Maximus Resources Limited Annual Report 2007

Plain-text annual report

ANNUAL REPORT 2007 Corporate Directory Maximus Resources Limited ABN 74 111 977 354 contents Highlights Chairman’s Report Managing Director’s Report Exploration Director’s Report Tenement Schedule Financial Report Corporate Goverance Statement Directors Report Auditors Independence Declaration Income Statement Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements Directors Declaration Indepenent Audit Report ASX Additional information 1 2 4 6 23 27 28 30 34 35 36 37 38 39 53 54 56 Directors robert Kennedy Non-executive Chairman Kevin Wills Managing Director Gary Maddocks Exploration Director ewan Vickery Non-executive Director coMpany secretary anD chief financial officer richard Willson reGistereD anD principal office 62 Beulah Road Norwood South Australia 5067 contact Details Phone +61 8 8132 7960 Fax +61 8 8132 7999 Email info@maximusresources.com Website www.maximusresources.com solicitor DMaW lawyers auDitors Grant thornton asX coDe: MXr share reGistry computershare investor services pty ltd Level 5 115 Grenfell Street Adelaide South Australia 5000 GPO Box 1903 Adelaide South Australia 5001 Enquiries within Australia Enquiries outside Australia Email web.queries@computershare.com.au Website www.computershare.com 1300 556 161 61 3 9415 4000 Highlights • Over 36 kilometres length of vanadium-bearing magnetite iron horizons have been sampled at the Canegrass and Shephards Zones within the Narndee Project — potential magnetite rich rock to only 30 to 40 metres depth is estimated at 160 to 200 million tonnes. • Testing of alluvial gold at the Sellheim Project in Queensland is gradually building up a resource inventory — alluvial gold production could commence as early as the first Quarter of 2008. EXpLORATIOn • The high grade gold resource at Bird-in-Hand in the Adelaide Hills has been increased to 162,000 contained ounces — drilling of lateral and deeper extensions is expected to further increase this resource — additional resources at Bird-in-Hand are expected to lead to a pre-feasibility study in early 2008. • Potentially economic grades of calcrete uranium mineralisation have been intersected over an area of about eight square kilometres in the Windimurra palaeochannel at the Narndee Project, Western Australia — this work is expected to culminate in the estimation of an inferred uranium resource less than six metres from surface. • Electromagnetic surveys detected strong electrical conductors leading to nickel sulphide mineralisation at the Milgoo prospect, Narndee Project. TEnEMEnT OwnERShIp InCREASES CORpORATE • • • Maximus has successful negotiated 100% ownership positions in its joint ventures at Bird-in-Hand and Narndee through share considerations to its respective previous partners. Maximus now holds outright the high grade gold resource at Bird-in-Hand and the principal uranium, gold, nickel, iron and vanadium potential at Narndee. In separate negotiations, the company has added to its previous Narndee JV tenement holdings and now controls some 97% of the highly prospective mineral rich Narndee and Windimurra layered igneous complexes. • • • During the year Maximus expended about $4.4 million on its exploration activities and raised a total of $1.1 million through a placement. Maximus’ spinoff Eromanga Uranium Limited successfully listed on the ASX on 31 October, raising $14.75 million — Maximus has a 35.4% interest in Eromanga totalling 44.36 million shares. On July 17 the Company completed a placement to raise $3.4 million. On 26 July the Company announced an underwritten rights issue to raise $5.78 million. This issue raised only $126,000 due to the July 2007 international share market instability. A further rights issue is planned. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 1 Chairman’s Report In terms of increases in tenement holdings, the Company has significantly strengthened is holding on the Windimurra and Narndee Complexes in Western Australia. At this time last year the company had a joint venture with Apex Minerals whereby Maximus was spending $3 million to earn 70% equity in about 60% of the geologically defined complexes. In May, the Company announced that it had terminated the joint venture and bought out its co venturers. In addition three new agreements enabled Maximus to gain control of 90 to 100% equity in about 97% of the geologically defined complexes. The Company has also entered an option agreement to purchase the Sellheim group of tenements in the northern Drummond Basin in Queensland with potential for short term cash flow from alluvial gold mining. In order to gain additional exposure through joint ventures, the Company has farmed out the metalliferous mineral rights at Kapunda in the northern Adelaide Hills to Copper Range Limited. Two joint ventures are also being negotiated to farm out the Woolanga Project in the Strangways Ranges of the Northern Territory. Maximus will also receive 25% of any royalty from Talc mining in a deal with Luzenac Australia Pty Ltd, the 100% owned talc production subsidiary of Rio Tinto Limited. Maximus’ 90% equity in the Yandal Homestead Project, which did not fit well with our exploration strategies, has been sold to our co venturer Nemex Pty Ltd for $135,000. Earlier in the year, Maximus received a very important asset, being the shares and options in Eromanga Uranium Limited (Eromanga) and joint venture interests in two uranium exploration projects. Maximus now owns 44.36 million shares or 35.4% of the capital of Eromanga which has had an implied value of between $7.5 million (at $0.17) and $37.7 million (at $0.85) during the year. The two uranium exploration projects are the Eromanga Basin JV and the Billa Kalina JV where Maximus will retain a 30% and 50% interest respectively. Dear Fellow Shareholders This is the first full-year annual repost since Maximus listed on the Australian Stock Exchange on 26 October, 2005. During the year, great strides forward have been made through increases in identified gold resources, new expectations of resources at three projects, increases in the area and value of exploration tenements and increases in the value of the Company’s share portfolio. The net effect of these increases is a significant increase in the value of the Companies assets. Maximus’ share of total identified inferred gold resources is now 221,000 ounces from the Bird-in Hand and Yandal prospects. Increases are expected in the near future. The Company has discovered mineralisation at three locations where resources are expected to be reported in the coming months. These are at: • • • Windimurra Uranium Prospect in Western Australia where an area of about six square kilometres of calcrete mineralisation has recently been drill outlined Sellheim gold prospect in Queensland where an area has been located carrying alluvial gold grades sufficient to plan commencement of an alluvial operation Canegrass and Shephards magnetite iron ore prospects at the Narndee project in Western Australia where potential for 160 to 200 million tonnes of magnetite iron ore has been recognised to a depth of only 30 to 40 metres. New exploration acreage has been added to the Narndee Project in Western Australia where Maximus now controls 97% of the geologically defined Windimurra and Narndee Complexes with multicommodity mineral potential. The Narndee project has an area of about 5,500 square kilometres which is equivalent to owning the whole of a greenstone belt in the Yilgarn Craton. Additional exploration licences have been acquired for gold and base metals in the Adelaide Hills and an option to purchase the Sellheim alluvial gold in Queensland has been completed. 2 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Chairman’s Report Since listing with about 65 million shares Maximus has raised about $3.4 million through a placement and also issued shares to purchase 100% equity in the Bird-in Hand project in South Australia and the Windimurra/Narndee project in Western Australia. The total number of ordinary shares on issue is now, in mid-October, about 95 million. On 13 July, Maximus announced a 1 for 5 renounceable rights issue to raise a total of $5.8 million. The issue was later underwritten by Patersons Securities Limited. Unfortunately, this issue was impacted by the period of market volatility in July and August 2007. Several of the underwriting conditions were breached and the underwriters withdrew. It is expected that a new rights issue will be undertaken later in 2007 to provide funds for ongoing activities. Turning to personnel issues, like other companies Maximus has found it hard to attract new staff during a period of buoyant times in the mining industry. We have carried out salary reviews and adjusted pay scales to keep pace with a dramatic increase in personnel remuneration. Apart from financial issues we have attempted to improve working relationships and conditions and focussed on safety issues in remote exploration. We are continually on the lookout for ways to improve conditions and safety in our operations. Finally, I wish to thank Maximus’ stakeholders for their efforts towards the Company’s continuing advancement. This includes office based personnel, field hands, geologists, management and directors. Thanks also to our consultants, accountants, lawyers, drillers, laboratories and other service providers who have combined to make Maximus a dynamic Company, moving forward to meet its objectives. Bob Kennedy Chairman MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 3 Yandal Gold The Yandal gold project contains the flushing Meadows gold prospect and is located in the Yandal greenstone belt about 100 kilometres east of Wiluna in Western Australia. An inferred resource of 59,000 ounces of gold was estimated from holes drilled prior to Maximus’ involvement. Additional RC drilling completed during the year will allow the estimation of an indicated resource and a probable reserve. Maximus may decide to sell, farm out or further explore this prospect area. Sellheim Gold The Sellheim gold project is located about 40 kilometres south of the Burdekin Dam or 180 kilometres south-southeast of Townsville in north Queensland. Maximus has negotiated an option to purchase with the vendors. Maximus’ main activities have been to evaluate the alluvial and bedrock gold potential of the area. To date over 70 test pits treating 5 loose cubic metre samples have been run through a small alluvial plant. Results are encouraging with an expectation that an alluvial gold operation can be developed early in 2008. Sellhein gold. Managing Director’s Report InTRODUCTIOn In Maximus’ IPO Prospectus it was noted that the Company had acquired many projects with known mineralisation and drill targets and this meant the Company had a good chance of rapidly defining resources to add to its asset base. This prediction has been realised with resources expected to be located or upgraded at five projects. They are Bird-in-Hand, Yandal and Sellheim gold, Windimurra Uranium and Windimurra iron ore. The situation at each of these projects is summarised below: Bird-in-hand Gold The Bird-in Hand gold mine is located near Woodside in the Adelaide Hills of South Australia. A diamond drill rig was active at Bird-in-Hand throughout most of the year with 14 diamond drill holes totalling 3,500 metres being completed since the last annual report. These holes extended the known position of the main reef a further 175 metres down plunge of the lode – from about 100 to 375 metres below the level of the old workings. The inferred resource estimate carried out from this drilling totalled 421,000 tonnes averaging 12.0 grams per tonne containing 162,000 ounces of gold. Further drilling since the end of the reporting year has increased the resource. It is anticipated that sufficient resources to justify commencement of a pre-feasibility study will be outlined by early 2008. Location of Resource Projects. �� 4 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 windimurra Uranium Windimurra uranium prospect is located in the Windimurra complex near Mount Magnet in Western Australia. An area containing calcrete uranium mineralisation was discovered by Western Mining Corporation (WMC) in the 1970s. Maximus has recently redrilled the mineralised area on a 320 by 160 metre grid. An area of over 8 square kilometres has been shown to be variably mineralised to a depth of only six metres. Intersections from the surface vary up to 2.5 metres thick averaging about 0.5 kg/t U3O8. Maximus will estimate an inferred resource and then conduct a scoping study to look at the project’s viability with an objective of being in a position to move quickly should the WA Government change its policy on the mining of uranium. Windimurra uranium. Managing Director’s Report windimurra Iron Ore The Windimurra iron ore project consists of the Canegrass and Shephards prospects located in the Windimurra complex near Mount Magnet in Western Australia. Maximus has recently recognised the potential for large quantities of magnetite iron ore with vanadium and titanium credits. Magnetite concentrates can be more easily produced from layered mafic complex type deposits because they do not need such fine grinding as banded iron formation deposits. Maximus has outlined about 36 strike kilometres of magnetite zones on its tenements. The northern end of the Shephards zone contains the Windimurra Vanadium Mine, owned by precious Metals Australia. PMA have recently announced that they will develop a new mine to produce about one million tonnes of magnetite concentrate per year from their resource of 148 million tonnes of magnetite mineralisation. Maximus has recently collected 505 rock chip samples from Canegrass and Shephards which averaged 49 to 52% iron, 13% titanium dioxide and 1.2% vanadium pentoxide. Previous metallurgical work by WMC showed that a concentrate averaging 57% iron 13% titanium dioxide and 1% vanadium pentoxide could be produced. Maximus has estimated the tonnage potential to 30 to 40 metres depth to be in the order of 160 to 200 million tonnes. A program of drill testing commencing in October 2007 has been announced. Windimurra iron ore. COnCLUSIOnS Clearly Maximus is moving towards a portfolio with significant resources of gold, uranium and iron ore - containing several opportunities for development projects. Maximus spent about $4.4 million on its exploration activities in 2006/07 and is likely to continue at this or a slightly higher rate. The aim is to continue to focus on those projects that can achieve a cash flow in the near future. Short-term cash flow (within a year) is possible from an alluvial gold operation at Sellheim. Medium-term cash flow (within 2 to 3 years) may be developed from the Bird-in Hand and Yandal prospects, while longer-term cash flow is possible from Windimurra uranium and iron ore projects. Maximus’ activities are spread out over distant parts of Australia, and the Company has developed three groups of personnel to carry out the work. Maximus’ shares a head office in Adelaide with Flinders Diamonds and Eromanga Uranium which provides the base for its activities in the Adelaide Hills. The Company has a small office in Perth and has built a field base at Sellheim in Queensland. Together with directors, management and personnel from FME Exploration services in Adelaide, Maximus employs 8 persons full-time and about another 20 persons part-time. Much has been achieved in the past year and I wish to thank everybody for their special contribution. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 5 Exploration Director’s Report Figure 1 Location of activities. �� REvIEw Of EXpLORATIOn ACTIvITIES ADELAIDE hILLS GOLD AnD BASE METAL pROjECTS, SOUTh AUSTRALIA �� 100% Maximus Maximus Resources Limited (Maximus) holds 100% equity in all metalliferous minerals in seven exploration licences in the Adelaide Hills through an agreement with the primary tenement holder, Flinders Diamonds Limited (Figures 1 & 2). Maximus is also the 100% owner of another exploration licence and applicant for three additional exploration licences in the same region. When all applications are granted, the total tenement package will cover 3811 square kilometres. In November 2006 Maximus, in conjunction with Flinders Diamonds Limited, negotiated the purchase of the remaining 25% interest held by Indo Mines Limited and Statelink Holdings Pty Ltd in the Lobethal joint venture agreement. The consideration paid included 1,350,000 Maximus shares to Indo Mines Limited and 450,000 Maximus shares to Statelink Holdings Pty Ltd. This negotiation secured for Maximus 100% ownership of the Bird-in-Hand gold mine and other historic gold mines in the Woodside goldfield (Figure 3). �� Figure 2 Adelaide Hills Goldfields showing Bird-in-Hand location. �� 6 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Exploration Director’s Report �� Figure 3 Location of Bird-in-Hand and historic gold mines in the Woodside Goldfield. Drilling at Bird-in-Hand, Adelaide Hills, September 2007. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 7 Exploration Director’s Report �� Bird-in-hand Gold Mine �� Core drilling has continued for most of the reporting period with 8 holes for 2683 metres being completed to June 30, 2007. A further 6 holes for 847 metres have been completed during July-September, 2007 (Figure 4). All significant drill results from this period of drilling are tabulated below and include well mineralised intersections to depths of 350 metres below surface (Table 1). Assays for the last three holes completed prior to September 30 are awaited. Drilling results have been used to undertake an independent estimate of the total inferred mineral resource available from 100 metres below surface to a vertical depth of 375 metres. The new estimate, supervised by Consultant Geologist Mr Douglas McLean, increased the 2006 resource estimate by a factor of three times to a total of 421,000 tonnes at 12 grams gold per tonne for 162,000 contained ounces as detailed in Table 2. The inferred resource remains untested below 350 metres depth and drill testing at greater depths is planned as part of an ongoing program (Figure 5). It is expected that the ongoing drilling program will significantly increase the total inferred resource. Figure 4 Longitudinal projection of Bird-in- Hand showing drill intersections. 8 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Exploration Director’s Report Table 1 Mineralised Intersections for Maximus Drilling at Bird-in-hand Gold Mine, woodside, South Australia from September 2006 to June 2007 Drill Hole No. From (metres) To (metres) Interval (metres) Gold (grams/ tonne) Silver (grams/ tonne) including including including including including including including including BH-24 BH-25 BH-26 BH-27 BH-28 BH-28W BH-29 BH-30 BH-31 BH-32 BH-33 BH-34 272.5 277.8 291.5 298.3 283.5 280.8 294.0 307.0 329.0 331.3 358.0 367.0 361.0 369.0 240.0 251.0 240.0 153.5 240.7 256.0 242.0 156.0 166.0 171.0 139.0 149.8 162.0 107.0 140.5 152.15 162.5 111.2 11.0 3.0 2.5 8.7 2.0 2.3 0.4 9.0 0.5 8.0 0.7 0.7 5.0 1.6 2.0 2.5 0.5 5.0 1.0 1.5 2.4 0.5 4.2 6.6 11.9 NSA 3.2 7.6 27.2 47.9 225.0 5.2 15.8 13.4 81.7 56.4 32.1 109.5 4.0 34.4 170.0 15.6 59.5 10.1 11.5 176.0 10.8 0.8 1.0 BD 7.36 32.0 17.8 77.0 BD 0.2 1.6 8.0 40.0 25.6 67.9 BD 7.6 38.0 11.0 42.0 0.7 24.0 59.0 7.5 Cu % <0.01 <0.01 Pb % 0.02 0.02 Zn % 0.01 <0.01 <0.01 <0.01 <0.01 0.03 0.13 0.02 0.11 <0.01 0.01 <0.01 <0.01 0.06 0.07 0.17 <0.01 <0.01 0.01 0.06 0.27 0.01 0.07 0.11 0.03 0.25 1.05 0.93 1.53 <0.01 <0.01 <0.01 0.01 1.77 1.86 1.96 0.03 0.10 0.45 0.64 2.42 0.37 0.80 0.42 0.62 0.09 0.33 0.36 1.46 <0.01 <0.01 <0.01 <0.01 0.63 1.09 0.13 0.05 0.10 0.32 0.15 0.37 0.16 0.16 0.99 0.11 Note: Blank in grade column means no significant value recorded. NSA - No significant assays BD - Below detection. Table 2 Inferred Mineral Resources, 100 to 375 metres vertical depth Bird-in-hand Gold Mine, woodside, South Australia As at June 30, 2007. Total Main Reef Zone Total White Reef Zone3 Mineralisation remaining, Level 5 & 6 of Mine Workings (1934 Estimate) Total Inferred Mineral Resource4 Bulk Density1 2.8 2.8 Average Width2 (metres) 7.6 2.4 Tonnes 384,740 28,296 7,585 421,000 Grade (g/t) Gold (ounces) 12.2 10.0 9.3 12.0 150,822 9,079 2,275 162,000 Density value is based on an average of measurements on up to 8 samples per mineralised intersection. Horizontal width based on lode dipping approximately 50 degrees to east. Resource estimate limited to between 100 and 200 metres below surface. Totals rounded to nearest thousand (tonnage/ounces) and first decimal point (grade). MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 9 Exploration Director’s Report woodside Goldfield Gold mines relating to the Woodside goldfield, centred to the east of the township, extend over an area of approximately five square kilometres (Figure 3). Maximus has commenced investigations around the Bird-in-Hand, Ridge and Eureka mines using ground geophysical surveys and is anticipating the drilling of several targets once a suitable contractor can be retained. Discovery of additional gold lodes in the Woodside area would significantly enhance the potential viability of any future mining development at the Bird-in-Hand gold prospect. Adelaide hills Gold province The Adelaide Hills Gold Province contains twelve declared goldfields and extends from Mt Compass in the south to north of Truro (Figure 2). Maximus has commenced ground geophysical and soil sampling surveys in the Birdwood Cromer area and at the Deloraine gold mine, which was the largest historic producer in the Adelaide Hills. Ground results for magnetics and induced polarisation at Cromer are anomalous and warrant initial exploratory drilling as soon as suitable contractor can be retained. Initial exploration is also planned for other historic goldfields as time and resources permit. Lansd surface Old workings -100 metre depth Drill holes Gold lode Figure 5 Bird in Hand 3D model showing old workings, completed and proposed drilling. -375 metre depth (approx.) 10 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Exploration Director’s Report Adelaide hills Base Metal potential While Maximus has remained focused on gold mineralisation in the Adelaide Hills, the base metals potential of this region has been enhanced by commencement of development of the Angas lead-zinc- silver mine near Strathalbyn (Terramin Resources) and the positive results of a pre-feasibility study to mine copper at Kanmantoo near Callington (Hillgrove Minerals). During the reporting period, Maximus negotiated a farm out of the historic Kapunda copper mine and surrounding areas to Copper Range Limited (CRL). CRL has the right to earn 51% equity of the metalliferous minerals rights in the northwest portion of EL3064 through the expenditure of $500,000 in five years and will expend a minimum of $100,000 in the first eighteen months. When CRL has completed $500,000 expenditure, Maximus has a once only right to contribute to ongoing exploration in proportion to its 49% interest or allow CRL to earn up to 75% equity for the expenditure of a further $500,000 over five years. CRL are proposing to review the remaining copper resource at Kapunda and have commenced exploration for further copper discoveries within the joint venture area. Maximus also holds the rights to several of the Karinya lead-zinc occurrences which have attracted interest from third parties, and a number of other base metal occurrences in Maximus’ Adelaide Hills mining tenements. Drilling at Bird-in-Hand, Adelaide Hills, March 2007. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 11 Exploration Director’s Report Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Wondinong Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel E m 0 0 0 0 5 6 E m 0 0 0 0 0 6 (cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23) Gold prospect (cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23) Nickel/PGM prospect (cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23) Copper/zinc prospect (cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23)(cid:23) Lead/zinc prospect Maximus tenure area nARnDEE jv pROjECT, wESTERn AUSTRALIA 6 900 000 mN Maximus predominantly 100%, The project area now comprises the original Apex Minerals NL (Apex) joint venture area, adjacent tenements and applications secured through negotiations with the Carson and Meeline Syndicates, and several new applications for exploration licences. The tenure covers an area of 5,474 square kilometres and consists of 33 granted exploration licences, 27 applications for exploration licences, 16 prescribed prospecting licences and 39 applications for prescribed prospecting licences (see Figure 6 and the tenement schedule, page 23 for details). Remaining interests in all tenements relating to the Apex joint venture were secured through the issue of 3 million Maximus shares and 2 million Maximus 50 cent options to previous joint venture partners, Apex, Windimurra Resources Pty Ltd and well known prospector/entrepreneur, Mr Mark Creasy. A twelve month option for 100% interest for $500,000 cash in the Meeline tenements and applications was achieved through the cash payment of $100,000, and a 90% interest was secured with the cash payment of $150,000 and the issue of 3 million Maximus shares and 2 million Maximus 50 cent options to Corporate Resource Consultants Pty Ltd, Mr Bruce Legendre and T E Johnston & Associates. Numerous mineral occurrences enclosed within the project area include (Figure 6): • • • • • Calcrete hosted Uranium mineralisation in Windimurra and Wondinong palaeochannels overlying the older basement geology Nickel, Copper and Platinum Group Metals [PGMs] in the basement layered mafic intrusives forming both the Narndee and Windimurra complexes Vanadium-enriched magnetite iron in the Windimurra complex similar to the vanadium mineralisation to be mined by PMA at their Windimurra Vanadium deposit Gold within the Windimurra complex and in peripheral contact zones of both complexes Copper, Lead and Zinc in both felsic volcanic and structural settings within the basement geology 12 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect Windimurra Uranium Prospect (cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29) Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Windimurra Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Palaeochannel Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Windimurra Vanadium Deposit Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect Canegrass Vanadium Prospect (cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29) (cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67)(cid:67) 6 850 000 mN Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Shepards Iron Ore Zone Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Windim urra-Narndee Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex Com plex (cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29)(cid:29) Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect Milgoo Nickel/PGM Prospect 6 800 000 mN 0 5 10 15 km Figure 6 Location of Narndee JV Project area. �� Exploration Director’s Report �� Figure 7 Airbourne radiometric image over part of the Narndee JV Project area. E m 0 0 0 5 4 6 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC548 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 MNAC529 (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 MNAC513 (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12)(cid:12) (cid:13) (cid:13) (cid:13) (cid:12)(cid:12) (cid:13)(cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13)(cid:13) (cid:13) MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 (cid:13)(cid:13) (cid:13) MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 MNAC126 (cid:13) (cid:13) (cid:13) MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 (cid:13) MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 (cid:13) (cid:13) MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 MNAC157 (cid:13) (cid:13) (cid:13) MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 MNAC484 (cid:13) (cid:13) (cid:13) (cid:13) (cid:13)(cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13)(cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13)(cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13)(cid:13) (cid:13) MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC510 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 MNAC509 E m 0 0 0 0 5 6 Line 648740mE (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:13)(cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13)(cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13)(cid:13) (cid:12) (cid:12) (cid:12) (cid:13) (cid:13)(cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 MNAC240 (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:12) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12)(cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) 6875000 mN Exploration licence Calcrete (WMC drilling) Area of WMC anomalous drilling Windimurra palaeochannel (cid:12) (cid:13) Anomalous drillhole (>100ppm U3O8) Drillhole (<100ppm U3O8) 1km Figure 8 Windimurra Uranium Project - completed aircore drilling and results. �� (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:12) (cid:13) (cid:12) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) (cid:13) MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 13 Uranium Maximus has undertaken a total of 3582 metres of shallow aircore drilling through the Windimurra and Wondinong Palaeochannels to further test airborne radiometric anomalies previously drilled by WMC Resources Limited (WMC) in the 1970s (Figure 7 and 8). The Maximus exploration drilling at Windimurra was focused on an area of elevated WMC drill results extending over eight kilometres of the palaeochannel and drilling on a 320 by 160 grid metre spacing has confirmed that this area is of ongoing interest (Figure 8). Downhole radiometric probe results and drill analyses have demonstrated the palaeochannel calcretes contain U3O8 values to significant levels and thicknesses over an area of potential economic interest. Better values include Hole MNAC126, 2.5 metres from surface at 0.49kg U3O8 (490ppm) Hole MNAC157, 2 metres from surface at 0.48kg U3O8 (480ppm) Hole MNAC240, 1 metre from 1 metre at 0.58kg U3O8 (580ppm) Hole MNAC484, 1.5 metres from 0.5 metres at 0.51kg U3O8 (510ppm) Hole MNAC509, 1.5 metres from 0.5 metres at 0.53kg U3O8 (530ppm) Hole MNAC510, 1.5 metres from 1.5 metres at 0.45kg U3O8 (450ppm) Hole MNAC513, 2 metres from 1.5 metres at 0.41kg U3O8 (410ppm) Hole MNAC529, 1.5 metres from surface at 0.52kg U3O8 (520ppm) Hole MNAC548, 2.5 metres from 0.5 metres at 0.43kg U3O8 (430ppm) including 0.5 metres at 1.11kg U3O8 (1110ppm) Exploration Director’s Report Hole MNAC577, 2 metres from surface at 0.55kg U3O8 (550ppm) It is anticipated that drill results at Windimurra will lead to the estimation of an inferred uranium resource during the second half of 2007. Broad spaced drill traverses along the entire Wondinong palaeochannel were less encouraging as U3O8 values were generally low and aircore drilling was difficult due to the presence of silcrete layers in the calcrete. However, a strong radiometrically anomalous area some 7 x 7 kilometres in size straddles the tenement boundary of E58/294. Aura Energy Limited who hold approximately two thirds of this radoimetric anomaly is working towards defining a uranium resource in their sector by late 2007. The sector of the anomaly located within E58/294 still remains to be drill tested. Windimurra Palaeochannel, Western Australia nickel/Copper/pGMs The Milgoo area near Narndee has been previously explored for nickel, copper and PGMs but Maximus has been the first company to test the area with a ground based electromagnetic (EM) survey. The survey covered only part of the Milgoo area but it was successful in detecting two conductive zones of potential interest; now designated the Central and NW conductors (Figure 9). Exploratory drilling of these conductive zones has indicated that their conductivity is due to disseminated copper, iron and nickel sulphide mineralisation within ultramafic rocks and further drilling, particularly on the 800 metre long Central conductor, is warranted as soon as a suitable drilling contractor can be secured. Assays for intersections in each of the conductors indicate nickel and associated copper values with a best interval of 3 metres from 99 metres downhole at 0.43% nickel and 0.48% copper in hole MNRC0002. This hole is one of two holes on a single traverse at the shallower end of the 800 metre long Central conductor. Another 700 metres of strike along the Central conductor remains to be drill tested. A single hole on the NW conductor recorded 3 metres from 145 metres at 0.35% nickel and 0.27% copper. It is anticipated that further drilling of each conductor will be undertaken as soon as a suitable contractor is available. Results to date, however, are considered highly encouraging and have led to Maximus planning airborne EM coverage of the entire Windimurra/Narndee complex during 2008. Additional PGM occurrences have been identified in the western portion of the Windimurra complex where Pancontinental Mining Limited (Pancon) reported up to 8.27 grams PGM per tonne in surface sampling from a thin but discontinuous chromite band. Unfortunately, exploratory core drilling by Pancon failed to locate significant PGMs at depth. Maximus intends to re-examine the potential this region in a collaborative study with the Australian National University. The study with the ANU will also cover many other aspects of the geology and mineralisation of the Windimurra and Narndee Complexes. 14 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Exploration Director’s Report Figure 9 Milgoo Nickel Prospect showing location of EM conductors. Hole 19 (8m@0.5% Ni) 6808000 mN MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 MNRC0001 (3m@0.35% Ni and 0.27% Cu) NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor NW conductor 6806000 mN plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north plunge to the north Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor Central conductor (3m@0.43% Ni and 0.48% Cu) MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0002 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 MNRC0003 Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling Historic drilling 6804000 mN E m 0 0 0 6 0 6 500m E m 0 0 0 8 0 6 EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines EM survey lines E m 0 0 0 0 1 6 Iron Ore/vanadium Magnetite enrichment in magmatic horizons within the layered gabbros of the Windimurra complex is considered to represent a potential opportunity to locate abundant magnetite iron ore which also hosts significant vanadium and titanium. The area is well located with respect to infrastructure currently being developed to exploit the extensive Mid West Iron Ore Province which encloses magnetite and hematite iron ore deposits such as Karara and Jack Hills (Figure 10). Maximus has undertaken surface sampling and mapping of extensive linear magnetic horizons at the Canegrass prospect and along the southern Shephards Zone. Average grades for 198 samples from Canegrass over 18 kilometres of strike length amount to 54% iron, 13% titanium and 1.2% vanadium pentoxide. The southern Shephards Zone has averaged 48.6% iron, 12.7% titanium and 1.2% vanadium pentoxide over an 18 kilometre strike length. The northern Shephards Zone, which is one of the few portions of the Windimurra complex not controlled by Maximus, hosts the Windimurra vanadium deposit owned by Precious Metals Australia Limited and containing proved and probable reserves of 98.2 million tonnes averaging 0.4% vanadium pentoxide within a resource of 198 million tonnes. Drilling MNRC0001 - July 2007. Wiluna West Jack Hills Meekatharra Weld Range Maximus Narndee Project Windimurra Iron ore projects Cu-Zn deposit Tallering Peak Mount Magnet GERALDTON Golden Grove Koolanooka Blue Hills Karara Iron Ore Project Extension Hill 0 100 km Figure 10 Location of iron ore projects in the vicinity of Maximus Narndee tenements. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 15 Exploration Director’s Report Gold Copper/Lead/Zinc During 2006, rotary air blast (RAB) drilling along the Kiabye Greenstone Belt on the western margin of the Narndee complex indicated minor gold. However, follow up exploration failed to locate any significant area of gold mineralisation. Exploration of the gold potential along poorly exposed margins of the Narndee and Windimurra complexes will continue and further RAB drill testing of the southern Wymandoo Shear is planned. Historic exploration for massive sulphide hosted copper, lead and zinc has occurred in two areas of felsic volcanics and related volcanoclastic sediments interpreted by others to overly the Narndee and Windimurra layered igneous complexes. Significant copper-zinc deposits in felsic volcanics are know from the Golden Grove area located about 150 kilometres west of Windimurra/Narndee (Figure 10). To date, Maximus has not further investigated the potential of these massive sulphide occurrences to host a significant base metal deposit but the airborne EM surveys over the Windimurra/Narndee complexes will cover the felsic volcanic terrain. Bronzewing/Ironstone Well area Canegrass ironstone outcrop - Narndee Project Area In the late 1970s/early 1980s WMC Resources Limited (WMC) undertook some drilling at Canegrass and made a preliminary metallurgy assessment of the magnetite. The drilling reported up to 24.7 metres from 36 metres downhole of 40.1% iron, 9.5% titanium and 0.8% vanadium pentoxide (WMC drill hole CGD1). The magnetite is coarse grained and does not require fine grinding. Preliminary metallurgical testing by WMC indicates the magnetite can be separated magnetically to produce a high grade concentrate containing up to 57% iron with associated titanium and vanadium. Preliminary estimates of likely tonnages of this iron ore based on the extent of airborne magnetic anomalies and assuming a minimum depth of 30 to 40 metres, amount to 120 million tonnes at Canegrass and 80 million tonnes in the southern Shepherds Zone. Such iron ore is treatable in technologically advanced blast furnaces currently operating in China, Russia and South Africa. Canegrass and Shepherds Zone therefore warrant investigation as sources of iron ore, titanium and vanadium. Maximus is planning to undertake initial drill traverses at each of these prospects and undertake further metallurgical testing during the December Quarter. 16 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Exploration Director’s Report -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º -19º (cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12) Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville Townsville -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º -20º Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Charters Towers Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen Bowen (cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12) Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Lake Dalrymple Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam Burdekin Falls Dam (cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12) Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville Collinsville -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º -21º SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM SELLHEIM Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon Mt Coolon (cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12) Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay Mackay (cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12)(cid:12) 0000000000000000000000000000000000000000000000000 50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km50km º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º º 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Figure 11 Location of Sellheim Project area - Queensland. Test pitting operation at the Sellheim Gold Project - October 2007. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 17 SELLhEIM GOLD pROjECT, QUEEnSLAnD Option for 100% Maximus The Sellheim project area covers 78 square kilometres and comprises three granted mining leases enclosed within an exploration permit and application for an exploration permit located 190 km south southeast of Townsville (Figures 1 and 11). The area is an active and historic alluvial gold mining centre dating back to 1867 and the underlying bedrock is prospective for the discovery of gold and base metal mineralisation. On 27 October 2006, Maximus announced the terms of a three year option agreement to purchase 100% ownership of the tenure from vendors Alan Stiff, Colleen Budge and Peter Harvey. These terms included an initial option payment of $75,000 in cash and the issue of 600,000 ordinary shares in Maximus. The agreement allows for annual extension of the option agreement for up to three years through further payments of $62,500 in cash and the issue of $75,000 in value of ordinary Maximus shares. The option for 100% equity in the project area may be exercised at any time after the initial option payment for a cash amount of $1,500,000. If the option is exercised, the vendors retain rights to a 1.5% net smelter return royalty on any mineral production from the project area. Maximus commenced exploration in November 2006 with the flying of helicopter-borne high resolution aeromagnetics and mapping of the alluvial gold potential. In early 2007, a camp was constructed and a small alluvial gold plant was purchased from New Zealand. Test pitting of the alluvial gold potential was Exploration Director’s Report underway in the second quarter of 2007 and bedrock geochemical drilling of the main mining lease area commenced in May. Despite field activities being seriously hampered by unseasonal rains in Northern Queensland through June-July, the Maximus field staff has dug and processed alluvial materials from over 70 test pits and completed the bedrock drilling of 214 rotary air blast (RAB) holes and 11 reverse circulation (RC) holes. To date, a total of some 500 loose cubic metres (lcm) of alluvial material has been treated and the majority of results from individual test pit have been encouraging (Figure 12). Better values from the test pits dug to the base of the alluvium have included 2.24 grams gold per lcm (Pit TT047R) 1.66 grams gold per lcm (Pit TT026R) 1.51 grams gold per lcm (Pit TT002R) 1.39 grams gold per lcm (Pit TT024) Figure 12 Location of alluvial gold areas and test pits at the Sellheim Project area - Queensland. ' 7 1 º 7 4 1 Boulder Run -20º56' EPM13499 ' 6 1 º 7 4 1 ML10328 TT024 TT047R Jacks Patch Golden Triangle -20º57' TT026R ML10269 TT002R Miers Run ML10270 Test pit Ore zone 0 500 m In several cases, gold nuggets have been recovered by metal detecting the weathered bedrock interface at the bottom of the test pit. Given that such soft weathered material could be excavated at the time of a mining operation and passed through the trommel section of an alluvial plant, recovery of such nuggets in a full scale alluvial mining operation can be anticipated. Geochemistry from RAB bedrock drilling on a 160 by 80 metre pattern across the mining leases has indicated anomalous patterns in potential pathfinder elements for gold such as arsenic and bismuth but, in general, few anomalous gold values were obtained. Eleven RC holes were drilled to follow up previously known targets such as Agnew’s Hole on the smaller central mining lease and the Margaretta copper mine workings in the main northern mining lease. At Agnew’s Hole, hole MQRC01 recorded 8 metres from 14 metres down hole at 1.35 grams gold per tonne and at Margaretta Extended, hole MQRC05 recorded 8 metres from 38 metres at 0.8 grams per tonne. Further investigation of the bedrock gold and copper potential throughout the tenement package will continue during 2008. 18 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Exploration Director’s Report �� Figure 13 Location of the Yandal Gold Project prospects in the Yandal Greenstone Belt - Western Australia. � � � � � � � � � � � � � �� YAnDAL GOLD pROjECT, wESTERn AUSTRALIA 90% Maximus The Yandal project area comprises two separate tenement packages situated near Wiluna (Figure 1) and located within the highly prospective Yandal Greenstone Belt. The Ironstone Well project contains two granted exploration licences and several prospecting licence applications covering 239 square kilometres and includes three zones of known gold mineralisation (Figure 14). The Yandal Homestead project comprises five granted tenements and five applications covering 56 square kilometres and includes two zones of gold mineralisation. Ironstone well Subsequent to the granting of most of the tenements at Ironstone Well, Maximus undertook 2331 metres of RC drilling for 31 holes on the Flushing Meadows inferred mineral resource (Figure 13). Most of this drilling was focused on confirming the reliability of previous drilling data used by Maximus to estimate an inferred mineral resource of 1.1 million tonnes of 1.7 grams gold per tonne (59,000 ounces of gold). The recent drilling will be used to support the upgrading of part of the inferred resource to an indicated resource and probable reserve status. Maximus believes that a grade of at least 2 grams gold per tonne would be necessary for a possible development. The estimate of a probable reserve will be completed during the December Quarter when Maximus will consider its options to realise value for its interest in the project. Yandal homestead Following receipt of modest gold results for drilling completed in the previous year, no further field activities have been undertaken. The project has now been sold to joint venture partner Nemex Pty Ltd for a cash payment of $135,000 for Maximus’ 90% interest in the Yandal Homestead tenements. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 19 Exploration Director’s Report wOOLAnGA GOLD AnD BASE METAL pROjECT, nORThERn TERRITORY 100% Maximus The Woolanga project area comprises five exploration licences and one Authority covering 1739 square kilometres and is located 100 kms northeast of Alice Springs (Figure 1). The tenement package includes the Johnnies Reward ironstone hosted copper-gold prospect for which previous explorers have intersected up to 50 metres averaging 1.8 grams gold per tonne from 75 metres (Alcoa hole DDH002). In addition, vermiculite occurrences of potential commercial grade, and similar to that currently mined by Australian Vermiculite at its nearby Mud Tank operation, occur within the project area (Figure 14). Field activities have included the completion of a helicopter-borne electromagnetic (EM) survey over the Johnnies Reward prospect; data from which indicated a modest anomaly in the area of the historic drilling. Inspection of core from this historic drilling failed to resolve the EM anomaly. However, as a result of its opportunities in other projects, Maximus has decided to offer the project for farm out. Maximus is currently negotiating agreements that will result in joint venture exploration of the Johnnies Reward prospect and the completion of an airborne geophysical survey over the remainder of the Woolanga tenement package. It is anticipated that this joint venture exploration will be underway during the December Quarter. � � � � � � � � � � �� Figure 14 Woolanga Project geology and prospects. 20 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Exploration Director’s Report RAnkIn BASE METAL pROjECT, nORThERn TERRITORY BILLA kALInA pROjECT, SOUTh AUSTRALIA Maximus 95% During the year, Maximus negotiated an agreement with Tanami Exploration NL (TENL) to secure 95% ownership of exploration licences EL9529 and EL22759. These ELs enclose the Rankin and Gecko massive sulphide base metal prospects situated less than 100 kilometres north of Alice Springs (Figure 1). TENL will retain a 5% interest in the joint venture carried to the point of “decision to mine”. The tenements cover 63 square kilometres and are contiguous with Maximus’ Woolanga project area. Maximus has completed helicopter-borne EM surveys over both the Rankin and Gecko prospects with mixed results. Data at Rankin indicate a modest EM response immediately north of some historic drilling but there was no significant EM anomaly at Gecko. Maximus has decided to offer the project for farm out, together with the Woolanga project, to a third party who is prepared to accept the 5% free carried interest of TENL. Maximus is currently negotiating an agreement that will result in new joint venture exploration of both the Rankin and Gecko prospects commencing in the December Quarter. Maximus diluting to 50% subject to Billa Kalina JV Agreement The Billa Kalina project area comprises five exploration licences located 70km northwest of the Olympic Dam copper- uranium-gold deposit and 45 km east of the Prominent Hill copper-gold deposit (Figure 1). In 2006, a farm out agreement involving the project resulted in Eromanga Uranium Limited (ERO) taking over management of ongoing exploration. Through its wholly owned subsidiary, Eromanga Uranium Resources Pty Ltd, ERO must spend $3 million on exploration to earn 50% interest in the project. During mid 2007, ERO completed two drill holes to approximately 600 metres depth each on a gravity anomaly considered to have potential for copper-uranium-gold mineralisation of Olympic Dam style. Each of the holes intersected basement geology comprising mafic volcanics. While these volcanics include quartz veining and some disseminated pyritic zones, no alteration or iron-oxide-copper-gold mineralisation was observed. The gravity anomalies are now thought to be due to buried topographic relief in the basement. ERO has advised that it will not immediately be continuing to pursue bedrock mineralisation within the Billa Kalina project area, but they intend to focus on the potential for sandstone hosted uranium in the sediments overlying the older crystalline basement rocks. In pursuit of this latter target, ERO has recently completed an airborne electromagnetic survey of the project area. Data from this survey remain to be interpreted. Drilling BK 1 at BillaKalina - June 2007. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 21 Exploration Director’s Report EROMAnGA BASIn SEDIMEnTARY URAnIUM pROjECT, SOUTh AUSTRALIA & nORThERn TERRITORY Maximus diluting to 30% subject to Eromanga JV Agreement The Eromanga Sedimentary Uranium Project comprises seventeen exploration licences and one application in five separate tenement packages covering 15,755 square kilometres of sedimentary units overlying Precambrian basement rocks on the margin of the Eromanga Basin (Figure 1). Each of the tenement packages is considered favourable for the discovery of sedimentary uranium deposits. Sedimentary uranium deposits are a significant source of the World’s uranium resources. Yet, despite Australia’s Precambrian basement rocks hosting approximately one third of the World’s low cost uranium resources, and the existence of ideal geological settings such as the Eromanga Basin to concentrate uranium weathered from basement, Australia is under represented in such sedimentary uranium deposits. Part of this deficiency is considered to be due to a lack of persistence exploration for this form of uranium deposit and the Eromanga Basin project represents an exciting opportunity to discover one or more new sedimentary uranium fields. Joint venture partner and manager, Eromanga Uranium Limited (ERO), has elected to use cutting edge technology by completing regional scale helicopter- borne EM surveys over the Maree and Abminga tenement packages. The objective is to identify palaeochannels within the Eromanga Basin Mesozoic sediments that are likely to host uranium mineralisation. The EM data at Maree have been complimented by initial drill traverses to assist in interpretation. Similar EM surveys will be completed over the Kingoonya and Ilowga tenements. 22 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 REPTEM Survey at Abminga Project area - June 2007. Tenement schedule For the year ended 30 June 2007 Tenement Number Tenement Name Date Granted / Applied For Expiry Date Area Sq. Km. Registered Holder / Applicant Related Agreement Western Australia Narndee Project E58/232 Boulder Well 29/07/02 28/07/2007** 50 Windimurra Resources Pty Ltd E58/235 Canegrass Well 29/07/02 28/07/2007** 50 Windimurra Resources Pty Ltd E58/236 Challa 22/03/02 21/03/2007** 50 Windimurra Resources Pty Ltd E58/237 Naluthanna Hill 22/03/02 21/03/2007** 50 Windimurra Resources Pty Ltd E58/240 Windimurra 11/03/02 10/03/2007** 50 Bernfried Gunter Franz Wasse Apex Sale Agreement Apex Sale Agreement Apex Sale Agreement Apex Sale Agreement Apex Sale Agreement E58/270 Wondinong Hill 28/10/05 27/10/10 196 Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement 132 Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement 196 Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement E58/271 Gingier Pool E58/273 Wagoo Hills E58/274 Paynesville 7/11/05 4/05/07 5/03/03 6/11/10 3/05/12 4/03/08 E58/281 Boundary Well 28/06/06 27/06/11 E58/282 Honeypot E58/294 Wondinong E58/295 Windsor 3/05/07 7/06/06 7/06/06 2/05/12 6/06/11 6/06/11 98 42 25 Apex Minerals NL Apex Minerals NL 87 Maximus Resources Ltd 6 Maximus Resources Ltd E58/300 Kundingguari Hill 1/12/06 30/11/11 42 Henning Otto Hintze E58/295 Windsor 7/06/06 6/06/11 6 Maximus Resources Ltd E58/309 Brailia South 22/01/07 21/01/12 17 Maximus Resources Ltd Apex Sale Agreement Apex Sale Agreement Apex Sale Agreement Apex Sale Agreement Meeline Option Agreement Apex Sale Agreement Apex Sale Agreement E59/908 Narndee 8/09/00 7/09/08 E59/1078 Tandy Bore 14/11/02 13/11/07 E59/1081 Dromedary Well 14/11/02 13/11/07 E59/1082 Warne River 14/11/02 13/11/07 98 59 54 42 Apex Minerals NL(80) Tyson Resources P/L(6) Wedgetail Resources P/L(14) Apex & Wedgetail Sale Agreements Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement E59/1083 Narndee West 14/11/02 13/11/07 106 Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement E59/1084 Moolyawarda Hill 14/11/02 13/11/07 E59/1085 Budnee 14/11/02 13/11/07 54 54 Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement E59/1087 Bricky Bore 6/06/07 5/06/12 196 Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement E59/1088 Dunns Tank 24/10/06 23/10/11 196 Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement Apex Minerals NL(80)/Mark Gareth Creasy (20) Apex Sale Agreement E59/1111 Tootawarra Well 28/10/05 27/10/10 E59/1173 E59/1174 11/23/2006 22/11/11 11/23/2006 22/11/11 42 60 20 Kesli Chemicals Pty Ltd Kesli Chemicals Pty Ltd E59/1206 Tootawarra East 29/10/06 28/10/11 14 Maximus Resources Ltd Wedgetail Sale Agreement Wedgetail Sale Agreement Apex Sale Agreement CRC Group Sale Agreement E59/1230 Narndee C1 2/8/2007 7/02/12 E59/1231 Boodanoo 2/8/2007 7/02/12 E59/1237 Boodanoo C1 1/25/2007 24/01/12 E59/1238 Boodanoo C2 1/22/2007 21/01/12 200 200 43 20 TE Johnston and Associates P/ L (40%), Corporate and Resource Consultants P/L (60%) TE Johnston and Associates P/ L (40%), Corporate and Resource Consultants P/L (60%) CRC Group Sale Agreement TE Johnston and Associates P/ L (40%), Corporate and Resource Consultants P/L (60%) CRC Group Sale Agreement TE Johnston and Associates P/ L (40%), Corporate and Resource Consultants P/L (60%) CRC Group Sale Agreement E59/1252 Boodanoo Well 21/06/07 20/06/12 48 Maximus Resources Ltd E58/244 Paynesville E1 7/10/99 E58/254 Paynesville E2 29/09/00 Apex Sale Agreement Meeline Option Agreement 3 Christopher Richard Elkington (25%), Peter William Youngs (50%), Darian Sampey (25%) 108 Alan Hunter Younger (25%), Christopher Richard Elkington (25%), Peter William Youngs (25%), Roger Townend (25%) Meeline Option Agreement MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 23 Tenement schedule For the year ended 30 June 2007 Tenement Number Tenement Name Date Granted / Applied For Expiry Date E58/257 Meeline E1 27/11/00 Area Sq. Km. 183 Registered Holder / Applicant Related Agreement Raimunda Silva Townend (25%), Alan Hunter Younger (25%), Christopher Richard Elkington (25%), Peter William Youngs (25%) Meeline Option Agreement E59/1335 4 Corner Bore 5/02/07 50 Apex Minerals NL(80) Tyson Resources P/L(6) Wedgetail Resources P/L(14) Apex & Wedgetail Sale Agreements E59/1365 Narndee A E59/1366 Wydgee A E59/1367 Wydgee B E59/1368 Wydgee C E59/1370 Windimurra- Warramboo 1/05/07 1/05/07 1/05/07 1/05/07 1/05/07 E59/1381 Boodanoo M1 5/22/2007 E59/1382 Narndee M3 5/22/2007 E59/1383 Yardiacco Hill 5/22/2007 E59/1384 Muleryon Hill 5/22/2007 6 Maximus Resources Ltd 49 Maximus Resources Ltd 9 Maximus Resources Ltd 3 Maximus Resources Ltd 3 Maximus Resources Ltd 21 Maximus Resources Ltd 99 Maximus Resources Ltd 200 Maximus Resources Ltd 192 Maximus Resources Ltd Also includes 35 superceded EL applications, 14 superceded ML applications, 16 granted PL’s (18 sq km) and 15 pending PL’s (16 sq km) Yandal Homestead Project P37/6709 Withers 1 15/04/05 14/04/09 2 Maximus Resources Limited(90)Nemex Pty Ltd(10) Nemex Agreement P37/6710 Withers 2 15/04/05 14/04/09 2 Maximus Resources Limited(90)Nemex Pty Ltd(10) Nemex Agreement P37/6711 Withers 3 15/04/05 14/04/09 2 Maximus Resources Limited(90)Nemex Pty Ltd(10) Nemex Agreement P37/6712 Withers 4 15/04/05 14/04/09 2 Maximus Resources Limited(90)Nemex Pty Ltd(10) Nemex Agreement P37/6713 Withers 5 15/04/05 14/04/09 2 Maximus Resources Limited(90)Nemex Pty Ltd(10) Nemex Agreement E37/818 Yandal Homestead P37/7078 P37/7079 P37/7080 P37/7081 P37/7082 P37/7083 P37/7084 P37/7085 7/02/05 16/01/07 16/01/07 16/01/07 16/01/07 16/01/07 16/01/07 16/01/07 16/01/07 34 Nemex Pty Ltd Nemex Agreement 2 1 1 2 2 2 2 2 Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Allied Technologies Group Ltd(33)Newmont Wiluna Gold P/L(67) Nemex Agreement Also includes 4 superceded ML applications Duketon Project E37/925 Woodarra 28/02/07 67 Maximus Resources Ltd 24 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Tenement schedule For the year ended 30 June 2007 Tenement Number Tenement Name Date Granted / Applied For Expiry Date Area Sq. Km. Registered Holder / Applicant Related Agreement Ironstone Well Project P53/1209 Barwidgee 8/08/05 7/08/09 2 AM-Australian Minerals Exploration P/L Nemex Agreement E53/1223 Ironstone Well 25/01/07 24/01/12 188 Maximus Resources Limited(90)Nemex Pty Ltd(10) Nemex Agreement E53/1224 Flushing Meadows 25/01/07 24/01/12 56 Maximus Resources Limited(90)Nemex Pty Ltd(10) Nemex Agreement P53/1308 P53/1309 P53/1310 P53/1311 P53/1312 P53/1313 P53/1314 P53/1315 P53/1316 P53/1317 P53/1318 P53/1319 P53/1320 P53/1321 P53/1322 P53/1323 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 12/01/07 2 Mark Gareth Creasy(30)Newmont Yandal Operations P/L(70) Nemex Agreement 2 Mark Gareth Creasy(30)Newmont Yandal Operations P/L(70) Nemex Agreement 1 Mark Gareth Creasy(30)Newmont Yandal Operations P/L(70) Nemex Agreement 1 Mark Gareth Creasy(30)Newmont Yandal Operations P/L(70) Nemex Agreement 2 1 1 2 2 2 2 2 2 2 1 0 Australian Metals Corporation P/L(20)Eagle Mining P/L(51) Hunter Resources P/L(29) Nemex Agreement Australian Metals Corporation P/L(20)Eagle Mining P/L(51) Hunter Resources P/L(29) Nemex Agreement Australian Metals Corporation P/L(20)Eagle Mining P/L(51) Hunter Resources P/L(29) Nemex Agreement Eagle Mining P/L(71)Hunter Resources P/L(29) Eagle Mining P/L(71)Hunter Resources P/L(29) Eagle Mining P/L(71)Hunter Resources P/L(29) Eagle Mining P/L(71)Hunter Resources P/L(29) Newmont Yandal Operations P/L Newmont Yandal Operations P/L Newmont Yandal Operations P/L Newmont Yandal Operations P/L Newmont Yandal Operations P/L Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Also includes 5 superceded ML applications Kimberley Project E80/3670 Police Valley 20/04/06 348 Flinders Diamonds Ltd (50) Maximus Resources Ltd (50) South Australia Adelaide Hills Project EL 3215 Lobethal 24/06/04 23/06/08 341 Flinders Diamonds Limited MC3783 Bird in Hand 23/04/07 22/04/08 Flinders Diamonds Limited EL 3425 Echunga 19/10/05 18/10/07 253 Flinders Diamonds Limited EL3534 Mt Pleasant 30/03/06 29/03/08 719 Flinders Diamonds Limited EL 3057 Mt Barker 17/01/03 16/01/08 162 Flinders Diamonds Limited EL 3064 Kapunda 12/03/03 11/03/08 746 Flinders Diamonds Limited EL 3141 Brukunga 24/10/03 23/10/07 176 Flinders Diamonds Limited EL 3239 Tarlee 10/09/04 9/09/07 533 Flinders Diamonds Limited ELA 251/06 Mount Monster 16/05/06 575 Maximus Resources Limited ELA252/06 Williamstown 16/05/06 44 Maximus Resources Limited ELA106/07 Tepko ELA170/07 Mount Rufus 5/03/07 4/04/07 160 Maximus Resources Limited 102 Maximus Resources Limited Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Flinders & Copper Range Agreements Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 25 Tenement schedule For the year ended 30 June 2007 Tenement Number Tenement Name Date Granted / Applied For Expiry Date Area Sq. Km. Registered Holder / Applicant Related Agreement Billa Kalina Project EL 3526 Francis 23/02/06 22/02/08 734 Flinders Diamonds Limited EL 3525 Margaret 23/02/06 22/02/08 771 Flinders Diamonds Limited EL 3170 Billa Kalina 25/02/04 24/02/08 1,435 Flinders Diamonds Limited EL 3337 Welcome Creek 19/05/05 18/05/08 373 Flinders Diamonds Limited EL 3338 Millers Creek 19/05/05 18/05/08 771 Flinders Diamonds Limited Eromanga Project EL 3579 Calcutta 21/06/06 20/06/08 984 Maximus Resources Limited EL3578 EL3577 EL3574 EL3575 Dalarinna Hill 21/06/06 20/06/08 1000 Maximus Resources Limited Wilpoorina 21/06/06 20/06/08 962 Maximus Resources Limited Mundowdna 21/06/06 20/06/08 963 Maximus Resources Limited Marla 21/06/06 20/06/08 988 Maximus Resources Limited EL3599 Alberga River 17/07/06 16/07/08 903 Maximus Resources Limited EL 3600 Mt Weir 17/07/06 16/07/08 959 Maximus Resources Limited EL 3601 Warrataddy Hill 17/07/06 16/07/08 963 Maximus Resources Limited EL 3602 Mt Anthony 17/07/06 16/07/08 966 Maximus Resources Limited EL3576 EL3573 Whymlet 21/06/06 20/06/08 973 Maximus Resources Limited Haggard Hill 21/06/06 20/06/08 859 Maximus Resources Limited EL 3590 Bon Bon 22/06/06 21/06/08 667 Maximus Resources Limited EL3591 McDouall Peak 22/06/06 21/06/08 980 Maximus Resources Limited EL 3613 Phar Lap 15/08/06 14/08/08 581 Maximus Resources Limited Northern Territory Woolanga Project EL 23592 Johnnies Reward 12/2/03 11/02/09 A 23714 Mud Tank Reserve 11/11/04 10/11/10 49 28 Flinders Diamonds Limited Flinders Diamonds Limited SEL25055 Strangways 13/6/06 12/06/10 1118 Flinders Diamonds Limited SEL25056 Mud Tank-Alcoota 13/6/06 12/06/10 520 Flinders Diamonds Limited Rankin Project EL9529 Rankin 5/14/2002 13/05/08 EL22759 Gecko Eromanga Project 4/2/2002 1/04/08 47 16 Tanami Exploration NL Tanami Exploration NL EL25161 Illogwa Creek 1/24/2006 1117 Maximus Resources Limited EL25162 Numery 11/22/2006 21/11/12 216 Maximus Resources Limited EL25163 Mt Peterswald 11/22/2006 21/11/12 1130 Maximus Resources Limited EL25166 Jenkins Bluff 11/22/2006 21/11/12 1005 Maximus Resources Limited Queensland Sellheim Project ML10269 Slim Chance 11/13/2003 30/11/08 0.13 Peter Lawrence Harvey ML10270 Next Chance 11/13/2003 30/11/08 0.50 Peter Lawrence Harvey ML10328 Sellheim 12/1/2006 30/11/26 3.27 Alan Raney Stiff EPM 13499 Mount Richardson 1/3/2004 28/02/09 11.00 Peter Lawrence Harvey EPM 15778 Sellheim River 7/27/2006 63.00 Alan Raney Stiff and Colleen Margaret Budge 26 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Tanami Agreement Tanami Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Eromanga Agreement Sellheim Agreement Sellheim Agreement Sellheim Agreement Sellheim Agreement Sellheim Agreement Financial Report For the year ended 30 June 2007 Maximus Resources Limited ABN 74 111 977 354 INDEX Corporate Governance Statement Directors Report Auditors Independence Declaration Income Statement Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements Directors Declaration Independent Audit Report ASX Additional information 28 30 34 35 36 37 38 39 53 54 56 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 27 Corporate Governance Statement The Board of Directors of Maximus Resources Limited aims to achieve the highest standards of corporate governance and has established corporate government policies and procedures, where practicable, consistent with the ASX Corporate Governance Council’s publication “Principles of Good Corporate Governance and Best Practice Recommendations” (“ASXCGC”). The Company to date has not adopted the ASXCGC best practice recommendations other than those specifically identified and disclosed below as the Board believes that it cannot justify the necessary cost in view of the size and early stage of the entity’s life as a listed exploration company. This statement outlines the main corporate governance practices of the Company disclosed under the principles outlined in the ASXCGC. PrinciPle 1 LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT Role of the Board The Board is governed by the Corporations Act 2001, the Company’s formal constitution and by the ASX Listing Rules. The Board’s primary role is to set policy regarding the affairs of the Company for the protection and enhancement of long- term shareholder value. The Board takes responsibility for the overall Corporate Governance of the Company including its strategic direction, management goal setting and monitoring, internal control, risk management and financial reporting. Board processes and management The Board has an established framework for the management of the entity including a system of internal control, a business risk management process and appropriate ethical standards. The Board has appointed a Managing Director responsible for the day to day management of the Company including management of financial, physical and human resources, development and implementation of risk management, internal control and regulatory compliance policies and procedures, recommending strategic direction and planning for the operations of the business and the provision of relevant information to the Board. PrinciPle 2 STRUCTURE BOARD TO ADD VALUE Composition of the Board The Board comprises individuals with a range of knowledge, skills and expertise that are appropriate to its activities and objectives. The composition of the Board consists of four directors. Two, including the Chairman, are non-executives. Mr Kennedy’s role as Chairman of the Board is separate from those of the Managing Director, Dr Wills who is responsible for the day to day management of the Company. This is in compliance with the ASXCGC best practice recommendation. 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 three years. PrinciPle 3 PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING Ethical standards The Company aims for a high standard of corporate governance and ethical conduct by directors and employees. All directors are required 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. Directors are required to disclose to the Board any material contract in which they may have an interest. In accordance with Section 195 of the Corporations Act 2001, a director having a material personal interest in any matter to be dealt with by the Board, will not be present when that matter is considered by the Board and will not vote on that matter. Trading in the Company’s Securities Directors, officers and employees are not permitted to trade in securities of the Company at any time whilst in possession of price sensitive information not readily available to the market. The Corporations Act 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. PrinciPle 4 SAFEGUARD INTEGRITY IN FINANCIAL REPORTING Audit Committee The Board has established an audit committee. The primary role of the committee is to monitor and review the effectiveness of the control environment in the Company and provide an independent and objective review of financial and other information prepared by management, including overseeing the Company’s discharge of its responsibilities with respect to: • • • • reviewing, assessing and making recommendations to the Board on the annual and half year financial reports and all other financial information published or released to the market by the Company; overseeing establishment, maintenance and reviewing the effectiveness of the Company's internal controls and ensuring efficacy and efficiency of operations, reliability of financial reporting and compliance with applicable Accounting Standards and ASX Listing Rules; liaising with and reviewing reports of the external auditor; and reviewing performance and independence of the external auditor and where necessary making recommendations for appointment and removal of the Company's auditor. The Committee meets at least two times per annum and reports to the Board. The Managing Director, Company Secretary and external auditor may by invitation attend meetings at the discretion of the Committee. 28 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Corporate Governance Statement The remuneration of the Managing Director is determined 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 employees is determined by the Managing Director subject to the approval of the Board. PrinciPle 10 RECOGNISE THE LEGITIMATE INTERESTS OF STAKEHOLDERS Code of Conduct The Company requires all its directors and employees to abide by the highest standards of behaviour, business ethics and in accordance with the law. In discharging their duties, Directors of the Company are required to: • • • • • • • • act in good faith and in the best interests of the Company; exercise care and diligence that a reasonable person in that role would exercise; exercise their powers in good faith for a proper purpose and in the best interests of the Company; not improperly use their position or information obtained through their position to gain a personal advantage or for the advantage of another person to the detriment of the Company; disclose material personal interests and avoid actual or potential conflicts of interests; keep themselves informed of relevant Company matters; keep confidential the business of all directors meetings; and observe and support the Board's Corporate Governance practices and procedures. PrinciPle 5 MAKING TIMELY AND BALANCED DISCLOSURE Continuous Disclosure The Company operates under the continuous disclosure requirements of the ASX Listing Rules and ensures that all information which may be expected to affect the value of the Company’s securities or influence investment decisions is released to the market in order that all investors have equal and timely access to material information concerning the Company. This is made publicly available on the Company’s web-site following release to the ASX. PrinciPle 6 RESPECT The Role of Shareholders The Board aims to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs. In accordance with the ASXCGC best practice recommendations, 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 Stock Exchange and Australian Securities and Investments Commission and sent to all shareholders who request it; notifications relating to any proposed major changes in the Company which may impact on share ownership rights that are submitted to a vote of shareholders; • notices of all meetings of shareholders; • • publicly released documents including full text of notices of meetings and explanatory material made available on the Company's web-site; and disclosure of the Company's Corporate Governance practices and communications strategy on the entity's web-site. The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company’s strategy and goals. 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. PrinciPle 7 RECOGNISE AND MANAGE RISKS Risk Assessment and Management The Board recognises that there are inherent risks associated with the Company’s operations including mineral exploration and mining, environmental, title and native title, legal and other operational risks. The Board endeavours to mitigate such risks by continually reviewing the activities of the Company in order to identify key business and operational risks and ensuring that they are appropriately assessed and managed. PrinciPle 8 ENCOURAGE PERFORMANCE Performance Evaluation The Board evaluates the performance of the Managing Director, other executive directors and senior management on a regular basis and encourages continuing professional development at these levels. PrinciPle 9 REMUNERATE FAIRLY AND RESPONSIBLY Remuneration Policy In view of the current size of the Board, remuneration matters are monitored by the entire board having regard for industry practices and laws. The Company’s Constitution specifies that the total amount of remuneration of non-executive directors shall be fixed from time to time by the members in a general meeting. 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. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 29 Directors Report Your directors present their report on the Company and its controlled entities for the financial year ended 30 June 2007. Directors The names of directors in office at any time during or since the end of the year are: Robert Michael Kennedy Kevin John Anson Wills Gary Eric Maddocks Ewan John Vickery Nick John Smart (alternate for E J Vickery) Richard Walter Cumming Willson (alternate for G E Maddocks, resigned 14 August 2007) The directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Company Secretary The following person held the position of company secretary at the end of the financial year: Richard Walter Cumming Willson B.Ac., CPA, GAICD Bachelor of Accounting, CPA, Graduate Member of the Australian Institute of Company Directors. Mr Willson has had more than 13 years experience. He has worked in public practice and in various financial management and company secretarial roles within the Provimi Australia group, BHP Billiton and the Jumbuck Pastoral group. He has been the Company Secretary since 1 March 2006 and to the date of this report. Principal Activities The principal activity of the Company during the financial year was gold, nickel, uranium, copper, platinum and other minerals exploration. Operating Results The consolidated net result of operations for the financial year was a loss of $710,678. Dividends There were no dividends declared or paid during the period. Review of Operations In the first full financial year since listing, Maximus expended about $4.2 million on multi-commodity mineral exploration. This was divided between three main projects, each in a different State. In South Australia work focused on the Adelaide Hills and particularly the Bird-in-Hand gold project. In Western Australia, Maximus gained control of 97% the entire Windimurra/ Narndee Complex which has potential for a variety of commodities including iron ore, gold, nickel and uranium. In Queensland work focused on evaluation of the alluvial and hard rock gold potential of the Sellheim project. In the Adelaide Hills Maximus is exploring below several historic gold mines with a view to their re-opening. The first of these is the Bird-in Hand gold mine near Woodside where continuity of a high grade gold lode has been established during the year. At the date of this report the inferred mineral resource is approximately 412,000 tonnes averaging 12.0 grams per tonne gold for a total of 162,000 ounces. In order to commence pre feasibility the company is targeting a resource of at least 250,000 ounces by the end of 2007. In Western Australia, at the Windimurra/ Narndee project Maximus has made several important advances during the year. Maximus has purchased former partners interests and now owns between 90 and 100% equity in 5,500 sq km which represents 97% of the geologically mapped area of the complex. There currently are three prospects identified within the complex where the results are highly encouraging. These are the Windimurra calcrete uranium project, the Milgoo nickel- copper-PGM prospect, and the Windimurra iron ore project. At Sellheim in Queensland, Maximus has an option to purchase an area of 75 sq km with a history of alluvial gold production. Maximus has set up a field camp, water supply and alluvial testing plant where testing commenced in late April. It is expected that sufficient alluvial gold will be located to commence an alluvial operation in late 2007 or early 2008. The bedrock gold potential is currently being evaluated by drilling in this highly prospective part of the northern Drummond Basin. Maximus also has two important Joint Ventures with Eromanga Uranium Limited. In the Billa Kalina joint venture, Eromanga has drill tested a gravity anomaly that was prospective for iron-oxide-copper- gold mineralisation. The anomaly was not found to be caused by mineralisation and additional work is necessary to define new targets. As the project contains about 50 km strike length of ground between Olympic Dam and Prominent Hill, further work is justified. Eromanga has also been exploring the margin of the Eromanga Basin for sandstone uranium mineralisation and has carried out major new airborne electromagnetic surveys to locate paleochannels during the year. Financial Position The net assets of the group have increased by $16,009,074 during the financial year from $8,123,591 at 30 June 2006 to $24,132,665 at 30 June 2007. This increase has largely resulted from the proceeds from share issues raising $907,195 and the listing of Eromanga Uranium Ltd. The Company has been actively undertaking exploration activities and has capitalised $6,987,454 in exploration expenditure during the current financial year. The directors believe the Company is in a strong and stable financial position to continue its exploration activities. After Balance Date Events No circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years. Future Developments, Prospects and Business Strategies Maximus will continue pursuing its strategy of locating resources with development potential during the next financial year. Work at Bird-in Hand will involve additional drilling and subject to successful results the commencement of a pre-feasibility study. Drill testing of other old gold mines in the Adelaide Hills is hoped to lead to additional resources for development. In Western Australia Maximus has a strategy of focussing on the Windimurra/ Narndee Complex to locate deposits of Uranium, nickel and iron ore. Uranium and iron ore mineralisation has already been located and it is intended to fly a major new airborne electromagnetic survey to locate additional nickel targets to explore in the coming year. At Sellheim, it is anticipated that alluvial gold production will be possible after further testwork. Recent work has focussed on the granted Mining Lease and in future the testing will be expanded to adjacent areas. Work on the hard rock potential will also continue. Maximus maintains an active program of project generation in its areas of interest. The Company also actively seeks joint venture participants for some of its projects as a method of spreading risk and increasing expenditure on its tenements. 30 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Directors Report Nicholas John Smart Alternate Director for E J Vickery (Non- Executive) An alternate director since 9 May 2005, Mr Smart has held positions as a General Manager in France and Australia in the wool, textile, leather and meat industries. Responsibilities included human resources, factory operations, currency movements and commodity trading. He was a full Associate Member of the Sydney Futures Exchange then became Managing Director of D&D-Tolhurst Ltd (sharebrokers) as a client advisor and in the corporate area including capital raising. He has been involved in start up companies in technology development such as the laser shearing of sheep skins, commercialisation of the Synroc process for safe storage of high level nuclear waste and controlled temperature and atmosphere transport systems. Mr Smart currently consults to various public and private companies. Mr Smart is a director of GTL Energy Limited. Richard Walter Cumming Willson Alternate Director for G E Maddocks (Executive) - B.Ac., CPA, GAICD Mr Willson has had more than 13 years experience. He has worked in public practice and in various financial management and company secretarial roles within the Provimi Australia group, BHP Billiton and the Jumbuck Pastoral group. Mr Willson is the Company Secretary and Chief Financial Officer for Flinders Diamonds Limited and Eromanga Uranium Limited. He is also a director of Housing Spectrum, a not for profit organisation that provides disability housing. He has been an alternate director since 18 May 2006 and resigned 14 August 2007. Environmental Issues The consolidated group’s operations are subject to significant environmental regulation under both Commonwealth and relevant State legislation in relation to discharge of hazardous waste and materials arising from any exploration or mining activities and development conducted by the Group on any of its tenements. The Group believes it is not in breach of any environmental obligation. Information on Directors Robert Michael Kennedy Non-Executive Chairman - ASAIT, Grad, Dip (Systems Analysis), FCA, ACIS, Life Member AIM, FAICD A Chartered Accountant and a consultant to Kennedy & Co, Chartered Accountants, a firm he founded. Mr Kennedy has been a director since incorporation 17 December 2004. Mr Kennedy is the Chairman of Beach Petroleum Limited (Director since 1991, Chairman since 1995), Flinders Diamonds Limited (since 2001), Monax Mining Limited (since 2004), Ramelius Resources Limited (since 1995) and Eromanga Uranium Limited (since 2006). 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. Mr Kennedy is a member of the Audit Committee. Kevin John Anson Wills Managing Director - ARSM, PhD, FAusIMM A director since incorporation 17 December 2004. Dr Kevin Wills is a geologist with 32 years experience in multi commodity mineral exploration including uranium exploration, feasibility studies and mine operations in Australasia. Dr Wills spent seven years with CRA Exploration Pty Ltd, the highlight of which was involvement with the location and evaluation of the Argyle Diamond Deposit. Later, with Penarroya Australia Pty Ltd, his work led to an expansion of reserves at Thalanga and the discovery of the Waterloo base metals deposit. In the late 1980s, Dr Wills was exploration manager with Metana Minerals NL. He built up a successful exploration team which extended known gold ore bodies and made new discoveries. In the early 1990s Dr Wills was regional exploration manager with Dominion Mining Ltd, based in Adelaide. His work on the Gawler Craton led to the development of a calcrete sampling technique which, later on, was instrumental in the Challenger gold discovery. Dr Wills is also managing director of Flinders Diamonds Limited (since 2000) and a Non-Executive Director of Eromanga Uranium Limited (since 2006). He is a recent past chairman of the Adelaide Branch of the AusIMM and the Exploration Committee at the South Australian Chamber of Mines and Energy. Ewan John Vickery Non-Executive Director – L.LB A director since incorporation 17 December 2004. Mr Vickery is a corporate and business lawyer with over 30 years experience in private practice in Adelaide. He has acted as an advisor to companies on a variety of corporate and business issues including capital and corporate restructuring, native title and land access issues, and as lead native title advisor and negotiator for numerous mining and petroleum companies. Mr Vickery is a Director of Flinders Diamonds Limited (since 2001), Eromanga Uranium Limited (since 2006) and member of the Exploration Committee of the South Australian Chamber of Mines and Energy Inc, the International Bar Association Energy and Resources Law Section, the Financial Services Institute of Australasia, the Australian Institute of Company Directors and is a past national president of Australian Mining and Petroleum Law Association (AMPLA Limited). Mr Vickery is the Chairman of the audit committee. Gary Eric Maddocks Exploration Director (Executive) – M.Sc. & App.Sc.(Geology), Dip.App.Chem., F AusIMM(CP) A director since incorporation 17 December 2004. Mr Maddocks has 37 years of experience in mineral exploration for gold, copper, lead/zinc, nickel and tin throughout Australia. He has been involved with exploration activities for gold and copper in India, Indonesia and New Zealand. He is principal of GEM Exploration Management Services, a Chartered Professional (Geology) and Fellow of the Australian Institute of Mining and Metallurgy. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 31 Directors Report Significant changes in State of Affairs The following significant changes in the state of affairs of the parent entity occurred during the financial year: On 3 November 2006 600,000 shares were issued as part consideration of the acquisition of an option to acquire the Selheim project. On 29 November 2006 1,800,000 shares were issued to acquire the remaining 25% of the Lobethal project. On 17 April 2007 7,346,666 shares were placed to sophisticated investors at $0.15. On 6 June 2007 67,500 shares were issued as a result of the exercise of options. Changes in controlled entities and divisions On 31 October 2006 Eromanga Uranium Resources Pty Ltd was sold to Eromanga Uranium Limited (Eromanga) for a consideration of 44,357,143 shares in Eromanga and 8,035,714 options to acquire shares in Eromanga at $0.30 anytime before 30 June 2011. Directors and Executive Officers Interests The relevant interest of each director and executive officer in the ordinary share capital of the Company at the date of this report is: R M Kennedy K J A Wills G E Maddocks E J Vickery N J Smart R W C Willson Shares Options 2,750,001(1) 3,150,001(1) 2,500,001(1) 2,672,501(1) 25,000 57,000(1) 1,375,000(1) 1,575,000(1) 1,250,000(1) 1,306,250(1) 512,500(1) 100,000(1) (1) held by directors and entities in which directors have a relevant interest. Remuneration Report This report details the nature and amount of remuneration for each director of Maximus Resources Limited. The board of Maximus Resources Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Company, as well as create goal congruence between directors, executives and shareholders. The board’s policy for determining the nature and amount of remuneration for board members and senior executives of the Company is as follows: • The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed and approved by the board. • Executives receive a base salary (which is based on factors such as length of service and experience), and superannuation, or Consulting Fees. • The board reviews executive packages annually by reference to the Company’s performance, executive performance and comparable information from industry sectors. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth. Executives are also entitled to participate in the employee option arrangements. The directors and executives remunerated by salary receive superannuation inclusive of the superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits. Details of remuneration for year ended 30 June 2007 The remuneration for each director of the consolidated entity during the year was as follows: Directors Salary, Fees and Commissions Super- annuation Contribution Share based payments Total Consulting Fees paid to entities in which the director has a relevant interest $ R M Kennedy 73,395 K J A Wills G E Maddocks E J Vickery N J Smart R W C Willson(i) - - - - - $ 6,605 - - - - - $ - 166,126 209,379 45,000 - - 73,395 6,605 420,505 $ 80,000 166,126 209,379 45,000 - 6,100 506,605 - - - - - 6,100 6,100 (i) Richard W C Willson is employed by FME Exploration Services Pty Ltd. His services are provided as part of the services agreement in place between FME Exploration Services Pty Ltd and Maximus Resources Limited. The management fees paid by Maximus Resources Limited to FME Exploration Services are outlined in Note 24. This agreement was formalised 3 August 2006. Employment contracts of directors The employment conditions of the managing director, Dr Wills and the exploration director, Mr Maddocks are formalised in consultancy agreements. The agreements are for a fixed term of three years from August 2005, after which the agreements continue on a monthly basis. Meetings of Directors During the financial year, 15 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: Directors Meetings Audit Committee Meeting Number eligible to attend Number attended Number eligible to attend Number attended 13 13 13 13 13 13 13 13 13 13 2 2 1 2 2 2 2 1 2 2 R M Kennedy K J A Wills G E Maddocks E J Vickery R W C Willson 32 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Indemnifying Officers or Auditor During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows: The Company has paid premiums to insure each of the following directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of the Company, other than conduct involving a willful breach of duty in relation to the Company. The amount of the premium was $7,978 for each director named below and includes their alternate. Mr R M Kennedy Dr K J A Wills Mr E J Vickery Mr G E Maddocks Options At the date of this report, the unissued ordinary shares of Maximus Resources Limited under option are as follows: Grant Date Date of Expiry Exercise Price Number under Option 1 April 2005 12 April 2005 29 July 2005 23 August 2005 20 October 2005 25 October 2005 30 January 2006 18 May 2006 10 April 2007 2 July 2007 2 July 2007 30 June 2008 12 April 2010 30 June 2008 30 June 2008 30 June 2008 30 June 2008 30 June 2008 30 June 2008 20 March 2012 2 July 2010 2 July 2012 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.14 $0.50 $0.50 7,500,000 1,000,000 312,500 862,500 333,333 19,406,647 3,500,000 250,000 860,000 2,000,000 2,000,000 38,024,980 During the year ended 30 June 2007, the following ordinary shares in Maximus Resources Limited were issued on the exercise of options granted under the Maximus Resources Limited Employee Option Plan. No further shares have been issued since that date. No amounts are unpaid on any of the shares. Grant Date Exercise Price Number of shares issued 10 April 2007 $0.14 35,000 No person entitled to exercise an option had or has any right by virtue of the option to participate in any share issue of any other body corporate. Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings. The Company was not a party to any such proceedings during the financial year. Directors Report 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 services disclosed below did not compromise the external auditor’s independence for the following reasons: • all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and • the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. The following fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2007: Preparation of Independent Accountants Report for Eromanga Uranium Limited Prospectus $10,000. Auditor’s Independence Declaration The lead auditor’s independence declaration for the year ended 30 June 2007 has been received and can be found on page 8 of the directors’ report. Dated at Adelaide this 28th day of September 2007 and signed in accordance with a resolution of the directors. Robert M Kennedy Chairman MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 33 Auditors Independence Declaration  AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF MAXIMUS RESOURCES LIMITED In accordance with the requirements of section 307C of the Corporations Act 2001, as auditor for the audit of Maximus Resources Limited for the year ended 30 June 2007, I declare that, to the best of my knowledge and belief, there have been: (a) (b) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON South Australian Partnership Chartered Accountants S J GRAY Partner Signed at Wayville this 28 day of September 2007               34 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Income Statement For the year ended 30 June 2007 Note Consolidated Group Parent Entity 2007 $ 2006 S 2007 $ 2006 $ 2 3 3 4 7 7 756,512 205,784 9,701,027 205,784 280,213 800,245 456,986 1,885 94,159 442,852 98,581 1,428 115,211 264,349 386,632 637 94,159 442,852 98,581 1,428 (782,817) (431,236) 8,934,198 (431,236) 29,355 227,792 2,566,397 227,792 (812,172) (659,028) 6,367,801 (659,028) 101,494 - - - (710,678) (659,028) 6,367,801 (659,028) (1.046) (1.046) (1.351) (1.351) 9.376 6.222 (1.351) (1.351) Revenue Marketing expenses Administrative expense Exploration expenses Finance costs Profit/(Loss) before income tax Income tax expense Profit/(Loss) for the year (Profit)/Loss attributable to outside equity interest Profit/(Loss) attributable to members of the parent company Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents) The accompanying notes form part of these financial statements. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 35 Balance Sheet As at 30 June 2007 Current assets Cash and cash equivalents Trade & other receivables Other current assets Total current assets Non-current assets Property, Plant & Equipment Exploration, & Evaluation, Expenditure Financial assets Investments accounted for using the equity method Total non-current assets Total assets Current liabilities Trade & other payables Provisions Deferred tax liability Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained earnings Parent interest Outside equity interest Total equity The accompanying notes form part of these financial statements. 36 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Note Consolidated Group Parent Entity 2007 $ 2006 $ 2007 $ 2006 $ 8 9 14 15 10 16 17 4 12,354,511 4,089,053 633,010 36,000 222,010 - 313,373 207,270 36,000 4,089,052 222,010 - 13,023,521 4,311,063 556,643 4,311,062 674,444 119,169 314,210 119,169 11,085,151 4,097,697 8,499,156 4,097,697 - 2 - 1 9,579,500 1 1 1 11,759,597 4,216,867 18,392,867 4,216,868 24,783,118 8,527,930 18,949,510 8,527,930 632,076 18,377 - 650,453 650,453 404,339 423,422 404,339 - - 6,019 2,537,042 - - 404,339 2,966,483 404,339 2,966,483 404,339 404,339 24,132,665 8,123,591 15,983,027 8,123,591 18 10,133,983 8,699,079 10,133,983 8,699,079 156,408 83,667 140,397 83,667 (1,369,832) (659,155) 5,708,647 (659,155) 8,920,559 8,123,591 15,983,027 8,123,591 15,212,106 - - - 24,132,665 8,123,591 15,983,027 8,123,591 Statement Of Changes In Equity For the year ended 30 June 2007 Issued Capital Share Option Reserve Retained Earnings Outside equity interest $ $ $ $ Consolidated group Balance at 1st July 2005 Loss for the period Shares issued during the period Transaction costs (net of tax) Options issued during the period Balance at 30th June 2006 Initial outside equity interest Loss for the period Loss attributed to outside equity interest 75,004 - 9,155,588 (531,513) - 8,699,079 - - - Shares issued during the period 1,503,400 Options issued during the period Outside equity interest in options reserve - - Transaction costs (net of tax) (68,496) - - - - 83,667 83,667 - - - - 72,741 - - Total $ 74,877 (659,028) 9,155,588 (531,513) 83,667 8,123,591 (127) (659,028) - - - (659,155) - - - - - - - 15,284,332 15,284,332 (710,678) - (710,678) - - - - - (101,494) (101,494) - - 29,268 1,503,400 72,741 29,268 - (68,496) Balance at 30 June 2007 10,133,983 156,408 (1,369,832) 15,212,106 24,132,665 Parent entity Balance at 1st July 2005 Loss for the period Shares issued during the period Transaction costs (net of tax) Options issued during the period Balance at 30th June 2006 Profit for the period Shares issued during the period 75,004 - 9,155,588 (531,513) - 8,699,079 - 1,503,400 - - - - 83,667 83,667 - - Options issued during the period - 56,730 Transaction costs (net of tax) (68,496) - (127) (659,028) - - - (659,155) 6,367,801 - - - Balance at 30 June 2007 10,133,983 140,397 5,708,646 The accompanying notes form part of these financial statements. - - - - - - - - - - - 74,877 (659,028) 9,155,588 (531,513) 83,667 8,123,591 6,367,801 1,503,400 56,730 (68,496) 15,983,026 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 37 Cash Flow Statement For the year ended 30 June 2007 Note Economic Entity Parent Entity 2007 $ 2006 $ 2007 $ 2006 $ Cash flows from operating activities Interest received 453,633 223,978 141,002 223,978 Payments to suppliers and employees (1,349,291) (419,505) (688,241) (419,505) Net cash provided by (used in) operating activities 21 (895,658) (195,527) (547,239) (195,527) Cash flows from investing activities Purchase of property, plant and equipment (599,934) (123,932) (223,424) (123,932) Purchase of investments - (1) - (1) Payment for exploration activities (4,989,702) (2,366,029) (3,992,376) (2,366,029) Loans to related entities Payment of security bonds Payments for subsidiaries net of cash acquired (90,380) (36,000) 14,692,735 - - - 27,310 (36,000) (19,500) - - - Net cash provided by (used in) investing activities 8,976,719 (2,489,962) (4,243,990) (2,489,962) Cash flows from financing activities Proceeds from issue of shares Net cash provided by (used in) financing activities 184,397 184,397 6,773,286 1,015,549 6,773,286 6,773,286 1,015,549 6,773,286 Net increase in cash held 8,265,458 4,087,797 (3,775,680) 4,087,797 Cash at beginning of financial year 4,089,053 1,256 4,089,053 1,255 Cash at end of financial year 8 12,354,511 4,089,053 313,373 4,089,052 The accompanying notes form part of these financial statements. 38 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Notes to the Financial Statements For the year ended 30 June 2007 b) Income Tax The charge for income tax expense is based on the profit for the year adjusted for any non- assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. c) Plant and Equipment Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and Equipment Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Subsequent costs are included in the assets’ carrying amount or recognised as separate assets, 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 are they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives 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 Non Current Asset Depreciation Rate Basis of Depreciation Plant and equipment 12.5 - 40% Straight line The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined in comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When re-valued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. d) Exploration Expenditure Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report covers the consolidated group of Maximus Resources Limited and controlled entities, and Maximus Resources Limited as an individual parent entity. Maximus Resources Limited is a listed public company, incorporated and domiciled in Australia. Compliance with IFRS Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated financial statements and notes of Maximus Resources Limited comply with International Financial Reporting Standards (IFRS). The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. Basis of Preparation The accounting policies set out below have been consistently applied to all years presented. Reporting Basis and Conventions The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied. Accounting Policies a) Principles of Consolidation A controlled entity is any entity Maximus Resources Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities. A list of controlled entities is contained in Note 13 to the financial statements. All controlled entities have a June financial year-end. All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity. Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/ excluded from the date control was obtained or until the date control ceased. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 39 Notes to the Financial Statements continued A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. e) Financial Instruments Recognition Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. Available-for-sale financial assets Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity. 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. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement. f) Impairment of Assets j) Cash and Cash Equivalents 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 assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to the income statement. Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. g) Investments in Associates Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognised the group’s share of post-acquisition reserves of its associates. h) 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 11. The consolidated group’s interests in joint venture entities are brought to account using the equity method of accounting in the consolidated financial statements. The parent entity’s interests in joint venture entities are brought to account using the cost method. i) 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 have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Equity-settled compensation The cost of equity-settled transactions is measured by the fair value at the date at which the equity instruments are granted. The fair value is determined using the Black- Scholes pricing model. The cost is recognised as an expense in the income statement with a corresponding increase in the share option reserve or issued capital when the options or shares are issued. Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. k) Revenue Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. l) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. m) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. Critical Accounting Estimates and Judgments The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group. Key Estimates — Exploration and evaluation The group’s policy for exploration and evaluation is discussed in note 1(d). The application of this policy requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised amount will be written off through the income statements. 40 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Notes to the Financial Statements continued Consolidated Group Parent Entity 2007 $ 2006 S 2007 $ 2006 $ NOTE 2. REVENUE Operating activities - Interest received from other persons 756,512 205,784 141,028 205,784 - Profit on sale of subsidiary - - 9,559,999 - 756,512 205,784 9,701,027 205,784 NOTE 3. LOSS FOR THE YEAR Marketing Expenses Company Promotion Subscriptions Public Relations Conferences Other Administration Expenses Accounting Services Legal Fees Management Fees Corporate Consulting ASX Fees Employee Benefits Expense Depreciation Other Exploration Expenses Exploration Expenditure Written off Consolidated Group Parent Entity 2007 $ 152,363 24,840 18,122 23,201 61,687 280,213 9,220 25,471 205,570 55,120 65,070 329,295 44,659 65,840 2006 S 14,849 1,679 11,109 32,948 33,574 94,159 52,189 89,103 99,000 153,552 17,872 14,317 4,762 12,057 2007 $ 11,131 24,840 4,139 7,207 67,894 115,211 3,379 3,554 102,785 86,633 10,795 20,141 28,383 8,679 2006 $ 14,849 1,679 11,109 32,948 33,574 94,159 52,189 89,103 99,000 153,552 17,872 14,317 4,762 12,057 800,245 442,852 264,349 442,852 456,986 456,986 98,581 98,581 386,632 386,632 98,581 98,581 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 41 Notes to the Financial Statements continued NOTE 4. Deferred tax assets have not been recognised in respect of the following items: INCOME TAX EXPENSE Consolidated Group Parent Entity 2007 $ - 29,355 29,355 2006 S 2007 $ 2006 $ - (1,284,914) 227,792 227,792 3,851,311 2,566,397 - 227,792 227,792 a. The components of tax expense comprise: Current tax Deferred tax 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% (2006: 30%) - consolidated group (234,845) (129,371) - - - parent entity Add: Tax effect of: - non deductible entertainment expenses - employee share based payments - deferred tax asset not brought to account - previously unrecognised tax losses of parent entity - 1,998 17,019 29,355 - - - - - - 2,680,259 (129,371) 1,290 17,019 - (869,306) - - - - - current year tax losses not brought to account 215,828 129,371 - 129,371 - previously unrecognised temporary differences - deferred tax asset arising from transaction costs not brought to account - - Income tax attributable to entity 29,355 - 737,135 - 227,792 227,792 - 2,566,397 227,792 227,792 c. Deferred tax liability The balance of deferred tax liabilities comprises temporary differences attributable to: Deferred capital gain on sale of subsidiary Capitalised exploration expenditure Other Carried forward tax losses Provisions Deferred tax liability - - - - - - - - - - - - 2,661,000 2,067,340 (27,806) (2,154,220) (9,272) 2,537,042 - - - - - - Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the consolidated group can utilise the benefits from them. NOTE 5. KEY MANAGEMENT PERSONNEL COMPENSATION a. Names and positions held of consolidated group and parent entity key management personnel in office at any time during the financial year are: Key Management Person Position R M Kennedy K J A Wills G E Maddocks E J Vickery R W C Willson Non-Executive Chairman Managing Director Executive Director Non-Executive Director Chief Financial Officer & Company Secretary 42 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Notes to the Financial Statements continued NOTE 5. KEY MANAGEMENT PERSONNEL COMPENSATION continued Directors Salary, Fees and Commissions Super- annuation Contribution R M Kennedy K J A Wills G E Maddocks E J Vickery N J Smart R W C Willson(i) $ 73,395 $ 6,605 - - - - - - - - - - Consulting Fees paid to entities in which the director has a relevant interest $ - 166,126 209,379 45,000 - - 73,395 6,605 420,505 Share based payments Total - - - - - 6,100 6,100 $ 80,000 166,126 209,379 45,000 - 6,100 506,605 (i) Richard W C Willson is employed by FME Exploration Services Pty Ltd. His services are provided as part of the services agreement in place between FME Exploration Services Pty Ltd and Maximus Resources Limited. The management fees paid by Maximus Resources Limited to FME Exploration Services are outlined in Note 24. This agreement was formalised 3 August 2006. b. Options and Rights Holdings Number of options held by key management personnel. Balance 1.7.2006 Issued as remuneration Net change other* Balance Total vested Total exercisable Total unexercisable 30.6.2007 30.6.2007 30.6.2007 30.6.2007 R M Kennedy 1,375,000 K J A Wills 1,575,000 G E Maddocks 1,250,000 E J Vickery N J Smart 1,462,500 512,500 - - - - - R W C Willson - 100,000 - - - 1,375,000 1,375,000 1,375,000 1,575,000 1,575,000 1,575,000 1,250,000 1,250,000 1,250,000 (156,250) 1,306,250 1,306,250 1,306,250 - - 512,500 100,000 512,500 100,000 512,500 100,000 6,175,000 100,000 (156,250) 6,118,750 6,118,750 6,118,750 - - - - - - - c. Share Holdings Number of shares held by key management personnel. ` R M Kennedy K J A Wills G E Maddocks E J Vickery N J Smart R W C Willson Balance 1.7.2006 2,750,001 3,150,001 2,500,001 2,985,001 25,000 57,000 11,467,004 * Net change other refers to shares purchased or sold during the financial year. Received as compensation Net change other* Balance 30.6.2007 2,750,001 3,150,001 2,500,001 - - - (312,500) 2,672,501 - - 25,000 57,000 (312,500) 11,154,504 - - - - - - - MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 43 Notes to the Financial Statements continued NOTE 6. AUDITORS REMUNERATION Remuneration of the auditor of the Company for: - Auditing or reviewing the financial report - Independent Report for Prospectus NOTE 7. EARNINGS PER SHARE Consolidated Group Parent Entity 2007 $ 44,034 10,000 54,034 2006 S 8,300 6,000 14,300 2007 $ 20,105 - 20,105 2006 $ 8,300 6,000 14,300 Earnings used to calculate basic & dilutive EPS Earnings used to calculate basic & dilutive EPS from continuing operations 2007 $ 2006 $ (710,678) (659,028) (710,678) (659,028) Weighted average number of ordinary shares outstanding during the year used to calculate basic EPS 67,915,108 48,787,703 Weighted average number of options outstanding during the year used to calculate dilutive EPS - - Weighted average number of ordinary shares outstanding during the year used to calculate dilutive EPS 67,915,108 48,787,703 The weighted average number of options on issue at 30 June 2007 was 34,424,028 (2006 2,571,233). They were not used in the earnings per share calculation as they were anti dilutive. NOTE 8. CASH AND CASH EQUIVALENTS Consolidated Group Parent Entity 2007 $ 1,404,511 2006 S 20,053 10,950,000 4,069,000 12,354,511 4,089,053 2007 $ 263,373 50,000 313,373 2006 $ 20,052 4,069,000 4,089,052 Cash at bank and in hand Short-term bank deposits The effective interest rate on short-term bank deposits was 6.5% (2006 - 4.9%) These deposits have an average maturity of 53 days. Reconciliation of cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: Cash and cash equivalents 12,354,511 4,089,053 313,373 4,089,052 NOTE 9. TRADE AND OTHER RECEIVABLES Note Consolidated Group Parent Entity 2007 $ 2006 S 2007 $ 2006 $ Current Interest receivable Receivable from FME Exploration Services Pty Ltd 9a Other receivable 302,880 235,380 94,750 633,010 18,195 149,527 54,288 222,010 26 117,690 89,554 207,270 18,195 149,527 54,288 222,010 9a The entity advanced this amount to assist in the funding of working capital. The parent entity provides support to the associated company to ensure it can pay its debts as and when they fall due and payable. This receivable from the associated company has no fixed date for repayment and is non interest bearing. The parent entity will not seek repayment where such repayments would prejudice the associated company’s ability to meet any obligations as and when they fall due. 44 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Notes to the Financial Statements continued NOTE 10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Interests are held in the following associated companies. Name Principal Activities Country of Incorporation Shares Ownership Interest Carrying amount of investment 2007 % 2006 % 2007 $ 2006 $ Unlisted: FME Exploration Services Pty Ltd Administration Services Australia Ord 66.6 50 2 1 a. Summarised presentation of aggregate assets, liabilities and performance of associates. Current assets Non current assets Total assets Current liabilities Total liabilities Net assets Share of associate’s profit after tax Consolidated Group Parent Entity 2007 114,142 321,184 435,326 435,323 435,323 3 - 2006 - - - - - - - 2007 114,142 321,184 435,326 435,323 435,323 3 - 2006 - - - - - - - NOTE 11. JOINT VENTURES The Consolidated group has the following interests in Joint Ventures: No. State Agreement Name Parties Summary 1 2 3 5 7 WA SA & NT SA SA NT Nemex Agreement Eromanga Basin Joint Venture Billa Kalina Joint Venture Kapunda Joint Venture Maximus Resources Ltd (MXR) and Nemex Pty Ltd MXR purchased a 90% interest in the Nemex Yandal Homestead and Ironstone Lagoon project tenements Eromanga Uranium Ltd (ERO) and Maximus Resources Ltd ERO can a 70% interest in MXR’s Eromanga Basin project tenements in SA and the NT by spending $7,000,000 on the tenements within 6 years Eromanga Uranium Ltd (ERO) and Maximus Resources Ltd (MXR) ERO can earn a 50% interest in the non-diamond mineral rights of MXR’s Billa Kalina project tenements by spending $3,000,000 on the tenements within 6 years Flinders Diamonds Limited (FDL) and Maximus Resources Ltd (MXR) and Copper Range (SA) Pty Ltd Copper Range can earn a 51% interest in MXR’s rights to base and precious metals in EL3064 by spending $500,000 over 5 years with an option to earn a 75% interest by further expenditure of $500,000 Rankin/Gecko Agreement Maximus Resources Ltd (MXR) and Tanami Gold NL (TGL) TGL has transferred a 95% interest in the project tenements for $1 plus the undertaking that MXR will meet future exploration and tenement expenditure while the tenements remain in force NOTE 12 FINANCIAL ASSETS Note Consolidated Group Parent Entity Available for sale financial assets 13a a Available for sale financial assets comprise Listed investments at fair value - Shares in listed corporations Total available for sale financial assets 2007 $ 2006 S - - - - - - 2007 $ 9,579,500 2006 $ 9,579,500 9,579,500 - - - MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 45 Notes to the Financial Statements continued NOTE 13. CONTROLLED ENTITIES a. Controlled entities consolidated Parent Entity Maximus Resources Limited Subsidiaries of Maximus Resources Limited Eromanga Uranium Resources Pty Ltd Eromanga Uranium Limited b Sale of subsidiary Country of Incorporation Percentage Owned (%) 2007 2006 Australia Australia Australia - 35.4 100 - Pursuant to a contract between the Company and Eromanga Uranium Limited (Eromanga), and with the satisfaction of the conditions within the contract, on 31 October 2006 the Company sold 100% of the issued capital in Eromanga Uranium Resources Pty Ltd to Eromanga in exchange for shares and options in Eromanga. Eromanga Uranium Resources Pty Ltd holds interests in Joint Ventures in Uranium exploration tenements. The sale had the following effect on the Company: Sales Consideration No. of shares Fair Value $ Ordinary shares in Eromanga Options in Eromanga 44,357,143 8,035,714 $0.20 $0.09 Assets disposed of: - Shares in Eromanga Uranium Resources Pty Ltd Profit on disposal c Business combinations 8,870,000 690,000 9,560,000 1 9,559,999 Through the transaction identified in Note 13b above, the Company holds 35.36% of the issued capital of Eromanga. Additionally, three of the Company’s directors have been appointed to the board of Eromanga. Therefore, Eromanga has been consolidated for the purposes of this financial report. Details of the fair value of assets and liabilities acquired from Eromanga as at 31 October 2006 are as follows: Cash and cash equivalents Trade and other receivables Exploration and evaluation expenditure Trade and other payables Net assets Outside equity interest Net identifiable assets acquired Represented by the following purchase consideration: - Fair value of tenement rights - Associated transaction costs $ 14,712,235 42,733 10,926,654 (817,790) 24,863,832 (15,284,332) 9,579,500 9,560,000 19,500 9,579,500 46 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Notes to the Financial Statements continued Consolidated Group Parent Entity 2007 $ 723,866 (49,422) 674,444 2006 $ 123,932 (4,763) 119,169 2007 $ 347,356 (33,146) 314,210 2006 $ 123,932 (4,763) 119,169 nOTE 14. pLAnT AnD EQUIpMEnT Plant and equipment at cost Accumulated depreciation Total Plant and Equipment a) Movements in carrying amounts: Movements in the carrying amounts for each class of plant and equipment between the beginning and the end of the current financial year. Balance at 1 July 2006 Additions Depreciation Balance at 30 June 2007 Consolidated Group Parent Entity Plant and Equipment 119,169 599,934 (44,659) 674,444 Total 119,169 599,934 (44,659) 674,444 Plant and Equipment 119,169 223,424 (28,383) 314,210 Total 119,169 223,424 (28,383) 314,210 NOTE 15. CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE Exploration and evaluation expenditure capitalised - Exploration and evaluation phases – 100% owned tenements Consolidated Group Parent Entity 2007 $ 2006 $ 2007 $ 2006 $ 88,304 78,501 - 78,501 - Exploration and evaluation phases – Joint Ventures 10,996,847 4,019,196 8,499,156 4,019,196 Total exploration and evaluation expenditure 11,085,151 4,097,697 8,499,156 4,097,697 Movements in carrying amounts: Exploration and evaluation Balance at the beginning of the year Amounts capitalised during the year Reductions through write off 4,097,697 9,603 4,097,697 9,603 6,987,454 4,186,675 4,401,459 4,186,675 - (98,581) - (98,581) Carrying amount at the end of year 11,085,151 4,097,697 8,499,156 4,097,697 NOTE 16. TRADE AND OTHER PAYABLES Unsecured Trade payables Sundry payables and accrued expenses Amounts payable to associated companies for management services Consolidated Group Parent Entity 2007 $ 2006 $ 2007 $ 2006 $ 517,842 72,466 41,768 632,076 202,208 103,131 99,000 404,339 382,258 20,280 20,884 423,422 202,208 103,131 99,000 404,339 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 47 Notes to the Financial Statements continued NOTE 17. SHORT-TERM PROVISIONS Employee entitlements Opening balance at 1 July 2006 Additional provisions Amounts used Balance at 30 June 2007 NOTE 18. ISSUED CAPITAL Consolidated Group Parent Entity 2007 $ 18,377 - 34,054 (15,677) 18,377 2006 $ - - - - - 2007 $ 6,019 - 8,635 (2,616) 6,019 2006 $ - - - - - Consolidated Group Parent Entity 2007 $ 2006 $ 2007 $ 2006 $ 74,792,087 (2006: 64,977,921) fully paid ordinary shares 10,133,983 8,699,079 10,133,983 8,699,079 a) Ordinary Shares At the beginning of the period Shares issued during the year - 29 July 2005 - 23 August 2005 - 17 October 2005 - 21 October 2005 - 31 October 2005 - 30 November 2005 - 20 December 2005 - 3 November 2006 (i) - 29 November 2006 (ii) - 17 April 2007(iii) - 6 June 2007(iv) At reporting date Number Number Number Number 64,977,921 15,600,004 64,977,921 15,600,004 1,250,000 3,450,000 2,000,000 666,667 35,000,000 7,000,000 11,250 1,250,000 3,450,000 2,000,000 666,667 35,000,000 7,000,000 11,250 600,000 1,800,000 7,346,666 67,500 600,000 1,800,000 7,346,666 67,500 74,792,087 64,977,921 74,792,087 64,977,921 i) On 3 November 2006 600,000 shares were issued at 17 cents as part consideration for the purchase of an option to acquire the Selheim project. ii) On 29 November 2006 1,800,000 shares were issued at 16 cents as consideration for the purchase of the 25% of the Lobethal Joint Venture that was not already owned. iii) On 17 April 2007 7,346,666 shares were placed to sophisticated investors at $0.15. iv) On 6 June 2007 35,000 shares were issued at 14 cents and 32,500 shares were issued at 20 cents upon the exercise of options. Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. b) Options For information relating to the Maximus Resources Limited Employee option plan including details of options issued and exercised during the financial year and the options outstanding at year end refer to Note 22 Share Based Payments. 48 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Notes to the Financial Statements continued NOTE 19. RESERVES Share Option Reserve The Share Option Reserve records items recognised as expenses on valuation of employee options and options issued to external parties in consideration for goods and services rendered. NOTE 20. COMMITMENTS FOR EXPENDITURE Exploration Licences In order to maintain current rights of tenure to exploration tenements the group will be required to outlay in the year ending 30 June 2008 amounts of approximately $1,786,000 in respect of tenement lease rentals and to meet minimum expenditure requirements pursuant to various joint venture requirements. NOTE 21. CASH FLOW INFORMATION Reconciliation of cash flow from operations with loss after income tax. Profit/(Loss) after tax Non-cash flows in loss Depreciation Issue of options to employees Deferred tax asset written off Sale of subsidiary Exploration expenditure written off Changes in operating assets and liabilities Consolidated Group Parent Entity 2007 2006 2007 2006 (812,172) (659,027) 6,367,801 (659,027) 44,659 102,009 29,355 - - 4,763 70,000 227,792 28,383 56,730 - - (9,559,999) 4,763 70,000 227,792 - 98,581 - 98,581 Decrease/(Increase) in trade and other receivables (277,887) (216,577) (12,570) (216,577) Increase/(Decrease) in trade and other payables - 278,941 - 278,941 Increase/(Decrease) in provisions 18,378 - 2,572,416 - Net cash provided by operating activities (895,658) (195,527) (547,239) (195,527) MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 49 Notes to the Financial Statements continued NOTE 22. SHARE-BASED PAYMENTS The following share-based payment arrangement existed at 30 June 2007: The Maximus Resources Limited Employee Share Option Plan enables the board, at its discretion, to issue options to employees of the Company or its associated companies. Each option will have a life of five years and be exercisable at a price determined by the board. This price will not be below the market price of a share at the time of issue. On 10 April 2007 930,000 options were issued to employees under the Company’s employee option plan. The options are exercisable at 14 cents on or before 30 March 2012. The options hold no voting or dividend rights. Consolidated Group Parent Entity 2007 2006 2007 2006 Number of Options Weighted average Exercise Price Cents Number of Options Weighted average Exercise Price Cents Number of Options Weighted average Exercise Price Cents Number of Options Weighted average Exercise Price Cents 34,222,083 930,000 (67,500) 20.0 14.0 16.8 5,000,000 29,233,333 (11,250) 20.0 20.0 20.0 34,222,083 930,000 (67,500) 20.0 14.0 16.8 5,000,000 29,233,333 (11,250) 20.0 20.0 20.0 35,084,583 19.8 34,222,083 20.0 35,084,583 19.8 34,222,083 20.0 35,084,583 19.8 34,222,083 20.0 35,084,583 19.8 34,222,083 20.0 Outstanding at the beginning of the year Granted Exercised Outstanding at the end of the year Exercisable at year end The options outstanding at 30 June 2007 had a weighted average exercise price of 19.8 cents and a weighted average remaining contractual life of 18 months. Exercise prices range from $0.14 to $0.20 in respect of options outstanding at 30 June 2007. The weighted average fair value of the options granted during the year was $0.154. This price was calculated by using a Black Scholes option pricing model applying the following inputs: Weighted average exercise price Weighted average life of the option Underlying share price Expected share price volatility Risk free interest rate $0.14 5.0 years $0.16 19.7% 6.03% Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future trends, which may not eventuate. The life of the options is based on the historical exercise patterns, which may not eventuate in the future. Included under “Administrative Expense” in the income statement is $56,730 (2006: $nil) which relates to share-based payments in accordance with the Company Employee Share Option Plan. NOTE 23. EVENTS AFTER THE BALANCE SHEET DATE No circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years. 50 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Notes to the Financial Statements continued NOTE 24. RELATED PARTY TRANSACTIONS Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Associated companies • Administrative services were provided by FME Exploration Services Pty Ltd to Maximus Resources Limited for $373,015. • Maximus Resources Limited advanced FME Exploration Services Pty Ltd $117,690 to fund working capital. Other Related Parties • Payments during the period to Flinders Diamonds Limited for expenses incurred on behalf of Maximus Resources Limited totalled $12,214. • Receipts from Flinders Diamonds Limited during the period for expenses incurred on their behalf totalled $250. NOTE 25. SEGMENT INFORMATION The entity operates predominately in the mining industry, in Australia and as such has no material reportable segments. NOTE 26. FINANCIAL INSTRUMENTS a. Financial Risk Management The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, and loans to subsidiaries. i Treasury Risk Management The senior executives of the group regularly analyse interest rate exposure and evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. ii Financial Risks The main risk the group is exposed to through its financial instruments is liquidity risk. Liquidity risk The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate funds are available to meet the cash demands. b. Financial Instruments i) Interest Rate Risk The consolidated group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows: Financial Assets Cash and cash equivalents Receivables Total Financial Assets Financial Liabilities Payables Total Financial Liabilities ii) Net Fair Values Weighted Average Effective Interest Rate Floating Interest Rate Non-interest Bearing Total 6.5 - - 12,354,511 - 12,354,511 - 633,010 633,010 12,354,511 633,010 12,987,521 - - 632,076 632,076 632,076 632,076 The Company’s financial assets and liabilities are included in the balance sheet at amounts that approximate net fair value. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 51 Notes to the Financial Statements continued NOTE 27. ECONOMIC DEPENDENCY As a junior explorer the Company has only sufficient funds on hand to meet its ongoing corporate and exploration commitments for the next six months. As a consequence the directors are considering the following activities: - negotiations to farm out the Company’s surplus exploration commitments; - steps to identify sources of additional capital; and - reduction of rate of expenditure. The Company is economically dependent on the achievement of one or all of the above options. At the date of this report the Company has not yet secured the farm out arrangements or additional capital. NOTE 28. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS The following Australian Accounting Standards have been issued or amended and are applicable to the parent and consolidated group but are not yet effective. They have not been adopted in the preparation of the financial statements at reporting date. AASB No. Title Issue Date Operative Date (Annual reporting periods beginning on or after) 7 8 101 123 2007-4 Financial Instruments: Disclosure Operating segments Presentation of Financial Statements (Amended) Borrowing costs (Amended) Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments [AASB 1, 2, 3, 4, 5, 6, 7, 102, 107, 108, 110, 112, 114, 116, 117, 118, 119, 120, 121, 127, 128, 129, 130, 131, 132, 133, 134, 136, 137, 138, 139, 141, 1023, &1038] Aug 2005 1 Jan 2007 Feb 2007 Oct 2006 1 Jan 2009 1 Jan 2007 June 2007 1 Jan 2009 April 2007 1 July 2007 NOTE 29. COMPANY DETAILS The principal place of business and registered office is: Maximus Resources Limited 62 Beulah Road Norwood South Australia 5067 52 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Directors Declaration The directors of the Company declare that : 1 the financial statements and notes, as set out on pages 9 to 24 are in accordance with the Corporation Act 2001 and: a comply with Accounting Standards and the Corporations Regulations 2001; and b give a true and fair view of the financial position as at 30 June 2007 and of the performance for the year ended on that date of the Company and consolidated group; 2 the Managing Director and Chief Finance Officer have each declared that: a the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001; b the financial statements and notes for the financial year comply with the Accounting Standards; and c the financial statements and notes for the financial year give a true and fair view 3 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. Robert M Kennedy Director Dated this 28 day of September 2007 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 53 Independent Audit Report Chartered Accountants and Business Advisers INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MAXIMUS RESOURCES LIMITED ABN 46 091 118 044 Report on the financial report We have audited the accompanying financial report of Maximus Resources Limited, which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1 the Directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards, which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance as to whether the financial report is free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstance, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we complied with the independence requirements of the Corporations Act 2001. Level 1 67Greenhill Road Wayville SA 5034 GPO Box 1270 Adelaide SA 5001 DX 275 Adelaide T (08) 8372 6666 F (08) 8372 6677 E info@gtsa.com.au W www.grantthornton.com.au Grant Thornton South Australian Partnership ABN 27 244 906 724 An independent South Australian partnership entitled to trade under the name Grant Thornton. Grant Thornton is a trademark owned by Grant Thornton International and used under licence by independent firms and entities throughout the world. 54 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Independent Audit Report Auditor’s opinion In our opinion: (a) The financial report of Maximus Resources Limited is in accordance with the Corporations Act 2001, including: i. ii. Giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2007 and of their performance for the year ended on that date; and Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) The financial report also complies with International Financial Reporting Standards as disclosed in Note 1. Emphasis of Matter – Economic Dependency Without qualification to the audit opinion expressed above, attention is drawn to the following matter. As described in Note 27 to the financial statements, the company is economically dependent on the outcomes of some future events. GRANT THORNTON South Australian Partnership Chartered Accountants S J GRAY Partner Signed at Wayville this 28 day of September 2007  MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 55 ASX Additional Information Additional information required by the Australian Stock Exchange and not shown elsewhere in this report is as follows. The information is current as of 20 September 2007. Distribution of equity securities Ordinary share capital Fully paid ordinary shares are held by 1,541 individual shareholders. All issued ordinary shares carry one vote per share. Restricted securities There are 22,225,000 shares and 12,612,500 options held in escrow until 25 October 2007. Options Options are held by 603 individual option holders. The number of shareholders, by size of holding, in each class are: Fully paid ordinary shares Options 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Holdings of less than a marketable parcel Substantial shareholders 41 239 381 769 111 1,541 106 2 203 111 232 55 603 221 Fully Paid Ordinary Shares Number % Flinders Diamonds Limited 7,000,000 Yandal Investments 5,946,666 Mr Bruce Robert Legendre 5,725,000 7.42 6.30 6.07 Twenty largest shareholders Fully Paid Ordinary Shares 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Flinders Diamonds Limited Mr Bruce Robert Legendre KJ Exploration Pty Ltd Chaffey Consulting Pty Ltd Mr Gary Eric Maddocks + Ms Paula Maddocks Apex Minerals Nl Triple Eight Gold Pty Ltd Merrill Lynch (Australia) Nominees Pty Limited Carmant Pty Ltd Mr Jun Luo Mr Arnold Olschyna Yandal Investments Pty Ltd Mr Nicholas Charles Richards Mr Richard Victor Heymann Akd Limited Baracus Pty Ltd RMK Super Pty Ltd Clodene Pty Ltd Baracus Pty Ltd Westtin Pty Ltd Number 7,000,000 5,000,000 3,000,000 2,537,500 2,500,000 2,000,000 1,990,000 1,555,345 1,350,890 1,100,000 1,010,000 1,000,000 648,530 574,100 500,000 500,000 497,500 444,588 440,000 400,000 % 10.77 7.69 4.62 3.91 3.85 3.08 3.06 2.39 2.08 1.69 1.55 1.54 1.00 0.88 0.77 0.77 0.77 0.68 0.68 0.62 Twenty largest optionholders 34,048,453 52.40 Options Flinders Diamonds Limited Mr Bruce Robert Legendre KJ Exploration Pty Ltd Chaffey Consulting Pty Ltd Mr Gary Eric Maddocks + Ms Paula Maddocks Rundle Capital Partners Limited Triple Eight Gold Pty Ltd Clodene Pty Ltd Merrill Lynch (Australia) Nominees Pty Limited Mr Nicholas John Smart Yandal Investments Pty Ltd Analystics Pty Ltd Kroy Investments Pty Ltd Mr Nicholas Charles Richards Analystics Pty Ltd Carojon Pty Ltd Mr Chee Chin Mrs Ivanka Stoevova-millen Mr Carsten Hans Huebner + Mrs Fiona Louise Huebner Lawrence Crowe Consulting Pty Ltd 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Number 3,500,000 2,500,000 1,500,000 1,268,750 1,250,000 1,000,000 995,000 848,230 578,900 500,000 500,000 400,000 400,000 358,150 300,000 300,000 291,400 284,200 258,000 256,689 17,289,319 % 10.54 7.53 4.52 3.82 3.76 3.01 2.99 2.55 1.74 1.51 1.51 1.20 1.20 1.08 0.90 0.90 0.88 0.86 0.78 0.77 52.00 56 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2007 Glossary of Technical Terms aircore A method of rotary drilling whereby rock chips are recovered by compressed air flow returning inside the rods. anomaly A value or group of values different from the expected norm. anticline A fold in rock strata that is convex upward with a core of older rocks. Archaean The oldest rocks of the Precambrian era, older than about 2,500 million years. assay Method of geochemical analysis generally referring to measurement of precious metal contents in a rock. base metal Referring to the transition elements, including copper, zinc and lead. basement The igneous and metamorphic crust of the earth, underlying sedimentary deposits. bedrock Solid rock underlying surficial deposits. carbonate A compound containing the radical CO3; commonly calcium carbonate or calcium-magnesium carbonate. calcite A mineral composed of calcium and carbonate. calcrete Calcium carbonate, dissolved and redeposited as surficial limestone. chert Fine grained sedimentary rock composed of cryptocrystalline silica. complex(es) In the geological sense meaning an area of general complexity. contact zone With reference to the contact between an intrusive igneous rock and surrounding intruded rocks. core drilling A rotary drilling technique in which a stick of rock is cut from the underlying geological sequence. craton Large, and usually ancient, stable mass of the earth’s crust. deformation A general term for the process of folding, faulting, shearing, compression or extension of rocks as a result of stress. diamond drilling A method of obtaining a cylindrical core of rock by drilling with a diamond impregnated bit. drill traverses Reference to a line of drill holes. electrical geophysics Geophysical survey techniques involving the use and measurement of electrical currents. extension drilling Reference to extending the drilling pattern generally along the projected strike or direction of a mineralised zone. fault A fracture in rock along which there has been relative displacement of the two sides either vertically or horizontally. farm-in Reference to dealing on opportunities through earning an equity in a new project through joint venture or purchase farm-out Reference to dealing on opportunities through earning an equity in an existing project through joint venture or sale of equity in a project felsic Descriptive of light coloured rocks containing an abundance of feldspars and quartz. g/t Au Grams gold per tonne geochemistry The study of the abundance and distribution of elements in rocks, or their weathering products, by chemical methods. gneiss A foliated rock formed by regional metamorphism. grams per tonne Unit of measurement often used for the number of grams of precious metal (gold, silver or PGMs) in a tonne of rock. granite A coarse-grained igneous rock containing mainly quartz and feldspar minerals and subordinate micas. granitoid A field term for a coarse grained felsic rock resembling granite. gravity The force due to a body’s attraction to the centre of the earth; also descriptive of a geophysical survey method which measures gravity responses. greywacke Type of sandstone composed of quartz, feldspar and clays. greenstone A term commonly applied to low metamorphic grade rocks of basic composition and comprised of the minerals chlorite and amphibole. Commonly applied to Archaean rock sequences dominated by these rock types (also referred to as “greenstone belts”). Heritage clearance Reference to a clearance survey undertaken to ensure exploration activities do not encroach on sites of indigenous heritage. igneous Rocks that have solidified from molten rock (magma). inferred (mineral) resource Mineralisation sufficiently assessed by drilling to allow an estimate of its tonnage and grade parameters under guidelines of the Australian Joint Ore Reserves Committee code. iron oxide Reference to a style of copper-gold-uranium mineralization that is hosted in rocks containing dominant iron oxide minerals such as magnetite and/or hematite. infill drilling Rrilling that infills a pattern of previous drilling. intersection General reference to encountering an interval of mineralisation in a drill hole. intrusive A mass of rock formed by magma cooling beneath the earth’s surface. layered Meaning the rock units are layered as in a cake. limestone Rock composed of calcium carbonate (calcite) lineament A significant linear feature of the earth’s crust, usually related to a major fault or shear structure. lode A tabular or vein-like deposit of valuable mineral between well defined walls. mafic Descriptive of rocks composed dominantly of magnesium, iron and calcium-rich rock-forming silicates. U magnetic anomaly Zone where the magnitude and orientation of the earth’s magnetic field differs from adjacent areas. Mesozoic Era of geological time from about 235 million years ago to 65 million years ago. metalliferous as referencing minerals in which the metal content is of potentially extractable and, therefore, of potential economic significance. metamorphosed A rock that has been modified by the effects of pressure, heat and fluids within the earth’s crust. mineralisation A concentration of metals and their chemical compounds within a body of rock. marble A metamorphic rock composed of calcite or dolomite. Native Title Reference to indigenous landownership non-diamond All minerals other than diamonds. occurrence A location generally marking the presence of abnormal or anomalous quantities of a naturally occurring material. oxidation Near surface decomposition by exposure to the atmosphere and ground water. PACE Program of Accelerated Exploration – a South Australian Government initiative. palaeochannel Ancient river channel that may or may not reflect the present day drainage pattern. Paleozoic Era of geological time between the Precambrian and Mesozoic and Eras, from about 545 million years ago to 235 million years ago. PGE An abbreviation for the platinum group elements, referring to ruthenium, rhodium, palladium, osmium, iridium and platinum. porphyry A rock with conspicuous crystals in a fine grained ground mass. ppb or ppm Parts per billion or parts per million. potentially economic Tonnage and grade of mineralisation is within range of other past and present mining operations but additional mining factors have not been assessed. Precambrian Part of geological time prior to about 545 million years ago and including both the Archaean and Proterozoic eras. precollared Generally referencing cored drill holes for which the upper start of the hole has been drilled by other techniques such as percussion or rotary mud drilling. primary mineralization Refers to mineralisation that remains in its original form within unweathered rocks. Proterozoic The younger part of the Precambrian Era, being between 545 and 2,500 million years ago. pyrite An iron sulphide mineral. quartz A mineral composed of silicon dioxide. quartzite A metamorphosed sandstone composed of quartz. radiometrics Here refers to radiometric measurements for uranium. reconnaissance A general examination or survey of a region with reference to its main features, usually preliminary to a more detailed survey. reef Mining term generally referring to a thick vein of quartz. regional exploration Exploration undertaken over a wide area. regolith Upper layer of rocks comprising weathered and extraneous materials that may cover the basement geology. resource In-situ mineral occurrence from which valuable or useful minerals may be recovered. RAB drilling Rotary airblast drilling; a rotary drilling technique in which sample is returned to surface outside of the drill rod string by compressed air. RC drilling Reverse circulation drilling; A method of drilling whereby rock chips are recovered by airflow returning inside the drill rods rather than outside, thereby (usually) providing more reliable samples. sandstone Sediment composed of sand size particles – generally quartz sand. saprolite A soft, earthy clay-rich, thoroughly decomposed rock formed in place by chemical weathering of rocks. schist A metamorphic rock with a platy or foliated texture. sediment Rocks formed by the deposition of solids from water. sedimentary Formed or existing within a sediment. serpentinised Hydrothermally altered magnesium rich rock dominated by serpentine minerals. sphalerite A sulphide mineral of zinc and iron. shear A planar zone of dislocation in rock similar to a fault. siltstone A very fine grained consolidated clastic rock composed predominantly of silt. soil sampling Systematic collection of samples of soil at a series of locations in order to study the distribution of geochemical values in the soil. stratigraphy Composition, sequence and correlation of stratified rock in the earth’s crust. structural Pertaining to geological structure. sulphide A mineral compound characterised by the linkage of sulphur and a metal supergene A term to describe a mineral deposit or enrichment formed near the surface generally by descending groundwater. syncline A fold in rock strata that is concave upward with a core of younger rocks ultramafic Igneous rocks consisting essentially of ferromagnesian minerals with trace quartz and feldspar. underground workings General reference to underground mine workings that include vertical shafts and horizontal tunnels beneath the natural surface. 3O8 Chemical formula for an oxide of uranium. vein A thin sheet-like intrusion into a fissure or crack, commonly bearing quartz. vermiculite A platy micaceous mineral used in insulation and for its absorption properties. volcanic Descriptive of rocks originating from extrusive igneous activity. weathering The group of processes that change the character and composition of rocks by decay.

Continue reading text version or see original annual report in PDF format above