area and the Company plans to pursue these opportunities over the next 12 months. The Company’s strategy of focussing on low risk, low cost advanced gold projects will remain and with this in mind, a variety of acquisitions have been reviewed during the year. I can also advise that Ramelius has been busy on the community relations front with a new agreement with the Widji native title claimants. Under the agreement, the Company has sponsored a business opportunity for local indigenous people. Ramelius has also helped to establish the Tim Prime Memorial Scholarship at the School of Mines in Kalgoorlie and has made a significant donation to the St John’s Ambulance in Kambalda, WA. I would like to thank shareholders for their loyalty and support throughout the year and together with my fellow directors, look forward to being able to deliver a successful mining operation in 2008/09. I also take this opportunity to sincerely thank our Directors, all our employees and consultants for their efforts throughout the year. Bob Kennedy Chairman 02 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Managing Director’s Report Dear Shareholders, Over the past year Ramelius has consolidated itself as a gold producer and advanced its Wattle Dam project to the point where the underground development has commenced. It has been a challenging year, where the Company has pushed hard to get Wattle Dam producing again, this time from the high grade underground resource. During the 2007/08 year the Company milled the remaining stockpiles from the original open pit, producing over 15,000 ounces of gold. Mining of the cutback pit commenced in late May 2008, and it is expected to be completed in the December 2008 Quarter. The cutback is primarily designed to provide access to fresh rock in which to commence the is expected to produce underground decline, but significant cash flow in its own right. The underground resource at Wattle Dam is a high grade deposit that will provide near term cash flow to underpin the Company’s future growth. Most of 2007/08 has been spent busily drilling out this resource, making plans for its development, gaining the requisite environmental and other approvals and employing the right people to ensure its smooth development. Operating in the Western Australian mining industry in today’s environment has its challenges in terms of cost pressures, environmental approvals and securing the right people. I am glad to say that Ramelius has been able to discover, drill out, obtain approvals and commence developing its high grade underground resource within 12 months of discovery – thanks to the dedication of its team. I believe that in the coming year, shareholders will begin to see the benefits of this development, which will put the Company in a strong position in the current market. We are also pursuing extensions of the high grade resource and drilling new projects such as Golden Orb to extend the mine life at Wattle Dam. I would like to take this opportunity to thank the Ramelius team for their dedication to getting the job done well in a difficult environment. I would also like to thank my fellow directors for their continued support and guidance. Diamond Drilling beneath Wattle Dam Joe Houldsworth Managing Director RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 03 Review of Operations Financial Highlights • Sales of 16,939 ounces of gold generating revenue of A$14.8 million at an average price of A$874 per ounce. • Payment of maiden dividend on 3 August 2007. • Payment of capital return of $12m on 28 September 2007. • Cash at the end of the financial year of $16.1 million. Sales revenue of $14.8 million was the result of a strong average gold price received for gold sales during the year of an average price of A$874 per ounce. The consolidated net profit after tax was A$611,697. At 30 June 2008 the Company had no debt and held cash assets of $16.1 million. During the financial year, the Company paid a fully franked maiden dividend of $0.005 per ordinary share, a capital return of $0.075 per ordinary share held on 3 August 2008; issued one free bonus option exercisable at $1.00 by 30 June 2009 for every ten Ramelius shares held on 3 August 2008 and issued one free bonus option exercisable at $1.50 by 30 June 2010 for every ten Ramelius shares held on 5 May 2008. The dividend totalled $780,739 and was paid to eligible shareholders on 3 August 2007. The return of capital totalled A$12 million and was paid on 28 September 2007. During the financial year option-holders exercised options as follows which raised additional capital of approximately $3.6 million. • 6,415,122 options at $0.11187 • 3,529,960 options at $0.18687 • 2,208,756 options at $1.00 and • 1,456 options at $1.50. 04 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Review of Operations Wattle Dam Open Pit Cutback Operational Highlights • Completion of milling for ore mined in the original open pit. • Production of 16,154 ounces of gold. • Drill out of the initial resource for the high grade gold zone at Wattle Dam, which is open at depth. • In June 2008, Ramelius commenced a cut back to open pit at Wattle Dam in order to establish a portal to access the high grade zone. Stoping of ore from this zone will commence in the 2008/09 financial year. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 05 Review of Operations 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 200 metres. The mine commenced production in March 2006 and open pit mining was suspended at the end of October 2006. A cut back to the open pit was commenced in June 2008 to establish underground access to the high grade zone at Wattle Dam. Mining During the 2008 financial year a total of 208,379 BCMs of waste was removed from the cut back to the open pit at Wattle Dam. The open pit is being deepened to a depth of 76 metres in order to access fresh rock for the establishment of a portal and decline to access the deeper high grade zone. Production Statistics – 2008 Financial Year Unit Mined Grade g/t gold 5.25 Ore processed tonnes 96,910 Recovery Gold Production* Gold Production* % oz kg 96.4 16,154 502 * Includes G.I.C recovered Milling A total of 96,910 tonnes of ore was processed during the 2008 financial year at the Company’s gold treatment plant at Burbanks. The mill has undergone further refurbishment since completing milling operations in January 2008 in preparation for treatment of higher grade ores from the underground development which will commence on the completion of the cutback to the open pit. Burbanks Plant 06 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Review of Operations Comment The Company completed a scoping study in early 2008 into mining the high grade gold zone beneath the Wattle Dam open pit. The study concluded it was economic to mine the high grade zone over a 12 month period producing 67,000 ounces of gold at a total cost of approximately $470 per ounce (including capital and $7 million in contingency costs). Since that time the Company has been working to better define the resource and finalise the underground mine plan. The development of the underground mine commenced in June 2008 with a cut back to the existing open pit. Ramelius is now poised to reap the benefits of its exploration efforts at Wattle Dam through the development of a high grade underground mine. Wattle Dam Underground Mine Plan 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. Gold exploration during the year was conducted at the Wattle Dam, Golden Orb, West Wattle Dam, Larkinville West and Eagles Nest prospects whilst nickel exploration was conducted at 1A North and Hilditch prospects. Regional exploration focusing on both gold and nickel was also conducted within the project area. During the year Ramelius exercised two options to earn in Pioneer Nickel Limited’s nickel an 80% interest exploration tenements covering the Wattle Dam and Logans/Larkinville project areas. Under the option Ramelius exercised 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 prospective for Kambalda style sulphide nickel mineralisation. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 07 Review of Operations Wattle Dam Project (Gold, Tantalum, Nickel) (100% Gold, Tantalum and earning 80% Nickel Rights; MLs; 1101; 1263; 1264; 15/1323; 1338; 15/1769-1773; PL 15/4479, 100% MLs 1774 – 1776; PL 15/4381 [MLA 15/1474]) Visible Gold in Drill Hole WDDH0036 the open pit. north of The zone has now been intersected in numerous RC and diamond drill holes over a strike length of 100 metres and is interpreted 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 existing open pit floor. A total inferred and indicated mineral resource at Wattle Dam was estimated at 540,000t at 4.8g/t gold for 83,200 ounces. Within the resource there are two higher grade zones, estimated to contain 70% of the gold (110,000t at 16.6g/t gold for 58,600 ounces). An initial mining scoping study was completed which anticipated a cutback to the existing open pit followed by underground mining of the high grade zones over a period of 12 months. A review of the resource estimate and mine plan is currently underway which will incorporate all drilling completed since the initial resource estimate, including all recent diamond and RC drilling. Wattle Dam Gold Mine (Gold) Reverse Circulation drilling totalling 68 holes for 7,247 metres and Diamond drilling totalling 55 holes for 14,710.6 metres was completed at Wattle Dam. The drilling was predominantly focused on the extension and definition of the high grade gold zone beneath and to the A single diamond hole for 925.9 metres was completed to evaluate a strong and broad conductor identified at depth, beneath and to the west of the Wattle Dam open pit. The drill holes intersected sulphidic sediments which are interpreted to be the conductive source. No significant results were received from the drilling. Wattle Dam Drill and Blast 08 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Review of Operations Golden Orb Long Section July 2008 During the 2007/08 year the Company milled the remaining stockpiles from the original open pit, producing over 15,000 ounces of gold. following up significant Golden Orb (Gold) RC Drilling totalling 4 holes for 702 metres were completed, intercepts from previous drilling at depth at the Golden Orb prospect. The drilling returned significant intersections including 7 metres @ 10.8 g/t gold from 117 metres. The intersections are interpreted to be associated with a north-northwest trending mineralised zone with the potential for high grade economic mineralisation. Diamond drilling commenced in August 2008 to follow-up these encouraging results. A program of detailed aircore drilling totalling 49 holes for 2,557 metres was completed at Golden Orb. Results from the drilling have downgraded the potential for shallow economic gold mineralisation at Golden Orb. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 09 Review of Operations Gold in Quartz 1A North (Nickel) Diamond drilling at 1A North by Pioneer Nickel Limited in late 2005 returned an intersection of 0.45 metres at 2.0% nickel. During the year the company completed RC and diamond drilling to test the interpreted down dip position of this result and associated DHEM conductor. A total of 290 metres of RC precollars and 268.9 metres of NQ diamond core were drilled over two holes. A small but encouraging intersection of 0.1 metre of massive sulphides grading 5% nickel within 1ANDH0002 was intersected. Results from DHTEM (Down Hole Transient Electro magnetics) conducted on the completed diamond drilling indicated a strong off-hole anomaly at a depth of 245 metres and a second weaker off-hole anomaly at a depth of 265 metres in diamond drill hole 1ANDH0001. A moderate late time off-hole response was also detected in 1ANDH0002 at a depth of approximately 190 metres which is considered to be a response to the previously reported intersection of 0.1 metre of massive sulphides grading 5% nickel. Diamond drilling is planned in the second half of 2008 in order to evaluate the identified conductors. West Wattle Dam (Gold) An Auger program comprising 934 holes was completed over a north-northwest trending ultramafic sequence located 600 metres to the west of Wattle Dam Gold Mine. Results from the auger drilling identified several >100ppb gold anomalous areas within ≥50ppb gold anomalous trends. Physical gold has been located by metal detecting by company representatives over one of the auger anomalies. A program of Aircore drilling has been generated and is planned for completion during the September 2008 quarter. 10 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Review of Operations Prospectors shaft near Hilditch A further 7 RC drill holes were completed at a drill spacing of 80 metres x 100 metres in order to evaluate the ultramafic sequence immediately to the north of the 1A North for nickel mineralisation. All results have been received from the RC drilling returning a maximum significant result of 6 metres at 0.5% Ni from 14 metres (including 1 metre @ 1.0% Ni from 15 metres). Down hole TEM is planned on this RC drilling. Gold Mine where the regional surface anomalous gold geochemistry is interpreted to be terminated and overlain by drainage. Aircore drilling was also completed to evaluate several anomalous areas and trends to the east and south of the Wattle Dam Gold Mine. Better results from the drilling include 4 metres at 3.1g/t gold from 32 metres and 4 metres at 1.5g/t gold from 48 metres. Eleven RC drill holes for 1,122 metres were drilled to evaluate the contact north of the 1A North prospect, where anomalous results of up to 6,800ppm nickel were returned from previous aircore drilling. No significant results were returned, although a sediment free basal contact position has been highlighted and will be further tested in the coming year. Regional RAB/Aircore Drilling (Gold and Nickel) Regional RAB and Aircore drilling totalling 413 Aircore drill holes for 15,675 metres and 523 RAB drill holes for 9,198 metres were completed to evaluate several gold and nickel anomalous areas within the Wattle Dam project area. The majority of the gold focused Aircore drilling was completed over an area to the north of the Wattle Dam The Wattle Dam Project tenements held by Ramelius Resources Limited host the Spargoville ultramafic belt which hosts the Spargoville 1A, 5B and Andrew’s Shaft Deposits (located in small excisions held by Breakaway Resources Limited). Nickel orientated RAB and Aircore drilling was completed over a series of nickel anomalies that were generated across the tenements utilising a combination of both geochemical and geophysical exploration techniques. Results from the drilling has highlighted several anomalous contacts and trends including a maximum result of 18 metres at 0.77% nickel from 16 metres including 4 metres at 1.1% nickel from 24 metres. Infill Aircore and RC drilling will be planned to further evaluate the above gold and anomalous areas and trends. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 11 Review of Operations Logan’s Larkinville Project (Gold, Tantalum, Nickel) (Pioneer Nickel 100%, Ramelius earning 75% Gold and Tantalum, earning 80% Nickel Rights; PLs 15/4464; 4213 & 4214 [MLA 15/1449]; EL15/689; EL15/742) Larkinville West RC Drilling (Gold) A total of 30 RC drill holes for 2,830 metres were completed to follow up previous anomalous RAB drilling which returned a maximum result of 32 metres at 2.0g/t gold from 12 metres. The intersected mineralisation is interpreted to strike north northwest and dip towards the west southwest at approximately 40 – 50 degrees. Significant results were returned within two interpreted zones within the RC drilling – Supergene zone and Fresh Rock Zone. Results from the supergene zone include 32 metres @ 2.0g/t gold from 12 metres. Results from the fresh rock zone include 3 metres @ 4.9g/t Au from 83 metres and 1 metre @ 20.6g/t from 115 metres. A further five RC holes for 838 metres were completed to evaluate the fresh rock intercepts above. The drilling did not return any significant results and downgraded the depth potential at Larkinville West. North Widgiemooltha Blocks (100% Gold Rights) 15/101; 15/102; 15/653; ML 15/1271) (MLs 15/97; 15/99; 15/100; Golden Orb Regional A total of 3 Aircore drill holes for 3,839 metres were completed to further evaluate anomalous areas immedi- ately surrounding the Golden Orb prospect to the south and southeast. A maximum result of 12 metres @ 5.5g/t gold from 28 metres including 4 metres at 10.5g/t gold from 32 metres was returned. This mineralisation is interpreted to be hosted within ultramafic lithologies adjacent to a contact with felsic lithologies located immediately to the east. A program of RC drilling has been generated to evaluate all significant results returned from the drilling. North Widgiemooltha Regional A total of 16 aircore drill holes for 1,013 metres were completed to evaluate an anomalous intercept of 4 metres at 3.1g/t gold from 36 metres within regional aircore drill hole NWAC0054. No significant results were received. Wattle Dam Open Pit 12 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Review of Operations Eagles Nest Area (Gold, Tantalum, Nickel) (100% M15/1475) RC drilling totalling 38 holes for 4,002 metres was completed over the Eagles Nest Project and adjoining North Widgiemooltha Project tenement, (M15/100), in order to evaluate a zone of co-incident gold and arsenic anomalism over a strike length of approximately 500 metres identified from previous auger drilling. The RC drilling defined an anomalous zone of gold over a strike length of 250 metres including significant intercepts of 9 metres at 2.7g/t gold from 50 metres and 12 metres at 2.0g/t gold from 55 metres. The zone remains open to the south and down dip. Further drilling targeting the zone will be conducted along strike to the south, in areas highlighted by anomalous surface geochemistry and/or structural complexity, (interpreted from aeromagnetic and geological mapping). A total of 36 aircore drill holes were completed at a drill spacing of 20 metres by 100 metres in the north east of and adjoining North the Eagles Nest Project Widgiemooltha Project (M15/99 and M15/100). The drilling was designed to provide coverage over an area that has been historically worked by previous tenement holders for alluvial gold. All results have been received from the drilling with no significant results returned. tenements, RC Drilling at Eagles Nest Hilditch Project (Nickel, Gold and Tantalum) (90% ML 15/1448) A total of 9 RC drill holes for 1455 metres and one diamond hole for 366.5 metres were drilled at the Hilditch North prospect. Four deep RC drill holes for 977 metres and one diamond hole were drilled to evaluate anomalous nickel geochemistry and Ni:Cr ratios, (indicative of proximal nickel sulphide mineralisation), identified in earlier drilling. The diamond tail intersected abundant pegmatite at the target depth within the hole. No significant results were returned. A single line comprising 4 RC holes for 478 metres was completed to test the ground between the northern most drilling conducted by Ramelius within M15/1448 and the southern most drilling completed by Pioneer Nickel Ltd. in the adjacent tenement to the north (M15/1770). Ramelius is currently earning 80% of the nickel rights within M15/1770 from Pioneer. No significant results were received. A program of RC drilling is planned to evaluate two areas of anomalous geochemistry returned from previous rock chip sampling. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 13 Review of Operations The Information in this report that relates to Exploration Results is based on information compiled by Matthew Svensson and Diane Tily-Laurie. 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 Australian 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 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 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 Jaurdi/Black Cat Coolgardie Jaurdi/Black Cat Coolgardie M16/34 M16/115 Granted Granted 15-Sep-86 29-Sep-88 28-Jan-87 10-Sep-90 27-Jan-29 9-Sep-11 Hilditch Coolgardie M15/1448 Granted 9-Mar-04 30-Jun-08 29-Jun-29 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 Granted 10-Feb-00 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1338 Granted 9-Jun-00 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1474 Application 12-Apr-04 P15/4381 Wattle Dam Coolgardie M15/1769 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1770 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1771 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1772 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1773 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1774 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1775 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie M15/1776 Granted 1-Feb-06 30-Jun-08 29-Jun-29 Wattle Dam Coolgardie P15/4381 Granted 5-May-00 9-Jan-01 8-Jan-05 M15/1474 Wattle Dam Wattle Dam Coolgardie P15/4444 Granted 2-Feb-01 5-May-06 Coolgardie P15/4479 Granted 15-Aug-01 28-Jul-05 4-May-10 27-Jul-09 North Widgie Coolgardie M15/97 Granted 9-Dec-83 26-Jul-84 25-Jul-26 North Widgie Coolgardie M15/99 Granted 9-Dec-83 26-Jul-84 25-Jul-26 North Widgie Coolgardie M15/100 Granted 9-Dec-83 26-Jul-84 25-Jul-26 North Widgie Coolgardie M15/101 Granted 9-Dec-83 26-Jul-84 25-Jul-26 North Widgie Coolgardie M15/102 Granted 9-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 7-Dec-98 7-Feb-07 6-Feb-28 was P15/3666 Larkinville Coolgardie E15/689 Granted 2-Jun-00 20-Apr-05 19-Apr-10 90% 90% 90% Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Steele Stacey Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Steele Stacey Ramelius 100% Prime Ramelius 100% & 80% of Ni Rights Ramelius Ramelius Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights 75% & 80%Ni Rights ANM Ramelius ANM Ramelius ANM Ramelius ANM Ramelius ANM Ramelius ANM Ramelius ANM Ramelius Ramelius & Pioneer Ramelius & Pioneer RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 15 Review of Operations Project Location Tenement Status Application Date Grant Date Expiry Date Associated Tenement ID Acquiring % Acquired % Registered Beneficial Owner Owner Larkinville Coolgardie E15/742 Granted 26-Oct-01 20-Apr-05 19-Apr-10 Larkinville Coolgardie E15/896 Granted 13-Jul-05 9-Jan-07 8-Jan-12 Larkinville Coolgardie E15/1039 Application 3-Sep-07 Larkinville Coolgardie E15/1062 Application 8-Feb-08 Larkinville Coolgardie M15/1449 Application 9-Mar-04 P15/4213- 4214 Larkinville Coolgardie P15/4213 Granted 17-Feb-99 28-Mar-00 27-Mar-04 M15/1449 Larkinville Coolgardie P15/4214 Granted 17-Feb-99 28-Mar-00 27-Mar-04 M15/1449 Larkinville Coolgardie P15/4765 Application 17-Jan-06 Larkinville Coolgardie P15/4790 Granted 19-Apr-06 14-Aug-07 13-Aug-11 Larkinville Coolgardie P15/4904 Application 22-Jan-07 Larkinville Coolgardie P15/4905 Application 22-Jan-07 M15/1449 M15/1449 Larkinville Coolgardie P15/5185 Granted 25-May-07 11-Apr-08 10-Apr-12 Eucalyptus Mt Margaret M39/803 Granted 15-Aug-00 22-May-08 21-May-29 Eucalyptus Mt Margaret M39/804 Granted 15-Aug-00 22-May-08 21-May-29 75% & 80%Ni Rights 75% & 80%Ni Rights 75% & 80%Ni Rights 100% 75% & 80%Ni Rights 75% & 80%Ni Rights 75% & 80%Ni Rights 75% & 80%Ni Rights 75% & 80%Ni Rights 75% & 80%Ni Rights 75% & 80%Ni Rights 100% 50% of Gold Rights 50% of Gold Rights Ramelius & Pioneer Pioneer Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius Ramelius Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius & Pioneer Ramelius Ramelius NiWest NiWest NiWest NiWest Lake Seabrook Yilgarn M77/943 Granted 5-Oct-98 20-Feb-07 19-Feb-28 90% Ramelius Ramelius Lake Seabrook Yilgarn E77/1108 Granted 30-Jan-02 9-Oct-06 8-Oct-11 100% Ramelius Ramelius Groundlark Coolgardie M15/1290 Granted 29-Jun-99 25-Oct-02 24-Oct-23 100% Ramelius Ramelius Eagles Nest Coolgardie M15/1475 Granted 12-Jul-04 29-Sep-04 28-Sep-25 100% Ramelius Ramelius Burbanks Coolgardie M15/1273 Granted 16-Dec-98 30-Mar-99 29-Mar-20 Burbanks Coolgardie M15/1369 Granted 22-May-01 31-Dec-01 30-Dec-22 Burbanks Coolgardie M15/1370 Granted 22-May-01 31-Dec-01 30-Dec-22 Burbanks Coolgardie P15/5269 Application 19-May-08 Burbanks Coolgardie G15/10 Granted 22-Mar-91 20-May-92 19-May-13 Burbanks Coolgardie G15/11 Granted 22-Mar-91 20-May-92 19-May-13 Burbanks Coolgardie G15/12 Granted 22-Mar-91 20-May-92 19-May-13 Burbanks Coolgardie G15/13 Granted 22-Mar-91 20-May-92 19-May-13 Burbanks Coolgardie L15/109 Granted 3-Jul-89 22-Jun-90 21-Jun-10 Burbanks Coolgardie L15/110 Granted 3-Jul-89 22-Jun-90 21-Jun-10 Burbanks Coolgardie L15/189 Granted 10-Mar-94 21-Jun-94 20-Jun-09 Burbanks Coolgardie L15/234 Granted 31-Jan-02 27-Nov-03 26-Nov-24 Burbanks Coolgardie L15/284 Application 21-Sep-07 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS Ramelius MS 16 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Review of Operations Royalty Interests The Current status of the Company’s Royalty Interests is as follows. Project Name SANDSTONE* – Gold BULONG* - Gold SPARGOS REWARD* – Gold Location Tenement East Murchison Various Current Holder Nature of Ramelius’ Royalty Troy Resources NL Production based Royalty Capped at $300,000 East Coolgardie Various Yilgarn Gold Ltd Production based Royalty Not Capped Coolgardie Various Breakaway Resources Ltd 3% Gross Gold Royalty SIBERIA* – Gold/Nickel Broad Arrow Various Siberia Mining Corp Ltd EDJUDINA – Gold Mt Margaret Various Saracen Mineral Holdings Ltd EUCALYPTUS* – Nickel Mt Margaret M39/803, M39/804 GME Resources Ltd Nickel and Gold Royalty Collectively capped at $100,000 Production based Royalty Capped at $500,000 Option to purchase on commencement of mining Nickel Laterites at $0.10/tonne of Proven Ore. Comments No Current Activity by Holder on the Royalty Tenements No Current Activity by Holder on the Royalty Tenements No Current Mining Activity by Holder on the Royalty Tenements No Current Activity by Holder on the Royalty Tenements Currently Subject to Feasibility Study No Current Activity by Holder on the Royalty Tenements PARKER RANGE - All minerals Yilgarn Cazaly Iron Pty Ltd E77/1403, P77/3764-5, P77/3481, P77/3740, M77/1085 Royalty of 1% of value of minerals produced capped at $500,000. No Current Activity by Holder on the Royalty Tenements * These royalty assets have been impaired and their carrying costs written off. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 17 Native Title Statement Exploration and mining 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 local sites with respect and a clear activities at understanding of important issues and priorities. Communication and Commitment Ramelius adopts practical measures to develop trust. Acknowledging that community leaders and representa- tives 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 concluded a mining and exploration agreement with the Widji People, which allows for access to existing and new mining tenements and provides certain benefits to the Widji People. The Company also made royalty equivalent payments 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 last financial year. 18 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Corporate Governance Statement During 2003 the Australian Securities Exchange Corporate Governance Council (“ASXCGC”) released its best practice recommendations based on ten core principles for corporate governance. These recommen- dations are not intended to be prescriptions to be followed by all ASX listed companies, but rather guidelines designed 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 stage of the entity’s life as a public listed exploration company. The Board is, 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 2008. 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 enhance- ment 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. The Board has adopted a formal Board Charter in accordance with ASXCGC best practice recommenda- tion 1.1. The Board Charter details the functions and responsibilities of the Board of Directors. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 19 Corporate Governance Statement The Board of Directors is responsible for the overall Corporate Governance of the Company. The Board overviews the formulation of strategies 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. 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 including the Chief Financial Officer and Company Secretary and approving conditions of service including remuneration and performance monitoring; • Reviewing senior management succession planning and development; • Approving strategic directions and performance objectives and monitoring the Company 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, requirements continuous disclosure and ASX Listing Rules; accounting including • 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 Committee’s role and responsibilities, composition, structure and membership are set out in a formal Charter. Since the end of the 2008 financial year the Board has established a Remuneration Committee to deal with executive remuneration, recruitment, retention and termination policies for senior management and incentive schemes. 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 below). 20 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 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. During the year two additional directors, an executive and a non-executive were appointed to the Board. The composition of the Board currently consists of five directors of whom three, including the Chairman, are non-executives. Although the composition of the Board is now comprised of a majority of non-executive directors, the majority of the Board is however not regarded as being independent because two of the non- executive directors are officers of a substantial shareholder of the Company. However one director, Mr Kevin Lines, meets the independent director criteria contained in ASXCGC best practice recommendation 2.1. 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 is instrumental in ensuring effective communications exist between the Board of Directors and senior management. The Chairman is also responsible for the following: • 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 Managing Director include the following: the Board. The responsibilities of • 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; • Developing and implementing risk management procedures; • Developing and implementing internal control and regulatory compliance policies and procedures; • Providing timely, accurate and relevant information to the Board. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 21 Corporate Governance Statement 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. The Company’s code of conduct requires Directors and officers 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 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 possession 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 possesses 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. In addition the Board has approved a formal policy regarding notification of Directors’ interests in securities of the Company and contracts. matters; • keep confidential meetings; and the business of all directors Principle 4 – Safeguard integrity in financial reporting ASXCGC best 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 annual 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. • observe and support the Board’s Corporate Governance practices and procedures. The Company has a Policy Manual which contains a code of conduct that provides guidance to employees regardingexpected standards of behaviour, ethics and integrity as a condition of their employment. 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. 22 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Corporate Governance Statement 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. The Board has 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 reporting and overseeing the performance and independence of the external auditor. the Company’s financial 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 information or formal reports and other financial announcements published or released by the Company; • Assessing and ensuring that significant transactions and related party dealings are properly recognised, recorded and disclosed in the Company’s financial reports; any • 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; • 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 and external findings auditor significant any recommendations; any • Reporting generally to the Board on the activities of necessary the Committee and making 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; RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 23 Corporate Governance Statement • Reviewing and assessing annually the performance of the Committee and the adequacy of this charter. The Audit Committee currently consists of the two non executive 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 Audit Committee currently consist of less than three members and does not have a majority of independent directors including an independent Chairman. The members of the Committee are not regarded as being independent because they are officers of a substantial shareholder of the Company. Nevertheless, notwithstanding that the Company is not required to have an Audit Committee by ASX Listing Rule 12.7, the Audit Committee established by the Board is in partial compliance with ASXCGC best practice recommendation 4.3 in that it consists of only non-executive directors with a Chairman who is not the Chairman of the Board. The Board considers the current composition of the Audit Committee as appropriate given the current composition and size of the Board of directors. 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; • 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. Although the Company has a procedure in place to promote timely disclosure of material information, proper vetting and authorisation of announcements that are factual and properly presented, such procedures have only been summarised and not formally documented in detail. The Board does not consider this to have impeded compliance with compliance requirements of the ASX Listing Rules given the size of the Company. continuous the 24 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Corporate Governance Statement 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 lodged with the Australian Securities Exchange and thereby the Australian Securities and Investments Commission and sent to all shareholders who request it; report • 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 associated with the Company’s operations including mineral exploration and mining, environmental, title and native title, legal and other operational risks. The Board endeavours to mitigate 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. In compliance with ASXCGC best practice recommendation 7.1, the the Board has approved a policy manual contents of which assists with risk mitigation, oversight and management. The Chief Executive Officer and Chief Financial Officer are required to declare to the Board in writing that the financial records of the Company for the financial year have been properly maintained in accordance with Section 286 of the Corporations Act 2001 the financial statements and associated notes comply in all material respects with the accounting standards as required by Section 296 of the Corporations Act 2001; and the financial statements and associated notes give a true and fair view, in all material respect, of the financial position as at balance date and performance of the Company for the year as required by Section 297 of the Corporations Act 2001. However these officers are not presently required to state in writing that the integrity of the financial statements are based on a sound system of risk management and internal control because the Board considers the size of the Company renders the costs of implementing such systems and controls prohibitive. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 25 Corporate Governance Statement Principle 8 – Encourage enhanced performance Performance Evaluation The Board evaluates the performance of the Managing Director, Chief Operating Officer 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. A performance evaluation for the Board and its members is conducted by the Chairman on an informal basis. Principle 9 – Remunerate fairly and responsibly Remuneration Policy In accordance with ASXCGC best practice recommen- dation 9.1 the Company’s remuneration practices are set out as follows. Remuneration Practices The Company’s policy for determining the nature and amounts of emoluments of board members and key management personnel 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 $400,000 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 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. 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 superannu- ation. 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. In the past, the Company did not 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 could pay cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board. The Company’s remuneration policies are being reviewed in light of the employee incentive plans approved by shareholders in November 2007. Cash bonuses were paid during the financial year as disclosed in the Remuneration Report above. Employee Incentive Plan The Company has an Employee Share Acquisition Plan and a Performance Rights Plan which have been approved by shareholders. The Share Acquisition Plan enables the Board to offer eligible employees 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 these Plans and are only remunerated by way of fees and superannuation in compliance with ASXCGC best practice recommendation 9.3. In accordance with the terms of the Plan, shares may be offered at no consideration unless the Board determines that market value or some other value is appropriate. 26 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Corporate Governance Statement Any consideration may be by way of interest free loans repayable in accordance with the terms and conditions of the Plan. The Performance Rights Plan enables the Board to grant Performance Rights (being entitlements to shares in the Company that are subject to satisfaction of vesting conditions) to selected key senior executives as a long-term incentive as determined by the Board in accordance with the terms and conditions of the Plan. The second method was through a Performance Rights Plan based on Key Performance Indicators (“KPI’s”) set by the Board. The KPI conditions attached to the performance Rights Plan include a vesting period of three years from grant date (7 April 2008) and a requirement for the Company’s share price to be within the top 40% comparator group of companies as set by the Board. The Companies in the comparator group are as follows. The objective of the Share Acquisition 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. The objective of the Performance Rights Plan is to provide selected senior executives the opportunity to participate in the equity of the Company through the issue of Performance Rights as a long term incentive that is aligned to the long term interests of shareholders. During the year ended 30 June 2008 a total of 152,420 shares with a fair value of $174,961 were issued to employees under the Employee Share Acquisition Plan. Performance Based Remuneration Key Management Personnel receive performance based remuneration as considered appropriate by the Board. The intention of this remuneration is to facilitate goal congruence between Key Management Personnel with that of the business and shareholders. The remuneration policy of the Company has been tailored to increase goal congruence between shareholders, directors and senior executives. Two methods have been used to achieve this aim. The first method was the issue of options to Key Management Personnel. During the financial year a total of 800,000 options (each exercisable at $1.90 by 30 June 2009) with a fair value of $272,000 were issued to certain Key Management Personnel. Avoca Resources Limited Dioro Exploration NL Alkane Resources Limited Gryphon Minerals Limited Apex Minerals NL Integra Mining Limited Barra Resources Limited Monarch Gold Mining Company Limited Bendigo Mining Limited Norton Gold Fields Limited Carrick Gold Limited Silver Lake Resources Limited Citigold Corporation Limited Tanami Gold NL Crescent Gold Limited Troy Resources NL During the financial year a total of 900,000 Performance Rights with a fair value of $864,000 were granted under the Performance Rights Plan to selected Key Management Personnel. These Rights are recognised on a pro-rata basis over the vesting period. Any options that do not vest on the vesting date will lapse. The options are subject to performance conditions which are to be tested in future financial periods. The employment conditions of executive directors including the Managing Director, Mr Houldsworth and key management personnel are formalised in contracts of employment. At the date of this report, the employment contracts of the Managing Director and the Chief Financial Officer/Company Secretary had expired and the Company has negotiated new agreements for these executives to documentation. Generally, employment contracts of senior executives enable the Company to terminate the contracts without cause by providing written notice or making a termination payment in lieu of notice including a minimum termination payment subject RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 27 Corporate Governance Statement as provided for under the contracts. However any such termination payment to officers of the Company are 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 Company as set out in the latest accounts given to the the payment shall be pro-rata based on the ASX, maximum total termination benefits allowable under ASX Listing Rule 10.19. Termination payments are not generally payable on resignation or dismissal for serious misconduct. the equity interests of Details of directors’ and executives/officers’ remunera- tion, superannuation and retirement payments are set out in the Remuneration Report section of the Directors’ Report. recruitment, Since the end of the 2008 financial year the Board has established a Remuneration Committee to deal with executive remuneration, retention and termination policies for senior management and incentive schemes. The composition of the Committee is two non-executive directors, Messrs Nelson and Kennedy who are not regarded as being independent under because they are officers of a substantial shareholder of the Company and the Board is yet to approve a formal charter the Committee in accordance with ASXCGC best practice recommenda- tion 9.2. There has been one meeting held since the formation of the Remuneration Committee attended by both members and chaired by Mr Nelson. for 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 and officers 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 meetings; and the business of all directors • observe and support the Board’s Corporate Governance practices and procedures. 28 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 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. AIRCORE 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. ANOMALOUS 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. ARCHAEAN The oldest rocks of the Earth’s crust – older than 2,400 million years. AURIFEROUS Gold bearing material AUGER A screw-like boring or drilling tool sediments. for use in clay or soft ASX The Australian Securities Exchange Limited (ACN 008 629 691) AU Gold AZ 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 Bank Cubic Metre. Usually refers to the volume of waste measured in situ. BERM A horizontal bench left in the wall of an open pit to provide stability to the wall. CHLORITE A representative of a group of micaceous greenish minerals which are common in low grade schists and is also is a common mineral associated with hydrothermal ore deposits. CIL CIRCUIT 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. COMPANY Ramelius Resources Limited (ACN 001 717 540) COSTEAN A trench dug through soil to expose the bedrock. CU Copper. CUT A term used when referring to average assays where the grade of a particularly high-grade interval is reduced to a lesser value. DISSEMINATED Usually referring to minerals of economic interest scattered or diffused through out the host rock. DIP The angle at which rock stratum or structure is inclined from the horizontal. DYKE Tabular igneous intrusive cutting the bedding or planar features in the country rock. EL Exploration Licence. ELA Exploration Licence application. EM Electromagnetic, a geophysical conductive material in the earth. EOH End of Hole. technique used to detect FAULT A fracture in rocks along which rocks on one side have been moved relative to the rocks on the other. BIOTITE A mineral of the mica group widely distributed in a variety of rock types. F.C.I. Free carried interest. CALCRETE Soil and superficial material cemented by calcium carbonate. FELSIC Light coloured rock containing an abundance of any of the following: - feldspars, felspathoids and silica. CARBONATE A common mineral type consisting of carbonates of calcium, iron, and/or magnesium. FERRUGINOUS Containing iron. FLITCH A Mining Term for the different levels in an open pit. High Grade Gold Ore Wattle Dam 30 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT Glossary of Terms GEOCHEMICAL EXPLORATION 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. GEOPHYSICAL EXPLORATION: The exploration of an area in which physical properties (eg. Resistivity, gravity, conductivity and magnetic properties) unique to the rocks in the area quantitatively measured by one or more geophysical methods. g/cc grams per cubic centimetre g/t grams per tonne GOSSAN The oxidised, near surface part of underlying primary sulphide minerals. GROSS GOLD ROYALTY A royalty payment based on the total amount of product (gold) produced. GRADE g/t – grams per tonne, ppb – part 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. 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 TONNES million tonnes M metre ML Mining Lease. MLA Mining Lease Application. NATIVE TITLE 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’s 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. GSWA The Geological Survey of Western Australia. Ni Nickel. ha Hectare JORC The Australasian Code for Reporting of Mineral Resources and Ore Reserves km kilometre KOMATIITE An ultramafic rock with high magnesium content extruded from a volcano. LAG A residual deposit remaining after finer particles have been blown away by wind. LATERITE Highly weathered residual material rich in secondary oxides or iron and/or aluminium. LEACHWELL An analytical method. 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 Refers to more metal (gold) being recovered than anticipated. OXIDISED Near surface decomposition by exposure to the atmosphere and groundwater, compare to weathering. oz Troy ounces = 31.103477 grams PEDOGENIC The development of soil. PENTLANDITE An important ore of nickel (FeNi)9S8 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 ANNUAL REPORT 31 Glossary of Terms PETROLOGICAL Pertains to a study of the origin, distribution, structure and history of rocks. RESOURCE Mineralisation to which a tonnage and grade has been assigned according to the JORC code. 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 Palladium. PL Prospecting Licence. PLA 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 Platinum. PYRITE A common, pale bronze iron sulphide mineral. PYRRHOTITE An iron sulphide mineral. QUARTZ Mineral species composed of crystalline silica. RAB DRILLING 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. REIDEL FAULT A slip surface that develops during the early stage of shearing. REGOLITH A layer of fragmented and unconsolidated material that overlies or covers basement. 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 enriched by weathering processes. to and usually 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. SILICIFIED Alteration of a rock by introduction of silica. STRATIGRAPHY The study of sedimentary rocks. formation, composition and correlation of 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 tonnes TEM 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 32,125 Troy ounces. OZ Troy ounce = 31.103477 grams TREMOLITE 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. RESERVE The mineable part of a resource to which a tonnage and grade has been assigned according to the JORC code. VACUUM DRILLING A method of rotary drilling where the drill cuttings are recovered inside the drill rods by a vacuum system. Wattle Dam initial open pit at completion Ramelius ResourcesLimited.FinancialReport.2008. 34 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Directors’ Report The Directors present their report together with the financial report of Ramelius Resources Limited (‘the Company’) and its controlled entities for the year ended 30 June 2008 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: 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. He brings to the Board his expertise in finance and management consultancy and extensive experience as chairman and non-executive Director of a range of listed public companies including in the resources sector. Special responsibilities include membership of the Audit Committee and the Remuneration Committee. Other listed company directorships are: Chairman of Beach Petroleum Limited (since 1995 and a Director since 1991), Flinders Diamonds Limited (since 2001), Maximus Resources Limited (since 2004), Eromanga Uranium Limited (since 2006), Monax Mining Limited (since 2004) and Marmota Energy 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 extensive 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 and the Remuneration 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), Monax Mining Limited (since 2004) and Marmota Energy Limited (since 2006). Kevin James Lines BSc (Geology), MAusIMM. Non-Executive Director. Board member since 9 April 2008. He has over 25 years experience in mineral exploration and mining for gold, copper, lead/zinc and tin. He has held senior geological management positions with Newmont Australia Limited, Normandy Mining Limited and the CRA group of companies. He was the foundation Chief Geologist at Kalgoorlie Consolidated Gold Mines where he led the team that developed the ore-body models and geological systems for the Super-Pit Operations in Kalgoorlie, managed the Eastern Australian Exploration Division of Newmont Australia that included responsibility for the expansive tenement holdings of the Tanami region. He has extensive experience in the assessment and evaluation of exploration projects and development of properties and mining operations overseas. Other listed company directorships are: Managing Director of Eromanga Uranium Limited. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 35 Directors’ Report Joseph Fred Houldsworth Managing Director and Chief Executive Officer. 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. Executive Director and Chief Operating Officer. Executive Director since 18 October 2007 and 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. He has 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. Directors’ meetings The Company held 19 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 attend Number attended Number eligible to attend Number attended Director Robert Michael Kennedy Reginald George Nelson Joseph Fred Houldsworth1 Ian James Gordon1,2 Kevin James Lines1,3 17 17 17 11 4 17 17 16 11 4 2 2 N/A N/A N/A 2 2 N/A N/A N/A 1 Messrs Houldsworth, Gordon and Lines are not members of the Audit Committee. 2 Mr Gordon was appointed a Director on 18 October 2007. 3 Mr Lines was appointed a Director on 9 April 2008. 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 the Company since 1 April 2003 and was appointed Chief Financial Officer in June 2005. Principal activities The Company’s principal activity is gold and minerals exploration and production. 36 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Directors’ Report Review and results of operations During the year the Company milled 96,910 tonnes of Wattle Dam ore to produce approximately 16,939 ounces of gold. Gold sales to 30 June 2008 were $14.8 million. In July 2007 the Company exercised an option to acquire 80% of Pioneer’s nickel interests in both the ‘Wattle Dam tenement group’ and the ‘Logans/Larkinville tenement group’ at a total cost of $700,000 cash. On 28 September 2007 a return of capital of $0.075 per share and totalling $11,975,816 was paid to all registered shareholders as at 3 August 2007. In January 2008 the Company issued 400,000 incentive options to Mr Ian James Gordon (Executive Director) and 400,000 incentive options to Mr Antony Philip Webb (Burbanks Process Manager) as approved by shareholders at the Company’s Annual General Meeting in November 2007. These options are non-transferable, unlisted and exercisable at $1.90 by 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 @ 154 g/t gold from 148 metres depth. The drilling program outlined high grade gold mineralisation in several holes including 16 metres @ 482 g/t gold from 123 metres (uncut – WDRC289) and 9 metres @ 454 g/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. In November 2007 the Company announced that an initial mineral resource estimate and geological model had been completed for the Wattle Dam Project. The total indicated and inferred resource is estimated at 540,000 tonnes @ 4.8 g/t gold containing 83,200 ounces and within the total mineral resource, there are two higher grade zones which are estimated to contain 70% of the gold (~58,600 ounces). Zone 3 is estimated to contain 73,000 tonnes @ 16.5 g/t gold for 38,700 ounces and Zone 18 is estimated to contain 37,000 tonnes @ 16.7 g/t for 19,900 ounces. Zone 3 includes a top cut of 200 g/t and Zone 18 includes a top cut of 50 g/t. On 3 June 2008 the Company announced that it had recommenced mining operations at Wattle Dam with a cut-back of the existing open pit to be followed by an underground development to access gold ore in the high grade zones discovered during 2007. The mine plan for this operation is expected to produce approximately 67,000 ounces of gold. Results The consolidated net profit after income tax was $611,697. Dividends A fully franked maiden dividend of $0.005 per share was paid on 3 August 2007. Significant changes in state of affairs Significant changes in the state of affairs of the Company during the year were as follows: In August 2007 the Company issued 15,925,019 options over unissued shares to shareholders pursuant to a one for ten free Bonus Option issue as at 3 August 2007. The options are exercisable at $1 each and have an expiry date of 30 June 2009. In May 2008 the Company issued 18,455,929 options over unissued shares to shareholders pursuant to a one for ten free Bonus Option issue as at 5 May 2008. The options are exercisable at $1.50 each and have an expiry date of 30 June 2010. During the financial year, option-holders exercised 1,456 options at $1.50; 2,208,756 options at $1.00; 3,529,960 options at $0.18687 and 6,415,122 options at $0.11187 generating a total of $3,588,243 in additional capital. In April 2008 the Company raised $11,000,000 through a placement of 11,578,948 shares to investors at $0.95 per share. In April 2008 the Company issued 5,260,727 shares at $0.95 under a Share Purchase Plan which raised $4,997,690. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 37 Directors’ Report Events subsequent to balance date Since 30 June 2008, the Company; • • • • announced that RC drilling had intersected Wattle Dam style mineralisation at Golden Orb with intercepts of 7 metres at 10.8 g/t gold from 117 metres (including 2 metres at 27 g/t gold) and 4 metres at 6.9 g/t gold from 103 metres (including 2 metres at 12.2 g/t gold) which with previous drilling, had defined a new gold zone on the same contact as Wattle Dam that was open to the north, south and down dip and which had the potential to add to the existing Wattle Dam resources as a low cost, high grade gold operation. acquired West Wattle Dam tenements PL15/4381 and MLA15/1474 through the issue of 100,000 shares in the Company as consideration at a fair value of $80,000. sold Parker Range tenements EL77/1403, PL’s 77/3481, 77/3740, 77/3764, 77/3765 and MLA77/1085 for a cash consideration of $100,000 and a 1% royalty on the sale of any precious metals from the tenements capped at $500,000. surrendered a small insignificant tenement holding, EL15/718 which the Controlling Entity elected not to convert to a mining lease. Apart from the above, there has not arisen in the interval between 30 June 2008 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. Likely developments Open pit mining at Wattle Dam is expected to continue during early financial year 2008/09 after which development of the underground mine is anticipated to commence. The Company expects that while accessing the underground high grade gold ore, processing of low grade ore from the open pit cut-back will continue at its 100% owned Burbanks Mill. Further information about likely developments in the operations of the Company and the expected results of those operations 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. 38 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Directors’ Report Remuneration report (audited) This report details the nature and amount of remuneration for each Director and key management person of Ramelius Resources Limited and for executives receiving the highest remuneration. Remuneration practices The Company’s policy for determining the nature and amounts of emoluments of board members and Key Management Personnel 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 $400,000 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 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. 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 market conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. In the past, the Company did not 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 could pay cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board. The Company’s remuneration policies are being reviewed in light of the employee incentive plans approved by shareholders in November 2007. Cash bonuses were paid during the financial year as disclosed in the Remuneration Report. Employee Incentive Plan The Company has an Employee Share Acquisition Plan and a Performance Rights Plan which have been approved by shareholders. The Share Acquisition Plan enables the Board to offer eligible employees ordinary fully paid shares in the Company and in accordance with the terms of the Plan, shares may be offered at no consideration unless the Board determines that market value or some other value is appropriate. Any consideration may be by way of interest free loans repayable in accordance with the terms and conditions of the Plan. The Performance Rights Plan enables the Board to grant Performance Rights (being entitlements to shares in the Company that are subject to satisfaction of vesting conditions) to selected key senior executives as a long-term incentive as determined by the Board in accordance with the terms and conditions of the Plan. The objective of the Share Acquisition 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. The objective of the Performance Rights Plan is to provide selected senior executives the opportunity to participate in the equity of the Company through the issue of Performance Rights as a long term incentive that is aligned to the long term interests of shareholders. During the year ended 30 June 2008 a total of 152,420 shares with a fair value of $174,961 were issued to employees under the Employee Share Acquisition Plan. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 39 Directors’ Report Performance based remuneration Key Management Personnel receive performance based remuneration as considered appropriate by the Board. The intention of this remuneration is to facilitate goal congruence between Key Management Personnel with that of the business and shareholders. The remuneration policy of the Company has been tailored to increase goal congruence between shareholders, Directors and senior executives. Two methods have been used to achieve this aim. The first method was the issue of options to Key Management Personnel. During the financial year a total of 800,000 options (each exercisable at $1.90 by 30 June 2009) with a fair value of $272,000 were issued to certain Key Management Personnel. The second method was through a Performance Rights Plan based on Key Performance Indicators (“KPI’s”) set by the Board. The KPI conditions attached to the Performance Rights Plan include a vesting period of three years from grant date (7 April 2008) and a requirement for the Company’s share price to be within the top 40% comparator group of companies as set by the Board. The Companies in the comparator group are as follows: Avoca Resources Limited Alkane Resources Limited Apex Minerals NL Barra Resources Limited Bendigo Mining Limited Carrick Gold Limited Citigold Corporation Limited Crescent Gold Limited Dioro Exploration NL Gryphon Minerals Limited Integra Mining Limited Monarch Gold Mining Company Limited Norton Gold Fields Limited Silver Lake Resources Limited Tanami Gold NL Troy Resources NL During the financial year a total of 900,000 Performance Rights with a fair value of $576,000 were granted under the Performance Rights Plan to selected Key Management Personnel. These Rights are recognised on a pro-rata basis over the vesting period. Any Rights that do not vest on the vesting date will lapse. The Rights are subject to performance conditions which are to be tested in future financial periods. The employment conditions of executive Directors including the Managing Director, Mr Houldsworth and Key Management Personnel are formalised in contracts of employment. At the date of this report, the employment contracts of the Managing Director and the Chief Financial Officer/Company Secretary had expired and the Company has negotiated new agreements for these executives subject to documentation. Generally, employment contracts of senior executives enable the Company to terminate the contracts without cause by providing written notice or making a termination payment in lieu of notice including a minimum termination payment as provided for under the contracts. However any such termination payments to officers of the Company are 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. Any performance rights or options not vested or exercised before the date of termination will lapse. 40 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Directors’ 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 Positions Chairman – Non-Executive Director – Non-Executive Mr JF Houldsworth Managing Director – Executive Mr IJ Gordon1 Mr KJ Lines2 Director – Executive Director – Non-Executive Key Management Personnel Mr DA Francese Mr BT Kelty3 Mr MI Svensson4 Mr AP Webb5 Chief Financial Officer/Company Secretary Wattle Dam Mine Manager Exploration Manager Burbanks Mill Process Manager 1 Mr Gordon was appointed a Director on 18 October 2007. 2 Mr Lines was appointed a Director on 9 April 2008. 3 Mr Kelty commenced as an employee of the Parent Entity on 1 July 2007 (he was previously employed as a consultant) and retired as the Wattle Dam Mine Manager on 31 July 2008 following the appointment of a qualified underground Mine Manager. 4 Mr Svensson was promoted to the position of Exploration Manager on 22 February 2008. 5 Mr Webb commenced as an employee of a subsidiary of the Parent Entity on 1 July 2007 (he was previously employed as a consultant). RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 41 Directors’ Report (b) Directors’ Remuneration 2008 Primary Benefits Directors’ fees $ Salary Cash bonus $ $ Super contributions $ Non-cash benefits3 $ Total $ Performance related % Directors Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines 135,841 67,095 – – 16,857 – – 329,358 207,187 – – – 114,000 – – 12,226 6,039 39,902 18,647 1,517 – – 25,775 153,184 – 148,067 73,134 509,035 379,018 18,374 – – 27.45 40.42 – 219,793 536,545 114,000 78,331 178,959 1,127,628 2007 Primary Benefits Directors’ fees $ Salary Cash bonus $ $ Super contributions $ Non-cash benefits $ Total $ Performance related % Directors Mr RM Kennedy Mr RG Nelson1 Mr JF Houldsworth2 106,859 21,820 – – – 217,125 – – 130,887 9,617 34,464 106,654 128,679 217,125 130,887 150,735 – – – – 116,476 56,284 454,666 627,426 – – 28.78 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 Non-cash benefits for 2008 are performance related rights to shares and in the case of Mr Gordon, also options as detailed in Note 21. Performance income as a proportion of total remuneration Executive Directors are paid performance based bonuses based on set monetary amounts rather than proportions of their fixed salary and also performance based rights to shares and options. This has resulted in the proportion of remuneration related to performance varying between individuals. The Board has set these bonuses in order to encourage the achievement of specific goals that have been given high levels of importance in relation to future growth and profitability of the Consolidated Entity. (c) Director’s service agreement During the previous 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 initial salary of $190,000 per annum inclusive of superannuation guarantee contributions is reviewed periodically. In May 2008, Mr Gordon was appointed to the role of Chief Operating Officer and his salary increased to $318,000 per annum inclusive of superannuation. Mr Gordon is entitled to a termination payment equal to six months remuneration where in certain circumstances the employment agreement is terminated. At the date of this report, the employment agreement of Mr Houldsworth in respect of his services as Managing Director had expired and the Company has negotiated new employment agreements with both of the above Directors subject to documentation. Apart from the potential termination payment referred to above, there are no other post- employment benefits payable to Directors. 42 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Directors’ Report (d) Director related entities During the year ended 30 June 2008 the Parent Entity made the following payments to Director related entities. Director Nature of payment Amount JF Houldsworth Wages inclusive of superannuation paid to spouse of the Director during a period of six weeks due to illness of existing administrative assistant Wages inclusive of superannuation paid to a brother of the Director for mine security Living away from home expenses paid to a brother of the Director 6,863 79,804 11,216 (e) Key Management Personnel 2008 Primary Benefits Salary Cash bonus $ $ Super contributions $ Non-cash benefits1 $ Total $ Performance related % Key Management Personnel excluding Directors Mr DA Francese2 Mr BT Kelty Mr MI Svensson Mr AP Webb 205,994 203,670 141,988 161,590 713,242 10,000 – – – 10,000 19,439 18,330 12,779 43,157 24,151 – – 136,000 259,584 222,000 154,767 340,747 7.16 – – 39.91 93,705 160,151 977,098 2007 Primary Benefits Salary Cash bonus $ $ Super contributions $ Non-cash benefits $ Total $ Performance related % Key Management Personnel excluding Directors Mr IJ Gordon Mr DA Francese2 12,417 173,930 186,347 – 31,000 31,000 1,117 18,444 19,561 – – – 13,534 223,374 236,908 – 13.88 1 Non cash benefits 2008 for employee shares, and in the case of Mr Francese, also performance related rights to shares and in the case of Mr Webb, also incentive options as detailed in Note 21. 2 During the 2007 and part of the 2008 financial year Mr Francese acted 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. Performance income as a proportion of total remuneration Key Management Personnel are paid performance based bonuses based on set monetary amounts rather than proportions of their fixed salary and also performance based rights to shares and options. This has resulted in the proportion of remuneration related to performance varying between individuals. The Board has set these bonuses in order to encourage the achievement of specific goals that have been given high levels of importance in relation to future growth and profitability of the Consolidated Entity. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 43 Directors’ Report Key Management Personnel service contracts The Company has entered into employment agreements with Key Management Personnel in respect of their services. These agreements provide for the initial set salary per annum inclusive of superannuation guarantee contributions to be reviewed periodically. In the event that the Company terminates the agreements without notice, the Key Management Personnel are entitled to a termination payment including a minimum termination payment as provided for in the agreements. However any such termination payments to officers of the Company are 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. At the date of this report, the employment agreement of Mr Francese in respect of his services as Chief Financial Officer/Company Secretary had expired and the Company has negotiated a new employment agreement with this executive subject to documentation. There were no other termination benefits or other post employment benefits payable to Key Management Personnel other than those referred to above. Key Management Personnel post employment/retirement benefits There were no other post employment retirement benefits payable to Key Management Personnel other than those referred to above. Options granted as remuneration Apart from the incentive options and those granted under the Performance Rights Plan as detail 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 Apart from shares granted under the Company’s Employee Share Acquisition Plan and the Performance Rights Plan as detailed above, no other shares were granted to Directors or Key Management Personnel or as result of the exercise of remuneration options during the financial year. 44 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Directors’ Report Options At the date of this report unissued ordinary shares of the Company under option are: Issue date 17 August 2007 25 January 2008 12 May 2008 Expiry date* 30 June 2009 30 June 2009** 30 June 2010 Exercise price $1.00 $1.90 $1.50 Number of shares 13,716,263 800,000 18,454,473 * 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. ** All options exercisable at $1.90 by 30 June 2009 are unlisted non-transferable securities. These options do not entitle the holder to participate in any share issue of the Company or any other body corporate. At various times during 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 2,208,756 3,529,960 6,415,122 12,153,838 Amount paid on each share $1.00 $0.18687 $0.11187 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 1,191 Amount paid on each share $1.00 During the financial year a total of 116,000 options with an exercise price of $0.11187 expired as they had not been exercised by the 31 December 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 provided 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 any of the Consolidated Entity’s operations. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 45 Directors’ Report 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 for any 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. 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. 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 2008 is set out immediately following the end of the Directors’ report. 46 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Auditor’s Independence Declaration RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 47 Income Statement FOR THE YEAR ENDED 30 JUNE 2008 Sales Other revenues from ordinary activities Note 2 2 Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 14,856,597 774,478 14,471,128 412,402 14,856,597 683,384 14,061,088 405,848 Total revenue 15,631,075 14,883,530 15,539,981 14,466,936 Administrative expenses Change in inventories Consultant expenses Depreciation and amortisation Employment expenses Impairment of exploration assets Gain on disposal of listed securities Exploration costs written off Listing expenses Loss on disposal of assets Mining and milling 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) 3 8 8 (1,135,645) (3,398,693) (157,689) (822,945) (1,079,631) (802,670) – (1,725) (29,018) (2,704) (7,059,942) (72,277) (30,164) (267,401) 1,506,676 (66,082) (364,144) (717,333) (481,450) 2,457 (2,702) (19,129) (215) (5,974,016) (49,851) (17,672) (1,087,237) (3,398,693) (157,689) (822,945) (1,079,631) (802,670) – (1,725) (29,018) (2,704) (7,017,256) (72,277) (30,164) (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) 1,037,972 8,432,668 1,037,972 8,570,897 (426,275) (1,554,578) (427,314) (1,594,960) 611,697 6,878,090 610,658 6,975,937 611,697 6,878,090 610,658 6,975,937 0.4 0.4 7.2 4.2 0.4 0.4 7.3 4.2 The above Income Statement should be read in conjunction with the accompanying Notes. 48 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Balance Sheet AS AT 30 JUNE 2008 Current assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Other current assets Total current assets Non-current assets Trade and other receivables Property, plant, equipment and development assets 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 based payments reserve Retained profits/(losses) Total equity Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 9 10 11 12 13 10 15 16 17 18 19 19 17 20 21 16,170,847 667,674 151,643 353,823 162,940 12,984,706 931,548 3,463,736 120,733 71,860 15,938,210 590,024 65,043 353,824 109,110 12,621,346 881,770 3,463,736 120,734 44,526 17,506,927 17,572,583 17,056,211 17,132,112 – 13,465,084 8,041,534 2,879,980 – 5,340,750 6,680,152 448,947 4,522,218 9,181,637 8,041,535 2,838,559 4,658,042 1,102,249 6,680,152 408,565 24,386,598 12,469,849 24,583,949 12,849,008 41,893,525 30,042,432 41,640,160 29,981,120 3,162,274 257,858 1,314,296 914,038 2,850,079 221,898 1,168,279 900,896 3,420,132 2,228,334 3,071,977 2,069,175 285,214 4,556,099 226,035 1,992,046 283,196 4,556,099 226,035 1,992,046 4,841,313 2,218,081 4,839,295 2,218,081 8,261,445 4,446,415 7,911,272 4,287,256 33,632,080 25,596,017 33,728,888 25,693,864 28,661,250 555,412 4,415,418 21,735,396 56,900 3,803,721 28,661,250 555,412 4,512,226 21,735,396 56,900 3,901,568 33,632,080 25,596,017 33,728,888 25,693,864 The above Balance Sheet should be read in conjunction with the accompanying Notes. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 49 Statement of Changes in Equity FOR THE YEAR ENDED 30 JUNE 2008 Consolidated Entity Note Balance as at 30 June 2006 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 Share capital ordinary $ Share based Retained profits/ (losses) $ payments reserve $ Total $ 10,005,636 – 2,150 54,750 (2,293,630) – 7,714,156 54,750 40,000 (26,783) 3,948,519 7,768,024 – – – – – – – – – 40,000 (26,783) 3,948,519 – 6,878,090 7,768,024 6,878,090 21,735,396 56,900 4,584,460 26,376,756 Dividends provided for 7 – – (780,739) (780,739) Balance as at 30 June 2007 21,735,396 56,900 3,803,721 25,596,017 Fair value of 800,000 incentive options issued to executives Fair value of 152,140 shares issued to employees Fair value of unvested performance rights for executives 3,529,960 options exercised during the period at $0.18687 6,415,122 options exercised during the period at $0.11187 2,208,756 options exercised during the period at $1.00 1,456 options exercised during the period at $1.50 16,839,675 shares issued during the period at $0.95 Transaction costs associated with the issue of shares net of tax Return of capital to shareholders Profit/(loss) attributable to shareholders – – – 659,642 717,659 2,208,756 2,184 15,997,691 (684,262) (11,975,816) – 272,000 174,961 51,551 – – – – – – – – – – – – – – – – – – 611,697 272,000 174,961 51,551 659,642 717,659 2,208,756 2,184 15,997,691 (684,262) (11,975,816) 611,697 Balance as at 30 June 2008 28,661,250 555,412 4,415,418 33,632,080 The above Statement of Changes in Equity should be read in conjunction with the accompanying Notes. 50 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Statement of Changes in Equity FOR THE YEAR ENDED 30 JUNE 2008 Parent Entity Note Balance as at 30 June 2006 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 Share capital ordinary $ Share based Retained profits/ (losses) $ payments reserve $ Total $ 10,005,636 – 2,150 54,750 (2,293,630) – 7,714,156 54,750 40,000 (26,783) 3,948,519 7,768,024 – 21,735,396 – – – – – – – – – 40,000 (26,783) 3,948,519 – 6,975,937 7,768,024 6,975,937 56,900 – 4,682,307 (780,739) 26,474,603 (780,739) Balance as at 30 June 2007 21,735,396 56,900 3,901,568 25,693,864 Fair value of 800,000 incentive options issued to executives Fair value of 152,140 shares issued to employees Fair value of unvested performance rights for executives 3,529,960 options exercised during the period at $0.18687 6,415,122 options exercised during the period at $0.11187 2,208,756 options exercised during the period at $1.00 1,456 options exercised during the period at $1.50 16,839,675 shares issued during the period at $0.95 Transaction costs associated with the issue of shares net of tax Return of capital to shareholders Profit/(loss) attributable to shareholders – – – 659,642 717,659 2,208,756 2,184 15,997,691 (684,262) (11,975,816) – 272,000 174,961 51,551 – – – – – – – – – – – – – – – – – – 610,658 272,000 174,961 51,551 659,642 717,659 2,208,756 2,184 15,997,691 (684,262) (11,975,816) 610,658 Balance as at 30 June 2008 28,661,250 555,412 4,512,226 33,728,888 The above Statement of Changes in Equity should be read in conjunction with the accompanying Notes. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 51 Cash Flow Statement FOR THE YEAR ENDED 30 JUNE 2008 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, equipment and development Proceeds from sale of investments Proceeds from sale of property, plant and equipment Payments for mining tenements and 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 options Payment of dividend to shareholders Return of capital to shareholders Net cash provided by/(used in) financing activities Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 15,764,152 (9,032,494) 541,525 13,656,680 (6,830,138) 259,763 15,709,657 (4,792,480) 525,615 13,655,280 (6,557,049) 254,481 24 7,273,183 7,086,305 11,442,792 7,352,712 (7,295,640) – (4,283,586) 2,556 (6,678,854) – (255,310) 2,556 15,891 (2,224,604) – (2,797,858) – (2,224,604) – (2,797,858) (9,504,353) (7,078,888) (8,903,458) (3,050,612) 19,585,934 (821,268) – (590,800) (780,739) (11,975,816) 11,716,542 (78,202) – (122,475) – – 19,585,934 (821,268) (4,639,781) (590,800) (780,739) (11,975,816) 11,716,542 (78,202) (4,658,043) (122,475) – – 5,417,311 11,515,865 777,530 6,857,822 Net increase/(decrease) in cash held Cash at the beginning of the financial year 3,186,141 12,984,706 11,523,282 1,461,424 3,316,864 12,621,346 11,159,922 1,461,424 Cash at the end of the financial year 9 16,170,847 12,984,706 15,938,210 12,621,346 The above Cash Flow Statement should be read in conjunction with the accompanying Notes. 52 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 1 Statement of significant accounting policies This financial report includes the consolidated financial statements and notes of Ramelius Resources Limited and controlled entities (‘Consolidated Entity’ or ‘Group’), and the separate financial statements and notes of the individual parent entity, Ramelius Resources Limited (‘Parent Entity’). Ramelius Resources Limited is a listed public company, incorporated and domiciled in Australia. (a) Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standard Board and the Corporation Act 2001. 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 The financial statements have been prepared on an accruals basis under the historical cost convention, modified where applicable by the measurement at fair value of relevant non current assets, financial assets and financial liabilities. Accounting Policies The material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. (b) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Ramelius Resources Limited as at 30 June 2008 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. All inter-group balances and transactions between entities in the Consolidated Group, including any realised profits or losses, have been eliminated on consolidation. A list of controlled entities is contained in Note 14 to the financial statements. All controlled entities have a 30 June financial year end. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 53 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 1 Statement of significant accounting policies (continued) (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. Current and deferred income tax (expense)/benefit is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax 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 and equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. 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 the asset’s useful life to the Consolidated 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 Plant and equipment Depreciation rate 1% – 50% 54 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 1 Statement of significant accounting policies (continued) 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 (refer Note 1(g) below). 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 life of the area of interest according to the rate of depletion of the economically 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. 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. Impairment: At each reporting date, the Group assess whether there is objective evidence that a financial instrument has been impaired. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 55 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 1 Statement of significant accounting policies (continued) (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. Share-based payments: The Group has an Employee Share Acquisition Plan and a Performance Rights Plan where employees and senior executives may be provided with shares or rights to shares in the Parent Entity. The Company may also grant performance related options over shares to Key Management Personnel. 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 to the fair value of the shares granted. The fair value of options is ascertained using the Black-Scholes pricing model which incorporates all market vesting conditions. (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 as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement with those goods. 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. 56 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 1 Statement of significant accounting policies (continued) (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 2008 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 2008. (s) Earnings per share (i) Basic earning per share Basic earnings per share is calculated by dividing the profit attributed to equity holders of the entity, 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. (t) Critical accounting estimates and judgements The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key Estimates – Impairment The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 2 Revenue from ordinary activities Revenues: From operating activities Refined gold sales Gold nugget sales Total revenue Other income 14,825,205 31,392 14,254,602 216,526 14,825,205 31,392 13,844,562 216,526 14,856,597 14,471,128 14,856,597 14,061,088 Interest received from other parties Gain on gold hedge options Other revenue 665,460 – 109,018 272,329 129,658 10,415 648,264 – 35,120 267,046 129,658 9,144 Total other income 774,478 412,402 683,384 405,848 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 57 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 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 Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ – 461,539 – (35,264) – 1,554,578 – – – 461,539 – (34,225) – 1,594,960 – – 426,275 1,554,578 427,314 1,594,960 (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: – – – Deferred tax asset in respect of tax losses not previously brought to account Share based payments costs of capital raising other non-allowable items Less: Tax Effect of: – Recognition of timing differences not previously brought to account Under/(over) provision in respect of prior years 311,391 – 2,529,800 – – 311,391 – 2,571,269 149,554 – 594 – 11,479 13,643 149,554 – 594 – 11,479 12,556 – – – – 461,539 2,554,922 461,539 2,595,304 – (35,264) 1,000,344 – – (34,225) 1,000,344 – Income tax attributable to entity 426,275 1,554,578 427,314 1,594,960 The applicable weighted average effective tax rates are as follows: 41% 18% 41% 18% The significantly lower effective tax rate in 2007 is impacted by the first time recognition of timing differences. 58 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 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 and amortisation Finance costs Interest paid to external entities Rental expense on operating leases Minimum lease payments Write off of capitalised exploration and evaluation expenditure Diminution in value of gold hedge put options Impairment of exploration and evaluation assets Provision in employee entitlements Other 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 18,911 804,034 10,502 353,642 18,911 804,034 10,502 353,642 822,945 364,144 822,945 364,144 592 831 509 831 84,510 20,781 84,510 20,781 802,670 307,460 1,725 183,738 – – – 1,818 (4,522) (2,704) 481,450 81,000 2,702 55,484 802,670 307,460 1,725 158,902 478,307 81,000 2,702 55,484 2,557 (100) 2,457 215 – 215 – – – 1,818 (4,522) (2,704) 2,557 (100) 2,457 215 – 215 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 59 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 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 Positions Chairman – Non-Executive Director – Non-Executive Mr JF Houldsworth Managing Director – Executive Mr IJ Gordon1 Mr KJ Lines2 Director – Executive Director – Non-Executive Key Management Personnel Mr DA Francese Mr BT Kelty3 Mr MI Svensson4 Mr AP Webb5 Chief Financial Officer/Company Secretary Wattle Dam Mine Manager Exploration Manager Burbanks Mill Process Manager 1 Mr Gordon was appointed a Director on 18 October 2007. 2 Mr Lines was appointed a Director on 9 April 2008. 3 Mr Kelty commenced as an employee of the Parent Entity on 1 July 2007 (he was previously employed as a consultant) and retired as the Wattle Dam Mine Manager on 31 July 2008 following the appointment of a qualified underground Mine Manager. 4 Mr Svensson was promoted to the position of Exploration Manager on 22 February 2008. 5 Mr Webb commenced as an employee of a subsidiary of the Parent Entity on 1 July 2007 (he was previously employed as a consultant). 60 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 5 Directors and Key Management Personnel Remuneration (continued) Key Management Personnel remuneration has been included in the Remuneration Report section of the Directors’ Report. (b) Directors and Key Management Personnel equity holdings and transactions Shares Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines Held by Directors’ personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines Total held by Directors Key Management Personnel excluding Directors Mr DA Francese Mr BT Kelty Mr MI Svensson Mr AP Webb Balance 1/7/07 Received as Options Remuneration Exercised Net Change Other1 Balance 30/6/08 – 100,217 4,565,318 – – 4,665,535 7,685,484 3,411,808 30,000 – – 15,792,827 – – – – – – – – – – – – – – – – – – – 5,263 5,263 10,263 – – 105,480 4,570,581 10,263 – 20,789 4,686,324 – 1,800,000 – – – 15,789 5,263 5,263 – – 7,701,273 5,217,071 35,263 – – 1,800,000 47,104 17,639,931 795,217 600,000 500,000 – 13,530* 13,420* 8,400* 12,310* – – – – 5,263 (274,737) 5,263 – 814,010 338,683 513,663 12,310 Total 17,688,044 47,660 1,800,000 (217,107) 19,318,597 * These shares were issued under the Employee Share Plan on 15 April 2008 and vest at the earliest of three years from the date of issue or the time of ceasing to be an employee. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 61 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 5 Directors and Key Management Personnel Remuneration (continued) Performance Rights to Shares Balance 1/7/07 Received as Remuneration Options Net Change Exercised Other1 Balance 30/6/08 Total Vested 30/6/08 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines Held by Directors’ personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines Total held by Directors Key Management Personnel excluding Directors Mr DA Francese Mr BT Kelty Mr MI Svensson Mr AP Webb Total – – – – – – – – – – – – – – – – – – – 450,000* 300,000* – 750,000 – – – – – 750,000 150,000* – – – 900,000 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 450,000 300,000 – 750,000 – – – – – 750,000 150,000 – – – 900,000 – – – – – – – – – – – – – – – – – * These Rights to shares were granted under the Performance Rights Plan on 7 April 2008. The KPI conditions attached to the Performance Rights include a vesting period of three years from the grant date and a requirement for the Company’s share price to be within the top 40% comparator group of companies as set by the Board. The Companies in the comparator group are set out in the Remuneration Report section of the Directors’ Report. 62 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 5 Directors and Key Management Personnel Remuneration (continued) Options exercisable at $0.18687* by 31 December 2007 Balance Received as 1/7/07 Remuneration Options Exercised Net Change Balance 30/6/08 Other1 Total Vested 30/6/08 Total Exercisable 30/6/08 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – – – – – – Held by Directors’ personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – 1,800,000 – – – Total held by Directors 1,800,000 Key Management Personnel excluding Directors Mr DA Francese Mr BT Kelty Mr MI Svensson Mr AP Webb – – – – Total 1,800,000 – – – – – – – – – – – – – – – – – – – – – – – – (1,800,000) – – – (1,800,000) – – – – (1,800,000) – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – * The exercise price of these options was reduced during the reporting period from $0.18687 to $0.11187 in accordance with the terms of the options and ASX Listing Rules following the Record Date of 3 August 2007 for a Return of Capital of 7.5 cents per ordinary share paid to all eligible shareholders on 28 September 2007. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 63 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 5 Directors and Key Management Personnel Remuneration (continued) Options exercisable at $1.00 by 30 June 2009 Balance Received as 1/7/07 Remuneration Options Exercised Net Change Balance 30/6/08 Other2 Total Vested 30/6/08 Total Exercisable 30/6/08 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – – – – – – Held by Directors’ personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – – – – – Total held by Directors – Key Management Personnel excluding Directors Mr DA Francese Mr BT Kelty Mr MI Svensson Mr AP Webb – – – – Total – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 10,022 456,532 – – – 10,022 456,532 – – – 10,022 456,532 – – – 10,022 456,532 – – 466,554 466,554 466,554 466,554 768,549 421,182 3,000 – – 768,549 421,182 3,000 – – 768,549 421,182 3,000 – – 768,549 421,182 3,000 – – 1,659,285 1,659,285 1,659,285 1,659,285 79,522 54,000 50,000 – 79,522 54,000 50,000 – 79,522 54,000 50,000 – 79,522 54,000 50,000 – 1,842,807 1,842,807 1,842,807 1,842,807 64 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 5 Directors and Key Management Personnel Remuneration (continued) Options exercisable at $1.50 by 30 June 2010 Balance Received as 1/7/07 Remuneration Options Exercised Net Change Balance 30/6/08 Other3 Total Vested 30/6/08 Total Exercisable 30/6/08 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – – – – – – Held by Directors’ personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – – – – – Total held by Directors – Key Management Personnel excluding Directors Mr DA Francese Mr BT Kelty Mr MI Svensson Mr AP Webb – – – – Total – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 10,548 457,059 1,027 – – 10,548 457,059 1,027 – – 10,548 457,059 1,027 – – 10,548 457,059 1,027 – 468,634 468,634 468,634 468,634 770,128 521,708 3,527 – – 770,128 521,708 3,527 – – 770,128 521,708 3,527 – – 770,128 521,708 3,527 – – 1,763,997 1,763,997 1,763,997 1,763,997 81,402 33,869 51,367 2,071 81,402 33,869 51,367 2,071 81,402 33,869 51,367 2,071 81,402 33,869 51,367 2,071 1,932,706 1,932,706 1,932,706 1,932,706 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 65 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 5 Directors and Key Management Personnel Remuneration (continued) Options exercisable at $1.90 by 30 June 2009 Balance Received as 1/7/07 Remuneration Options Exercised Net Change Balance 30/6/08 Other3 Total Vested 30/6/08 Total Exercisable 30/6/08 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – – – – – – – – – – – – Held by Directors’ personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines – – – 400,000 – – – – – – Total held by Directors – 400,000 Key Management Personnel excluding Directors Mr DA Francese Mr BT Kelty Mr MI Svensson Mr AP Webb – – – 400,000 – – – – Total – 800,000 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 400,000 – – – – 400,000 – – – – 400,000 – 400,000 400,000 400,000 – – – 400,000 – – – 400,000 – – – 400,000 800,000 800,000 800,000 1 Net change other in respect of shares and $0.18687 options refers to shares and/or options purchased and/or sold during the financial year. 2 Net change other in respect of $1.00 options refers to options over unissued shares which were issued in August 2007 to all shareholders on the basis of one free Bonus Option for every ten Shares held at 3 August 2007. The options are exercisable at $1.00 each and have an expiry date of 30 June 2009. 3 Net change other in respect of $1.50 options refers to options over unissued shares which were issued in May 2008 to all shareholders on the basis of one free Bonus Option for every ten Shares held at 5 May 2008. The options are exercisable at $1.50 each and have an expiry date of 30 June 2010. 66 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 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 was paid on 3 August 2007 45,000 – 45,000 20,000 – 20,000 45,000 – 20,000 – 45,000 20,000 – 780,739 – 780,739 8 Earnings per share (a) Classification of securities All ordinary shares have been included in basic earnings per share. (b) Classification of securities as potential ordinary shares All of the following options on issue at the end of the financial year are included as potential ordinary shares. Number of Options 13,716,263 18,454,473 800,000 Exercise Price $1.00 $1.50 $1.90 Exercise Date 30/6/2009 30/6/2010 30/6/2009 Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ (c) Earnings used in the calculation of earnings per share Profit/(loss) from ordinary activities after related income tax expense 633,527 6,878,090 632,488 6,975,937 (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 168,246,390 95,387,724 168,246,390 95,387,724 168,246,390 18,202,618 95,387,724 69,664,091 168,246,390 18,202,618 95,387,724 69,664,091 186,449,008 165,051,815 186,449,008 165,051,815 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 67 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 9 Cash and cash equivalents Cash Deposits at call* 870,178 15,300,669 6,557,458 6,427,248 863,540 15,074,670 6,504,099 6,117,247 16,170,847 12,984,706 15,938,210 12,621,346 * Includes deposits of $428,900 for the Consolidated Group ($252,900 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. 10 Trade and other receivables Current Trade debtors Other debtors Amounts receivable from Director related entities Non-current Amounts receivable from subsidiary 11 Inventory Current Gold Nuggets at cost Raw Materials – unprocessed gold ore at cost Finished goods – gold bullion at cost Other 12 Other financial assets Current Gold Hedge Investments in subsidiary 13 Other current assets Current Prepayments 72,825 594,849 653,732 192,548 30,068 559,956 653,732 142,770 26 – 85,268 – 85,268 667,674 931,548 590,024 881,770 – – 4,522,218 4,658,042 1,862 – 28,414 121,367 1,757 3,461,979 – – 1,862 – 28,414 34,767 1,757 3,461,979 – – 151,643 3,463,736 65,043 3,463,736 353,823 – 120,733 – 353,823 1 120,733 1 353,823 120,733 353,824 120,734 162,940 71,860 109,110 44,526 68 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 14 Controlled Entities Country of Incorporation Percentage owned %* 2008 2007 Australia Australia 100 100 (a) Controlled entities consolidated Parent Entity: Ramelius Resources Ltd Subsidiaries of Ramelius Resources Ltd: Ramelius Milling Services Pty Ltd * Percentage of voting power is in proportion to ownership. (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. Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 15 Property, plant, equipment and development assets Plant and equipment At cost Accumulated depreciation/amortisation Net book value Development expenditure Production phase at cost Accumulated amortisation Net book value (i) (ii) 5,304,276 (465,714) 4,623,399 (65,598) 655,124 (100,009) 356,151 (36,851) 4,838,562 4,557,801 555,115 319,300 9,810,255 (1,183,733) 8,626,522 1,183,733 (400,784) 782,949 9,810,255 (1,183,733) 8,626,522 1,183,733 (400,784) 782,949 Total property, plant and equipment 13,465,084 5,340,750 9,181,637 1,102,249 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 69 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 15 Property, plant, equipment and development assets (continued) 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/amortisation 4,557,801 701,768 (20,412) (400,595) 84,978 4,525,108 (215) (52,070) 319,300 303,972 (4,522) (63,635) 84,978 257,861 (215) (23,324) Carrying amount at end of year 4,838,562 4,557,801 555,115 319,300 (ii) Reconciliation Development expenditure* Carrying amount at beginning of year Transfer from Exploration and Evaluation Expenditure Phase 2 Development Amortisation 782,949 7,039,673 1,586,848 (782,948) 1,125,419 – – (342,470) 782,949 7,039,673 1,586,848 (782,948) 1,125,419 – – (342,470) Carrying amount at end of year 8,626,522 782,949 8,626,522 782,949 * Development assets relate to Phase 2 of the Wattle Dam Mine with production from the pit cut-back and underground development expected to commence in September/October 2008. Amortisation of capitalised development costs will commence at that date and continue over the estimated life of the mine. 16 Exploration and evaluation expenditure Costs carried forward in respect of areas of interest in: Exploration and/or evaluation (i) 8,041,534 6,680,152 8,041,535 6,680,152 Total Exploration and evaluation expenditure 8,041,534 6,680,152 8,041,535 6,680,152 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 6,680,152 9,203,725 (802,670) (7,039,673) 4,117,469 3,043,692 (481,009) – 6,680,152 9,203,726 (802,670) (7,039,673) 4,117,469 3,043,692 (481,009) – Carrying amount at end of year 8,041,534 6,680,152 8,041,535 6,680,152 70 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 17 Tax Consolidated Entity Liabilities Current Income tax Parent Entity Liabilities Current Income tax Assets and liabilities Non-current Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ – – – – – – – – Opening Balance Adjustment Charged to Income $ $ $ Charged Directly to Equity $ Closing Balance $ Consolidated Group Deferred tax liability Exploration and evaluation Development 1,992,046 – 12,000 – 2,520,316 31,737 Balance at 30 June 2008 1,992,046 12,000 2,552,053 – – – 4,524,362 31,737 4,556,099 Deferred tax asset Issued Equity Transaction Costs Provisions Future income tax benefits attributable to tax losses Other 53,215 107,801 265,619 22,312 (6,870) – (740) 55,121 209,778 – 255,383 162,922 55,028 (895) 2,110,276 9,335 – – 2,430,923 30,752 Balance at 30 June 2008 448,947 47,263 2,173,992 209,778 2,879,980 Parent Entity Deferred tax liability Exploration and evaluation Development 1,992,046 – 12,000 – 2,520,316 31,737 Balance at 30 June 2008 1,992,046 12,000 2,552,053 – – – 4,524,362 31,737 4,556,099 Deferred tax asset Issued Equity Transaction Costs Provisions Future income tax benefits attributable to tax losses Other 53,215 103,858 234,265 17,227 (6,870) – (740) 47,670 209,778 – 255,383 151,528 53,094 – 2,120,889 6,173 – – 2,408,248 23,400 Balance at 30 June 2008 408,565 46,224 2,173,992 209,778 2,838,559 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 71 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 2,874,480 287,794 903,956 410,340 2,685,277 164,802 846,708 321,571 3,162,274 1,314,296 2,850,079 1,168,279 257,858 – 133,299 780,739 221,898 – 120,157 780,739 257,858 914,038 221,898 900,896 1(f) 102,314 182,900 43,135 182,900 100,296 182,900 43,135 182,900 285,214 226,035 283,196 226,035 20(a) 28,661,250 21,735,396 28,661,250 21,735,396 18 Trade and other payables Trade creditors Other creditors and accruals 19 Provisions Current Employee entitlements Dividend declared Non current Employee entitlements Restoration costs 20 Issued capital Issued and paid-up share capital 156,147,567 (2007: 90,529,422) ordinary shares, fully paid (a) Ordinary shares Balance at the beginning of year Shares issued during the year 11,578,948 shares placed at $0.95 5,260,727 shares issued through share purchase plan at $0.95 Less transaction costs arising from share issues for cash net of tax 3,529,960 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 6,415,122 shares issued to Option-holders on exercise of options at $0.11187 cash 2,208,756 shares issued to Option-holders on exercise of options at $1.00 cash 1,456 shares issued to Option-holders on exercise of options at $1.50 cash Return of capital of $0.075 cash per share on 159,677,527 shares 21,735,396 10,005,636 21,735,396 10,005,636 11,000,000 4,997,691 – – 11,000,000 4,997,691 – – (684,262) (26,783) (684,262) (26,783) 659,642 3,948,519 659,642 3,948,519 – – 40,000 7,768,024 – – 40,000 7,768,024 717,659 2,208,756 2,184 (11,975,816) – – – – 717,659 2,208,756 2,184 (11,975,816) – – – – Balance at end of year 28,661,250 21,735,396 28,661,250 21,735,396 72 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 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), (ii) At 30 June 2008, there were 32,970,736 (30 June 2007: 10,061,082) unissued shares for which options were outstanding. 13,716,263 options are exercisable at $1.00 by 30 June 2009; 18,454,473 options are exercisable at $1.50 by 30 June 2010 and 800,000 options are exercisable at $1.90 by 30 June 2009 (30 June 2007: all options were exercisable at $0.18687 by 31 December 2007). (i) For information relating to the Ramelius Resources Limited Incentive Options issued to Key Management Personnel 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 Key Management Personnel during the financial year refer to Note 5. 21 Share based payments The following share-based payments arrangements existed: • On 15 April 2008, 152,140 shares were issued to employees at no consideration pursuant to the Employee Share Acquisition Plan which was approved by shareholders in November 2007. The fair value of these shares at the date of issue was $174,961. Vesting of these shares occurs three years after the issue date or the time the holder ceases to be an employee, whichever is the earlier. Given that vesting is certain to occur, the market value of the shares at the issue date was used to determine their fair value. • On 7 April 2008, a total of 900,000 Performance Rights were granted to three senior executives and Key Management Personnel pursuant to a Performance Rights Plan which was approved by shareholders in November 2007. The Performance Rights, being an entitlement to shares in the Company, will vest in three years after the grant date subject to satisfaction of certain performance conditions at which time shares will be issued to the executives. The fair value of these Performance Rights at grant date was $576,000 of which $51,551 was recognised at 30 June 2008 in Share Based Reserves. At balance date, none of the 900,000 Performance Rights had vested. The fair value was determined using the market price of the underlying shares at the date the Performance Rights were granted and assuming that all holders continue to be employees of the Group until the end of the vesting period and that the performance condition, which requires the Company’s share price to be within the top 40% of the comparator group as detailed in the Remuneration Report section of the Directors’ Report, is met and the Rights vest. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 73 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 21 Share based payments (continued) Performance Rights granted by the Parent Entity during the 2007/08 financial year Name Number of Rights1 Grant Date Fair Value per Right Exercise price Rights expiry date at grant date2 per Right Rights first exercise date Rights last Performance exercise measurement date period JF Houldsworth IJ Gordon DA Francese Total 450,000 300,000 150,000 900,000 7 April 2008 7 April 2008 7 April 2008 $ 288,000 192,000 96,000 576,000 $ – – – 7 April 2011 7 April 2011 7 April 2011 7 April 2011 7 April 2011 7 April 2011 7 April 2011 7 April 2011 7 April 2011 3 years 3 years 3 years 1 Each Right is issued for no consideration. Once exercisable, a Right entitles the holder to one fully paid ordinary share in the Parent Entity on payment of the exercise price. 2 The aggregate value of Rights at the grant date is $576,000 of which $51,551 has been expensed in the 2007/08 year and $524,449 to be expensed in subsequent years. In accordance with the requirements of the Australian Accounting Standards, remuneration includes a proportion of the notional value of equity compensation granted or outstanding during the year. The notional value of equity instruments which do not vest during the reporting period is determined as at the grant date and is progressively allocated over the vesting period. The amount included as remuneration is not related to or indicative of the benefit (if any) that individuals may ultimately realise should the Rights vest. The notional value of Rights as at grant date has been determined in accordance with AASB2. The calculations are performed using an appropriate valuation methodology. The total minimum value of Rights, if the performance conditions are not met, is nil. • On 25 January 2008, a total of 800,000 incentive share options were granted to two Key Management Personnel to take up ordinary shares at an exercise price of $1.90 each by 30 June 2009. The options were non-transferable and not quoted securities. The fair value of the 800,000 options was $272,000. At balance date, none of the 800,000 share options had been exercised. The fair value of these options was determined using the Black- Scholes Pricing model as detailed below. Options and Performance Rights 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. Outstanding at the beginning of the year Granted Forfeited Exercised Expired Outstanding at year-end Exercisable at year-end 2008 2007 Number of Weighted Average Number of Weighted Average Options – 800,000 – – – 800,000 800,000 Exercise Price $ Options Exercise Price $ – 1.90 – – – 1.90 1.90 2,000,000 750,000 – (2,750,000) – – – 0.18687 0.18687 – 0.18687 – – – 74 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 21 Share based payments (continued) The weighted average fair value of the options granted during the year was $0.34. 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 (days) Underlying share price Expected share price volatility Risk free interest rate $1.90 522 $0.99 107% 7.75% The life of the options is based on the days remaining until expiry. Included under employee benefits expense in the income statement is $524,287 (2007: $54,750), and relates, in full, to equity-settled share-based payment transactions. 22 Financial risk management policies The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payables. The main risks the group is exposed to through its financial instruments are interest rate risk, credit risk, liquidity risk and treasury risk. (a) Treasury risk management The Board meets on a regular basis to analyse financial risk exposure and evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The Board’s overall risk management strategy seeks to assist the Consolidated Group in meeting its financial targets, whilst maintaining the effects on financial performance. (b) Interest rate risk The Group 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 deposits where the interest rate can vary from day to day. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 75 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 22 Financial risk management policies (continued) (i) Risk management Interest rate risk is managed with a mixture of fixed and floating rate cash deposits. At 30 June 2008 approximately 94.6% of group deposits are fixed. Weighted average effective interest rate Effective interest rate Interest bearing Non-Interest bearing Total Consolidated 2008 2007 Group % % 2008 $ 2007 $ 2008 $ 2007 $ 2008 $ 2007 $ 2008 $ 2007 $ Financial assets Cash at bank Deposits Receivables Total financial assets 5.43 3.57 869,678 6.03 6.17 15,300,669 – – – 6,556,958 869,678 6,427,248 15,300,669 – – 6,556,958 6,427,248 – 500 – 667,674 500 870,178 – 15,300,669 – 931,548 6,557,458 6,427,248 – 16,170,347 12,984,206 16,170,347 12,984,206 668,174 932,048 16,170,847 12,984,706 Financial liabilities Payables – – Total financial liabilities Total net financial assets – – – – – – – (3,162,274) (1,314,296) (3,162,274) (1,314,296) – (3,162,274) (1,314,296) (3,162,274) (1,314,296) 16,170,347 12,984,206 16,170,347 12,984,206 (2,494,100) (382,248) 13,008,573 11,670,410 (ii) Sensitivity analysis Interest rate and price risk The Group has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result in a change in these risks. It should be noted that the group does not have borrowings and any impacts would be in relation to deposit yields on cash assets. Interest rate sensitivity analysis At 30 June 2008, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows: Change in profit Increase in interest rate by 2% Decrease in interest rate by 2% Change in equity Increase in interest rate by 2% Decrease in interest rate by 2% Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 323,417 (323,417) 259,694 (259,694) 318,764 (318,764) 252,427 (252,427) 323,417 (323,417) 259,694 (259,694) 318,764 (318,764) 252,427 (252,427) 76 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 22 Financial risk management policies (continued) (c) 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 of the entity which have been recognised in the Balance Sheet, is the carrying amount, net of any provision of doubtful debts. In respect to the Parent Entity, credit risk also incorporates the exposure of Ramelius to the liabilities of all members of the Group. (d) Liquidity risk The Group manages liquidity risk by monitoring forecast cash flows. (e) 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. Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 23 Commitments and 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 643,580 2,295,160 7,836,000 503,284 1,149,061 2,285,153 613,580 2,175,160 7,586,000 457,865 967,861 1,795,955 10,774,740 3,937,498 10,374,740 3,221,681 The Company sub-leases a serviced office in Adelaide under a non-cancellable annual operating lease expiring in October 2008 and leases two properties in Kambalda WA expiring in July and September 2008. The Company also leases office accommodation in Perth under a non-cancellable operating lease expiring in March 2009. 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. Tenement acquisitions At 30 June 2008 the Company had contracted to acquire certain tenements at West Wattle Dam for a consideration of 100,000 shares in the Parent Entity. The fair value of the consideration shares was $80,000. RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 77 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 23 Commitments and contingent liabilities (continued) 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 Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 36,131 – – 36,131 30,040 16,445 – 46,485 36,131 – – 30,040 16,445 – 36,131 46,485 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 expenditure 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 Exploration expenditure to earn mineral rights on tenements in addition to minimum exploration expenditure commitment disclosed above 22(a) 22(b) 218,727 250,000 166,815 250,000 251,824 – 251,824 – 470,551 250,000 418,639 250,000 Gold royalties and gold production payments Within one year One year or later and no later than five years 1,145,989 562,819 688,188 – 1,145,989 562,819 688,188 – 22(c) 1,708,808 688,188 1,708,808 688,188 (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 2008 under the service agreements is the amount disclosed above. (b) Exploration expenditure Exploration expenditure relates to periods up to 4 years in accordance with terms set out in relevant agreements. During the earning period the Parent Entity is associated with another entity in a joint venture whereby the Parent Entity sole funds certain exploration expenditure of not less than $1 million which at 30 June 2008 had substantially been spent with only the sum disclosed above yet to be incurred. (c) Gold royalties and gold production payments Gold royalties and gold production payments relate to royalties payable to the Western Australian Government and production payments to Native Title Parties in accordance with gold production agreements. 78 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 23 Commitments and contingent liabilities (continued) Performance guarantees Unconditional bank guarantees have been provided by the Consolidated Entity’s bankers 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, to secure supply of gas and electricity. Deposits of $428,900 for the Consolidated Group ($252,900 for the Parent Entity) have been provided as security against these unconditional bank guarantees (refer Note 9). Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ 24 Notes to the statement of cash flow 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 6,878,090 611,697 610,658 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 in deferred tax assets (Decrease)/increase in accounts payable (Decrease)/increase in provisions (Decrease)/increase in deferred tax liability (Decrease)/increase in reserves (Decrease)/increase in issued capital transaction costs – tax effect 377,843 782,948 (88,585) 470,560 3,312,093 647,014 357,710 – (2,431,033) (306,622) 183,738 2,564,053 498,512 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 39,518 782,948 (62,089) 5,223,994 3,398,693 689,318 357,710 – (2,429,994) (682,685) 158,901 2,564,053 498,512 6,975,937 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 66,229 293,255 – 293,255 – Net cash provided by/(used in) operating activities 7,273,183 7,086,305 11,442,792 7,352,712 25 Employee entitlements Aggregate liability for employee entitlements, including on-costs Current Non-current 19 19 Number of employees Number of employees at year end 257,858 102,315 133,299 43,135 221,898 100,296 120,157 43,135 360,173 176,434 322,194 163,292 28 25 17 14 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 79 Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 26 Related parties 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: Director Transaction RM Kennedy and RG Nelson related entity for Company Secretarial Amount received from a Director RM Kennedy services and associated costs. Amount received from a Director related entity for the sale of a gold gravity bar (2007 gold nuggets) at market value. JF Houldsworth Amount paid to spouse of the Director in respect of wages inclusive of superannuation during a period of six weeks due to illness of existing administrative assistant. Amount paid to a relative of the Director in respect of wages inclusive of superannuation in respect of mine security and living away from home expenses. Amount paid to an entity of which the Director is a Director in respect of labour hire. Amount received from a relative of the Director in respect of the sale of a second hand vehicle. Amount received from a relative of the Director in respect of the sale of gold nuggets. Amount paid to a relative of the Director in respect of the purchase of a second hand vehicle. Consolidated Group Parent Entity Note 2008 $ 2007 $ 2008 $ 2007 $ (i) 86,839 173,120 86,839 173,120 37,535 2,375 37,535 2,375 6,863 – 6,863 – 91,020 42,810 91,020 42,810 – 79,000 – 79,000 2,000 – 2,000 – – 750 5,000 – – – 750 5,000 (i) This amount relates to the services of Mr Francese who was a Company Secretary and Financial Officer of listed entity, Monax Mining Limited between December 2005 and August 2007 (a Company associated with RM Kennedy and RG Nelson). Monax Mining Limited reimbursed the Company 50% of his remuneration, on-costs and other associated expenses relating to secretarial and financial services provided to it. 80 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2008 Key Management Personnel BT Kelty Transaction Note Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ Amount paid to a related entity for mine security and field staff costs Amount received from spouse and relatives for sale of gold nuggets 26,412 680 – – 26,412 680 – – Amounts receivable from and payable to Directors and their Director related entities at balance date arising from these transactions were as follows: Current receivables Trade debtors Loan to subsidiary 27 Segment reporting – – 85,268 – – 5,828,600 85,268 4,658,042 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) 4,484,503 3,135,737 4,484,503 3,135,737 Total assets employed in joint ventures 4,484,503 3,135,737 4,484,503 3,135,737 29 Events subsequent to balance date Since 30 June 2008, the Company; • • • • announced that RC drilling had intersected Wattle Dam style mineralisation at Golden Orb with intercepts of 7 metres at 10.8 g/t gold from 117 metres (including 2 metres at 27 g/t gold) and 4 metres at 6.9 g/t gold from 103 metres (including 2 metres at 12.2 g/t gold) which with previous drilling, had defined a new gold zone on the same contact as Wattle Dam that was open to the north, south and down dip and which had the potential to add to the existing Wattle Dam resources as a low cost, high grade gold operation. acquired West Wattle Dam tenements PL15/4381 and MLA15/1474 through the issue of 100,000 shares in the Company as consideration at a fair value of $80,000. sold Parker Range tenements EL77/1403, PL’s 77/3481, 77/3740, 77/3764, 77/3765 and MLA77/1085 for a cash consideration of $100,000 and a 1% royalty on the sale of any precious metals from the tenements capped at $500,000. surrendered a small insignificant tenement holding, EL15/718 which the Controlling Entity elected not to convert to a mining lease. Apart from the above, there has not arisen in the interval between 30 June 2008 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. 30 Company details The registered office and principal place of business of the Company is: 140 Greenhill Road UNLEY SA 5061 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 81 Directors’ Declaration FOR THE YEAR ENDED 30 JUNE 2008 1 In the opinion of the Directors of Ramelius Resources Limited: (a) the financial statements and notes, as set out on pages 47 to 80, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the financial position as at 30 June 2008 and of the performance for the year ended on that date of the Company and Consolidated Entity; 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. 2 The Chief Executive Officer and Chief Financial Officer have given the Directors the declarations required by section 295A of the Corporations Act 2001. 82 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Independent Audit Report FOR THE YEAR ENDED 30 JUNE 2008 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 83 Independent Audit Report FOR THE YEAR ENDED 30 JUNE 2008 84 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Independent Audit Report FOR THE YEAR ENDED 30 JUNE 2008 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 85 Shareholder Information FOR THE YEAR ENDED 30 JUNE 2008 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 12 September 2008 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 34,267,648 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 12 September 2008 are as follows: Expiry date 30/06/2009 30/06/2009 30/06/2010 Exercise price Number of options $1.00 $1.90 $1.50 13,716,263 800,000 18,453,282 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 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total Number of security holders Holders of ordinary shares Holders of 30 June 2009 $1.00 options Holders of 30 June 2009 $1.90 options Holders of 30 June 2010 $1.50 options 477 1,073 690 1,319 194 3,753 1,223 632 158 165 20 2,198 0 0 0 0 2 2 2,111 1,043 212 178 17 3,561 The number of shareholders holding less than a marketable parcel of ordinary shares is 326. 86 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Shareholder Information FOR THE YEAR ENDED 30 JUNE 2008 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 12 September 2008 are as follows: 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 Aurelius Resources Pty Ltd Joseph Fred Houldsworth Goldfields Hotels Pty Ltd Mr Stig Hakan Hellsing Mr Stig Hakan Hellsing Mrs Patricia Anne Hellsing Rosalind Mary Smart Mrs Marie Helen Harrex Sassey Pty Ltd 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 RBC Dexia Investor Services Australia Nominees Pty Limited MLCI A/C 20,100,003 19,824,316 17,642,440 10,878,725 6,420,380 5,322,551 4,570,581 2,530,263 2,000,000 1,875,000 1,500,000 1,274,190 1,203,338 1,135,413 1,020,526 1,000,000 1,000,000 937,563 921,739 704,239 101,861,267 10.84 10.69 9.52 5.87 3.46 2.87 2.47 1.36 1.08 1.01 0.81 0.69 0.65 0.61 0.55 0.54 0.54 0.51 0.50 0.38 54.95 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 87 Shareholder Information FOR THE YEAR ENDED 30 JUNE 2008 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 12 September 2008 are as follows: Name Number of options held Percentage held Beach Petroleum Limited ANZ Nominees Limited Mandurang Pty Ltd Joseph Fred Houldsworth Aurelius Resources Pty Ltd Mr Stig Hakan Hellsing Goldfields Hotels Pty Ltd Mr Stig Hakan Hellsing Mrs Patricia Anne Hellsing Colin John Hough Rosalind Mary Smart Mr Brian Burg Mr Richard Anthony Yelash Mrs Marie Helen Harrex Mr Shane Francis Kennedy Citicorp Nominees Pty Ltd RMK Super Pty Ltd RBC Dexia Investor Services Australia Nominees Pty Limited Mr David Ian Kerr Mrs Cheryl Dorothea Kerr B & J O’Shannassy Management Pty Ltd Hawgood Pty Ltd 2,010,001 693,606 641,512 456,532 431,204 292,290 280,250 200,000 185,000 150,000 147,500 139,121 125,893 124,141 119,396 113,015 110,027 104,000 100,093 100,000 6,523,581 14.65 5.06 4.68 3.33 3.14 2.13 2.04 1.46 1.35 1.09 1.08 1.01 0.92 0.91 0.87 0.82 0.80 0.76 0.73 0.73 47.56 88 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT Shareholder Information FOR THE YEAR ENDED 30 JUNE 2008 Twenty largest RMSOC option holders The names of the 20 largest holders of options exercisable at $1.50 by 30 June 2010 constituting a class of quoted equity securities on the Australian Securities Exchange Limited including the number and percentage held by those holders as at 12 September 2008 are as follows: Name Number of options held Percentage held Beach Petroleum Limited HSBC Custody Nominees (Australia) Limited Citicorp Nominees Pty Ltd Mandurang Pty Ltd ANZ Nominees Limited Aurelius Resources Pty Ltd Joseph Fred Houldsworth PAN Australian Nominees Pty Limited Mr Peter Cecil Langsford Goldfields Hotels Pty Ltd Mr Stig Hakan Hellsing Mr Stig Hakan Hellsing Mrs Patricia Anne Hellsing Colin John Hough Rosalind Mary Smart Mrs Marie Helen Harrex RMK Super Pty Ltd Mr David Ian Kerr Mrs Cheryl Dorothea Kerr B & J O’Shannassy Management Pty Ltd Warman Investments Pty Ltd TTF Maintenance Co Pty Ltd 2,010,001 1,970,285 1,770,029 642,038 554,653 532,256 457,059 429,118 376,565 260,527 222,027 193,027 170,000 150,000 127,619 113,542 100,000 93,757 92,174 71,040 10,335,717 10.89 10.68 9.59 3.48 3.01 2.88 2.48 2.33 2.04 1.41 1.20 1.05 0.92 0.81 0.69 0.62 0.54 0.51 0.50 0.38 56.01 RAMELIUS RESOURCES LIMITED AND CONTROLLED ENTITIES 2008 FINANCIAL REPORT 89 Shareholder Information FOR THE YEAR ENDED 30 JUNE 2008 Unquoted and Restricted Equity Securities Fully paid ordinary Shares Details of fully paid ordinary shares on issue as at 12 September 2008 which are unquoted restricted securities are as follows. Date until securities are restricted Number of unquoted fully paid ordinary shares on issue Number of holders 15 April 2011* 152,140 27 * These securities are issued to employees and do not vest until 3 years from the date of issue of 15 April 2008 or the holder ceases as an employee, whichever occurs first. Options Details of options exercisable at $1.90 by 30 June 2009 on issue as at 12 September 2008 which are unquoted restricted securities are as follows. Date until securities are restricted Number of unquoted options on issue Number of holders N/A* 800,000 2 * These securities are restricted in that they are non-transferable securities and may only be exercised by the holders. The names of holders with more than 20% of this a class of unquoted equity securities as at 12 September 2008 are as follows. Name Ian James Gordon Antony Philip Webb Number of options held Percentage held 400,000 400,000 800,000 50 50 100 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 Australian Securities Exchange Code RMS: Shares RMSOB: Options RMSOC: Options Listed on Australian Securities Exchange Limited Home Exchange: Adelaide Level 25, 91 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 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 Chief Operating Officer KEVIN JAMES LINES BSc (Geology), MAusIMM. Non-Executive Director DOMENICO ANTONIO FRANCESE BEc, FCA, FFin, ACIS Company Secretary and Chief Financial Officer DANNY DOHERTY BSc, Applied (Mining Engineering) MAusIMM, Registered Mine Manager, WA Operations Manager ANTONY WEBB BSc. (Metallurgy) Process Manager Annual Report.2008.Ramelius Resources Limited. 

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