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Annual Report 2010

Plain-text annual report

Ramelius Resources Limited Annual Report 2010 Contents Chairman’s Report Chief Executive Officer’s Report Review of Operations Native Title Statement Corporate Governance Statement Glossary of Terms Photographs & Diagrams Directors’ Report Auditor’s Independence Declaration Income Statement Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Shareholder Information Corporate Directory 01 02 03 15 16 34 37 42 54 55 56 57 58 59 60 99 100 103 Back Cover 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 Friday, 26 November 2010 at 11.00 am Adelaide time. Stock Exchange The Company is listed on the Australian Securities Exchange Limited. The Home Exchange is Adelaide. ASX Codes Shares: RMS Front Cover: Wattle Dam gold dore` bars. Photographs on pages 1 to 32 are a step by step depiction of a gold pour. Chairman’s Report Dear
Shareholder,
It
is
with
pleasure
that
I
present
to
you
the
2010
Annual
Report
of
Ramelius
Resources
Limited. During
2009/10
Ramelius
became
a
successful
underground
mining
company
with
the
extraction
of 96,091
tonnes
of
gold
ore
at
Wattle
Dam. The
Company
milled
more
than
78,000
tonnes
of
gold ore
at
its
100%
owned
Burbanks
Processing
Plant
producing
60,780
ounces
of
gold
and
it
is
most
pleasing
to
record
a
significant
increase
in
gold
sales
revenue
from
$19.8
million
in
2009,
to
$58.2
million
for the
2010
year
on
the
back
of
this
production. The
Wattle
Dam
mine
has
certainly
been
good
to Ramelius
since
mining
began
in
2006.
It
is
the
highest grade
gold
mine
in
Australia
and
it
continues
to
deliver wealth
for
shareholders.
Earlier
this
year,
Ramelius
announced
a
66%
increase
to
the
gold
resource
at
Wattle
Dam
and
in
recent
months,
underground
exploration
drilling
has
resulted
in
further
significant
gold mineralisation
below
the
current
mine
plan
which
augers well
for
a
potential
third
phase
of
mining
at
Wattle
Dam. The
Company
recorded
its
fourth
consecutive
profit.
Net profit
after
tax
for
the
year
ended
30
June
2010
was $20.2
million,
a
pleasing
306%
increase
from
last
year’s result
which
I
believe
vindicates
the
directors’
strategy of
focusing
the
Company’s
efforts
in
recent
years
on
the low
cost
operation
at
Wattle
Dam. Ramelius
is
financially
strong
with
cash
on
hand
at
30
June
2010
of
$80.2
million
and
importantly,
has
no debt. Limited.
As
a
result,
the
Company
now
has
exciting
gold exploration
projects
in
Nevada
USA,
where
it
can
earn
a 60%
interest
in
the
Big
Blue
project
and
a
70%
interest in
the
Angel
Wing
project,
as
well
as
in
Eastern
Australia, where
it
has
the
opportunity
to
earn
a
51%
interest
in
an epithermal
gold
deposit
at
the
Glen
Isla
project
near Dubbo
NSW
and
a
60%
interest
in
the
Mt
Windsor
gold project
in
Queensland. It
is
also
worth
mentioning
that
the
Company’s
excellent endeavours
in
making
an
offer
for
Dioro
Exploration
NL during
the
year,
achieved
a
pleasing
68%
take
up
of
the offer
by
Dioro
shareholders
(excluding
its
other
suitor). The
ultimate
sale
of
the
acquired
37.51%
of
the
target entity
resulted
in
gross
cash
proceeds
of
$42.4
million and
a
profit
of
$7.1million.
Significantly,
the
cash
proceeds
made
it
possible
for
Ramelius
to
subsequently acquire
the
Mt
Magnet
Gold
project
in
July
2010
and
to pay
a
return
of
capital
to
shareholders
of
5
cents
per share
in
August
2010. In
this
regard,
I
take
this
opportunity
to
thank
our
Directors,
particularly
Ian
Gordon
who
last
year
assumed
the
role
of
CEO
following
Joe
Houldsworth’s retirement
as
Managing
Director,
and
all
employees
and consultants
for
their
tremendous
efforts
during
the
year. I
thank
shareholders
for
their
continued
support
during
the
year
and
together
with
my
fellow
directors, look
forward
to
another
high
grade
production
result
in the
year
ahead. This
year
Ramelius
commenced
its
exploration
footprint
beyond
the
Spargoville
Belt
in
the Eastern
Goldfields
of
Western
Australia
with
key
joint venture
agreements
entered
into
with
Miranda
Gold
Inc, Carpentaria
Exploration
Limited
and
Liontown
Resources


to
expand
Bob Kennedy Chairman 01 Chief Executive Officer’s Report Dear
Shareholders,
The
2010
financial
year
has
been
transforming
for
our Company. Through
the
implementation
of
our
strategy
to
focus
on maximising
cash
flow
from
operations
and
company growth,
Ramelius
has
moved
successfully
from
a
small producer
to
a
more
diversified
company
with
significant cash
and
multiple
opportunities
for
growth. The
Company’s
assets
now
include
two
Western
Australian
development
assets
at
Wattle
Dam
and
Mt
Magnet
and
world
class
exploration
assets
in Queensland
and
Nevada
(US). Ramelius’
wholly‐owned
Wattle
Dam
underground
gold mine
has
begun
to
reach
its
potential
in
terms
of
high grade
production
and
cash
flows.
This
has
placed Ramelius
Resources
in
an
enviable
financial
position compared
to
other
small
Australian
gold
producers.
The Company
continues
to
maintain
robust
cash
flows,
has a
balance
sheet
with
no
debt,
is
delivering
a
high
return on
our
assets
and
is
increasingly
being
recognised
for strong
performance
on
near
term
earnings. During
the
year
under
review,
Wattle
Dam
transformed from
a
high
grade
gold
opportunity
with
a
limited
mine life
to
an
exceptionally
productive
underground
gold mine,
which
at
the
time
of
this
report,
has
already
produced
more
gold
than
the
original
mine
plan
of 68,000
ounces.
Net
profit
after
tax
of
A$20.2
million
for the
year
was
also
very
pleasing,
reflecting
the
strong
operating
performance. The
underground
mine
at
Wattle
Dam
commenced
gold production
late
in
November
2009,
and
by
June
2010,
had produced
more
than
60,000
ounces
of
gold
at
an
average grade
of
24
g/t,
making
it
the
highest
grade
gold mine
in
Australia.
During
this
period,
the
mine
had
total cash
costs
of
A$482
per
ounce
in
a
market
environment where
the
average gold
sale
price
for
2009/10
was A$1261
per
ounce
‐ an
effective
cash
margin
of
A$780 per
ounce. 75,500
tonnes
of
Wattle
Dam
ore
and
76,000
tonnes
of third
party
ore.
Overall
recovery
for
the
year
was
97%,
an excellent
achievement,
given
the
high
grade
of
the
ore treated. Your
Company
also
made
significant
inroads
into
developing
its
growth
projects.
During
the
year,
Ramelius secured
world‐class
exploration
projects
in
Queensland and
Nevada
in
the
United
States,
and
laid
the
groundwork
for
the
subsequent
acquisition
in
July
this year
of
the
Mt
Magnet
gold
project
in
Western
Australia. The
Mt
Magnet
gold
project
offers
the
Company
the
potential
in
coming
years
to
significantly
increase
its
gold production
as
well
as
increasing
the
value
of
this
project through
new
discoveries. The
project
is
an
open‐pit
and
underground
mining
asset set
in
a
prolific
gold
province.
The
acquisition
boosted the
Company’s
gold
resources
to
3.4
million
ounces
plus; and
opens
up
a
potential
100,000
ounce
plus
per
annum production
scenario
for
5‐7
years
off
an
historic
base that
saw
the
project
produce
5.6
million
ounces
of
gold. New
drill
programs
being
scheduled
for
Mt
Magnet
later this
year
are
designed
to
infill
its
current
gold
resources, test
new
targets
and
move
the
project
towards
a
decision
to
mine
in
the
first
half
of
calendar
2011. The
coming
year
promises
to
be
an
exciting
one,
with significant
ongoing
low
cost
production
at
Wattle
Dam, new
exploration
success
and
the
likely
development
of the
Mt
Magnet
project. I
extend
my
thanks
to
our
Board
of
Directors,
members of
which
have
supported
the
growth
strategy
developed for
the
Company.
I
also
sincerely
thank
Ramelius’
staff and
contractors
who
have
delivered
an
exceptional
performance
for
the
year. Our
milling
facility
at
Burbanks
close
to
Wattle
Dam,
operated
satisfactorily
for
the
year,
treating
more
than 151,500
tonnes
of
gold
ore,
comprising
approximately Ian Gordon Chief
Executive
Officer 02 Review Of Operations Financial Highlights • Total
revenue
of
$71.1
million
(up
from
$20.7
million
in
2009) • Gold
sales
of
$58.2
million
(up
from
$19.8
million
in
2009)
• Other
income
of
$9.8
million
(up
from
$0.8
million
in
2009) • Net
profit
after
tax
of
$20.2
million
(up
from
$4.97
million
in
2009) • Cash
assets
at
the
end
of
the
financial
year
of
$80.2
million
(up
from
$26.7
million
in
2009) Total
consolidated
revenue
was
up
243%
from
the
previous
year
to
$71,101,431
which
included
profit
from
sale
of
financial
assets
of
$7,144,396. Revenue
from
gold
sales
was
$58,216,932,
up
193%
from
the
previous
year
and
resulted
from
sales
of
46,147 ounces
of
gold
during
the
year
at
an
average
price
of
A$1,261.56
per
ounce
compared
to
15,393
ounces
in
2009. Gold
sales
during
the
year
reflect
high
grade
gold
production
from
the
Wattle
Dam
underground
mine. Total
after
tax
consolidated
comprehensive
income
was
$20,202,041. At
30
June
2010
the
consolidated
entity
continued
to
be
debt
free
and
held
cash
assets
of
$80.2
million. Total
net
assets
increased
96%
during
the
year
from
$56,098,438
to
$110,339,121. Operational Highlights • Successfully
commenced
underground
mining
operations
at
Wattle
Dam • Record
Production
of
60,000
ounces
of
gold • Acquisition
of
growth
exploration
projects 03 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
over
300
metres.
The
mine
commenced
production
in
March
2006
and
as
at
30
June
2010,
had
produced
approximately
110,000 ounces
of
gold. Underground
ore
mining
and
milling
commenced
during the
2009/10
financial
year
with
approximately
60,000 ounces
of
gold
produced
during
this
period. Mining By
the
end
of
the
2010
financial
year,
the
underground decline
was
established
to
the
bottom
of
the
current mine
plan
and
the
majority
of
development
for
the 2010/11
year’s
production
completed
(refer
Figure
1
on page
37).
A
total
of
1,673m
of
underground
capital
development
and
845m
of
operating
development
was completed
during
this
period. During
the
2010
financial
year
a
total
of
96,000
tonnes of
ore
was
mined
from
underground
at
a
mine
estimated grade
of
16
grams
per
tonne
gold.
Of
this
ore,
a
total
of 75,500
was
milled
at
a
recovered
grade
of
25
g/t
for
the production
of
60,780
ounces
of
gold.
As
has
been
experienced
in
previous
years,
the
grade
recovered through
milling
the
ore
has
been
substantially
higher
than the
mine
estimated
grade,
due
to
the
coarse
gold
present,
which
is
not
always
reflected
in
drilling
results. An
updated
mineral
resource
estimate
for
the
Wattle Dam
gold
deposit
was
completed
in
February
2010. The
resource
estimate
was
226,500
tonnes
at
18
g/t
Au for
130,900
ounces
of
gold.

Ordinary
Kriging
and
a
top cut
of
2,000
g/t
gold
were
used
to
estimate
the
resource. 04 Underground Diamond Drilling Diamond
drilling
was
conducted
in
a
series
of
campaigns
during
the
year.
119
underground
diamond holes
were
drilled
for
a
total
of
13,952m.
Most
holes were
drilled
as
LTK60
size
core
as
grade
control/ resource
definition
drilling
on
a
relatively
close
spaced pattern
of
20m
x
10m.
Some
exploratory
holes
were drilled
targeting
southern
extensions
to
the
Wattle
Dam lode,
but
only
returned
weak
mineralisation.
Towards
year
end,
exploratory
drilling
was
conducted down
plunge
of
the
Wattle
Dam
main
lode
zone
and
in June
2010
some
significant
intercepts
were
returned from
an
area
around
100m
below
the
current
base
of mining.
These
to
show
a
redevelopment
of
the
lode
zone
at
depth
after
a
zone
of weaker
mineralisation. intercepts
appear
Milling During
the
2010
financial
year
the
Company’s
gold
treatment
plant
at
Burbanks,
near
Coolgardie
milled 75,500
tonnes
of
Wattle
Dam
ore
at
an
average
recovered
grade
of
25
g/t
Au
and
76,000
tonnes
of
third party
ore.
A
new
gravity
recovery
system
was
installed
to improve
gold
the
higher
grade
underground
ore. recovery
from
Production Statistics – 2010 Financial Year (Wattle Dam) Unit Mined Grade g/t gold Ore
processed tonnes 75,500 25 Recovery Gold
Production*
Gold
Production*
% oz kg 97 60,780 1,890.4 *
Includes
G.I.C.
recovered Review of Operations Exploration Eastern Goldfields Ramelius
controls
the
gold
rights
and
majority
nickel
rights over
approximately
135
km2 covering
predominantly
the Spargos
Reward
Shears
(refer
Figure
2
on
page
37). Gold
exploration
during
the
year
was
conducted
at
the Wattle
Dam,
8500N,
West
Wattle
Dam,
5Q,
Hilditch
and Eagles
Nest
prospects. Wattle Dam Project (Gold, Tantalum, Nickel) (100% Gold, Tantalum and 80% Nickel Rights; MLs; 15/1101; 15/1263; 15/1264; 15/1323; 15/1338; 15/1769-1773, 100% MLs 1774-1776; PL 15/4381 [MLA 15/1474]) Wattle Dam Gold Mine (Gold) Surface
exploration
diamond
drilling
totalling
5
holes
for 2,176.8
metres
was
completed
at
Wattle
Dam.
The drilling
was
focused
on
defining
further
high
grade
mineralisation
further
down
plunge
from
the
current
underground
mine
plan. Significant
results
of
3.5
metres
at
13.8
g/t
gold
from 353
metres
including
1.2
metres
@
37.0
g/t
Au
from 353.8
metres
and
2
metres
at
7.5
g/t
gold
from
355
metres.
Surface
diamond
drilling
has
defined
a
mineralised
zone
over
90
metres
of
plunge
extent
which has
been
infill
drilled
by
underground
diamond
drilling. Gravity
and
Sub-Audio
Magnetic
surveys
were
completed
over
and
along
strike
of
Wattle
Dam
gold mine
in
order
to
assist
with
the
geological
understanding of
the
area
and
drill
targeting. A
total
of
14
RC
drill
holes
for
2,791
metres
were
completed
to
assist
with
the
geological
understanding along
strike
from
Wattle
Dam
as
well
as
test
an
anomalous
EM
trend
identified
from
the
recently
completed
SAM
survey
and
test
anomalous
intercepts and
alteration
within
previous
shallow
RAB
drilling
at depth.

A
maximum
result
of
3
metres
at
1.2
g/t
gold
from 45
metres
(WDRC330)
was
received
from
the
drilling. 8500N (Gold) A
total
of
10
RC
holes
(SRRC0024
–
SRRC0033)
for 1,258
metres
were
drilled
to
further
evaluate
the
supergene
mineralisation
intersected
within
previous
RC drilling
and
untested
areas
of
the
felsic/ultramafic
contacts
and
their
association
with
an
interpreted
northeast
trending
aeromagnetic
structure.

A
maximum significant
result
of
9
metres
at
4.3
g/t
gold
from
65
metres
including
1
metre
at
16.2
g/t
gold
from
73
metres (SRRC0029)
was
the
supergene
environment
adjacent
to
a
previous
RC
drill
hole
which returned
a
maximum
result
2
metres
at
2.3
g/t
gold
from 65
metres. returned
from
West Wattle Dam (Gold) A
total
of
40
RC
drill
holes
for
2,088
metres
were
completed
to
evaluate
an
area
of
auger
gold
anomalism associated
with
an
ultramafic
sequence
to
the
west
of Wattle
Dam
Gold
Mine.

Significant
results
of
4
metres
at 9.0
g/t
gold
from
28
metres
and
4
metres
at
6.9
g/t
gold from
36
metres
were
returned
from
the
drilling. 5Q (Gold and Nickel) A
single
RC
drill
hole
(SRRC0034)
for
160
metres
was completed
to
evaluate
coincident
geochem
and
EM anomalies
along
strike
from
the
5A
nickel
prospect.

A
sulfidic
black
shale
was
intersected
at
the
target
depth which
is
the
likely
source
for
the
EM
anomaly.
No
significant
gold
or
nickel
results
were
received. A
total
of
9
RC
holes
for
780
metres
was
completed
to test
areas
of
anomalous
(≥100ppb)
gold
returned
from previous
costean
sampling
and
auger
drilling
and
to
test underneath
historical
gold
workings.

A
maximum
result of
5
metres
at
4.4
g/t
gold
from
22
metres
including
2 metres
at
6.4
g/t
gold
from
22
metres
was
received
from the
drilling
associated
with
quartz
veining
within
upper saprolite
clays. Regional Aircore Drilling (Gold and Nickel) A
single
RC
hole
(SRRC0075)
for
approximately
100
metres
is
planned
to
test
underneath
significant
gold 05 Review of Operations (4m
@
0.7
g/t
Au
from
18m)
and
nickel
(20m
@
0.8%
Ni from
18m
to
EOH
including
2m
@
1.4%
Ni
from
24m) within
SRRB0240,
located
just
north
of
the
Hilditch
Project
boundary
and
at
a
similar
stratigraphic
location
to the
Hilditch
gold
workings.

Maximum
gold
and
nickel intercepts
of
5
metres
at
0.3
g/t
gold
from
80
metres
and 5
metres
at
0.4%
nickel
from
69
metres
were
received. Hilditch Project (90%) (ML 15/1448) A
programme
of
9
RC
holes
for
857
metres
was
completed
to
test
for
strike
and/or
plunge
extensions
of mineralisation
intersected
within
drilling
completed
by previous
explorers
at
the
Hilditch
Gold
workings.
A maximum
result
from
the
previous
drilling
of
14
metres
at
2.1
g/t
gold
from
33
metres
was
returned. Maximum
significant
results
returned
from
the
drilling
include
2
metres
at
8.8
g/t
gold
from
86
metres
and
5
metres
at
4.3
g/t
gold
from
39
metres. A
further
3
RC
holes
for
340
metres
were
completed
at Hilditch
South
to
primarily
evaluate
an
interpreted
zone of
supergene
anomalism
within
previous
RC
drilling, which
includes
maximum
results
of
2
metres
at
5.6
g/t gold
from
24
metres
and
8
metres
at
1.6
g/t
gold
from 36
metres.

No
significant
results
were
received. North Widgiemooltha Project (100% Gold Rights) (MLs 15/97; 15/99; 15/100; 15/101; 15/102; 15/653; ML 15/1271) regional
aircore
drilling
programme
North Widgiemooltha Regional A
totalling
approximately
300
drill
holes
commenced
during
the
period
to
evaluate
areas
along
the
eastern
ultramafic
belt within
the
North
Widgie
Project
where
limited
systematic gold
exploration
has
been
undertaken
within
areas
of transported
cover.

A
total
of
181
holes
for
7,616
metres were
completed.

Initial
results
have
been
received, which
would
equate
to
approximately
20%
of
the
entire programme.

A
maximum
anomalous
result
of
4
metres at
0.9
g/t
gold
from
36
metres
has
been
received. Eagles Nest South A
total
of
7
RC
drill
holes
for
706
metres
were
drilled
to test
for
high
grade
mineralisation
associated
with
strike extensions
of
a
≥2
g/t
gold
mineralised
trend
identified by
previous
RC
drilling
at
Eagles
Nest.

No
significant
results
were
received. Eagles Nest Project (100%) (ML 15/1475) A
single
RC
drill
hole
for
184
metres
was
completed
to test
for
high
grade
mineralisation
associated
with
dip
extensions
of
a
≥2
g/t
gold
mineralised
trend
identified by
previous
RC
drilling.

A
maximum
result
of
3
metres at
1.7
g/t
gold
from
148
metres
was
received. Bullabulling West Project (100%) (PL 15/5399-5400; PLA 15/5509) A
total
of
three
RC
drill
holes
were
completed
to
test
an aeromagnetic
high
anomaly
to
the
west
of
the
Bullabulling
gold
operations.

The
aeromagnetic
high anomaly
was
interpreted
to
display
synergies
with
the aeromagnetic
anomaly
over
the
Wallaby
Gold
Mine
near Laverton.

No
significant
results
were
received
from
the drilling. Mt Windsor Project During
the
period
Ramelius
Resources
Limited
entered a
joint
venture
with
Liontown
Resources
Limited
in
regards
to
its
Mt
Windsor
Gold
Project,
located
south
of Charters
Towers
in
Queensland
(refer
Figure
3
on
page 38).


Ramelius
can
earn
a
60%
equity
in
the
project
by spending
$7
million
over
four
years.

A
minimum
expenditure
of
$1.25M
is
required
prior
to
July
2011. A
programme
of
4
RC
holes
(G5RC0001
–
0004)
for
954 metres
was
completed
at
Spring
Creek
(G-5)
to
evaluate chargeable
and
resistive
zones
identified
from
an
IP
survey
by
Liontown
Resources.

A
maximum
composite result
of
4
metres
at
0.1
g/t
gold
from
268
metres
was
returned.

The
intercept
is
also
weakly
anomalous
in
Ag, As,
Hg,
Sb,
and
Pb. 06 Review of Operations Deep
penetrating
3D
IP
surveys
will
be
undertaken
over each
of
Mt
Redan,
Mosquito
Hill
and
Cardigan
Dam
(formerly
G-14)
prior
to
diamond
drill
testing.
Collaborative Drilling
Initiative
(CDI)
funding
has
been
sourced
from
the Queensland
Government
to
assist
with
drilling
at
Mt Redan
and
Mosquito
Hill
(refer
Figure
4
on
page
38). Glen Isla Joint Venture NSW: EL 6246 (Ramelius
earning
75%) During
the
year
Ramelius
entered
into
a
joint
venture
with Carpentaria
Exploration
Limited
to
earn
a
75%
interest
in the
Glen
Isla
project
(refer
Figure
3
on
page
38). A
detailed
3‐D
induced
polarization
(IP)
survey
over
the Glen
Isla
epithermal
target
area
was
completed
and (from
100m
below
surface)
identified
a
shallow
anomalous
chargeable
response.
RC
drilling
of
the chargeable
anomaly
is
scheduled
during
the
September 2010
quarter. Nevada Projects (Ramelius
earning
70%
with
Marmota) Ramelius
and
its
partner
Marmota
Energy
Ltd
have
entered
into
two
agreements
with
Miranda
Gold
Corporation
to
earn
a
70%
interest
in
the
Big
Blue
and Angel
Wing
projects
in
Nevada,
US.
The
Big
Blue
project
is
prospective
for
Carlin
Style
sediment
hosted gold
deposits
and
the
Angel
Wing
project
is
being
explored
for
high
grade
epithermal
gold
veins.
Ramelius expects
both
of
the
projects
to
be
drill
tested
in
the
second half
of
calendar
2010
(refer
Figure
5
on
page
39). Consents The information in this report that relates to Exploration Results is based on information compiled by Matthew Svensson and Kevin Seymour. Matthew Svensson is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting 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. Kevin Seymour 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 they have undertaken to qualify as a Competent Person. Kevin Seymour is a full-time employee of Ramelius Resources Limited and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. The information in this report that relates to resources and estimated mine grade at Wattle Dam is based on information compiled by Rob Hutchison. Rob Hutchison 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 he is undertaking to qualify as a Competent Person. Rob Hutchison 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. 07 Review of Operations Interests in Mining Tenements The
Company’s
interests
in
mining
tenements
are
as
follows: Project Location Tenement Status Application Date Grant Date Expiry Date Associated Acquiring Tenement ID % Acquired % Registered Beneficial Owner Owner Coolgardie Coolgardie Coolgardie P15/5399 P15/5400 P15/5509 Granted Granted Application 13-May-09 13-May-09 22-Dec-09 19-Nov-09 19-Nov-09 18-Nov-13 18-Nov-13 100% 100% 100% Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Coolgardie M16/34 Granted 15-Sep-86 28-Jan-87 27-Jan-29 90% Ramelius Ramelius Bullabulling Bullabulling Bullabulling Jaurdi/ Black Cat Jaurdi/ Black Cat Coolgardie M16/115 Granted 29-Sep-88 10-Sep-90 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 Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius 90% 90% 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 Wattle Dam Coolgardie M15/1474 Application 12-Apr-04 P15/4381 100% Ramelius Ramelius 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 Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius 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% & 80% of Ni Rights 100% & 80% of Ni Rights 100% & 80% of Ni Rights Wattle Dam Coolgardie P15/4381 Granted 5-May-00 9-Jan-01 8-Jan-05 M15/1474 100% Ramelius Ramelius North Widgie North Widgie North Widgie North Widgie North Widgie North Widgie North Widgie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie M15/97 M15/99 M15/100 M15/101 M15/102 M15/653 M15/1271 Granted Granted Granted Granted Granted Granted Granted 9-Dec-83 9-Dec-83 9-Dec-83 9-Dec-83 9-Dec-83 20-Nov-92 7-Dec-98 26-Jul-84 26-Jul-84 26-Jul-84 26-Jul-84 11-Apr-85 29-Jan-93 7-Feb-07 25-Jul-26 25-Jul-26 25-Jul-26 25-Jul-26 10-Apr-27 28-Jan-14 6-Feb-28 Larkinville Coolgardie E15/896 Granted 13-Jul-05 9-Jan-07 8-Jan-12 Larkinville Coolgardie M15/1449 Application 9-Mar-04 was P15/3666 P15/4213 -4214 Larkinville Coolgardie P15/4213 Granted 17-Feb-99 28-Mar-00 27-Mar-04 M15/1449 Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights Gold Rights ANM ANM ANM ANM ANM ANM ANM Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius Ramelius 75% & 80% Ni Rights Pioneer Ramelius & Pioneer 75% & 80% Ramelius Ramelius & Pioneer & Pioneer Ni Rights 75% & 80% Ramelius Ramelius & Pioneer & Pioneer Ni Rights 08 Project Location Tenement Status Application Date Grant Date Expiry Date Associated Acquiring Tenement ID % Acquired % Registered Beneficial Owner Owner Larkinville Coolgardie P15/4214 Granted 17-Feb-99 28-Mar-00 27-Mar-04 M15/1449 Larkinville Coolgardie P15/4765 Granted 17-Jan-06 17-06-2010 16-06-2014 Larkinville Coolgardie P15/4904 Application 22-Jan-07 Larkinville Coolgardie P15/4905 Application 22-Jan-07 M15/1449 M15/1449 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 Groundlark Coolgardie M15/1290 Granted 29-Jun-99 25-Oct-02 24-Oct-23 Eagles Nest Coolgardie M15/1475 Granted 12-Jul-04 29-Sep-04 28-Sep-25 Mt Magnet Mt Magnet E21/100 Granted 10-Nov-99 14-Apr-09 13-Apr-14 Mt Magnet Mt Magnet E21/112 Granted 26-Jun-01 03-Jan-06 02-Jan-11 Mt Magnet Mt Magnet E21/151 Application 24-May-10 Mt Magnet Mt Magnet E21/152 Application 24-May-10 Mt Magnet Mt Magnet E58/278 Granted 23-Jul-02 23-Aug-06 22-Aug-11 Mt Magnet Mt Magnet E58/380 Application 04-Jun-09 Mt Magnet Mt Magnet G58/3 Granted 27-Jul-88 10-May-89 09-May-31 Mt Magnet Mt Magnet L58/16 Granted 24-Oct-88 20-Dec-88 19-Dec-13 Mt Magnet Mt Magnet L58/20 Granted 18-May-89 27-Nov-89 26-Nov-14 Mt Magnet Mt Magnet L58/31 Application 31-Mar-99 Mt Magnet Mt Magnet L59/40 Granted 20-May-96 31-Oct-96 30-Oct-11 Mt Magnet Mt Magnet M58/11 Granted 11-Nov-82 08-Jun-83 07-Jun-25 Mt Magnet Mt Magnet M58/119 Granted 25-Mar-88 16-Dec-88 15-Dec-30 Mt Magnet Mt Magnet M58/120 Granted 25-Mar-88 16-Dec-88 15-Dec-30 Mt Magnet Mt Magnet M58/121 Granted 25-Mar-88 16-Dec-88 15-Dec-30 Mt Magnet Mt Magnet M58/122 Granted 25-Mar-88 16-Dec-88 15-Dec-30 Mt Magnet Mt Magnet M58/130 Granted 09-May-88 30-Aug-88 29-Aug-30 Mt Magnet Mt Magnet M58/136 Granted 23-Jun-88 17-Aug-88 16-Aug-30 Mt Magnet Mt Magnet M58/140 Granted 14-Sep-88 10-May-89 09-May-31 Mt Magnet Mt Magnet M58/143 Granted 22-Nov-88 21-Mar-89 20-Mar-31 Mt Magnet Mt Magnet M58/146 Granted 08-Dec-88 09-Oct-89 08-Oct-10 Mt Magnet Mt Magnet M58/147 Granted 16-Dec-88 06-Jun-89 05-Jun-31 Mt Magnet Mt Magnet M58/157 Granted 23-Jun-89 27-Mar-90 26-Mar-11 Mt Magnet Mt Magnet M58/161 Granted 24-Oct-89 04-Apr-90 03-Apr-11 Mt Magnet Mt Magnet M58/163 Granted 24-Oct-89 04-Apr-90 03-Apr-11 Mt Magnet Mt Magnet M58/172 Granted 26-Feb-90 11-Sep-90 10-Sep-11 Mt Magnet Mt Magnet M58/173 Granted 26-Feb-90 11-Sep-90 10-Sep-11 Mt Magnet Mt Magnet M58/174 Granted 26-Feb-90 11-Sep-90 10-Sep-11 Mt Magnet Mt Magnet M58/179 Granted 12-Dec-90 20-Mar-92 19-Mar-13 Mt Magnet Mt Magnet M58/180 Granted 12-Dec-90 20-Mar-92 19-Mar-13 Mt Magnet Mt Magnet M58/181 Granted 12-Dec-90 20-Mar-92 19-Mar-13 Mt Magnet Mt Magnet M58/182 Granted 12-Dec-90 27-Nov-91 26-Nov-12 Mt Magnet Mt Magnet M58/185 Granted 15-Mar-91 09-Aug-91 08-Aug-12 09 75% & 80% Ramelius Ramelius & Pioneer & Pioneer Ni Rights 75% & 80% Ni Rights Pioneer Ramelius & Pioneer 75% & 80% Ramelius Ni Rights Ramelius & Pioneer & Pioneer 75% & 80% Ramelius Ni Rights Ramelius & Pioneer & Pioneer 50% of Gold Rights 50% of Gold Rights NiWest NiWest NiWest NiWest 100% 100% 100% Ramelius Ramelius Ramelius Ramelius Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL Review of Operations Interests in Mining Tenements (continued) Project Location Tenement Status Application Date Grant Date Expiry Date Associated Acquiring Tenement ID % Acquired % Registered Beneficial Owner Owner Mt Magnet Mt Magnet M58/186 Granted 17-Apr-91 09-Aug-91 08-Aug-12 Mt Magnet Mt Magnet M58/187 Granted 17-Apr-91 12-Dec-91 11-Dec-12 Mt Magnet Mt Magnet M58/188 Granted 17-Apr-91 09-Aug-91 08-Aug-12 Mt Magnet Mt Magnet M58/189 Granted 28-May-91 27-Nov-91 26-Nov-12 Mt Magnet Mt Magnet M58/191 Granted 28-May-91 11-Mar-92 10-Mar-13 Mt Magnet Mt Magnet M58/192 Granted 28-May-91 11-Mar-92 10-Mar-13 Mt Magnet Mt Magnet M58/193 Granted 28-May-91 27-Oct-92 26-Oct-13 Mt Magnet Mt Magnet M58/194 Granted 28-May-91 27-Oct-92 26-Oct-13 Mt Magnet Mt Magnet M58/195 Granted 28-May-91 11-Mar-92 10-Mar-13 Mt Magnet Mt Magnet M58/198 Granted 04-Nov-91 20-Feb-92 19-Feb-13 Mt Magnet Mt Magnet M58/201 Granted 31-Jan-92 22-Oct-92 21-Oct-13 Mt Magnet Mt Magnet M58/202 Granted 10-Feb-92 03-Dec-92 02-Dec-13 Mt Magnet Mt Magnet M58/205 Granted 13-Nov-92 11-Jun-93 10-Jun-14 Mt Magnet Mt Magnet M58/208 Granted 07-May-93 10-Aug-93 09-Aug-14 Mt Magnet Mt Magnet M58/209 Granted 22-Jun-93 19-Nov-93 18-Nov-14 Mt Magnet Mt Magnet M58/210 Granted 30-Nov-93 18-Feb-94 17-Feb-15 Mt Magnet Mt Magnet M58/211 Granted 07-Feb-94 17-May-94 16-May-15 Mt Magnet Mt Magnet M58/222 Granted 10-Jan-95 23-Aug-95 22-Aug-16 Mt Magnet Mt Magnet M58/231 Granted 25-Jul-95 11-Jul-96 10-Jul-17 Mt Magnet Mt Magnet M58/232 Granted 25-Jul-95 11-Jul-96 10-Jul-17 Mt Magnet Mt Magnet M58/233 Granted 25-Jul-95 11-Jul-96 10-Jul-17 Mt Magnet Mt Magnet M58/234 Granted 25-Jul-95 11-Jul-96 10-Jul-17 Mt Magnet Mt Magnet M58/235 Granted 25-Jul-95 11-Jul-96 10-Jul-17 Mt Magnet Mt Magnet M58/236 Granted 25-Jul-95 11-Jul-96 10-Jul-17 Mt Magnet Mt Magnet M58/241 Granted 13-Feb-96 19-May-99 18-May-20 Mt Magnet Mt Magnet M58/248 Application 06-May-96 P58/825 Mt Magnet Mt Magnet M58/263 Application 10-Mar-97 Mt Magnet Mt Magnet M58/273 Application 20-Feb-98 Mt Magnet Mt Magnet M58/285 Application 13-Oct-98 Mt Magnet Mt Magnet M58/286 Application 13-Oct-98 Mt Magnet Mt Magnet M58/30 Granted 13-Dec-83 08-Aug-85 07-Aug-27 Mt Magnet Mt Magnet M58/304 Granted 22-Nov-99 05-Jul-00 04-Jul-21 Mt Magnet Mt Magnet M58/320 Application 16-May-01 Mt Magnet Mt Magnet M58/323 Application 08-Oct-01 Mt Magnet Mt Magnet M58/345 Application 18-Nov-04 Mt Magnet Mt Magnet M58/4 Granted 03-Jun-82 21-Mar-83 20-Mar-25 Mt Magnet Mt Magnet M58/43 Granted 16-May-85 23-Jul-86 22-Jul-28 Mt Magnet Mt Magnet M58/47 Granted 23-Sep-85 03-Apr-86 02-Apr-28 Mt Magnet Mt Magnet M58/5 Granted 22-Jun-82 12-Jan-83 11-Jan-25 Mt Magnet Mt Magnet M58/60 Granted 20-Jan-87 07-Oct-87 06-Oct-29 P58/924 P58/940 P58/941 P58/1042 P58/1396 10 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL Project Location Tenement Status Application Date Grant Date Expiry Date Associated Acquiring Tenement ID % Acquired % Registered Beneficial Owner Owner Mt Magnet Mt Magnet M58/64 Granted 30-Apr-87 12-Jul-88 11-Jul-30 Mt Magnet Mt Magnet M58/78 Granted 05-Jun-87 06-May-88 05-May-30 Mt Magnet Mt Magnet M58/79 Granted 05-Jun-87 06-May-88 05-May-30 Mt Magnet Mt Magnet M58/8 Granted 28-Jul-82 07-Jan-83 06-Jan-25 Mt Magnet Mt Magnet M58/80 Granted 10-Jun-87 06-May-88 05-May-30 Mt Magnet Mt Magnet M58/81 Granted 10-Jun-87 06-May-88 05-May-30 Mt Magnet Mt Magnet M58/97 Granted 17-Aug-87 08-Feb-88 07-Feb-30 Mt Magnet Mt Magnet M58/98 Granted 17-Aug-87 08-Feb-88 07-Feb-30 Western Queen Mt Magnet M59/208 Granted 18-Jun-90 17-Dec-90 16-Dec-11 Western Queen Mt Magnet M59/45 Granted 11-Aug-86 23-Mar-87 22-Mar-29 Mt Magnet Mt Magnet P21/690 Granted 12-Feb-08 09-Jun-09 08-Jun-13 Mt Magnet Mt Magnet P21/691 Granted 12-Feb-08 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P21/692 Granted 12-Feb-08 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P21/694 Granted 12-Feb-08 09-Jun-09 08-Jun-13 Mt Magnet Mt Magnet P21/710 Granted 26-Oct-09 28-Jun-10 27-Jun-14 Mt Magnet Mt Magnet P21/711 Granted 26-Oct-09 28-Jun-10 27-Jun-14 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL Mt Magnet Mt Magnet P58/1042 Granted 02-Jan-97 29-May-97 28-May-01 M58/320 100% Mt Magnet Mt Magnet Mt Magnet Mt Magnet P58/1303 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1304 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1305 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1306 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1307 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1308 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1309 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1310 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1311 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1312 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1313 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1314 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1315 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1316 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1317 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1318 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1319 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1320 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1321 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1322 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1323 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1324 Granted 01-Sep-05 01-Nov-06 31-Oct-10 Mt Magnet Mt Magnet P58/1377 Granted 09-Nov-06 08-Jun-09 07-Jun-13 11 Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL Review of Operations Interests in Mining Tenements (continued) Project Location Tenement Status Application Date Grant Date Expiry Date Associated Acquiring Tenement ID % Acquired % Registered Beneficial Owner Owner Mt Magnet Mt Magnet P58/1378 Granted 09-Nov-06 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1389 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1390 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1391 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1392 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1393 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1394 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1395 Granted 29-Jan-07 08-Jun-09 07-Jun-13 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL Mt Magnet Mt Magnet P58/1396 Application 29-Jan-07 M58/323 100% Mt Magnet Mt Magnet Mt Magnet Mt Magnet P58/1397 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1398 Granted 29-Jan-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1399 Granted 01-Feb-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1400 Granted 01-Feb-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1401 Granted 01-Feb-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1402 Granted 01-Feb-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1407 Granted 25-Jul-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1416 Granted 20-Sep-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1417 Granted 20-Sep-07 08-Jun-09 07-Jun-13 Mt Magnet Mt Magnet P58/1502 Application 17-Nov-09 Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL 100% Mt Magnet Mt Magnet Gold NL Gold NL Mt Magnet Mt Magnet P58/825 Granted 31-Aug-92 27-Oct-92 26-Oct-96 M58/248 100% Mt Magnet Mt Magnet Gold NL Gold NL Mt Magnet Mt Magnet P58/924 Granted 03-Dec-93 22-Feb-94 21-Feb-96 M58/273 100% Mt Magnet Mt Magnet Gold NL Gold NL Mt Magnet Mt Magnet P58/940 Granted 12-Aug-94 25-Oct-94 24-Oct-98 M58/285 100% Mt Magnet Mt Magnet Gold NL Gold NL Mt Magnet Mt Magnet P58/941 Granted 19-Aug-94 22-Nov-94 21-Nov-98 M58/286 100% Mt Magnet Mt Magnet 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 Granted 19-May-08 29-Jun-09 28-Jun-13 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 12 100% 100% 100% 100% 100% 100% 100% 100% 100% Gold NL Gold NL Ramelius Ramelius Milling Services Pty Ltd Milling Services Pty Ltd Ramelius Ramelius Milling Services Pty Ltd Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Ramelius Milling Services Pty Ltd Project Location Tenement Status Application Date Grant Date Expiry Date Associated Acquiring Tenement ID % Acquired % Registered Beneficial Owner Owner Burbanks Coolgardie L15/110 Granted 3-Jul-89 22-Jun-90 21-Jun-10 100% Ramelius Ramelius Milling Services Pty Ltd Milling Services Pty Ltd Burbanks Coolgardie L15/189 Granted 10-Mar-94 21-Jun-94 20-Jun-14 100% Ramelius Ramelius Milling Services Pty Ltd Milling Services Pty Ltd Burbanks Coolgardie L15/234 Granted 31-Jan-02 27-Nov-03 26-Nov-24 100% Ramelius Ramelius Milling Services Pty Ltd Milling Services Pty Ltd Burbanks Coolgardie L15/284 Granted 21-Sep-07 25-May-09 24-May-30 100% Ramelius Ramelius Glen Isla Gold NSW EL6246 Granted 27-Jan-04 25-May-04 24-May-12 Mt Windsor Queensland EPM14161 Granted 15-Jul-03 15-Jun-04 14-Jun-12 Mt Windsor Queensland EPM15102 Granted 10-May-05 28-Mar-06 27-Mar-11 Mt Windsor Queensland EPM15192 Granted 22-Aug-05 30-Aug-06 29-Aug-11 Mt Windsor Queensland EPM15197 Granted 23-Aug-05 30-Aug-06 29-Aug-11 Mt Windsor Queensland EPM16408 Granted 1-May-07 12-Nov-09 11-Apr-14 Mt Windsor Queensland EPM16627 Granted 2-Jul-07 6-Nov-08 5-Nov-13 Mt Windsor Queensland EPM16712 Granted 1-Aug-07 30-Oct-08 29-Oct-13 Mt Windsor Queensland EPM16846 Application 3-Jun-07 Mt Windsor Queensland EPM16920 Application 1-Oct-07 Mt Windsor Queensland EPM17081 Application 3-Dec-07 Mt Windsor Queensland EPM17082 Application 3-Dec-07 Mt Windsor Queensland EPM17804 Granted 1-Sep-08 3-May-10 2-May-15 Mt Windsor Queensland EPM17971 Application 9-Dec-08 Mt Windsor Queensland EPM18224 Application 3-Aug-08 Mt Windsor Queensland EPM18231 Application 4-Aug-09 Mt Windsor Queensland EPM18233 Application 4-Aug-09 Mt Windsor Queensland EPM18235 Application 4-Aug-09 Mt Windsor Queensland EPM18236 Application 4-Aug-09 Mt Windsor Queensland EPM18352 Application 20-Oct-09 Mt Windsor Queensland EPM18376 Application 3-Nov-09 Mt Windsor Queensland EPM18422 Application 18-Feb-10 Mt Windsor Queensland EPM18545 Application 1-Dec-09 13 Earning 51 % Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Earning 60% Milling Services Pty Ltd Milling Services Pty Ltd Carpentaria Carpentaria Exploration Exploration Limited Limited Liontown Resources Resources Liontown Limited Limited Uranium Liontown Equities Resources Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Uranium Liontown Equities Resources Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Liontown Resources Resources Liontown Limited Limited Review of Operations Interests in Mining Tenements (continued) Project Location Tenement Status Application Date Grant Date Expiry Date Associated Acquiring Tenement ID % Acquired % Registered Beneficial Owner Owner Mt Windsor Mt Windsor Queensland EPM18682 Application 12-May-10 Queensland EPM18759 Application 1-Jul-10 100% 60% Ramelius Ramelius Ramelius Mt Windsor Queensland EPM18768 Application 9-Jul-10 60% Ramelius Mt Windsor Queensland EPM18776 Application 16-Jul-10 60% Ramelius Mt Windsor Queensland EPM18805 Application 2-Aug-10 60% Ramelius Mt Windsor Queensland EPM18807 Application 2-Aug-10 60% Ramelius Ramelius & Liontown Resources Limited Ramelius & Liontown Resources Limited Ramelius & Liontown Resources Limited Ramelius & Liontown Resources Limited Ramelius & Liontown Resources Limited Royalty Interests The Current status of the Company’s Royalty Interests is as follows: Project Name Location Tenement SANDSTONE* –
Gold East
Murchison Various Current Holder Nature of Ramelius’ Royalty Troy
Resources
NL
Production
based Royalty
Capped at
$300,000 BULONG* –
Gold SPARGOS REWARD* –
Gold 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
Proposed

Development No
Current
Activity
by Holder
on
the

Royalty
Tenements PARKER
RANGE* –
All
minerals Yilgarn E77/1403,
P77/3764-5, P77/3481
Cazaly
Iron
Pty
Ltd 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. 14 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 co-operation
in
its
dealings
with
indigenous
people,
create
goodwill,
mutual
awareness
and
understanding and
most
importantly,
respect
and
commitment. Recognition and Respect Ramelius
recognises
Aboriginal
regard
for
land
and
respects
their
culture,
traditions
and
cultural
sites. Understanding and Trust Ramelius
listens
to
Aboriginal
community
representatives in
order
to
understand
their
views
and
beliefs.
Recognising that
communities
may
not
be
fully
appreciative
of
how
the Company’s
business
and
industry
operates,
Ramelius works towards
increasing
their
understanding,
respect and
trust
and
to
promote
the
Company’s
obligations
and economic constraints
amongst
indigenous
communities. Ramelius
ensures
that
its
employees
and
contractors approach
the
Company’s
activities
at
local
sites
with
respect and
a
clear
understanding
of
important
issues and
priorities. that
leaders
community
Communication and Commitment Ramelius
adopts
practical
measures
to
develop
trust.
Acknowledging
and
representatives have
an
obligation
to
consult
its
people in
order
to
determine
their
opinions
and
wishes
and
that this
may
often
not
be
achieved
as
quickly
as
is
desired, Ramelius
uses
its
best
endeavours
to
expedite
the process
and
ensure
that
its
commercial
interests
are
not adversely
impacted.
The
Company
also
uses
its
best
endeavours
to
ensure
reasonable
rights
of
consultation and
continued access
to
land
are
facilitated
and
the
integrity
of
land
is
preserved.
The
Company
is
committed to
taking
appropriate
steps
to
identify
and
reduce
the
effects
of
any
unforseen
impacts
from
its
activities. Achievements During
the
year,
Ramelius
made
production
related
payments
to
both
the
Widji
People
and
the
Central
West Goldfields
People
and
continued
its
business
development arrangements
with
the
Widji
People.

Acknowledgement The
directors
of
Ramelius
publicly
acknowledge
the
continued
co-operation
and
goodwill
shown
by
the
Widji and
Central
West
Goldfields
People
and
their
representatives
in
the
course
of
their
interactions
with the
Company
during
the
year. 15 Corporate Governance Statement Corporate Governance Statement Part A: Introduction A1. The
Board
of
Directors
are
responsible
for
the
overall
Corporate
Governance
of
the
Company
including
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. A2. As
a
listed
entity,
Ramelius
Resources
Limited
is
required
to
adhere
to
the
ASX
Listing
Rules
of
the
Australian
Securities
Exchange.
This
includes
the
requirement
to
annually
report
the
extent
to
which
the
entity
has
followed
the
Corporate
Governance
Recommendations
published
by
the
ASX
Corporate
Governance
Council
(“ASXCGC”).
The
recommendations
are
based
on
eight
core
principles
of
best
practice
for
corporate governance
which
are
not
intended
to
be
prescriptions
to
be
followed
by
all
ASX
listed
companies,
but
rather guidelines
designed
to
produce
an
outcome
that
is
effective
and
of
high
quality
and
integrity.

In
considering corporate
governance
practices,
the
Board
is
mindful
of
the
recognition
by
the
ASXCGC
that
a
“one size fits all”
approach
to
Corporate
Governance
is
not
required.
Instead,
the
ASXCGC
states
suggestions
for
best practice
designed
to
optimise
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. A3. 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
2010.
16 Corporate Governance Statement Summary of Corporate Governance Principles and Recommendations Reference Principle 1 – Lay solid foundations for management and oversight 1.1 Establish
the
functions
reserved
to
the
Board
and
those
delegated
to
senior executives
and
disclose
those
functions. B4,
B6,
B8,

B18,
B20 1.2 Disclose
the
process
for
evaluating
the
performance
of
senior
executives. B9 1.3 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
1. B11,
B66 Principle 2 – Structure the Board to add value 2.1 A
majority
of
the
Board
should
be
independent
directors. 2.2 2.3 The
chair
should
be
an
independent
director. The
roles
of
the
chair
and
chief
executive
officer
should
not
be
exercised
by
the
same
individual. 2.4 The
board
should
establish
a
nomination
committee. 2.5 Disclose
the
process
for
evaluating
the
performance
of
the
board,
its
committees
and
individual
directors. 2.6 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
2. B14 B12,
B14 B15 B7 B11 B11,
B12,
B13,
B14,
B16,
B17,
B66 Principle 3 – Promote ethical and responsible decision making 3.1 Establish
a
code
of
conduct
and
disclose
the
code
or
summary
of
the
code
as
to: • The
practices
necessary
to
maintain
confidence
in
the
company’s
integrity; • The
practices
necessary
to
take
into
account
their
legal
obligations
and
the
B22,
B23 reasonable
expectations
of
their
stakeholders; • The
responsibility
and
accountability
of
individuals
for
reporting
and
investigating
reports
of
unethical
practices. 3.2 Establish
a
policy
concerning
trading
in
company
securities
by
directors,
B26,
B27 senior
executives
and
employees,
and
disclose
the
policy
or
a
summary
of
that
policy. 3.3 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
3. B66 17 Corporate Governance Statement Principle 4 – Safeguard integrity in financial reporting 4.1 The
board
should
establish
an
audit
committee. 4.2 The
audit
committee
should
be
structured
so
that
it: • Consists
only
of
non-executive; • Consists
of
a
majority
of
independent
directors; • • Has
at
least
three
members. Is
chaired
by
an
independent
chair,
who
is
not
chair
of
the
board; 4.3 The
audit
committee
should
have
a
formal
charter. 4.4 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
4. B25 B12,
B14,
B29,
B34 B30 B12,
B13,
B34,
B36,
B66 Principle 5 – Making timely and balanced disclosure 5.1 Establish
written
policies
designed
to
ensure
compliance
with
ASX
Listing
Rules
disclosure
requirements
and
to
ensure
accountability
at
senior
executive
level
for
that
compliance
and
disclose
those
policies
or
a
summary
of
those
policies. B38 5.2 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
5. B37,
B66 Principle 6 – Respect the rights of shareholders 6.1 Design
a
communications
policy
for
promoting
effective
communication
with
B39 shareholders
and
encouraging
their
participation
at
general
meetings
and
disclose
the
policy
or
a
summary
of
the
policy. 6.2 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
6. B40,
B66 Principle 7 – Recognise and manage risks 7.1 Establish
policies
for
the
oversight
and
management
of
material
business
risks
B41,
B42 and
disclose
a
summary
of
those
policies. 7.2 The
Board
should
require
management
to
design
and
implement
the
risk
management
and
internal
control
system
to
manage
the
company’s
material
business
risks
and
report
to
it
on
whether
those
risks
are
being
managed
effectively.
The
board
should
disclose
that
management
has
reported
to
it
as
to
the
effectiveness
of
the
company’s
management
of
its
material
business
risks. B42 18 Corporate Governance Statement 7.3 The
Board
should
disclose
whether
it
has
received
assurance
from
the
chief
executive
officer
(or
equivalent)
and
chief
financial
officer
(or
equivalent)
that
the
declaration
provided
in
accordance
with
section
295A
of
the
Corporations
Act
is
founded
on
a
sound
system
of
risk
management
and
internal
control
and
that
the
system
is
operating
effectively
in
all
material
respects
in
relation
to
financial
reporting
risks. B44 7.4 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
7. B44,
B66 Principle 8 – Remunerate fairly and responsibly 8.1 The
board
should
establish
a
remuneration
committee. B49 8.2 Clearly
distinguish
the
structure
of
non-executive
director’s
remuneration
from
that
of
executive
directors
and
senior
executives. 8.3 Provide
the
information
indicated
in
the
Guide
to
reporting
on
Principle
8. B48,
B50,
B56 B12,
B13,
B48,
B66 Part B: Corporate Governance Disclosure Principle 1 – Lay solid foundations for management and oversight Role of the Board B1. 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
and
as
subsequently
amended
by
shareholders. B2. The
Board’s
primary
role
is
the
protection
and
enhancement
of
long-term
shareholder
value.
B3. 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. B4. The
Board
has
adopted
a
formal
Board
Charter
in
accordance
with
ASXCGC
best
practice
recommendation 1.1.
The
Board
Charter
details
the
functions
and
responsibilities
of
the
Board
of
Directors
including
the
Chairman
and
the
Managing
Director/Chief
Executive
Officer
of
the
Company. B5. 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. 19 Corporate Governance Statement B6. 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
for
the
Company
and
monitoring
implementation by
management; • 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
requirements
including
accounting
standards,
continuous
disclosure
and
ASX
Listing
Rules; • 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 B7. 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.
In
August
2008
the
Board
established
a
Remuneration
Committee
to
deal
executive
performance,
remuneration,
recruitment,
retention
and
termination
policies
for
senior
management and
incentive
schemes.
In
August
2009
the
Committee
was
renamed
the
Nomination
and
Remuneration
Committee. B8. The
Board
appoints
a
Managing
Director/Chief
Executive
Officer
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 Corporate Governance Statement Performance Evaluation B9. The
Nomination
and
Remuneration
Committee
evaluates
the
performance
of
the
Managing
Director/Chief
Executive
Officer,
Chief
Financial
Officer/Company
Secretary
and
other
senior
executives
on
a
regular
basis
and makes
recommendations
to
the
Board
on
any
performance
related
remuneration
matters.
The
Board
encourages
continuing
professional
development
of
senior
executives
and
other
employees.
The
Company’s remuneration
practices
are
disclosed
in
the
Remuneration
Report
section
of
the
Directors
Report. B10. The
Nomination
and
Remuneration
Committee’s
responsibilities
include
the
following: • Evaluating
the
necessary
and
desirable
competencies
for
members
of
the
Board
of
Directors; • Assessing
skills,
experience
and
expertise
and
making
recommendations
to
the
Board
on
candidates
for
appointment
and
re-appointment
as
directors
on
the
Board; • Reviewing
and
making
recommendations
on
processes
for
evaluating
the
performance
of
members
of
the Board
and
its
Committees
and
for
assessing
and
enhancing
director
competencies; • Reviewing
and
monitoring
progress
of
succession
plans
and
making
recommendations
to
the
Board; • Reviewing
and
making
recommendations
to
the
Board
on
the
remuneration
of
the
Managing
Director/CEO; • Reviewing
and
making
recommendations
to
the
Board,
on
advice
from
the
Managing
Director/CEO,
on
remuneration
of
senior
executives
of
the
Company
(other
than
the
Managing
Director/CEO)
and
in
respect of
remuneration
matters
generally; • Evaluating
and
making
recommendations
to
the
Board
on
the
Company’s
recruitment,
retention
and
termination
policies
and
procedures; • Assessing
and
making
recommendations
to
the
Board
on
remuneration
policies
and
practices
including
superannuation
arrangements,
incentive
schemes
and
performance
targets
for
senior
executives
and
other employees
of
the
Company. • Reviewing
and
assessing
annually
the
performance
of
the
Committee
and
the
adequacy
of
its
charter. B11. A
performance
evaluation
for
the
Board
and
its
members
is
conducted
by
the
Chairman
on
an
informal
basis as
considered
necessary.
Such
evaluation
was
undertaken
by
the
Chairman
during
the
2010
financial
year.
Performance
evaluations
for
relevant
senior
executives
were
undertaken
by
the
remuneration
committee
during
the
2010
financial
year
in
accordance
with
the
company’s
performance
evaluation
process. Principle 2 – Structure the Board to add value Composition of the Board B12. 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
below.
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. Robert Michael Kennedy Non-Executive Chairman - ASAIT, Grad, Dip (Systems Analysis), FCA, ACIS, Life member AIM, FAICD. Mr
Kennedy
joined
Ramelius
Resources
Limited
on
1
November
1995
as
a
non-executive
chairman.
He
is
a
chartered
accountant
and
a
consultant
to
Kennedy
&
Co,
Chartered
Accountants,
a
firm
he
founded.
He
is also
a
director
of
ASX
listed
companies
Beach
Energy
Limited
(since
1991),
Flinders
Mines
Limited
(since 2001),
Maximus
Resources
Limited
(since
2004),
Monax
Mining
Ltd
(since
2004),
ERO
Mining
Limited 21 Corporate Governance Statement (since
2006),
Marmota
Energy
Limited
(since
2007)
and
Somerton
Energy
Limited
(since
2010).
His
special
responsibilities
include
membership
of
the
Audit
Committee
and
the
Nomination
&
Remuneration
Committee. Mr
Kennedy
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.
Mr
Kennedy
leads
the
development
of
strategies
for
the
development
and
future
growth
of the
Company. Reginald George Nelson Non-Executive Director - BSc, Hon Life Member Society of Exploration Geophysicists, FAusIMM, FAICD. Mr
Nelson
joined
Ramelius
Resources
Limited
as
a
non-executive
director
on
1
November
1995.
He
has
had a
career
spanning
four
decades
as
an
exploration
geophysicist
in
the
minerals
and
petroleum
industries. He
was
chairman
of
the
peak
industry
organisation,
the
Australian
Petroleum
Production
and
Exploration
Association
(APPEA)
from
2004
to
2006
and
remains
a
member
of
its
Council.
He
is
a
former
Chairman
of
the Nevoria
Gold
Mine
Joint
Venture
in
Western
Australia.
He
has
broad
experience
in
gold
exploration
and
mining
operations
in
Western
Australia,
the
Northern
Territory
and
South
Australia.
He
is
also
a
director
of
ASX listed
companies,
Beach
Energy
Limited
(since
1992),
Monax
Mining
Ltd
(since
2004),
Marmota
Energy Limited
(since
2007)
and
Sundance
Energy
Limited
(since
2010).
His
special
responsibilities
include
Chairmanship
of
the
Audit
Committee
and
the
Nomination
&
Remuneration
Committee.
Mr
Nelson’s
contribution to
the
Board
is
his
wide
technical
expertise
and
knowledge
of
the
mining
industry
and
corporate matters.
Ian James Gordon Executive Director and Chief Executive Officer - B.Com, MAICD. Mr
Gordon
joined
Ramelius
Resources
Limited
as
an
executive
director
on
18
October
2007.
He
has
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.
He
was
a
director
of
ASX
listed
company,
Glengarry
Resources
Limited
(2004
to
2005).
His
special
responsibilities
relate
to
directing
the
exploration
program
and
development
of
the
Wattle
Dam
gold
mine.
Mr
Gordon’s
contribution
to
the
Board
is
his
broad
experience
in
gold
exploration
and
mining
operations
in
Australia
and knowledge
of
industry
issues
is
directed
towards
expanding
and
strengthening
the
future
growth
of
the
Company.
Joseph Fred Houldsworth Non-Executive Director Mr
Houldsworth
joined
Ramelius
Resources
Limited
as
an
executive
director
on
18
February
2002
and
was
Managing
Director
and
Chief
Executive
Officer
until
31
July
2009.
He
has
extensive
practical
experience
in
the
resources
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.
He
was
instrumental
in
turning
around
the
troubled
Nevoria
Gold
Mine
in
1993
and
is
a
former
consultant
for
10
years
to
insolvency specialists
on
both
mining
and
exploration.
Mr
Houldsworth’s
contribution
to
the
Board
is
his
considerable
experience
and
knowledge
of
the
mining
industry
and
as
the
former
chief
executive
of
the
company
as
well as
his
background
in
asset
management
for
various
mining
entities.
22 Corporate Governance Statement Kevin James Lines Non-Executive Director - BSc (Geology), MAusIMM. Mr
Lines
joined
Ramelius
Resources
Limited
as
a
non-executive
director
on
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
is
also
managing
director
of
ASX listed
company,
ERO
Mining
Limited
(since
2006).
Mr
Line’s
contribution
to
the
Board
is
his
extensive experience
in
the
assessment
and
evaluation
of
exploration
projects
and
development
of
properties
and
mining
operations
overseas. B13. The
Company
held
35
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 Nomination & Remuneration Committee Meetings Due Diligence Committee Meetings Number Number Attended Eligible to attend Number Eligible to attend Number Attended Number Number Attended Eligible to attend Number Number Eligible Attended to attend Director Robert
Michael
Kennedy
2 Reginald
George
Nelson
2 Joseph
Fred
Houldsworth
1,
2 Ian
James
Gordon 1 Kevin
James
Lines
1 26 26 26 26 26 26 25 25 26 26 2 2 - - - 2 2 - - - 2 2 - - - 2 2 - - - - - - 5 5 - - - 5 5 1 Messrs
Houldsworth,
Gordon
and
Lines
are
not
members
of
the
Audit
Committee
or
the
Nomination
&
Remuneration
Committee. 2 Messrs
Kennedy,
Nelson
and
Houldsworth
are
not
members
of
the
Due
Diligence
Committee. 23 Corporate Governance Statement B14. The
composition
of
the
Board
currently
consists
of
five
directors,
Mr
RM
Kennedy
(Chairman),
Mr
RG
Nelson,
Mr
JF
Houldsworth,
Mr
KJ
Lines
and
Mr
IJ
Gordon.
Apart
from
Mr
Gordon
(Chief
Executive
Officer),
all
other
directors
including
the
Chairman,
are
non-executives.
Although
the
composition
of
the
Board
is
comprised
of a
majority
of
non-executive
directors,
the
majority
of
the
Board
is
however
not
regarded
as
meeting
the
criteria
of
being
independent
because
two
of
the
non-executive
directors
(Messrs
Kennedy
and
Nelson)
are officers
of
a
substantial
shareholder
of
the
Company
and
Mr
Houldsworth
was
Managing
Director
until
July 2009.
One
director
(Mr
Lines)
meets
the
independent
director
criteria
contained
in
ASXCGC
best
practice
recommendation
2.1.
Notwithstanding
the
criteria
set
out
in
best
practice
recommendation
2.1,
the
Board considers
that
all
non-executive
directors
act
independent
from
any
conflict
of
interest
and
in
the
best
interests
of
stakeholders
because
all
directors
are
required
to
disclose
any
conflict
or
material
interest
in
any matter
being
considered
by
the
Board
in
accordance
with
the
provisions
of
Section
191
of
the
Corporations
Act. B15. Mr
Kennedy’s
role
as
Chairman
of
the
Board
is
separate
from
that
of
the
Managing
Director/Chief
Executive
Officer,
Mr
Houldsworth
(until
31
July
2009)/Mr
Gordon
(since
1
August
2009)
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. B16. 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. B17. 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.
B18. The
Board
Charter
details
the
roles
of
the
Chairman
and
Managing
Director/Chief
Executive
Officer
as
follows. Role of the Chairman B19. 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/Chief
Executive
Officer
and
providing
ongoing
support
and
advice; • Overseeing
communications
with
shareholders
and
other
key
stakeholders
and
representing
the
Board
of
Directors
as
required. 24 Corporate Governance Statement Role of the Managing Director/Chief Executive Officer B20. The
role
of
the
Managing
Director/Chief
Executive
Officer
is
separate
from
the
Chairman
and
is
appointed
by the
non-executive
directors
of
the
Board.
The
responsibilities
of
the
Managing
Director/Chief
Executive
Officer
include
the
following: • Recommending
strategic
directions
and
implementing
business
plans
approved
by
the
Board; • Managing
the
day
to
day
operations
of
the
Company
including
its
financial,
physical
and
human
resources; • 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. Principle 3 – Promote ethical and responsible decision making Ethical standards B21. The
Company
aims
to
a
high
standard
of
corporate
governance
and
ethical
conduct
by
directors
and
employees. B22. The
Company
has
a
Policy
Manual
which
contains
a
code
of
conduct
that
provides
guidance
to
employees
regarding
expected
standards
of
behaviour,
ethics
and
integrity
as
a
condition
of
their
employment. B23. 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
matters;
• keep
confidential
the
business
of
all
directors
meetings;
and • observe
and
support
the
Board’s
Corporate
Governance
practices
and
procedures. B24. 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. B25. 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. 25 Corporate Governance Statement Trading in the Company’s Securities B26. The
Company
has
a
policy
whereby
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. B27. In
addition
the
Board
has
approved
a
formal
policy
regarding
notification
of
Directors’
interests
in
securities
of the
Company
and
contracts. Principle 4 – Safeguard integrity in financial reporting CEO/CFO declarations on financial reports B28. 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. Audit Committee B29. 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
established
an
Audit
Committee
in
accordance
with
ASXCGC
best
practice
recommendation 4.1
to
oversee
the
Company’s
internal
controls,
ethical
standards,
financial
reporting,
and
external
accounting and
compliance
procedures.
B30. The
Board
has
adopted
a
formal
Charter
for
the
Audit
Committee
in
accordance
with
ASXCGC
best
practice
recommendation
4.3.
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. B31. The
Audit
Committee
is
generally
responsible
for
the
integrity
of
the
Company’s
financial
reporting
and
overseeing
the
performance
and
independence
of
the
external
auditor. B32. 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. B33. The
Audit
Committee’s
responsibilities
are
as
follows: • Overseeing
establishment,
maintenance
and
reviewing
the
effectiveness
of
the
Company’s
internal
control and
ensuring
efficacy
and
efficiency
of
operations,
reliability
of
financial
reporting
and
compliance
with
applicable
Accounting
Standards,
Regulations
and
ASX
Listing
Rules;
• Reviewing,
assessing
and
making
recommendations
to
the
Board
on
the
annual
and
half
year
financial
reports
and
other
financial
information
or
formal
announcements
published
or
released
by
the
Company; • Assessing
and
ensuring
that
any
significant
transactions
and
related
party
dealings
are
properly
recognised,
recorded
and
disclosed
in
the
Company’s
financial
reports; • Obtaining
and
reviewing
statements
from
the
Chief
Executive
Officer
and
Chief
Financial
Officer
expressing
opinions
on
whether
the
Company’s
financial
records
have
been
properly
maintained
and
whether
financial
statements
comply
with
accounting
standards
and
present
a
true
and
fair
view; 26 Corporate Governance Statement • 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
any
significant
external
auditor
findings
and
recommendations; • Reporting
generally
to
the
Board
on
the
activities
of
the
Committee
and
making
any
necessary
recommendations
relating
to
areas
of
improvement; • Reviewing
the
contents
of
statements
to
be
included
in
the
annual
report
on
the
activities
of
the
Committee; • Ensuring
effective
communication
and
reporting
of
the
role
of
the
Committee
to
shareholders
and
other
key stakeholders
of
the
Company; • Reviewing
and
assessing
annually
the
performance
of
the
Committee
and
the
adequacy
of
this
Charter. B34. The
Audit
Committee
currently
consists
of
the
two
non-executive
Board
directors,
Messrs
Kennedy
&
Nelson, and
is
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
according
to
the
criteria
set
out
in
the
ASXCGC
best
practice
recommendations
because
they
are
officers
of a
substantial
shareholder
of
the
Company.
Notwithstanding
the
criteria
set
out
in
best
practice
recommendation 2.1
regarding
independence,
the
Board
considers
that
all
members
of
the
Committee
act
independent
from any
conflict
of
interest
and
in
the
best
interests
of
stakeholders
because
all
directors
are
required
to
disclose any
conflict
or
material
interest
in
any
matter
being
considered
by
the
Committee
in
accordance
with
the
provisions
of
Section
191
of
the
Corporations
Act.
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
4.2
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
is
appropriate
given
the
current
composition
and
size
of
the
Board
of
Directors.
B35. 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: 27 Corporate Governance Statement • 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/Chief
Executive
Officer,
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. B36. The
Committee
meets
at
least
two
times
per
annum
and
reports
to
the
Board.
The
Managing
Director/Chief
Executive
Officer,
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 B37. 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. B38. 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
the
continuous
compliance
requirements
of
the
ASX
Listing
Rules
given
the
size
of the
Company. Principle 6 – Respect the rights of shareholders The Role of Shareholders B39. The
Board
aims
to
ensure
that
shareholders
are
informed
of
all
major
developments
affecting
the
Company’s state
of
affairs.

In
accordance
with
the
ASXCGC
best
practice
recommendation
6.1,
information
is
communicated
to
shareholders
as
follows: • the
annual
financial
report
which
includes
relevant
information
about
the
operations
of
the
Company
during
the
year,
changes
in
the
state
of
affairs
of
the
entity
and
details
of
future
developments,
in
addition to
the
other
disclosures
required
by
the
Corporations
Act
2001;
the
half
yearly
financial
report
lodged
with
the
Australian
Securities
Exchange
and
thereby
the
Australian
Securities
and
Investments
Commission
and
sent
to
all
shareholders
who
request
it;
• 28 Corporate Governance Statement • 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. B40. 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
recommendations,
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 B41. 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.
The
Board of
Directors

believe
that
consistent
with
the
operations
of
the
Company,
its
key
stakeholders,
principally
shareholders,
are
willing
to
accept
a
higher
level
of
risk
than
may
otherwise
be
expected
with
other
listed
companies
in
return
for
higher
potential
rewards.

Nevertheless,
the
Directors
consider
that
there
is
value
in
formalising
a
process
for
monitoring
material
business
risks
in
order
to
assist
it
with
its
overall
responsibility
for
mitigating
such
risks.
B42. The
Board
has
approved
a
policy
manual
the
contents
of
which
assists
with
risk
mitigation,
oversight
and management.
However
the
Board
has
not
to
date
requested
management
to
formally
design
and
implement a
risk
management
and
internal
control
system
to
manage
the
entity’s
material
business
risks
because
the Board
considers
the
size
of
the
Company
renders
the
costs
associated
with
this
to
be
prohibitive.
Consequently
management
does
not
currently
report
to
the
Board
against
a
formal
risk
management
and
internal
control
system.
Notwithstanding
this,
the
Company
has
during
the
year
held
a
risk
review
and
developed
a
risk
register. B43. Although
the
Board
recognises
its
ultimate
responsibility
for
risk
management
and
oversight,
in
discharging
its
duties,
considerable
reliance
is
placed
on
information
provided
by
management
to
mitigate
material
business risks.

Ramelius
does
not
have
a
separate
Risk
Management
Committee
as
the
Directors
do
not
consider
this
would
be
efficient
given
the
size
of
the
Board
and
in
view
of
the
size
of
the
Company
and
the
environment
in which
it
operates.
Instead
Directors
prefer
to
proactively
and
continually
assess
all
material
business
risks
as part
of
the
Board’s
overall
decision
making
process.

Whilst
every
effort
is
made
by
Directors
to
weigh
up 29 Corporate Governance Statement material
business
risks
against
potential
rewards
in
their
decision
making
process,
the
Board
acknowledges that
no
process
can
guarantee
elimination
of
potential
material
loss. B44. 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
respects,
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.
The
declarations
were
provided
to
the
Board
in
respect
of
the
2010
financial
year. 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.
Principle 8 – Remunerate fairly and responsibly Remuneration Policy B45. In
accordance
with
ASXCGC
best
practice
recommendations,
the
Company’s
remuneration
practices
are
set out
as
follows: Remuneration Practices B46. 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. B47. 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
$450,000
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/Chief
Executive
Officer
is
determined
by
the
non-executive
Directors
on
the
Nomination
and
Remuneration
Committee
and
approved
by
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/Chief
Executive
Officer
subject
to the
approval
of
the
Board. B48. Non-executive
director
remuneration
is
by
way
of
fees
and
statutory
superannuation
contributions.
Non- executive
Directors
do
not
participate
in
schemes
designed
for
remuneration
of
executives
nor
do
they
receive
options
or
bonus
payments
and
are
not
provided
with
retirement
benefits
other
than
salary
sacrifice
and
statutory
superannuation. 30 Corporate Governance Statement B49. 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
Nomination
and
Remuneration
Committee
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
August
2008,
a
Nomination
and
Remuneration
Committee
was
established
to
assist
the
Board
by
overseeing
remuneration
policies
and
make
recommendations
to
the
Board.
The
Company
may
also
engage
external
consultants
to
advise
on
remuneration
policy
and
to
benchmark
remuneration
of
senior
executives
against
comparable
entities
so
as
to
ensure
that
remuneration
packages
are
consistent
with
the
market
and
are
appropriate
for
the
organisation. B50. All
key
management
personnel
receive
a
base
salary
based
on
factors
such
as
experience,
length
of
service,
superannuation
and
performance
incentives.
Performance
incentives
are
generally
paid
once
predetermined key
performance
indicators
have
been
met.
Key
management
personnel
receive
a
statutory
superannuation
guarantee
contribution,
however
do
not
receive
any
other
form
of
retirement
benefits.
Individuals
may
elect
to salary
sacrifice
part
of
their
salary
to
increase
payments
towards
superannuation.
On
retirement,
key
management
personnel
are
paid
employee
benefit
entitlements
accrued
to
the
date
of
retirement. B51. To
date,
the
Company
has
not
emphasised
payment
for
results
through
the
provision
of
cash
bonus
schemes or
other
incentive
payments
based
on
key
performance
indicators.
However
the
Nomination
and
Remuneration Committee
may
recommend
to
the
Board
the
payment
of
cash
bonuses
from
time
to
time
in
order
to
reward
individual
executive
performance
in
achieving
key
objectives
as
considered
appropriate
by
the
Nomination

and
Remuneration
Committee.
Cash
bonuses
paid
during
the
financial
year
are
disclosed
in
the
Remuneration Report. B52. All
remuneration
paid
to
key
management
personnel
is
valued
at
the
cost
to
the
Company
and
expensed. Employee Incentive Plan B53. The
Company
has
an
Employee
Share
Acquisition
Plan
and
a
Performance
Rights
Plan
which
have
been
approved
by
shareholders
in
November
2007.
The
Share
Acquisition
Plan
enables
the
Board
to
offer
eligible
employees
as
a
long-term
incentive,
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.

B54. 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. B55. During
the
year
ended
30
June
2010
no
shares
were
issued
to
employees
under
the
Employee
Share
Acquisition
Plan
or
Performance
Rights
Plan. 31 Corporate Governance Statement Performance Based Remuneration B56. Key
Management
Personnel
receive
performance
based
remuneration
as
considered
appropriate
by
the
Nomination
and
Remuneration
Committee
and
the
Board.
The
intention
of
this
remuneration
is
to
facilitate goal
congruence
between
Key
Management
Personnel
with
that
of
the
business
and
shareholders. B57. 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. B58. The
first
method
was
the
issue
of
options
to
Key
Management
Personnel.
During
the
2008
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.
These
options
were
not
exercised
and
lapsed
at
expiry.
No
options
were issued
to
Key
Management
Personnel
during
the
2010
financial
year. B59. 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 B60. During
the
2008
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.
No
Performance
Rights
were granted
during
the
2010
financial
year.
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.
B61. The
employment
conditions
of
Executive
Directors
including
the
Chief
Executive
Officer
and
Key
Management
Personnel
are
formalised
in
contracts
of
employment.
During
the
year
a
new
employment
contract
for
the
Chief
Executive
Officer
was
entered
into.
The
contracts
have
no
fixed
term
with
3
months
and
6
months
notice
of
termination
by
the
executive
and
Company
respectively.
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.

32 Corporate Governance Statement 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. B62. Details
of
Directors’
and
executives/officers’
remuneration,
superannuation
and
retirement
payments
are
set out
in
the
Remuneration
Report
section
of
the
Directors’
Report. B63. In
August
2008
the
Board
established
a
Remuneration
Committee
to
deal
with
executive
performance,
remuneration,
recruitment,
retention
and
termination
policies
for
senior
management
and
incentive
schemes.
In
August
2009
the
committee
was
renamed
the
Nomination
and
Remuneration
Committee. B64. The
Nomination
and
Remuneration
Committee
currently
consists
of
two
non-executive
Board
directors, Messrs
Kennedy
&
Nelson,
and
is
chaired
by
Mr
Nelson.
Details
of
these
directors’
qualifications
and
attendance
at
meetings
are
set
out
in
the
Directors’
Report
section
of
this
report.
The
Board
considers
the
current
composition
of
the
Nomination
and
Remuneration
Committee
is
appropriate
given
the
current
composition
and
size
of
the
Board
of
Directors. Products Limiting Risk B65. The
Company
has
a
policy
that
Directors
should
not
engage
in
hedge
contracts
over
securities
of
the
Company. Corporate Governance Statements B66. Corporate
governance
statements
relating
to
the
following
matters
are
publicly
available
from
the
Company’s
website
at
www.rameliusresources.com.au


• Functions
and
responsibilities
of
the
Board,
Chairman
&
Managing
Director/Chief
Executive
Officer; • Board
Charter; • Audit
Committee
Charter; • Nomination
and
Remuneration
Committee
Charter; • Code
of
Conduct; • Trading
Policy; • Continuous
Disclosure; • Risk
oversight
and
management; • Products
limiting
risk. 33 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 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. AUGER -
A
screw-like
boring
or
drilling
tool
for
use
in
clay
or
soft sediments. DIP -
The
angle
at
which
rock
stratum
or
structure
is
inclined from
the
horizontal. AS -
Arsenic DYKE -
Tabular
igneous
intrusive
cutting
the
bedding
or
planar features
in
the
country
rock. ASX -
The
Australian
Securities
Exchange
Limited
(ACN
008 629
691) EL -
Exploration
Licence. AU -
Gold ELA -
Exploration
Licence
application. 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. EM -
Electromagnetic,
a
geophysical
technique
used
to
detect
conductive
material
in
the
earth. EOH -
End
of
Hole. FAULT -
A
fracture
in
rocks
along
which
rocks
on
one
side
have been
moved
relative
to
the
rocks
on
the
other. BCM -
Bank
Cubic
Metre.
Usually
refers
to
the
volume
of
waste
measured
in
situ. F.C.I. -
Free
carried
interest. BERM -
A
horizontal
bench
left
in
the
wall
of
an
open
pit
to
provide
stability
to
the
wall. BIOTITE -
A
mineral
of
the
mica
group
widely
distributed
in
a variety
of
rock
types. CALCRETE -
Soil
and
superficial
material
cemented
by
calcium carbonate. CARBONATE -
A
common
mineral
type
consisting
of
carbonates
of
calcium,
iron,
and/or
magnesium. FELSIC -
Light
coloured
rock
containing
an
abundance
of
any of
the
following:
-
feldspars,
felspathoids
and
silica. FERRUGINOUS -
Containing
iron. FLITCH -
A
Mining
Term
for
the
different
levels
in
an
open
pit. GEOCHEMICAL EXPLORATION - 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. CHLORITE -
A
representative
of
a
group
of
micaceous
greenish
minerals
which
are
common
in
low
grade
schists
and is
also
a
common
mineral
associated
with
hydrothermal
ore
deposits. 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. 34 Glossary of Terms g/cc -
grams
per
cubic
centimetre M -
metre G.I.C. -
Gold
in
circuit g/t -
grams
per
tonne ML -
Mining
Lease. MLA -
Mining
Lease
Application. 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. 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. GRAVITY CIRCUIT -
Part
of
the
Gold
Treatment
Plant
where gold
particles
are
accumulated
by
virtue
of
their
density. 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 Hg -
Mercury JORC -
The
Australasian
Code
for
Reporting
of
Mineral
Resources and
Ore
Reserves km -
kilometre 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. KOMATIITE -
An
ultramafic
rock
with
high
magnesium
content extruded from
a
volcano. OXIDISED -
Near
surface
decomposition
by
exposure
to
the atmosphere
and
groundwater,
compare
to
weathering. LAG -
A
residual
deposit
remaining
after
finer
particles
have been
blown
away
by
wind. oz -
Troy
ounces
=
31.103477
grams LATERITE -
Highly
weathered
residual
material
rich
in
secondary oxides
or
iron
and/or
aluminium. Pb -
Lead PEDOGENIC -
The
development
of
soil. LEACHWELL -
An
analytical
method. LODE DEPOSIT -
A
vein
or
other
tabular
mineral
deposit
with distinct
boundaries. MASSIVE -
Large
Homogeneous
structure. in
mass,
having
no
stratification.
MINERALISED -
Rock
impregnated
with
minerals
of
economic importance. PENTLANDITE -
An
important
ore
of
nickel
(FeNi)9S8 PETROLOGICAL -
Pertains
to
a
study
of
the
origin,
distribution, structure
and
history
of
rocks. PERCUSSION DRILLING -
Method
of
drilling
where
rock
is
broken
by
the
hammering action
of
a
bit
and
the
cuttings
are carried
to
the
surface
by
pressurised
air
returning
outside
the drill
pipe. M TONNES -
million
tonnes Pd -
Palladium. 35 Glossary of Terms PL -
Prospecting
Licence. Sb - Antinomy
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. SECONDARY GOLD - Gold
mineralisation
that
has
been
subject
to
and
usually
enriched
by
weathering
processes. SEDIMENTARY ROCKS -
Rocks
formed
by
deposition
of
particles
carried
by
air,
water
or
ice. SHEAR ZONE -
A
generally
linear
zone
of
stress
along
which deformation
has
occurred
by
translation
of
one
part
of
a
rock body
relative
to
another
part. PROTEROZOIC - The
Precambrian
era
after
Archaean. SILICIFIED -
Alteration
of
a
rock
by
introduction
of
silica. 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. RESERVE -
The
mineable
part
of
a
resource
to
which
a
tonnage
and
grade
has
been
assigned
according
to
the
JORC code. RESOURCE - Mineralisation
to
which
a
tonnage
and
grade
has been
assigned
according
to
the
JORC
code. ROCK CHIP SAMPLE -
A
series
of
rock
chips
or
fragments taken
at
regular
intervals
across
a
rock
exposure. STRATIGRAPHY -
The
study
of
formation,
composition
and correlation
of
sedimentary
rocks. STRIKE -
The
direction
of
bearing
of
a
bed
or
layer
of
rock
in the
horizontal
plane. SULPHIDES -
Minerals
consisting
of
a
chemical
combination
of sulphur
with
a
metal. t -
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.
VACUUM DRILLING - A
method
of
rotary
drilling
where
the drill
cuttings
are
recovered
inside
the
drill
rods
by
a
vacuum
system. 36 Photographs and Diagrams Figure 1 - Wattle Dam Underground Mine (Left) Figure 2 Spargoville Project Location including Wattle Dam Gold Mine (Above) Examining Wattle Dam Diamond Core 37 Photographs and Diagrams Figure 3 - Australian Project Locations Figure 4 - Mt Windsor Prospect Locations 38 Photographs and Diagrams Figure 5 - Nevada Project Locations 39 Photographs and Diagrams Wattle Dam Underground Mining Operations Haulage of Gold Ore from Wattle Dam Underground Mine 40 Ramelius Resources Limited Consolidated Entity Annual Financial Report 30 June 2010 41 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report The directors present their report together with the financial report of Ramelius Resources Limited - Consolidated Entity (“the Group”) for the year ended 30 June 2010 and the auditor’s report thereon. Directors The directors of Ramelius Resources Limited (“the Company”) at any time during or since the end of the financial year are as set out below. Details of directors’ qualifications, experience, special responsibilities and interests in shares and options of the Company are as follows. Robert Michael Kennedy Non-Executive Chairman - ASAIT, Grad. Dip (Systems Analysis), FCA, ACIS, Life member AIM, FAICD. Mr Kennedy joined Ramelius Resources Limited on 1 November 1995 as a non-executive chairman. He is a chartered accountant and a consultant to Kennedy & Co, Chartered Accountants, a firm he founded. He is also a director of ASX listed companies Beach Energy Limited (since 1991), Flinders Mines Limited (since 2001), Maximus Resources Limited (since 2004), Monax Mining Ltd (since 2004), ERO Mining Limited (since 2006), Marmota Energy Limited (since 2007) and Somerton Energy Limited (since 2010). His special responsibilities include membership of the Audit Committee and the Nomination & Remuneration Committee. Mr Kennedy 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. Mr Kennedy leads the development of strategies for the development and future growth of the Company. Mr Kennedy has an interest in 7,729,572 shares but does not have an interest in any options of the Company. Reginald George Nelson Non-Executive Director - BSc, Hon Life Member Society of Exploration Geophysicists, FAusIMM, FAICD. Mr Nelson joined Ramelius Resources Limited as a non-executive director on 1 November 1995. He has had a career spanning four decades as an exploration geophysicist in the minerals and petroleum industries. He was chairman of the peak industry organisation, the Australian Petroleum Production and Exploration Association (APPEA) from 2004 to 2006 and remains a member of its Council. He is a former Chairman of the Nevoria Gold Mine Joint Venture in Western Australia. He has broad experience in gold exploration and mining operations in Western Australia, the Northern Territory and South Australia. He is also a director of ASX listed companies, Beach Energy Limited (since 1992), Monax Mining Ltd (since 2004), Marmota Energy Limited (since 2007) and Sundance Energy Limited (since 2010). His special responsibilities include Chairmanship of the Audit Committee and the Nomination & Remuneration Committee. Mr Nelson’s contribution to the Board is his wide technical expertise and knowledge of the mining industry and corporate matters. Mr Nelson has an interest in 5,331,984 shares but does not have an interest in any options of the Company. Ian James Gordon Executive Director and Chief Executive Officer - BCom, MAICD. Mr Gordon joined Ramelius Resources Limited as an executive director on 18 October 2007. He has 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. He was a director of ASX listed company, Glengarry Resources Limited (2004 to 2005). His special responsibilities relate to directing the exploration program and development of the Wattle Dam gold mine. Mr Gordon’s contribution to the Board is his broad experience in gold exploration and mining operations in Australia and knowledge of industry issues directed towards expanding and strengthening the future growth of the Company. Mr Gordon has an interest in 14,979 shares but does not have an interest in any options of the Company. Joseph Fred Houldsworth Non-Executive Director Mr Houldsworth joined Ramelius Resources Limited as an executive director on 18 February 2002 and was Managing Director and Chief Executive Officer until 31 July 2009. He has extensive practical experience in the resources 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. He was instrumental in turning around the troubled Nevoria Gold Mine in 1993 and is a former consultant for 10 years to insolvency specialists on both mining and exploration. Mr Houldsworth’s contribution to the Board is his considerable experience and knowledge of the mining industry and as the former chief executive of the Company as well as his background in asset management for various mining entities. Mr Houldsworth has an interest in 4,124,710 shares but does not have an interest in any options of the Company. 42 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Kevin James Lines Non-Executive Director - BSc (Geology), MAusIMM. Mr Lines joined Ramelius Resources Limited as a non-executive director on 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 is also managing director of ASX listed company, ERO Mining Limited (since 2006). Mr Line’s contribution to the Board is his extensive experience in the assessment and evaluation of exploration projects and development of properties and mining operations overseas. Mr Lines does not have an interest in any shares or options of the Company. Directors’ meetings The Company held 35 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 Nomination & Remuneration Committee Meetings Due Diligence Committee Meetings Number Eligible to attend Number Attended Number Eligible to attend Number Attended Number Eligible to attend Number Attended Number Eligible to attend Number Attended Director Robert Michael Kennedy 2 Reginald George Nelson 2 Joseph Fred Houldsworth 1, 2 Ian James Gordon 1 Kevin James Lines 1 26 26 26 26 26 26 25 25 26 26 2 2 - - - 2 2 - - - 2 2 - - - 2 2 - - - - - - 5 5 - - - 5 5 1 Messrs Houldsworth, Gordon and Lines are not members of the Audit Committee or the Nomination & Remuneration Committee. 2 Messrs Kennedy, Nelson and Houldsworth are not members of the Due Diligence Committee. 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 Group’s principal activity is minerals exploration with a focus on gold, mining and milling services. Review and results of operations Mining & Milling During the financial year the Group continued to develop the Wattle Dam underground gold mine. Milling of the first parcel of development ore from the mine commenced in November 2009 and resulted in the production of the second tonne of gold from Wattle Dam during December 2009. Stoping of high grade ore commenced on 30 December 2009. The Group mined 85,024 tonnes of high grade ore during the financial year from the Wattle Dam underground mine at an estimated grade of 17.875g/t gold and 11,067 tonnes of low grade ore at 2.29g/t gold for a total of 96,091 tonnes at an average of 16.08g/t. A total of 78,749 tonnes of gold ore was milled during the year to produce 60,780 ounces of gold. In June 2010 production from the Wattle Dam mine achieved a milestone of 100,000 fine ounces of gold. 43 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Gold sales to 30 June 2010 totalled $58,216,931 at an average gold sales price of $1,261.56 per ounce. This compares with gold sales of $19,830,035 at an average gold sales price of $1,288.33 per ounce during the previous financial year. The Burbanks processing facility also toll treated 73,339 tonnes of third party ore during the year. Exploration During the year the Group carried out in-pit and underground infill diamond drilling at the Wattle Dam gold mine to further define the interpreted mineralised zone at depth below the current underground mine plan. This work was continuing subsequent to the end of the reporting period. During the financial year, drilling programs were also carried out at the Company’s Eagles Nest, Bullabulling West, Hilditch, West Wattle Dam, 5Q, Wattle Dam Regional and North Widgie projects however no further exploration work has been planned on these projects. A SAM (Sub-Audio Magnetics) survey was completed immediately north of the Wattle Dam open pit which covered approximately 1.1 kilometres of strike, north from Wattle Dam. At Glen Isla a 3D induced polarisation (IP) survey over the project area was carried out in the latter part of the financial year. A soil sampling program was carried out during the June 2010 quarter at the Big Blue gold project in Nevada USA. Results The consolidated net profit after income tax for the year was $20,198,695 and compares with an after tax profit of $4,973,356 for the previous financial year. Dividends No dividends have been paid or provided by the Group since the end of the previous financial year. Significant changes in state of affairs Significant changes in the state of affairs of the Group during the year were as follows: (cid:120) Mr Joe Houldsworth retired as founding Managing Director after more than six years in the role however he continues to serve on the Ramelius Board as a Non-Executive Director. In addition to accrued leave entitlements, Mr Houldsworth at the time of his retirement was paid a separation payment totalling $234,712. Mr Houldsworth’s entitlement to 450,000 rights in Ramelius shares which were granted on 7 April 2008 at a fair value of $288,000, lapsed on his retirement (refer Note 22(ii) to the Financial Statements). (cid:120) Chief Operating Officer and Executive Director, Mr Ian Gordon, was appointed Chief Executive Officer, effective from 1 August 2009; (cid:120) The Company announced an offer for all of the shares of Dioro Exploration NL (“Dioro”) on 30 July 2009 whereby Ramelius offered Dioro shareholders two Ramelius shares for every one Dioro share held. The 2 for 1 scrip offer valued Dioro shares at $1 per share with total equity value at approximately $92 million. On 11 August 2009 the Company announced that it had waived all conditions on the offer (including the minimum requirement of 50.1% acceptances) except for Foreign Investment Review Board approval, which was subsequently received on 22 September 2009. Dioro shareholders were sent a Bidder’s Statement on 9 September 2009. The offer opened on 10 September 2009 and the initial closing date of 12 October 2009 was extended several times. On 18 December 2009 the Company increased the offer consideration to 2.1 Ramelius shares for every Dioro share and declared it to be the last and final offer and would not be extended past the closing date of 8 February 2010. The Company closed its offer for Dioro Exploration NL on 8 February 2010 having secured 34,352,544 Dioro shares representing a 37.51% stake of the target; (cid:120) On 12 February 2010 the Company accepted an offer from Avoca Resources Limited for its interest in Dioro for a consideration of $0.65 cash and 0.325 Avoca shares per Dioro share resulting in the receipt of $22.3 million in cash and 11,164,578 Avoca shares. All the Avoca shares were subsequently sold at a price of $1.80 for gross proceeds of $20.1 million; (cid:120) The Company executed a letter of acceptance with Miranda Gold Corporation to spend up to US$4 million on exploration over 5 years to earn a 60% interest in Miranda’s Big Blue project in Nevada, USA (with a minimum 44 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) expenditure of US$250,000 before the Company can withdraw), and the potential to earn a further 10% interest by completion of a bankable feasibility study, incurring expenditure of at least US$4 million over 4 years or additional expenditure of US$10 million over 10 years (under an Alliance Agreement agreed between Ramelius and Marmota Energy Limited, Marmota elected to participate for a 40% interest in Ramelius’ rights under the agreement); (cid:120) A farm-in agreement was entered into with Carpentaria Exploration Limited to spend A$1 million on exploration over 18 months to earn a 51% interest in Carpentaria’s Glen Isla Project near Dubbo in NSW (with a minimum expenditure of A$100,000 before the Company can withdraw), and the potential to earn a further 24% interest by completion of a bankable feasibility study; (cid:120) In April 2010 the Company entered into a farm-in agreement with Liontown Resources Limited to spend up to A$7 million over 4 years with a minimum spend of A$1.25 million in the first year to earn a 60% interest in the Mt Windsor Gold Project in North Queensland; (cid:120) On 1 March 2010, the Company announced a 66% increase in the Wattle Dam gold resource estimate; (cid:120) In May 2010 directors announced a repayment of capital of 5 cents per share subject to the approval of shareholders and receipt of a favourable ATO class ruling. Shareholders approved the capital repayment on 30 June 2010 and a favourable ATO class ruling was subsequently received in August 2010; and (cid:120) Share capital increased during the financial year by $33,934,524 as result of 72,140,701 shares issued to accepting Dioro shareholders at a fair value of $33,932,056 and 2,468 shares issued to option-holders who exercised 2,468 options at $1 each. Events subsequent to balance date The following events occurred since 30 June 2010. Acquisition of Mt Magnet On 20 July 2010 the Group acquired 100% of the issued capital of Mt Magnet Gold NL for a cash consideration of $35,346,500 plus replacement of environmental bonds of $4,653,500 via bank guarantees. Joint venture agreement The Group entered into a farm-in agreement with Miranda Gold Corporation to earn a 70% interest in the Angel Wing Gold Project in Nevada USA by exploration expenditure of US$4 million over 5 years with a minimum expenditure commitment of US$350,000 before it may withdraw. Under an alliance with Marmota Energy Limited, Marmota may participate and earn a 40% interest in Ramelius’ rights under the farm-in agreement. Capital Repayment The capital repayment amounting to $14,567,264 was paid on 20 August 2010. Apart from the above, there has not arisen in the interval between 30 June 2010 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 Development of the Wattle Dam current underground mine plan is expected to continue into 2011. A significant exploration program of A$5 million is planned to be undertaken at the Mt Magnet Gold Project in 2010/11. 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. Options At the date of this report there were no unissued ordinary shares of the Company under option. During the financial year, 2,468 ordinary shares were issued as a result of the exercise of options. Since the end of the financial year, the Company issued ordinary shares as a result of the exercise of options on 30 June 2010 as follows. There were no amounts unpaid on shares issued. 45 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Number of shares 2,362 Amount paid on each share $1.50 During the financial year a total of 18,450,258 options with an exercise price of $1.50 expired as they had not been exercised by the 30 June 2010 expiry date. Environmental regulation and performance statement The Consolidated Group’s operations are subject to significant environmental regulations under both Commonwealth and State 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 Group 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 Group 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 Group’s operations. Indemnification and insurance of officers Indemnification The Company is required to indemnify the directors and other officers of the Company against any liabilities incurred by the directors and officers that may arise from their position as directors and officers of the Company. No costs were incurred during the year pursuant to this indemnity. 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 the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the nature of the services provided as disclosed below did not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. The following fees were paid or payable to Grant Thornton for non-audit services provided during the year ended 30 June 2010: Due diligence related services $16,000 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 2010 has been received as set out immediately following the end of the Directors’ Report. 46 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Remuneration Report (Audited) This report forms part of the Directors Report and 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 Group’s policy for determining the nature and amounts of emoluments of Board members and Key Management Personnel of the Group 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 $450,000 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/Chief Executive Officer is determined by the non-executive directors on the Nomination and Remuneration Committee and approved by 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/Chief Executive Officer 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 salary sacrifice and statutory superannuation. The Group’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 Group. The Nomination and Remuneration Committee is responsible for assessing relevant employment market conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. The Nomination and Remuneration Committee assists the Board by overseeing remuneration policies and make recommendations to the Board. The Group may also engage external consultants to advise on remuneration policy and to benchmark remuneration of senior executives against comparable entities so as to ensure that remuneration packages are consistent with the market and are appropriate for the organisation. All key management personnel receive a base salary based on factors such as experience, length of service, superannuation and performance incentives. Performance incentives are generally paid once predetermined key performance indicators have been met. Key management personnel receive a statutory superannuation guarantee contribution but do not receive any other form of retirement benefits. Individuals may elect to salary sacrifice part of their salary to increase payments towards superannuation. On retirement, key management personnel are paid employee benefit entitlements accrued to the date of retirement. To date, the Group has not emphasised payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators. However the Nomination and Remuneration Committee may recommend to the Board the payment of cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Nomination and Remuneration Committee. Cash bonuses paid during the financial year are disclosed in the Remuneration Report. All remuneration paid to key management personnel is valued at the cost to the Company and expensed. Employee Incentive Plan The Company has an Employee Share Acquisition Plan and a Performance Rights Plan which have been approved by shareholders in November 2007. The Share Acquisition Plan enables the Board to offer eligible employees as a long- term incentive, 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 Group with the opportunity to participate in the equity of the Company as an incentive to achieve greater success and profitability for the Group and to maximise the long term performance of the Group. The objective 47 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) 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. There were no shares issued to employees under the Employee Share Acquisition Plan during the 2009/10 financial year. Performance Based Remuneration Key Management Personnel receive performance based remuneration as considered appropriate by the Nomination and Remuneration Committee and 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 through the issue of options to Key Management Personnel during the 2008 financial year. No options were issued to Key Management Personnel during the 2009 and 2010 financial years. 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 2008 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. No Performance Rights were granted during the 2009 and 2010 financial years. 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 the Chief Executive Officer and Key Management Personnel are formalised in contracts of employment. During the year, a new employment contract was entered into with Chief Operating Officer on his appointment as Chief Executive Officer. The contracts have no fixed term with 3 months and 6 months notice of termination by the executives and Company respectively. 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. Remuneration of Directors and Key Management Personnel This Report details the nature and amount of remuneration for each Director and Key Management Person of the Company and for the Executives receiving the highest remuneration. (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: 48 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Directors Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth 1 Mr IJ Gordon 2 Mr KJ Lines Key Management Personnel 4 Mr DA Francese Mr DA Doherty 4 Mr MI Svensson Mr AP Webb Mr KM Seymour 3 Positions Chairman – Non-Executive Director – Non-Executive Director – Non-Executive Director – Executive – Chief Executive Officer Director – Non-Executive Chief Financial Officer / Company Secretary Wattle Dam Underground Mine Manager Exploration Manager Burbanks Mill Process Manager Manager Business Development 1 Mr Houldsworth held the position of Managing Director and Chief Executive Officer until his retirement as an executive of the Company on 31 July 2009. Mr Houldsworth continues to serve on the Board as a non-executive director. 2 Mr Gordon held the position of Executive Director and Chief Operating Officer until the retirement of Mr Houldsworth as an executive of the Company. On 1 August 2009 Mr Gordon was appointed Chief Executive Officer. 3 Mr Seymour commenced as Manager Business Development on 1 July 2009. 4 Mr Kelty, a previous member of Key Management Personnel, retired as the Wattle Dam Mine Manager on 31 July 2008 following the appointment of Danny Doherty as Wattle Dam Underground Mine Manager. (b) Non-Executive Directors’ Remuneration Benefits and payments during the financial year and components of remuneration for Non-Executive Directors of the Consolidated Group are detailed as follows. Primary Benefits Year Directors Fees $ Super Contributions $ Non Cash Benefits $ Mr RM Kennedy Mr RG Nelson Mr KJ Lines Mr JF Houldsworth* 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 154,128 154,128 77,064 77,064 77,064 77,064 70,642 - 378,898 308,256 13,872 13,872 6,936 6,936 6,936 6,936 6,358 - 34,102 27,744 - - - - - - - - - - Total $ 168,000 168,000 84,000 84,000 84,000 84,000 77,000 - 413,000 336,000 Performance Related % - - - - - - - - - - * Mr Houldsworth retired as an executive on 31 July 2009 but continued as a non executive director of Ramelius Resources Limited. Mr Houldsworth’s additional executive remuneration is separately disclosed in the following table. Apart from the potential termination payment referred to above, there are no other post-employment benefits payable to non-executive directors. (c) Executive Director / Key Management Personnel Remuneration Benefits and payments during the financial year and components of remuneration for Executive Directors and Key Management Personnel of the Consolidated Group are detailed as follows. 49 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Executive Directors and Group Key Management Personnel Year IJ Gordon DA Doherty DA Francese JF Houldsworth* 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 KM Seymour MI Svensson AP Webb BT Kelty Short-term benefits Post-employment benefits Share-based payments Salary, Fees & Leave $ 25,986 251,457 362,074 306,330 243,418 253,431 246,000 227,232 - 37,785 180,000 - 167,856 163,761 243,346 188,575 Cash Bonus $ Non- Monetary $ Super Contributions $ - - - - 935 - 14,696 - - - 935 - 826 13,647 14,696 - 32,088 13,647 - - - - - - - - - - - - - - - - - - 2,338 22,631 32,587 27,569 49,2421 22,808 23,463 20,450 - 3,400 16,284 - 15,181 15,966 49,2242 62,0923 188,319 174,916 LTI Shares $ LTI Rights / Options4 $ - - - - - - - - - - - - - - - - - - 8,153 44,713 64,000 29,808 32,000 14,905 - - - - - - - - - - 104,153 89,426 Performance Related % 3.00 14.02 13.95 8.19 10.11 5.11 5.17 - - - 0.47 - 0.45 7.05 4.78 - 6.72 6.04 Total $ 271,189 318,801 458,661 363,707 325,595 291,144 284,159 247,682 - 41,185 197,219 - 183,863 193,374 307,266 250,667 2,027,952 1,706,560 Other $ 234,712 - - - - - - - - - - - - - - - 234,712 - 2010 2009 1,468,680 1,428,571 * Mr Houldsworth retired as an executive on 31 July 2009 but continued as a non executive director of Ramelius Resources Limited. Mr Houldsworth’s additional non executive remuneration is separately disclosed in the previous table. 1 Super contributions for Mr Francese for 2010 include salary of $25,000 sacrificed for super. 2 Super contributions for Mr Webb for 2010 include salary of $26,000 sacrificed for super. 3 Super contributions for Mr Webb for 2009 include salary of $41,395 sacrificed for super. 4 LTI Rights/Options for 2009 relate to performance related rights to shares issued under the Performance Rights Plan. Performance income as a proportion of total remuneration Executive Directors and Key Management Personnel may be 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 Group. The terms and conditions relating to options and bonuses granted as remuneration during the year to Non-Executive Directors and Key Management Personnel are as follows. 50 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Executive Directors and Group Key Management Personnel DA Francese DA Doherty KM Seymour MI Svensson AP Webb Remuneration Type Grant Date Cash Bonus Cash Bonus Cash Bonus Cash Bonus Cash Bonus Cash Bonus Cash Bonus 14/12/2009 22/6/2009 14/12/2009 14/12/2009 14/12/2009 22/6/2009 14/12/2009 Reason For Grant* Performance Performance Performance Performance Performance Performance Performance * Cash bonuses were paid to each of the above Key Management Personnel as reward for general performance in accordance with a recommendation made to the Board by the Managing Director/CEO. Executive Director and Key Management Personnel Service Agreements On 31 July 2009, Mr Houldsworth retired as an executive of the Company and a separation payment totalling $234,712 was paid to Mr Houldsworth. Mr Houldsworth’s entitlement to 450,000 rights in the Company’s shares which were granted on 7 April 2008 at a fair value of $288,000, lapsed on the date of his retirement (refer Note 22(ii) to the Financial Statements). Mr Gordon was appointed to the role of Chief Executive Officer effective 1 August 2009 and his salary increased to $399,425 per annum inclusive of superannuation from that date. Mr Gordon was also entitled to receive a general performance bonus subject to the discretion of the Board. Mr Gordon is entitled to a termination payment equal to six months remuneration where in certain circumstances the employment agreement is terminated. Mr Gordon’s employment agreement has no fixed term and may be terminated by the Company with six month’s notice and by Mr Gordon with three month’s notice. The Company has also entered into employment agreements with other 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. Mr Francese is entitled to a termination payment equal to six months remuneration where in certain circumstances the employment agreement is terminated. Mr Francese’s employment agreement has no fixed term and may be terminated by the Company with six month’s notice and by Mr Francese with three month’s notice. Mr Doherty is entitled to a termination payment equal to three months remuneration where in certain circumstances the employment agreement is terminated. Messrs Doherty and Seymour’s employment agreements have no fixed term and may be terminated by either the Company or the relevant executives with three month’s notice. Messrs Svensson and Webb are entitled to a termination payment equal to one month and three month’s remuneration respectively where in certain circumstances the employment is terminated. Mr Svensson’s employment agreement is for a fixed term of one year, is renewable annually and may be terminated by either the Company or Mr Svensson with one month’s notice. Mr Webb’s employment agreement has no fixed term and may be terminated by the Company with three month’s notice and by Mr Webb with one month’s notice. Any 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. Executive Director and Key Management Personnel post employment/retirement and termination benefits There were no other post employment, retirement or termination benefits payable to Executive Directors and Key Management Personnel other than those referred to above. 51 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) (d) Securities received that are not performance related No directors or members of key management personnel are entitled to receive securities which are not performance related as part of their remuneration package. Options and Rights Granted as Remuneration There were no options or rights granted as remuneration to Directors or Key Management Personnel of the Company during the 2009 and 2010 financial years. Options 800,000 options expired during the 2009 financial year (2010: nil), as detailed at Note 22 of the financial statements. Performance Rights Performance Rights granted by the Parent Entity are as follows. Name No. of Rights Grant Date Fair Value per Right at grant date 1 $ Exercised No: Exercised $ Lapsed 2 No: Lapsed Lapsed $ % JF Houldsworth3 450,000 7 April 2008 288,000 IJ Gordon 300,000 7 April 2008 192,000 DA Francese 150,000 7 April 2008 96,000 TOTAL 900,000 576,000 - - - - - - - - 450,000 288,000 - - - - 450,000 288,000 100 - - 50 1 The value of rights granted as remuneration and shown in the above table has been determined in accordance with applicable accounting standards. 2 The value of rights that have lapsed during the year due to vesting conditions not being satisfied have been determined at the time the rights lapsed as if vesting conditions had been satisfied. 3 On 31 July 2009 Mr Houldsworth retired as an executive of the Company and as a result, his entitlement to these Rights lapsed. 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. Directors’ Interests in Shares and Options Directors’ relevant interests in shares and options of the Company are disclosed in Note 5 to the Financial Statements. The Report of Directors, incorporating the Remuneration Report is signed in accordance with a resolution of the Board of Directors. 52 Directors’ Report Ramelius Resources Limited - Consolidated Entity Directors’ Report (continued) Competent Person Statement The information in this report that relates to Exploration Results is based on information compiled by Matthew Svensson. Matthew Svensson is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting 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. The information in this report that relates to resources and estimated mine grade at Wattle Dam is based on information compiled by Rob Hutchison. Rob Hutchison 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 he is undertaking to qualify as a Competent Person. Rob Hutchison 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. 53 Auditor’s Independence Declaration 54 Income Statement Ramelius Resources Limited - Consolidated Entity Income Statement For the year ended 30 June 2010 Revenue Other income Total revenue Administrative expenses Change in inventories Consultant expenses Depreciation and amortisation Employment expenses Impairment of exploration assets Exploration costs written off Foreign exchange losses Listing expenses Mining and milling expenses Occupancy expenses Other expenses from ordinary activities Profit/(loss) before income tax expense Income tax expense Profit/(loss) after income tax expense Basic earnings per share (cents) Diluted earnings per share (cents) Note 2 2 3 4 8 8 Consolidated Group 2009 2010 $ $ 61,271,067 19,861,748 9,830,364 819,532 71,101,431 20,681,280 (734,521) 8,740,539 (141,840) (18,476,576) (1,343,664) (9,102,214) (361,955) (25,778) (36,367) (20,813,426) (38,762) (79,952) 28,686,915 (8,488,220) 20,198,695 (689,524) 995,815 (120,000) (5,077,221) (843,140) (126,515) (21,407) - (29,318) (7,541,576) (34,810) (35,978) 7,157,606 (2,184,250) 4,973,356 7.5 7.5 2.6 2.6 The accompanying notes form part of these financial statements. 55 Statement of Comprehensive Income Ramelius Resources Limited - Consolidated Entity Statement of Comprehensive Income For the year ended 30 June 2010 Note Profit/(loss) for the period Other comprehensive income - Exchange differences on translating foreign controlled entities Total other comprehensive income for the period, net of tax Consolidated Group 2009 2010 $ $ 20,198,695 4,973,356 3,346 3,346 - - Total comprehensive income for the period 20,202,041 4,973,356 The accompanying notes form part of these financial statements. 56 Statement of Financial Position Ramelius Resources Limited - Consolidated Entity Statement of Financial Position As at 30 June 2010 Note 9 10 11 12 13 15 16 17 18 19 17 19 17 20 21 Current Assets Cash and cash equivalents Trade and other receivables Inventories Derivatives Other current assets Total current assets Non-current assets Plant, equipment & development assets Exploration and evaluation expenditure Deferred tax asset Total non-current assets Total assets Current liabilities Trade and other payables Short term provisions Current tax liabilities Total current liabilities Non-current liabilities Long term provisions Deferred tax liability Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained earnings Total Equity The accompanying notes form part of these financial statements. 57 Consolidated Group 2009 2010 $ $ 80,226,850 26,692,626 1,438,035 3,867,847 1,147,458 10,933,927 - 2,741 205,861 254,941 95,286,306 29,483,980 27,959,334 24,983,428 6,767,255 12,084,996 5,214,266 35,447,544 42,282,690 720,955 130,733,850 71,766,670 6,867,231 499,451 6,322,879 13,689,561 6,518,303 421,563 41,512 6,981,378 590,280 6,114,888 6,705,168 285,493 8,401,361 8,686,854 20,394,729 15,668,232 110,339,121 56,098,438 79,864,456 45,929,967 779,697 9,388,774 887,196 29,587,469 110,339,121 56,098,438 Statement of Changes in Equity Ramelius Resources Limited - Consolidated Entity Statement of Changes in Equity For the year ended 30 June 2010 Consolidated Group Balance as at 1 July 2008 Fair value of 72,090 shares issued to employees Fair value of unvested performance rights for executives Fair value of 100,000 shares issued as consideration for tenement acquisition 3,847 options exercised during the period at $1.00 1,853 options exercised during the period at $1.50 33,727,288 shares issued during the period at $0.53 Transaction costs associated with the issue of shares net of tax Total comprehensive income Share Based Payments Reserve $ Foreign Currency Translation Reserve $ Issued Capital $ Retained Earnings $ Total $ 28,661,250 555,412 - 4,415,418 33,632,080 - 39,650 - 184,635 80,000 3,847 2,779 17,875,463 (693,372) - - - - - - - - - - - - - - - - 39,650 - 184,635 80,000 - 3,847 - 2,779 - - 17,875,463 - 4,973,356 (693,372) 4,973,356 Balance as at 30 June 2009 45,929,967 779,697 - 9,388,774 56,098,438 Fair value of 72,140,701 shares issued pursuant to a takeover offer at a cost of $0.47 per share Fair value of unvested performance rights for executives 2,468 options exercised during the period at $1.00 Transaction costs associated with the issue of shares net of tax Total comprehensive income 33,932,056 - - 2,468 104,153 - (35) - - - - - - - 33,932,056 - - 104,153 2,468 - (35) 3,346 20,198,695 20,202,041 - Balance as at 30 June 2010 79,864,456 883,850 3,346 29,587,469 110,339,121 The accompanying notes form part of these financial statements. The accompanying notes form part of these financial statements. 58 Statement of Cash Flows Ramelius Resources Limited - Consolidated Entity Statement of Cash Flows For the year ended 30 June 2010 Note 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 plant, equipment & development Proceeds from sale of mining tenements Proceeds from sale of plant and equipment Proceeds from sale of investments Payments for mining tenements & exploration Net cash provided by/(used in) investing activities Cash Flows from Financing activities Proceeds from issue of shares Transaction costs from issue of shares Payments for hedge options Net cash provided by/(used in) financing activities Net increase/(decrease) in cash held Cash at the beginning of the financial year Effect of exchange rates on cash holdings in foreign currencies Consolidated Group 2009 2010 $ $ 61,602,173 19,931,625 (9,572,962) (24,123,142) 620,764 1,466,921 25 38,945,952 10,979,427 (23,862,676) (12,386,113) 100,000 - - (4,832,861) - 25,000 42,425,394 (3,390,411) 15,197,307 (17,118,974) 2,468 17,884,557 (1,119,991) (103,240) (30,568) (566,500) (594,600) 16,661,326 53,548,659 10,521,779 26,692,626 16,170,847 (14,435) - Cash at the end of the financial year 9 80,226,850 26,692,626 The accompanying notes form part of these financial statements. 59 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 1 Statement of significant accounting policies This financial report includes the consolidated financial statements and notes of Ramelius Resources Limited and controlled entities (“Consolidated Group” or “Group”). (a) Basis of preparation This financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standard Board and the Corporations Act 2001. Ramelius Resources Limited is a listed public company, incorporated and domiciled in Australia. Compliance with International Financial Reporting Standards Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Historical cost convention The financial report has 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 controlled entities as at 30 June 2010 and their results for the year then ended. Ramelius Resources Limited and its subsidiaries together are referred to in this financial report as the Group or Consolidated Group. A controlled entity is any entity over which Ramelius Resources Limited has power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing power to govern, the existence and effect of holdings of actual and potential voting rights are considered. A list of controlled entities is contained in Note 28 to the financial statements. All controlled entities have a 30 June financial year end. All inter-group balances and transactions between entities in the consolidated group, including any realised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries are consistent with those adopted by the parent entity. (c) Income Tax The income tax expense (benefit) for the year comprises current income tax expense (benefit) and deferred tax expense (benefit). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates that have been enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. 60 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. 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 assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. 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 tax legislation and the anticipation that the Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Ramelius Resources Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity in the Group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity. The Group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2008. The tax consolidated group has entered a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the Group in proportion to their contribution to the Group’s taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to the head entity. (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) Plant & equipment Each class of plant and equipment is carried at cost or fair value as indicated 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 asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. 61 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Depreciation The depreciation of all fixed assets is depreciated on a straight line basis over the asset’s useful life to the Consolidated Group 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% The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. 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. 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 development 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 62 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 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. (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 Initial recognition and measurement: Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified “at fair value through profit or loss” in which case transaction costs are expensed to the profit or loss immediately. Classification and subsequent measurement: Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method or cost. Fair value represents the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties. Where available, quoted prices in an active market are used to determine fair value. The Group does not designate any interest in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments. Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Held-to-maturity investments: These investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Available for sale financial assets: Available for sale financial assets are non-derivative assets that are either not suitable to be classified into other categories of financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. Available for sale financial assets are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. Financial liabilities: Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Derivative instruments: The Group designates certain derivatives as either: i. Hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or ii. Hedges of highly probable forecast transactions (cash flow hedges). Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedging items, are also made. (i) Fair value hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of hedged assets or liabilities that are attributable to the hedged risk. 63 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (ii) Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred to a hedge reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in the hedge reserve in equity are transferred to the income statement in the periods when the hedged item will affect profit or loss. Fair value: Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Impairment: At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired. (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) Interests in Joint Ventures The consolidated group’s share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated financial statements. Details of the consolidated group’s interests are shown at Note 30. (l) Foreign Currency Transactions and Balances Functional and presentation currency The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency. Transaction and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non- monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement. Group companies The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows: (cid:120) assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; (cid:120) (cid:120) income and expenses are translated at average exchange rates for the period; and retained earnings are translated at the exchange rates prevailing at the date of the transaction. 64 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (m) 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. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. 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 Group may also grant performance related options over shares to Key Management Personnel. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Black-Scholes pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. (n) 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. (o) Cash and cash equivalents Cash and cash equivalents includes cash on hand, demand deposits held with banks, other short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in values. (p) Revenue Revenue is measured at the fair value of the consideration received or receivable. 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 using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. All revenue is stated net of goods and services tax (GST). (q) Trade and other payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Group during the reporting period which remains unpaid, The balance is recognised as a current liability with the amount being normally paid within 30 days of initial recognition. (r) 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 statement of financial position 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 statement of financial position. 65 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Cash flows are included in the statement of cash flows 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. (s) 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. (t) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (u) Earnings per share (i) Basic earning per share Basic earnings per share is calculated by dividing the profit attribute 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. (v) Third statement of financial position applies an accounting policy retrospectively; Two comparative periods are presented for the statement of financial position when the Company: (i) (ii) makes a retrospective restatement of items in its financial statements; or (iii) reclassifies items in the financial statements. The Group has determined that only one comparative period for the statement of financial position was required for the current reporting period as application of new accounting standards have had no material impact on the previously presented financial statements that were presented in the prior year. (w) Adoption of new and revised accounting standards During the financial year, the Group adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current annual reporting period. The 2009 comparatives contained in these financial statements therefore differ from those published in the financial statements for the year ended 30 June 2009 as described below. Significant effects on current, prior or future periods arising from the first-time application of the standards discussed above in respect of presentation, recognition and measurement of accounts are described in the following notes. Adoption of AASB 8 Operating Segments From 1 January 2009, operating segments are identified and segment information disclosed on the basis of internal reports provided to or received by the chief operating decision maker which is the Chief Executive Officer. 66 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Adoption of AASB 101 Presentation of Financial Statements (revisions), AASB 2007-8 and 2007-10 Amendments arising from the revisions to AASB 101 The Group has adopted the revisions to AASB 101 Presentation of Financial Statements in these financial statements which has resulted in the introduction of the statement of comprehensive income, changes to the statement of changes in equity, and other terminology changes. (x) New accounting standards for application in future periods The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows: AASB 2009-4: Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 2 and AASB 138 and AASB Interpretations 9 & 16] (applicable for annual reporting periods commencing from 1 July 2009) and AASB 2009-5: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 117, 118, 136 & 139] (applicable for annual reporting periods commencing from 1 January 2010). These standards detail numerous non-urgent but necessary changes to accounting standards arising from the IASB’s annual improvements project. No changes are expected to materially affect the Group. AASB 9: Financial Instruments and AASB 2009–11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] (applicable for annual reporting periods commencing on or after 1 January 2013) These standards are applicable retrospectively and amend the classification and measurement of financial assets. The Group has not yet determined the potential impact on the financial statements. The changes made to accounting requirements include: (cid:120) (cid:120) (cid:120) (cid:120) (cid:120) (cid:120) simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value; simplifying the requirements for embedded derivatives; removing the tainting rules associated with held-to-maturity assets; removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost; allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument; and reclassifying financial assets where there is a change in an entity's business model as they are initially classified based on: a. b. the objective of the entity's business model for managing the financial assets; and the characteristics of the contractual cash flows. AASB 2009–8: Amendments to Australian Accounting Standards — Group Cash-settled Share-based Payment Transactions [AASB 2] (applicable for annual reporting periods commencing on or after 1 January 2010) These amendments clarify the accounting for group cash-settled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the share-based payment transaction. The amendments incorporate the requirements previously included in Interpretation 8 and Interpretation 11 and as a consequence, these two Interpretations are superseded by the amendments. These amendments are not expected to impact the Group. AASB 2009–10: Amendments to Australian Accounting Standards — Classification of Rights Issues [AASB 132] (applicable for annual reporting periods commencing on or after 1 February 2010) These amendments clarify that rights, options or warrants to acquire a fixed number of an entity's own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or 67 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 warrants pro-rata to all existing owners of the same class of its own non-derivative equity instruments. These amendments are not expected to impact the Group. AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011) This standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of International Financial Reporting Standards by the IASB. The standard also amends AASB 8 to require entities to exercise judgment in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. These amendments are not expected to impact the Group. AASB 2009–13: Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB 1] (applicable for annual reporting periods commencing on or after 1 July 2010) This standard makes amendments to AASB 1 arising from the issue of Interpretation 19. The amendments allow a first-time adopter to apply the transitional provisions in Interpretation 19. This standard is not expected to impact the Group. AASB Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments (applicable for annual reporting periods commencing on or after 1 July 2010) This Interpretation deals with how a debtor would account for the extinguishment of a liability through the issue of equity instruments. The Interpretation states that the issue of equity should be treated as the consideration paid to extinguish the liability, and the equity instruments issued should be recognised at their fair value unless fair value cannot be measured reliably in which case they shall be measured at the fair value of the liability extinguished. The Interpretation deals with situations where either partial or full settlement of the liability has occurred. This Interpretation is not expected to impact the Group. The Group does not anticipate the early adoption of any of the above Australian Accounting Standards. (y) 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 and Judgements (i) Impairment The Group assesses impairment at each reporting date by evaluating conditions and events specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. (ii) Exploration and evaluation expenditure The Group capitalises exploration and evaluation expenditure where it is considered likely to be recoverable or where activities have not reached a stage to permit a reasonable assessment of the existence of reserves. While there are certain areas of interest for which no reserves have been extracted, the directors continue to believe that such expenditure should not be written off, as evaluation in those areas has not yet been concluded. (iii) Development The group capitalises development expenditure which is amortised over the life of the economic resource. The recoverable economic resource is subject to estimates and assumptions that impact on the rate of depletion of the economic resource (amortisation), depreciation and assessment of impairment of assets. Assessment of future development involves various assumptions including commodity gold price, exchange rates for Australian and US dollars and general economic conditions. (iv) Provision for restoration The Group estimates future mine site restoration costs that are expected to be incurred. Such estimates are based on a review of amounts required by the Western Australian Department of Mines to be lodged as environmental 68 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 bonds, which the Group effects via unconditional bank guarantees, and management’s assessment of any additional expenditure expected to be incurred. (v) Employee Benefits In calculating long service leave at balance date, management judgement is applied in determining key assumptions relating to future increases in wages and salaries, future on-cost rates and experience of employee departures and period of service. (z) Authorisation for issue of financial statements The financial statements were authorised for issue by the Board of Directors on 30 August 2010. Note Consolidated Group 2010 $ 2009 $ 2 Revenue and other income Revenues: From operating activities Refined gold sales Toll milling sales Refined silver sales Total revenue Other income Interest received from other parties Gain on sale of non-current investments Gain on disposal of tenements Foreign exchange gains Other revenue Total other income 14 3 Profit before income tax expense has been determined after Expenses Depreciation and amortisation of non current assets Plant and equipment - depreciation Mining and milling - depreciation Mining and milling - amortisation Rental expense on operating leases Minimum lease payments Exploration costs written off Diminution in value of gold hedge put options Foreign currency translation losses Impairment of exploration and evaluation assets Provision for employee benefits 69 58,216,932 19,830,035 - 3,054,135 31,713 - 61,271,067 19,861,748 2,079,171 7,144,396 - 1,990 604,807 9,830,364 648,856 - 38,443 - 132,233 819,532 39,274 505,149 17,932,153 18,476,576 27,462 377,817 4,671,942 5,077,221 175,226 361,955 563,759 25,778 9,102,214 125,676 100,002 21,407 457,063 - 126,515 103,884 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note Other revenue and expenses Consideration on disposal of mining tenements Carrying amount of listed mining tenements Net gain on disposal Consideration on disposal of assets Carrying amount of assets disposed Carrying amount of assets written off Net loss on disposal 4 Income tax expense (a) The components of tax expense comprise: Current tax Deferred tax Under provision in respect of prior years (b) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: Prima facie tax payable on profit from ordinary activities before income tax at 30% - Consolidated group Add: Tax effect of: - Share based payments - costs of capital raising - other non allowable items Deferred tax asset in respect of tax losses utilised Less: Tax effect of: Other allowable items Recognition of timing differences not previously brought to account Over provision in respect of prior years Income tax attributable to entity The applicable weighted average effective tax rates are as follows: 70 Consolidated Group 2010 $ 2009 $ - - - 25,000 (25,000) - - 100,000 (61,557) 38,443 - - (22,957) (22,957) 6,322,879 2,183,371 (18,030) 8,488,220 41,512 2,142,738 - 2,184,250 8,606,075 2,147,282 31,246 - 6,465 67,285 - 966 - 8,643,786 22,675 2,238,208 137,536 31,283 - 22,675 (18,030) 8,488,220 - 2,184,250 30% 31% Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note Consolidated Group 2010 $ 2009 $ 5 Directors and Key Management Personnel Remuneration Director and Key Management Personnel remuneration has been included in the Remuneration Report section of the Directors Report. The totals of remuneration paid to Directors and Key Management Personnel of the Group during the year are as follows: Short-term employee benefits Post-employment benefits Other long-term benefits Termination benefits Share-based payments Directors & Key Management Personnel 1,879,666 457,133 - - 104,153 2,440,952 1,750,474 202,660 - - 89,426 2,042,560 (a) Directors and Key Management Personnel The names and positions held by Directors and Key Management Personnel of the Company during the financial year are: Directors Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth 1 Mr IJ Gordon 2 Mr KJ Lines Key Management Personnel Mr DA Francese Mr DA Doherty 4 Mr MI Svensson Mr AP Webb Mr KM Seymour 3 Positions Chairman – Non-Executive Director – Non-Executive Director – Non-Executive Director – Executive / Chief Executive Officer Director – Non-Executive Chief Financial Officer / Company Secretary Wattle Dam Underground Mine Manager Exploration Manager Burbanks Mill Process Manager Manager Business Development 1 Mr Houldsworth held the position of Managing Director and Chief Executive Officer until his retirement as an executive of the Company on 31 July 2009. Mr Houldsworth continues to serve on the Board as a non-executive director. 2 Mr Gordon held the position of Executive Director and Chief Operating Officer until the retirement of Mr Houldsworth as an executive of the Company. On 1 August 2009 Mr Gordon was appointed Chief Executive Officer. 3 Mr Seymour commenced as Manager Business Development of the Company on 1 July 2009. 4 Mr Kelty, a previous member of Key Management Personnel, retired as the Wattle Dam Mine Manager on 31 July 2008 following the appointment of Danny Doherty as Wattle Dam Underground Mine Manager. 71 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (b) Directors and Key Management Personnel equity remuneration holdings and transactions (i) Options provided as remuneration and shares issued on exercise of such options Details of options provided as remuneration and shares issued on the exercise of such options together with the terms and conditions of the options can be found in the remuneration report. (ii) Shareholdings The number of shares in the Company held during the financial year by each director of Ramelius Resources Limited and other key management personnel of the group including their personal related entities, are set out below. There were no shares granted during the year as remuneration. Shares Year Opening Balance Received as Remuneration Options Exercised Net Change Other1 Closing Balance Mr RG Nelson Mr JF Houldsworth Held by Directors in own name 2010 Mr RM Kennedy 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Mr IJ Gordon Mr KJ Lines Held by personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines Total held by Directors - - 105,480 105,480 4,580,014 4,570,581 14,979 10,263 - - 4,700,473 4,686,324 7,729,572 7,701,273 5,226,504 5,217,071 44,696 35,263 - - - - 17,701,245 17,639,931 - - 823,443 814,010 328,116 338,683 - - 223,481 513,663 21,743 12,310 19,098,028 19,318,597 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Mr DA Francese Mr BT Kelty Mr KM Seymour Mr MI Svensson Mr AP Webb Total Key Management Personnel excluding Directors Mr DA Doherty - - - - - - 105,480 105,480 (500,000) 4,080,014 9,433 4,580,014 14,979 14,979 - - (500,000) 4,200,473 14,149 4,700,473 - 4,716 - - - 7,729,572 28,299 7,729,572 - 5,226,504 9,433 5,226,504 44,696 44,696 - - - - (500,000) 17,201,245 61,314 17,701,245 - 9,433 - - - - - - - 9,433 (20,000) (10,567) 20,000 - - (290,182) - 9,433 - - 823,443 823,443 308,116 328,116 20,000 - 223,481 223,481 21,743 21,743 (500,000) 18,598,028 (220,569) 19,098,028 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 72 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (iii) Performance rights to shares The number of performance rights to shares in the Company held during the financial year by each Director and other key management personnel of the group including their personal related entities, are set out below. There were no performance rights to shares granted during the year as remuneration. Performance Rights to Shares* Year Opening Balance Received as Remuneration Options Exercised Net Change Other2 Closing Balance Total Vested at Year End Total Exercisable at Year End Mr RG Nelson Mr JF Houldsworth Held by Directors in own name 2010 Mr RM Kennedy 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Mr IJ Gordon Mr KJ Lines Held by personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines Total held by Directors - - - - 450,000 450,000 300,000 300,000 - - 750,000 750,000 - - - - - - - - - - 750,000 750,000 - - 150,000 150,000 - - - - - - - - 900,000 900,000 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Mr DA Francese Mr BT Kelty Mr KM Seymour Mr MI Svensson Mr AP Webb Total Key Management Personnel excluding Directors Mr DA Doherty - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (450,000) - - - - - - - - - - - (450,000) - - - - - - - - - - - - - - - - - - - - - - - (450,000) - - - - - - - - - - - - - - - - - - - - - - - - - - - (450,000) - - - - - - - 450,000 300,000 300,000 - - 300,000 750,000 - - - - - - - - - - 300,000 750,000 - - 150,000 150,000 - - - - - - - - 450,000 900,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - * 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. 73 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (iv) Option holdings The number of options over ordinary shares in the Company held during the financial year by each director of Ramelius Resources Limited and any other key management personnel of the group, including their personally related parties are set out below. Options Exercisable at $1.00 by 30 June 2009 Year Opening Balance Received as Remuneration Options Exercised Net Change Other 3 Closing Balance Total Vested at Year End Total Exercisable at Year End Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 - - - 10,022 - 456,532 - - - - - 466,554 Mr RG Nelson Mr JF Houldsworth Held by personally related entities Mr RM Kennedy 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Total held by Directors 2010 - 768,549 - 421,182 - 3,000 - - - - - 2009 1,659,285 Mr IJ Gordon Mr KJ Lines Key Management Personnel excluding Directors Mr DA Doherty Mr DA Francese Mr BT Kelty Mr KM Seymour Mr MI Svensson Mr AP Webb Total - 2010 - 2009 - 2010 79,522 2009 - 2010 54,000 2009 - 2010 - 2009 - 2010 50,000 2009 - 2010 - 2009 2010 - 2009 1,842,807 - - - - - - - - - - - - - - - (10,022) - (456,532) - - - - - (466,554) - - (768,549) - - - (421,182) - - - (3,000) - - - - - - - - - - - - (1,659,285) - - - - - - (79,522) - - - (54,000) - - - - - - - (50,000) - - - - - - - - (1,842,807) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 74 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (iv) Option holdings (continued) Options Exercisable at $1.50 by 30 June 2010 Year Opening Balance Received as Remuneration Options Exercised Net Change Other 4 Closing Balance Total Vested at Year End Total Exercisable at Year End Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines Held by personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Total held by Directors 2010 2009 Mr IJ Gordon Mr KJ Lines 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 - - 10,548 10,548 457,059 457,059 1,027 1,027 - - 468,634 468,634 770,128 770,128 521,708 521,708 3,527 3,527 - - - - 1,763,997 1,763,997 - - 81,402 81,402 1,342 33,869 - - 51,367 51,367 1,231 1,231 1,899,339 1,931,866 Mr DA Francese Mr BT Kelty Mr KM Seymour Mr MI Svensson Mr AP Webb Total Key Management Personnel excluding Directors Mr DA Doherty - - - - - - - - - - - - - - (10,548) - (457,059) - (1,027) - - - (468,634) - - - - 10,548 - 457,059 - 1,027 - - - 468,634 - - - 10,548 - 457,059 - 1,027 - - - 468,634 (770,128) - - - (521,708) - - - (3,527) - - - - - - - - - - - - (1,763,997) - - - 770,128 770,128 - - 521,708 521,708 - - 3,527 3,527 - - - - - - - - - - - 1,763,997 1,763,997 - - - - (81,402) - - - - (1,342) - (32,527) - - - - (51,367) - - - (1,231) - - - - (1,899,339) - - - - 81,402 - 1,342 - - - 51,367 - 1,231 - (32,527) 1,899,339 1,899,339 - - - 81,402 - 1,342 - - - 51,367 - 1,231 - - - - 10,548 - 457,059 - 1,027 - - - 468,634 - 770,128 - 521,708 - 3,527 - - - - - 1,763,997 - - - 81,402 - 1,342 - - - 51,367 - 1,231 - 1,899,339 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 75 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (iv) Option holdings (continued) Year Opening Balance Received as Remuneration Options Exercised Net Change Other 3 Closing Balance Total Vested at Year End Total Exercisable at Year End Options Exercisable at $1.90 by 30 June 2009 Held by Directors in own name Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth Mr IJ Gordon Mr KJ Lines 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Held by personally related entities Mr RM Kennedy Mr RG Nelson Mr JF Houldsworth 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Total held by Directors 2010 2009 Mr IJ Gordon Mr KJ Lines - - - - - - - - - - - - - - - - - - - 400,000 - - - 400,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (400,000) - - - (400,000) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Key Management Personnel excluding Directors Mr DA Doherty Mr BT Kelty Mr DA Francese Mr KM Seymour - - - - - - - - - - - - - - 1. Net change other in respect of shares refers to shares purchased and/or sold during the financial year. 2. Net change other in respect of performance rights to shares relate to rights which lapsed at retirement of Joe - - - - - - - - - - - (400,000) - (800,000) - - - - - - - - - - - 400,000 - 800,000 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr MI Svensson Mr AP Webb Total Houldsworth as Managing Director. 3. Net change other in respect of $1.00 and $1.90 options refers to options which expired at 30 June 2009. 4. Net change other in respect of $1.50 options refers to options purchased/sold or which expired at 30 June 2010. 76 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 No options previously granted to Directors, Director related entities or Key Management Personnel were exercised during the year. Other Key Management Personnel Transactions There have been no other transactions involving equity instruments other than those described in the tables above. For details of other transactions with Directors or Key Management Personnel, refer Note 27: Related Parties. 6 Auditors’ remuneration Audit services: Auditors of the Company – Grant Thornton Audit and review of the financial reports Other due diligence related services 7 Dividends and return of capital Dividends paid Return of capital to shareholders* * On 5 May 2010 the directors proposed a capital return to shareholders of 5 cents per share which was paid in August 2010. (a) Proposed final 2010 dividend (b) Balance of franking account at year end adjusted for franking credits arising from: - payment of provision for income tax - dividends recognised as receivables and franking debits arising from payment of proposed dividends, and franking credits that may be prevented from distribution in subsequent financial years Consolidated Group 2009 2010 $ $ 46,775 16,000 62,775 46,564 - 46,564 - - - - - - - - - - 334,603 334,603 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 The Consolidated Group had no options listed on ASX Limited at the close of business on 30 June 2010. (c) Earnings used in the calculation of earnings per share Profit/(loss) after income tax expense 20,198,695 4,973,356 77 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (d) Weighted average number of shares outstanding during the year used in calculating earnings per share Consolidated Group 2009 2010 $ $ Number for basic earnings per share Ordinary shares Number for dilutive earnings per share Ordinary shares Options 9 Cash and cash equivalents Cash Deposits at call* 267,690,423 192,844,130 267,690,423 192,844,130 - - 267,690,423 192,844,130 673,726 36,199,182 44,027,668 26,018,900 80,226,850 26,692,626 * Includes deposits of $412,900 for the Consolidated Group 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 93,679 3,774,168 3,867,847 77,173 1,360,862 1,438,035 Other debtors represent accrued interest receivable, refundable security deposits and amounts due from taxation authorities. Receivables are not considered to be past due and/or impaired. Credit risk – trade and other receivables The Group has one main customer in respect of gold sales however this is not regarded as a significant concentration of credit risk because the customer is owned by the WA State Government. 11 Inventory Current Gold nuggets at cost Raw materials - unprocessed gold ore at cost Work in progress - unrefined gold at cost Finished goods - gold bullion at cost Consumables and spare parts at cost 9,690 4,545,465 927,203 5,013,813 437,756 10,933,927 5,251 148,653 717,603 - 275,951 1,147,458 78 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 12 Derivatives Current Gold hedge - put options Consolidated Group 2009 2010 $ $ 2,741 - Put options are used to hedge cash flow risk associated with future transactions. Gains and losses arising from changes in the fair value of derivatives are initially recognised in the income statement to the extent that the cash flow hedges are ineffective. 13 Other current assets Current Prepayments 14 Financial assets Acquisition and disposal of financial assets 254,941 205,861 On 30 July 2009 the Group announced an offer for all of the shares of Dioro Exploration NL (“Dioro”) with consideration of two Ramelius shares for every one Dioro share held. The offer was extended several times and on 18 December 2009 the consideration was increased to 2.1 Ramelius shares for every Dioro share. The Dioro offer closed on 8 February 2010 and the Group secured 34,352,544 Dioro shares representing a 37.51% stake of the target entity. On 12 February 2010 the Group accepted an offer from Avoca Resources Limited (“Avoca”) for its interest in Dioro for a consideration of $0.65 cash and 0.325 Avoca shares per Dioro share resulting in the receipt of $22,329,154 in cash and 11,164,578 Avoca shares. All the Avoca shares were subsequently sold at a price of $1.80 per share for gross proceeds of $20,096,240. 15 Plant, equipment & development assets Plant and equipment At cost Accumulated depreciation/amortisation Net book value Development expenditure Production phase at cost Accumulated amortisation Net book value Total property, plant and equipment Reconciliations (i) (ii) 8,477,906 (1,675,730) 6,802,176 6,621,044 (961,249) 5,659,795 44,721,093 25,109,250 (23,563,935) (5,785,617) 21,157,158 19,323,633 27,959,334 24,983,428 Reconciliations of the carrying amounts for each class of plant, equipment and development assets are set out below: 79 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note (i) Reconciliation Plant and equipment Carrying amount at beginning of year Additions Disposals/written off Depreciation/amortisation Carrying amount at end of year (ii) Reconciliation Development expenditure* Carrying amount at beginning of year Transfer from exploration and evaluation expenditure Capitalised development additions Amortisation Carrying amount at end of year Consolidated Group 2009 2010 $ $ 5,659,795 1,881,862 (25,000) (714,481) 4,838,562 1,341,558 (22,957) (497,368) 6,802,176 5,659,795 19,323,633 - 8,626,522 - 19,611,843 15,298,994 (4,601,883) (17,778,318) 21,157,158 19,323,633 * Development assets relate to the Wattle Dam Mine with initial production from a pit cut-back in the September 2008 quarter and followed by underground ore production during the December 2009 quarter. Amortisation of capitalised development costs commenced from the beginning of the pit cut-back and will 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 evaluation Total exploration and evaluation expenditure (i) 6,767,255 12,084,996 6,767,255 12,084,996 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 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 Exploration tenement sold during the year Amounts transferred to development expenditure Carrying amount at end of year 12,084,996 3,784,473 (9,102,214) - 8,041,535 4,231,533 (126,515) (61,557) - - 6,767,255 12,084,996 80 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note Consolidated Group 2010 $ 2009 $ 6,322,879 41,512 17 Tax Consolidated entity Liabilities Current Income tax Assets and liabilities Non current Opening Balance $ Other $ Charged to Income $ Charged Directly to Equity $ Closing Balance $ Consolidated group Deferred tax liability Exploration and evaluation Development Balance at 30 June 2010 Deferred tax asset Issued equity transaction costs Provisions Future income tax benefits attributable to tax losses Franking deficit tax offset Other Balance at 30 June 2010 3,625,499 4,775,862 8,401,361 422,761 194,087 4,227,896 334,603 34,919 5,214,266 - - - (1,619,724) (666,749) (2,286,473) - - - 2,005,775 4,109,113 6,114,888 - - - - - - (125,832) 132,833 (4,227,896) (334,603) 62,172 (4,493,326) 15 - - - - 15 296,944 326,920 - - 97,091 720,955 18 Trade and other payables Trade creditors Other creditors and accruals 19 Provisions Current Employee benefits Non current Employee benefits Restoration costs 26 26 1(f) 81 6,102,302 764,929 6,867,231 6,079,894 438,409 6,518,303 499,451 421,563 90,280 500,000 590,280 42,493 243,000 285,493 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note Consolidated Group 2010 $ 2009 $ Provision for long service leave A provision for long service leave has been recognised for employee benefits. In calculating the present value of future cash flow in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits has been included in Note 1 to this report. Provision for restoration In calculating the provision for restoration, the estimated provision has been estimated by reference to be the sum of guarantees required by the Western Australia Department of Mines for the Wattle Dam mine and management’s assessment of any additional expenditure expected to be incurred. The measurement and recognition criteria relating to restoration provisions have been included in Note 1 to this report. 20 Issued capital Issued and paid-up share capital 291,342,923 (2009: 219,199,754) ordinary shares, fully paid 20(a) (a) Ordinary shares Balance at the beginning of year Shares issued during the year 72,140,701 shares issued pursuant to a takeover offer at a fair value of $0.47036 per share 25,283,017 shares placed at $0.53 8,444,271 shares issued through share purchase plan at $0.53 Less transaction costs arising from share issues for cash net of tax 100,000 shares issued as consideration for tenement acquisition Nil (2009: 72,090) shares issued to employees at nil consideration 2,468 shares issued to option-holders on exercise of options at $1.00 cash Nil shares issued to option-holders on exercise of options at $1.50 cash 79,864,456 45,929,967 45,929,967 28,661,250 33,932,056 - - 13,399,999 - 4,475,464 (35) (693,372) - - 80,000 - 2,468 3,847 - 2,779 Balance at end of year 79,864,456 45,929,967 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. Capital management Management effectively monitors the capital of the Group by assessing the financial risks and adjusting the capital structure in response to changes in these risks and the market. The responses include the management of 82 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 dividends to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital during the year. (b) Options At close of business on 30 June 2010 all unexercised options expired and there were no unissued shares for which options were outstanding. (30 June 2009: 18,452,620 were exercisable at $1.50 by 30 June 2010). (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 and the options outstanding at year end, refer to Note 22. (ii) For information relating to share options issued to Key Management Personnel during the financial year refer to Note 5. 21 Reserves Share based payments reserve Foreign currency translation reserve Note (a) (b) Consolidated Group 2010 $ 2009 $ 883,850 3,346 887,196 779,697 - 779,697 (a) Share based payments reserve The share based payments reserve records items recognised as expenses on valuation of employees share options and performance rights. (b) Foreign currency translation reserve The foreign currency translation reserve records exchange differences arising on translations of a foreign controlled subsidiary. 22 Share based payments The following share-based payments arrangements existed at 30 June 2010: (i) Shares Shares granted to Key Management Personnel and other employees as share based payments are as follows: Shares granted to Key Management Personnel and other employees as share based payments Name No. of Shares 1 Grant Date Fair Value per Share at grant date 1 Key Management Personnel Other Employees Other Employees TOTAL 47,660 15 April 2008 54,809 104,480 15 April 2008 120,152 72,090 20 April 2009 224,230 39,650 214,611 1 Each fully paid ordinary share was issued for no consideration. 83 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 These shares were issued to employees at no consideration pursuant to the Employee Share Acquisition Plan which was approved by shareholders in November 2007. No shares were issued to employees during the 2010 financial year. The fair value of these shares at the date of issue for 2009 was $39,650 which was recognised in share based payments reserve and included under employee expenses in the income statement (2010: nil). Vesting of these shares occurs three years after the issue date or the time the holder ceases to be an employee, which ever 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. (ii) Performance Rights 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 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 $104,153 was recognised during the 2010 financial year in share based payments reserve and income statement (2009: $184,635). During the year 450,000 Performance Rights lapsed as result of Mr Houldsworth retiring as an executive of the Company. At balance date, none of the remaining 450,000 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 continued to be employees of the Group until the end of the vesting period, adjusted for the risk that vesting conditions are not met. This assumes 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. Performance Rights granted by the Parent Entity during the 2008 financial year Name No. of Rights 1 Grant Date Fair Value per Right at grant date 2 Exercise price per Right Rights expiry date Rights first exercise date Rights last exercise date Performance measurement period JF Houldsworth3 450,000 7 April 2008 288,000 IJ Gordon 300,000 7 April 2008 192,000 DA Francese 150,000 7 April 2008 96,000 TOTAL 900,000 576,000 $ - - - - 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 $104,153 was expensed in the 2010 financial year (2009: $184,635) and after allowing for lapsed Performance Rights $73,907 is to be expensed in subsequent years (2009: $339,814). 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. 3 On 31 July 2009 Mr Houldsworth retired as an executive of the Company and as a result, his entitlement to these Rights lapsed. (iii) Options Options granted to Key Management Personnel as share based payments are as follows: 84 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 2010 2009 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price $ - - - - - - - - - - - - - - 800,000 1.90 - - - - - - (800,000) 1.90 - - - - Outstanding at the beginning of the year Granted Forfeited Exercised Expired Outstanding at year-end Exercisable at year-end The weighted average fair value of the options granted during the 2008 financial 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 was based on the days remaining until expiry. 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. None of the 800,000 share options had been exercised prior to expiry and therefore lapsed. The fair value of these options was determined using the Black-Scholes Pricing model as detailed above. Options and Performance Rights granted to Key Management Personnel were over ordinary shares in Ramelius Resources Limited, which conferred a right of one ordinary share for every option held. 23 Financial risk management policies The Group’s financial instruments consist mainly of deposits with banks, derivatives, accounts receivable and payables. The totals for each category of financial instruments, measured in accordance with AASB 119 as detailed in the accounting policies to the financial statements, are as follows. 85 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Consolidated Group 2010 $ 2009 $ Financial assets Cash at bank 36,199,182 673,726 Deposits 44,027,668 26,018,900 Receivables 3,847,009 1,438,035 Derivatives 2,741 - Total financial assets 84,076,600 28,130,661 Financial liabilities Payables (6,638,011) (6,518,303) Total financial liabilities (6,638,011) (6,518,303) Total net financial assets 77,438,589 21,612,358 Financial risk management policies The Board of Directors are responsible for monitoring and managing financial risk exposures of the Group. Specific financial risk exposures and management The main risks the Group is exposed to include interest rate risk, price risk, credit risk, liquidity risk and treasury management risk. (a) Interest rate risk Exposure to interest rate risk arises on financial assets and liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. 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 is both fixed and variable according to the financial asset. (i) Risk management Interest rate risk is managed with a mixture of fixed and floating rate cash deposits. The Group has, where possible, placed funds with financial institutions in order to receive the benefit of available government guarantees. (ii) Sensitivity analysis Interest rate 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. 86 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Interest rate sensitivity analysis Based on the cash at the end of the financial year, if interest rates were to change by + / - 2% with all other variables remaining constant, the estimated impact on pre-tax profits would have been as follows: Impact on pre-tax profit Increase in interest rate by 2% Decrease in interest rate by 2% Impact on equity Increase in interest rate by 2% Decrease in interest rate by 2% (b) Price risk Consolidated Group 2010 $ 2009 $ 1,603,601 533,496 (1,603,601) (533,496) 1,603,601 533,496 (1,603,601) (533,496) Price risk relates to the risk that the fair value of future cash flows of gold sales will fluctuate because of changes in market prices largely due to demand and supply factors for commodities. The Group sells gold produced from the Wattle Dam Mine through a gold refiner in Perth Western Australia. The Group is exposed to commodity price risk as a result of the sale of gold on physical delivery at prices determined by market gold prices at time of sale. (i) Risk management Gold price risk is managed with the use of hedging strategies through the purchase of gold put options to establish gold “floor prices” in Australian dollars over the Group’s gold production. Gold prices, gold futures and economic forecasts are constantly monitored to determine whether to implement a hedging program. (ii) Sensitivity analysis Price risk The Group has performed a sensitivity analysis relating to its exposure to gold price 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 may also hedge part of its gold production by implementing gold “floor prices” through the purchase of gold put options however this is generally at levels lower than current market prices. Notwithstanding this, the sensitivity analysis is still valid for gold prices above any floor prices that may be put in place. Any impacts from such hedging would be in relation to revenue from gold sales. Price sensitivity analysis Based on the gold sales of 15,393oz and 46,147oz for the 2009 and 2010 financial years respectively, if the gold price in Australian dollars changed by + / - A$100, with all other variables remaining constant, the estimated impact on pre-tax profits would have been as follows: 87 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Impact on pre-tax profit Increase in gold price by A$100 Decrease in gold price by A$100 Impact on equity Increase in gold price by A$100 Decrease in gold price by A$100 Consolidated Group 2010 $ 2009 $ 4,614,700 1,539,300 (4,614,700) (1,539,300) 4,614,700 1,539,300 (4,614,700) (1,539,300) (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 statement of financial position, is the carrying amount, net of any provision of doubtful debts. Credit risk is managed through the maintenance of procedures which ensure to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. No receivables are considered past due or impaired. (d) Liquidity risk Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. All financial assets and liabilities as disclosed above have maturities within one year. The Group manages liquidity risk by monitoring forecast cash flows. (e) 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. Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the Board has otherwise cleared as being financially sound. (f) Net fair values of financial assets and liabilities Fair values are amounts at which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arms length transaction. The net fair values of financial assets and liabilities are determined by the entity on the following bases: (i) 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. (ii) Non monetary financial assets and liabilities are recognised at their carrying values in the statement of financial position. 88 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note Consolidated Group 2010 $ 2009 $ 24 Commitments & contingent liabilities (a) Commitments Exploration expenditure commitments In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by the various State Governments of 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 1,572,700 4,474,020 6,721,600 682,060 2,324,500 7,306,600 12,768,320 10,313,160 The Group sub-leases a serviced office in Adelaide under a non-cancellable annual operating lease expiring in October 2010; two properties in Kambalda WA expiring in July 2010 and March 2011 and a property in Charters Towers QLD. The Group also leases office accommodation in Perth under a non-cancellable operating lease expiring in May 2013. The lease generally provides the Group with a right of renewal for a further 2 years after which time all terms are renegotiated. Lease payments comprise a base amount plus an incremental contingent rental. Contingent rentals are based on movements in the Consumer Price Index and operating criteria. Non-cancellable operating lease expense commitments Future operating lease commitments not provided for in the financial statements and payable: Within one year One year or later and no later than five years Later than five years Tenement acquisitions No contracts exist at year end for acquisition of tenements. (b) Contingent liabilities 129,344 182,457 - 311,801 37,177 - - 37,177 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. 89 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Contingent liabilities Termination benefits Mine development services Exploration expenditure to earn mineral rights on tenements in addition to minimum exploration expenditure commitment disclosed above Gold royalties & gold production payments Within one year One year or later and no later than five years Note (i) (ii) (iii) (iv) Consolidated Group 2010 $ 2009 $ 736,359 913,287 200,000 1,000,000 10,897,673 11,834,032 152,143 2,065,430 2,062,346 - 2,062,346 1,774,000 237,438 2,011,438 (i) Termination benefits Service Agreements exist with the executive officers and other employees under which termination benefits may, in appropriate circumstances, become payable. The maximum total contingent liability at 30 June 2010 under the service agreements is the amount disclosed above. (ii) Mine development services Mine development services relate to termination of contractor services that may, in certain circumstances, become payable. The maximum total contingent liability at 30 June 2010 under the services agreement is the amount disclosed above. (iii) Exploration expenditure Exploration expenditure relates to periods up to 5 years (2009: 4 years) in accordance with terms set out in relevant agreements. During the earning period the Company is associated with other entities in joint ventures whereby the Company sole funds certain exploration expenditure of not less than $1.02 million which at 30 June 2010 had substantially been spent with only the sum disclosed above yet to be incurred. (iv) Gold royalties and gold production payments Gold royalties and gold production payments relate to royalties payable to Western Australian Government and production payments to Native Title Parties in accordance with gold production agreements. The amounts payable have been based on the current mine plan and represents management’s best estimate of the contingent liability. (c) Performance guarantees Unconditional bank guarantees have been provided by the Consolidated Group’s bankers in favour of the Western Australian Government in respect of restoration costs required for the company’s projects including 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 $412,900 have been provided by the Consolidated Group as security against these unconditional bank guarantees (refer Note 9). 90 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note Consolidated Group 2010 $ 2009 $ (d) Credit facilities The Group has established corporate credit card facilities with its bankers which are used by senior executives to incur business related expenditure. These cards each have a maximum available facility limit which is drawn down as corporate expenditure is incurred. Drawn down amounts are repaid monthly. The total maximum facility limit available to the Group at 30 June 2010 was $57,500. 25 Notes to the statement of cash flows Reconciliation of profit from ordinary activities after income tax to net cash provided by operating activities Profit/(loss) after income tax expense Add/(less) non cash items Depreciation Amortisation of development expenditure Effect of exchange rates on cash holdings in foreign currencies Changes in assets and liabilities (Increase)/decrease in investments (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 deferred tax assets (Decrease)/increase in accounts payable (Decrease)/increase in provisions (Decrease)/increase in current tax liabilities (Decrease)/increase in deferred tax liability Items classified as investing/financing activities (Decrease)/increase in share based payments reserve (Decrease)/increase in issued capital (Decrease)/increase in issued capital Transaction costs – tax effect Net cash provided by/(used in) operating activities 91 20,198,695 4,973,356 698,258 395,336 17,778,318 4,601,884 17,781 - (42,425,394) (76,544) 947,316 (9,781,826) 9,101,456 563,759 - (85,335) (401,732) (995,814) 111,799 457,063 4,493,312 (2,334,287) (216,613) (747,065) 65,553 6,428,136 41,512 - (2,286,474) 3,845,262 104,153 33,932,056 224,284 - 15 297,159 38,945,952 10,979,427 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note 19 19 26 Employee benefits Aggregate liability for employee benefits, including on-costs Current Opening balance Increase/(decrease) in provision Closing balance Non-current Opening balance Increase/(decrease) in provision Closing balance Total Number of employees Number of employees at year end 27 Related parties Consolidated Group 2010 $ 2009 $ 421,563 77,888 499,451 42,493 47,787 90,280 257,858 163,705 421,563 102,315 (59,822) 42,493 589,731 464,056 39 35 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 JF Houldsworth Amount paid to a relative of the director representing wages inclusive of superannuation in respect of mine security and living away from home expenses. Amount paid to a relative of the director in respect of a leased property at Kambalda WA on an arms length basis. RM Kennedy Amount paid to relatives of the director in respect of casual wages 85,808 78,863 3,661 694 - - There were no transactions with key management personnel and their related entities during the financial year. There were no amounts receivable from and payable to directors and their director-related entities at balance date. 92 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 28 Controlled Entities Country of Incorporation Australia Percentage Owned (%)* 2010 2009 Australia United States 100 100 100 - Parent entity: Ramelius Resources Limited Subsidiaries of Ramelius Resources Limited: Ramelius Milling Services Pty Ltd Ramelius Nevada LLC** * percentage of voting power is in proportion to ownership ** incorporated during the financial year 29 Operating segments The Consolidated Entity has adopted AASB 8 Operating Segments with effect from 1 July 2009. AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker, the Chief Executive Officer, in order to allocate resources to the segment and to assess its performance. The Consolidated Entity has identified its operating segments to be as follows based on distinct operational activities: (i) Exploration; and (ii) Mining & Milling This is the basis on which internal reports are provided to the Chief Executive Officer for assessing performance and determining the allocation of resources within the Consolidated Entity. Unless stated otherwise, all amounts reported to the Chief Executive Officer, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the group. The Consolidated Entity operates primarily in one business, namely the exploration, development and production of minerals with a focus on gold. Details of the performance of each of these operating segments for the financial years ended 30 June 2009 and 30 June 2010 are set out below: Segment performance Segment revenue Sales revenue Segment results Gross segment result before development amortisation & impairment costs Development amortisation costs Impairment costs Interest income Other revenue Other expenses Profit before tax Exploration Mining & Milling Total 2010 $ 2009 $ 2010 $ 2009 $ 2010 $ 2009 $ 61,271,067 19,861,748 61,271,067 19,861,748 48,539,197 12,877,966 48,539,197 12,877,966 (9,102,214) (9,102,214) (126,515) (126,515) 30,760,879 8,276,082 (17,778,318) (4,601,884) (17,778,318) (9,102,214) 21,658,665 2,079,171 7,751,067 (2,801,988) 28,686,915 (4,601,884) (126,515) 8,149,567 648,856 170,676 (1,811,493) 7,157,606 93 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Exploration Mining & Milling Total 2010 $ 2009 $ 2010 $ 2009 $ 2010 $ 2009 $ 3,784,473 (9,102,214) 4,231,533 (126,515) 19,611,843 15,298,994 19,611,843 3,784,473 (9,102,214) 15,298,994 4,231,533 (126,515) 7,025,179 12,245,118 39,336,709 26,112,642 46,361,888 38,357,760 80,226,850 26,692,626 3,360,391 1,428,602 63,767 73,416 720,954 5,214,266 130,733,850 71,766,670 880,613 533,542 5,830,058 5,587,611 6,710,671 6,121,153 1,091,825 951,481 106,852 104,016 6,322,879 41,512 47,615 48,709 6,114,887 8,401,361 20,394,729 15,668,232 Capitalised expenditure Mine development Exploration Less Impairment Segment assets Total corporate and unallocated assets - Cash and cash equivalents - Trade and other receivables Plant equipment and development - - Deferred tax assets Total consolidated assets Segment liabilities Total corporate and unallocated liabilities - Trade and other - payables Short term provisions - Current tax liabilities - Long term provisions - Deferred tax liabilities Total consolidated liabilities Major customers The group has one major customer to whom it provides its products. This customer accounts for 95% (2009: 99%) of sales revenue. 94 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Note Consolidated Group 2010 $ 2009 $ 30 Interests in unincorporated joint ventures (a) The group has a direct interest in a number of unincorporated joint ventures, as follows: Joint Venture Project Black Cat Hilditch Wattle Dam Logan’s Larkinville Principal Activities Gold Nickel Nickel Nickel Gold and Tantalum Gold Gold Gold * Under an alliance with Marmota Energy Limited, Marmota may participate and earn a 40% interest in Ramelius’ interest Interest 90% 90% 80% 80% 75% 60% 75% 60% Nevada* Glen Isla Mt Windsor (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) Total assets employed in joint ventures 31 Events subsequent to balance date The following events occurred since 30 June 2010. 1,743,258 1,743,258 4,953,040 4,953,040 Acquisition of Mt Magnet On 20 July 2010 the Group acquired 100% of the issued capital of Mt Magnet Gold NL for a cash consideration of $35,346,500 plus replacement of environmental bonds of $4,653,500 via bank guarantees. The acquisition is part of the group’s strategy of expanding its exploration and development portfolio. Through the acquisition of 100% of the issued capital of Mt Magnet Gold NL, the group has obtained control of the company. Mt Magnet Gold NL owns various tenements which comprise the Mt Magnet Gold Project. The financial effect of this transaction has not been brought to account in the financial year ended 30 June 2010. Purchase consideration: Cash Assets and liabilities held at acquisition date: Exploration and evaluation assets Plant, equipment and development Inventories Trade and other payables Current provisions Non-current provisions Net assets Assets acquired $ Fair Value of assets acquired $ 387,687 6,414,809 807,777 (81,476) (11,869) (18,329,817) (10,812,889) 35,346,500 46,547,076 6,414,809 807,777 (81,476) (11,869) (18,329,817) 35,346,500 Fair values will be confirmed prior to 30 June 2011 as required by the Australian accounting standards. 95 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 Joint venture agreements The Group entered into a farm-in agreement with Miranda Gold Corporation to earn a 70% interest in the Angel Wing Gold Project in Nevada USA by exploration expenditure of US$4 million over 5 years with a minimum expenditure commitment of US$350,000 before it may withdraw. Under an alliance with Marmota Energy Limited, Marmota may participate and earn a 40% interest in the Group’s rights under the farm-in agreement. Capital repayment The capital repayment amounting to approximately A$14.5 million was paid on 20 August 2010. Apart from the above, there has not arisen in the interval between 30 June 2010 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. 32 Reserves Share options reserve: The share options reserve records items recognised as expenses on valuation of employee share options. 33 Parent Company details Note Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained earnings Total equity Financial performance Profit/(loss) for the period Other comprehensive income Total other comprehensive income for the period, net of tax Parent Entity 2010 $ 2009 $ 90,191,555 24,778,181 39,485,243 46,110,865 129,676,798 70,889,046 12,613,886 6,130,081 6,677,260 8,677,239 19,291,146 14,807,320 110,385,652 56,081,726 79,864,456 45,929,967 779,697 29,637,346 9,372,062 883,850 110,385,652 56,081,726 20,265,284 4,859,836 - - - - Total comprehensive income for the period 20,265,284 4,859,836 96 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (a) Commitments Exploration expenditure commitments In order to maintain current rights of tenure to exploration tenements, the Parent Entity is required to perform minimum exploration work to meet the minimum expenditure requirements specified by the various State Governments of 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 1,550,700 4,390,020 6,591,600 650,060 2,198,500 7,086,600 12,532,320 9,935,160 The Parent Entity sub-leases a serviced office in Adelaide under a non-cancellable annual operating lease expiring in October 2010; two properties in Kambalda WA expiring in July 2010 and March 2011 and a property in Charters Towers QLD. The Parent Entity also leases office accommodation in Perth under a non-cancellable operating lease expiring in May 2013. The lease generally provides the Parent Entity with a right of renewal for a further 2 years after which time all terms are renegotiated. Lease payments comprise a base amount plus an incremental contingent rental. Contingent rentals are based on movements in the Consumer Price Index and operating criteria. Non-cancellable operating lease expense commitments Future operating lease commitments not provided for in the financial statements and payable: Within one year One year or later and no later than five years Later than five years (b) Contingent liabilities Termination benefits Mine development services Exploration expenditure to earn mineral rights on tenements in addition to minimum exploration expenditure commitment disclosed above Gold royalties & gold production payments Within one year One year or later and no later than five years (i) (ii) (iii) (iv) 97 129,344 182,457 - 311,801 37,177 - - 37,177 618,645 806,171 200,000 1,000,000 10,897,673 11,716,318 152,143 1,958,314 2,062,346 1,774,000 - 2,062,346 237,438 2,011,438 Notes to the Financial Statements Ramelius Resources Limited - Consolidated Entity Notes to the financial statements For the year ended 30 June 2010 (i) Termination benefits Service Agreements exist with the executive officers and other employees under which termination benefits may, in appropriate circumstances, become payable. The maximum total contingent liability at 30 June 2010 under the service agreements is the amount disclosed above. (ii) Mine development services Mine development services relate to termination of contractor services that may, in certain circumstances, become payable. The maximum total contingent liability at 30 June 2010 under the services agreement is the amount disclosed above. (iii) Exploration expenditure Exploration expenditure relates to periods up to 5 years (2009: 4 years) in accordance with terms set out in relevant agreements. During the earning period Ramelius Resources Limited is associated with other entities in joint ventures whereby Ramelius Resources Limited sole funds certain exploration expenditure of not less than $1.02 million which at 30 June 2010 had substantially been spent with only the sum disclosed above yet to be incurred. (iv) Gold royalties and gold production payments Gold royalties and gold production payments relate to royalties payable to Western Australian Government and production payments to Native Title Parties in accordance with gold production agreements. The amounts payable have been based on the current mine plan and represents management’s best estimate of the contingent liability. (c) Performance guarantee Unconditional bank guarantees have been provided by the Parent Entity’s bankers in favour of the Western Australian Government in respect of restoration costs required for the company’s projects including 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 $236,900 have been provided by the Parent Entity as security against these unconditional bank guarantees (refer Note 9). (d) Credit facilities The Parent Entity has established corporate credit card facilities with its bankers which are used by senior executives to incur business related expenditure. These cards each have a maximum available facility limit which is drawn down as corporate expenditure is incurred. Drawn down amounts are repaid monthly. The total maximum facility limit available to the Parent Entity at 30 June 2010 was $45,000. (e) Guarantees in relation to debts of subsidiaries There were no guarantees in relation to debts of subsidiaries. 34 Company details The registered office and principal place of business of the company is: 140 Greenhill Road UNLEY SA 5061 98 Directors’ Declaration Ramelius Resources Limited - Consolidated Entity Directors’ declaration For the year ended 30 June 2010 Directors’ declaration The Directors of Ramelius Resources Limited declare that: (a) the financial statements and notes, as set out on pages 55 to 98, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the financial position as at 30 June 2010 and of the performance for the year ended on that date of the Consolidated Group; and (ii) complying with Accounting Standards; (iii) complying with International Financial Reporting Standards as disclosed in Note 1; (b) The Chief Executive Officer and Chief Financial Officer have declared that: (i) the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001; (ii) the financial statements and notes for the financial year comply with the accounting standards; and (iii) the financial statements and notes for the financial year give a true and fair view; and (c) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. 99 Independent Auditor’s Report 100 Independent Auditor’s Report 101 Independent Auditor’s Report 102 Shareholder Information Ramelius Resources Limited Shareholder Information Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below. Shareholdings as at 17 September 2010 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 Sprott Asset Management Inc. Beach Energy Limited J P Morgan Chase & Co and its affiliates Number of fully paid ordinary shares held 48,070,574 20,100,003 14,495,152 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 There were no options on issue by the Company as at 17 September 2010. 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 921 1,981 1,243 2,449 309 6,903 The number of shareholders holding less than a marketable parcel of ordinary shares is 528. On market buy-back There is no current on-market buy-back. 103 Shareholder Information Ramelius Resources Limited Shareholder Information 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 17 September 2010 are as follows. Name HSBC Custody Nominees (Australia) Limited JP Morgan Nominees Australia Limited Beach Energy Limited JP Morgan Nominees Australia Limited Mandurang Pty Ltd Aurelius Resources Pty Ltd National Nominees Limited Joseph Fred Houldsworth ANZ Nominees Limited Mr Stig Hakan Hellsing Mrs Patricia Anne Hellsing Citicorp Nominees Pty Ltd Mr George Chien Hsun Lu & Mrs Jenny Chin Pao Lu NEFCO Nominees Pty Ltd Comsec Nominees Pty Limited Goldfields Hotels Pty Ltd Mr Harold Walter Daly & Mrs Maureen Hazel Daly Pan Australian Nominees Pty Limited B & J O’Shannassy Management Pty Ltd Mrs Rosalind Mary Smart Triple Eight Gold Pty Ltd Number of fully paid ordinary shares held 29,479,636 23,291,683 20,100,003 7,166,663 6,429,813 5,074,091 4,173,450 4,080,014 4,057,120 2,635,000 2,478,525 2,475,000 1,928,378 1,722,832 1,500,000 1,420,501 1,335,340 1,209,653 1,209,415 1,194,732 Percentage held 10.12 7.99 6.90 2.46 2.21 1.74 1.43 1.40 1.39 0.90 0.85 0.85 0.66 0.59 0.51 0.49 0.46 0.42 0.42 0.41 122,961,849 42.19 104 Shareholder Information Ramelius Resources Limited Shareholder Information Unquoted and restricted equity securities Fully paid ordinary shares Details of fully paid ordinary shares on issue as at 17 September 2010 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* 20 April 2012** 14 September 2013*** 119,360 72,090 72,520 21 10 6 * 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. ** These securities are issued to employees and do not vest until 3 years from the date of issue of 20 April 2009 or the holder ceases as an employee, whichever occurs first. *** These securities are issued to employees and do not vest until 3 years from the date of issue of 14 September 2010 or the holder ceases as an employee, whichever occurs first. 105 106 Wattle Dam Underground Drill Rig Wattle Dam Gold Pour Burbanks Gold Processing Mill Australian Securities Exchange Code RMS: Shares Listed on Australian Securities Exchange Limited Home Exchange: Adelaide 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 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) 8373 5917 Email: info@rameliusresources.com.au Website: www.rameliusresources.com.au Perth Exploration Office Level 1, 130 Royal Street EAST PERTH WA 6004 P.O. BOX 6070 EAST PERTH WA 6892 Telephone: (08) 9202 1127 Facsimile: (08) 9202 1138 Email: accounts@rameliusresources.com.au Directors and Senior Management ROBERT MICHAEL KENNEDY ASIT, Grad. Dip. (Systems Analysis) FCA, ACIS, FAIM, FAlCD Non-Executive Chairman IAN JAMES GORDON BCom, MAICD Executive Director & Chief Executive Officer REGINALD GEORGE NELSON BSc (MATHS), FAusIMM, FAICD Non-Executive Director JOSEPH FRED HOULDSWORTH Non-Executive Director 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 KEVIN MARK SEYMOUR BSc, (Geology) MAusIMM Business Development Manager ANTONY WEBB BSc. (Metallurgy) Process Manager 

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