18 October 2009 The Manager Company Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam 2010 Annual Report Please find attached for release to the market the 2010 Annual Report for Maximus Resources Limited (ASX: MXR). The 2010 Annual Report will also be sent by post to those shareholders who have previously elected to receive a hard copy Annual Report. An electronic copy of the 2010 Annual Report is available on the Company’s website at: www.maximusresources.com/corporate/reports/2010/mxr_ar2010.pdf. Yours faithfully D W Godfrey Company Secretary Annual Report 2010 CORPORATE DIRECTORY Maximus Resources Limited ABN 74 111 977 354 DIrECTOrS Robert Michael Kennedy (Non executive Chairman) Leigh Carol McClusky (Non executive Director) Ewan John Vickery (Non executive Director) Nicholas John Smart (Alternate for Mr Vickery) COMPANy SECrETAry David Wayne Godfrey rEgISTErED AND PrINCIPAL OffICE 62 Beulah Road Norwood South Australia 5067 Telephone +61 8 8132 7950 Facsimile +61 8 8132 7999 SOLICITOr DMAW Lawyers Level 3, 80 King William Street Adelaide South Australia 5000 Telephone +61 8 8210 2222 Facsimile +61 8 8210 2233 ShArE rEgISTry Computershare Investor Services Level 5, 115 Grenfell Street Adelaide South Australia 5000 Telephone +61 8 8236 2300 Facsimile +61 8 8236 2305 AuDITOr grant Thornton 67 Greenhill Road Wayville South Australia 5034 BANkEr National Australia Bank 161–167 Glynburn Road Firle South Australia 5070 STOCk ExChANgE LISTINg Australia Securities Exchange (Adelaide) Maximus Resources Limited shares are listed on the Australian Securities Exchange ASX code: MXR WEBSITE www.maximusresources.com The website includes information about the Company, its strategies, projects, reports and ASX announcements. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 Contents HIGHLIGHTS CHAIRMAN’S REPORT MANAGING DIRECTOR’S REPORT DEVELOPMENT AND EXPLORATION REVIEW TENEMENT SCHEDULE FINANCIAL REPORT DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION CORPORATE GOVERNANCE STATEMENT FINANCIAL STATEMENTS STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF FINANCIAL POSITION STATEMENT OF CHANGES IN EQUITY STATEMENT CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT ASX ADDITIONAL INFORMATION 1 2 3 4 12 14 15 24 25 29 30 31 33 34 62 63 66 COMPLIANCE STATEMENTS Disclaimer This Annual Report contains forward looking statements that are subject to risk factors associated with the exploration and mining industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a variety of variables which could cause actual results or trends to differ materially. Exploration Targets Exploration Targets are reported according to Clause 18 of the JORC Code, 2004. This means that the potential quantity and grade is conceptual in nature and that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource. Competent Person The information in this report relates to Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Mr Stephen Hogan who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Hogan is an employee of ERO Mining Ltd who has been seconded to Maximus Resources Limited. He has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and consents to the inclusion of the information in this report in the form and context in which it appears. Mr Hogan qualifies as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). HIGHLIGHTS GOLD Sellheim CORPORATE f Successful capital raising of $2.06 million. f Mining plan developed for an annual production of approximately 2,200 ounces gold from around 120,000 bank cubic metres (bcm) treated alluvial wash. f Production commenced at a designed throughput of 25–30 bcm per hour. f Initial plant recovery of 76 ounces at an average grade of 0.35 g/loose cubic metre (lcm), in line with forecast. Adelaide Hills f Drill programme underway at Deloraine gold prospect, largest historic gold mine in the Adelaide Hills Gold Province. f Exploration aspiration to locate at least one million ounces of gold in the Adelaide Hills. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 1 CHAIRMAN’S REPORT Dear Fellow Shareholders, Since my last report, the tentative steps towards recovery from what is now known as the Great Recession, have continued but there are still global concerns regarding the ability of governments to continue their quantitative easing to increase the money supply in the large economies of the world. This is overlaid by the great uncertainty created by the Rudd Government in the precipitous proposed imposition of a Resources Super Profits Tax. This proposition sent the resources market into an immediate downward spiral and caused capital for small mining companies to dry up. Following the sacking of the Rudd government and a hastily cobbled together compromise by the Gillard government and the mining majors the small mining companies were again left out in the cold with no proposition regarding a flow-through share scheme. The Mineral Resources Rent Tax leaves it open for minerals other than coal and iron ore to be included, probably by regulation. The effect is to move capital out of our sector to overseas or other sectors of the economy. Our ability to raise capital is, in my view, restricted by the imposition of additional taxes on the minerals and energy sectors. The capital raised in the last financial year has been applied to progress our exploration efforts at the Deloraine Prospect in the Adelaide Hills and we are embarking on a series of ground EM surveys at Narndee to identify drill-ready targets. We had proposed to drill at Eureka, but due to the break in the seasons, rain has prevented us from getting on site. Our Sellheim alluvial gold project in North Queensland was delayed during the year as the wet continued for longer than usual and the year has been unseasonably wet causing interruption to production, which only began in mid-May. The plant and equipment suffered some initial teething problems and continues to suffer occasional breakdown due to its age, however our operators have been successful in maintaining fairly consistent production. The Adelaide Hills Project which contains the Bird in Hand deposit and the Deloraine Prospect has been advanced by the commencement of drilling at Deloraine where we hope to find a sufficient resource to enhance the previously defined Inferred Resource. 2 2 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 The high tech REPTEM survey over the whole of the Windimurra–Narndee complex produced an enormous amount of data which required detailed analysis and interpretation during the year in order that the Company could identify the areas to retain for further exploration and relinquish the less prospective areas. Shareholders will appreciate that the financial resources of the Company are severely restricted in these economic times causing us to reduce costs as much as possible. The economic conditions have also caused the ability to joint venture these projects to be severely restricted. At this stage because of the greenfields nature of the project we have been unsuccessful in attracting a joint venture partner. Similarly, our Windimurra Uranium Resource containing 7.5 million pounds of U3O8 has not attracted any interested parties in the current climate. We are hopeful that if the economy continues to improve that a purchaser for this resource will be found. Subsequent to 30 June, Mr Simon Booth resigned as Managing Director to pursue other interests. I thank Simon for his contribution in the rationalisation of our tenement position to assist in bringing us to be a more tightly focussed mineral explorer. At the time of writing this report we are in the process of seeking a replacement who will be able to achieve our current objective to become a more tightly focussed mineral explorer with nearer-term project outcomes. We were pleased that Ms Leigh McClusky accepted our invitation to join the Maximus Board. Ms McClusky is a experienced and highly respected media personality who now runs her boutique public relations consultancy McClusky & Co Public Relations and Communications. We are looking forward to the contribution that Leigh will make to the progress of the Company. It remains for me to thank shareholders, my fellow Directors, staff and contractors for their assistance and support in what has been another difficult year. I look forward to some exploration success and your continued support for Maximus for the coming year. Bob Kennedy CHAIRMAN MANAGING DIRECTOR’S REPORT Last year we announced our commitment to our business Modifications were completed to the existing test plant to oath: Focus. Discipline. Delivery. That commitment continues bring it to production capability and production now continues. and has guided us through the tentative recovery now Production is sourced from each of the three resource areas, emerging in the junior resource sector, which has lagged that namely Jacks Patch, Boulder Run and Golden Triangle, to seen by the middle and large-scale producers. We remain gain experience of the performance of each of the resource focussed on our three core projects: Sellheim (gold) in north wash material through the modified trommel plant. Plant Queensland, Adelaide Hills (gold) in South Australia and operations continue to be reviewed to identify areas to improve Narndee (base metals) in Western Australia. throughput. In October 2009, Maximus completed a successful capital As previously advised, Maximus will operate the plant in raising of $2.06 million. The focus for funds raised was its current configuration to gain confidence in our resource primarily to enable the Company to undertake a drilling estimates and operational performance prior to moving to program over the historic Deloraine gold mine near Kersbrook construct larger capacity plant of 40–50 bcm (bank cubic in the Adelaide Hills. Although access for drilling was delayed metres) per hour throughput. longer the anticipated, we are now on site and drilling – as we promised when we undertook the capital raising. It is very pleasing that early results of this program demonstrates the depth extension of a strongly mineralised system. As recently announced*, hole DelDDH02 recorded an intersection of three metres at 30.3 grams per tonne gold associated with quartz–carbonate–chalcopyrite veins within a wider interval of altered, brecciated, and quartz carbonate veined metamorphosed sedimentary rocks. This aggressive step-out, some 150–200 metres below the historic workings provides good support to the Company’s exploration target model. The historic Deloraine mines were the largest gold producer in the Adelaide Hills, with production of about 50,000 tonnes at 20 grams per tonne for about 33,000 ounces of gold with additional minor copper and silver. At Sellheim in North Queensland, Maximus completed the infill sampling program, on time and on budget. Following Board approval, we moved quickly to commence trial production. Finally, in Western Australia, our exploration focus is on the Windimurra–Narndee Complex for economic deposits of copper, zinc, nickel, platinum group metals and gold. This is an exciting and potentially “company-making” project. Following a detailed review and interpretation of the extensive airborne electro-magnetic (EM) survey flown in 2008, work proceeded to the design of detailed ground EM surveys to follow up selected anomalies identified. The ground surveys are expected to be completed during the last quarter of 2010 and should provide drill-ready targets. Initial work will concentrate on base metal VMS targets within the eastern felsic volcanic units and nickel-PGM targets within the Milgoo ultramafic belt in the south west. In summary, this year has been one of consolidation and positioning for Maximus to gain the reward from adhering to its key business drivers: Focus, Discipline and Delivery. * ASX release 5 October 2010 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 3 DEVELOPMENT AND EXPLORATION REVIEW YANDAL GOLD Yilgarn Craton NARNDEE ZINC COPPER GOLD NICKEL PLATINUM WOOLANGA COPPER GOLD SELLHEIM GOLD Eromanga Basin Eromanga Basin URANIUM Gawler Craton BILLA KALINA URANIUM COPPER GOLD ADELAIDE HILLS GOLD BIRD IN HAND DELORAINE GOLD Figure 1 Location of activities. 4 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 QuEENSLAND 0 50km 0 4km Ingham EPM15778 Jacks Patch Boulder Run Townsville Ayr -20º Charters Towers Golden Triangle ML10269 ML10328 S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh ellh eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim eim ML10270 River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River River EPM13499 Bowen Lake Dalrymple Burdekin Falls Dam Collinsville (See inset) SELLHEIM Mt Coolon Mackay SELLHEIM GOLD PROJECT Maximus 100% The Sellheim Gold Project covers some 75 square kilometres of tenements in a known alluvial–hardrock gold province on the northern portion of the highly prospective Drummond Basin in north Queensland (Figures 1 and 2). A strategic review of the Sellheim project in late 2009 determined that additional infill sampling was required in order to better understand the distribution of gold within the alluvial systems within ML 10328. This information was required to complete the most cost effective mine plan and the design of a commercial production plant. The infill sampling programme was completed during the December Quarter. The Company was fortunate that only minimal delays were caused by inclement weather resulting in the programme running on time and budget. A mining plan was developed for an annual production of approximately 2,200 ounces gold from around 120,000 bcm treated alluvial wash. Following Board approval to commence trial production, final modifications were completed on the existing test plant to bring it to production capability. During the June Quarter, 6,839 lcm were treated for the recovery of º 6 4 1 º 8 4 1 Figure 2 Location of Sellheim Project showing tenement holdings and estimated resources. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 5 Resource Areas 0 400m House/Office Workshop Area Camp Dam Fuel Storage Boulder Run Dams Slurry Dam Plant Jacks Patch Golden Triangle -20°57' ' 5 1 ° 7 4 1 Figure 3 Sellheim Project resource areas. ' 6 1 ° 7 4 1 Riv er S e l l h e i m ' 7 1 ° 7 4 1 76.8 ounces gold doré. This equates to a recovered grade We will operate the plant in its current configuration to of 0.35 g/lcm which is in line with forecast. Gold fineness is gain confidence in our resource estimates and operational generally high, at around 92%. Selected nuggets have been performance prior to moving to construct the main plant of held aside for possible direct sale. 40–50 bcm per hour throughput. The interim stage is expected Production was sourced from each of the three resource to have a duration of approximately four months. areas, namely Jacks Patch, Boulder Run and Golden Triangle Maximus anticipates the commercial operation at Sellheim will (Figure 3), to gain experience of the performance of each of generate a significant cash flow for the company in excess of the resource wash material through the modified trommel $1 million annually. This cash flow will help underpin corporate plant. Plant operation has been reviewed to identify areas to cash requirements for further exploration. improve throughput. Opportunities have been identified and modifications planned. This should lead to less stoppages due to wash material hold-up. Site works were affected to a minor degree by the passage of Cyclone Ului in late March which temporarily restricted access to the site and also caused minor damage to camp facilities due to wind damage. 6 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 SOuTH AuSTRALIA ADELAIDE HILLS PROJECT 100% Maximus Deloraine The Deloraine prospect has an Exploration Target* of 800,000 The Adelaide Hills project, located immediately east and to 1,100,000 tonnes at grades of 15 to 20 g/t Au. Between north of Adelaide, comprises some 3,500 square kilometres 1909 and 1941, the Deloraine and Deloraine Queen mines of contiguous exploration licences and applications covering produced around 33,270 ounces of gold from 48,700 tonnes numerous gold and base metal occurrences (Figures 1 and 4) at a grade of approximately 20 g/t Au by-product copper and and also includes the Company’s wholly owned high grade silver. Wardens Court proceedings took place throughout the gold resource at the Bird in Hand deposit. year in order to enable drilling at our Deloraine gold project. ' 0 3 º 8 3 1 0 10 km º 9 3 1 Mt Rufus G Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda Kapunda MoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppaMoppa Moppa -34º30' Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Gomersal Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston Angaston G Gumeracha Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa Barossa G G Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra Para Wirra G G Deloraine G Birdwood GG G G GGGGG G G Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef Scotts Reef G Bird in Hand ADELAIDE Uraidla and Forest Range -35º Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside Woodside New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era GGGG New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era New Era G G G G Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Eureka Kanmantoo Copper (Hillgrove) Echunga G G G Willunga G Angas Lead/Zinc (Terramin) E Figure 4 Adelaide Hills Gold Province. E G Exploration Target Resource Mine Historic hardrock gold mines Goldfields Gold Province Maximus Resources Tenements Kapunda JV (Copper Range Ltd) Subsequent to the end of the March Quarter, the Court determined that the Company had permission to undertake the proposed drilling. The proposed 2010 drilling program for Deloraine will focus initially on drilling beneath the historic mine workings to confirm continuity of the reef system. This approach is similar to that employed to significantly expand resources at our Bird in Hand gold deposit, directly south of Deloraine. Maximus secured a drilling contractor to undertake the first of its 2010 drilling program at the Company’s wholly owned Deloraine gold prospect. All regulatory requirements were completed and drilling commenced at Deloraine in early August. Preliminary results were received and released on 5 October 2010. Hole DelDDH02 recorded an intersection of 3 metres at 30.3 grams per tonne gold associated with quartz– carbonate–chalcopyrite veins within a wider interval of altered, brecciated, and quartz carbonate veined metamorphosed sedimentary rocks. This aggressive step-out, some 150– 200 metres below the historic workings provides good support to the Company’s exploration target model. Full results are expected during the December Quarter. Eureka The Eureka prospect, located less than two kilometres from our Bird in Hand deposit, has an Exploration Target* of 160,000 to 240,000 tonnes at grades of 10 to 15 g/t Au. Production records for the Eureka mine are incomplete. However, PIRSA records indicate that most mining activity occurred before 1887. During 1894, the mine was re-opened and approximately 500 tonnes were mined at a recovered grade of 18.8 g/t Au. Maximus has previously negotiated an agreement with the landowner covering the Eureka prospect and it is expected that drilling will commence as soon as the drilling at Deloraine has been completed. Resource potential The intent of the two 2010 drilling programs is to identify additional resource potential to supplement the previously reported high grade resource of 237,000 ounces at 12.3 g/t Au (ASX release on 8 August 2008) at the Company’s Bird in Hand deposit at Woodside. * See inside front cover for explanation of Exploration Target. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 7 KAPUNDA JOINT VENTURE Maximus diluting to 25% subject to Kapunda JV Agreement IOCGU mineralisation. The Company is awaiting a response from the Defence Department on the joint venture’s application. The Kapunda Joint Venture covers the NW portion of the Adelaide Hills Gold Province and the historic copper mining area of Kapunda (Figure 4). Joint Venture manager, Copper Range Limited (CRJ), has advised that no activities were undertaken throughout the year. Given that the area of interest to the joint venture lies very close to the margin of the Restricted Zone the Company is hopeful that permission to proceed with be forthcoming from the Defence Department and in such an event will immediately embark on the ground gravity program. BILLA KALINA PROJECT Maximus diluting to 50% subject to Billa Kalina JV Agreement The Billa Kalina project area comprises five exploration licences located 70 km northwest of the Olympic Dam copper– uranium–gold (IOCGU) mine and 45 km east of the Prominent Hill copper–gold deposit (Figure 1). Detailed analysis of all previous gravity survey data at Billa Kalina has highlighted a potentially significant single point gravity anomaly at Peeweena Dam, proximal to the western margin of EL 3338. The anomalous point has an amplitude of approximately 10 mgal and was originally recorded within a 6–7 km spaced gravity survey completed by the Bureau of Mineral Resources. Based upon nearby drilling by the joint venture operator ERO Mining, the anomaly is interpreted to lie adjacent to a major structurally controlled contact between Archaen basement to the west and Proterozoic/Palaezoic sediments to the east. The area of interest lies approximately 12.5 km south of the 30 degree south latitude and therefore falls within the recently defined Restricted Zone of the larger Woomera Prohibited Area. Under newly formulated guidelines the Joint Venture operator, ERO Mining, has submitted a request to undertake a small gravity survey to confirm, and better define, the anomaly and if justified to complete a single drillhole to evaluate the target for EROMANGA SEDIMENTARY URANIUM PROJECT Maximus diluting to 30% subject to Eromanga JV Agreement The Eromanga joint venture project areas, comprising Abminga, Marree and Kingoonya projects, are situated along the margins of the Eromanga Basin in South Australia and Northern Territory (Figure 1). Abminga and Marree Projects The joint venture operator, ERO Mining, reported no significant ground based exploration activities were undertaken at the Abminga and Marree Projects throughout the year. Kingoonya Project Following discussions with the management of the Woomera Prohibited Area, the joint venture partners completed a full review of the Kingoonya Project. This review concluded that as the Kingoonya Project area is located directly beneath the main flight path for testing at the Woomera facilities, any future ground based exploration at Kingoonya would be subject to significant operational constraints. These limitations, combined with the assessment of residual exploration potential, do not justify the substantial costs of maintaining our tenure at Kingoonya. On this basis the joint venture partners surrendered their title over ELs 3576, 3573, 3590, 3591 and 3613, effective following the end of the March Quarter. 8 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 WESTERN AuSTRALIA º 8 1 1 0 20 km -28º Mount Magnet ' 0 3 º 8 1 1 PbZn PGM Au Au Au Au Au Windimurra Uranium Resource Au E Windimurra Vanadium Deposit (non MXR) PGM PGM -28º30' CuZn Ni PGM Ni PGM Au CuZn Milgoo Nickel/PGM Prospect -29º CuZn Maximus Tenement Area Airborne EM Target Windimurra-Narndee Complex Figure 5 Narndee base metals and uranium tenements. NARNDEE PROJECT Maximus 90% to 100% The project area is located in the Mt Magnet region of Western Australia and comprises a comprehensive package of tenements covering a total area of approximately 2,649 square kilometres over the mineral rich Narndee and Windimurra layered mafic complexes (Figures 1 and 5). Work continued to design detailed ground EM surveys to follow up selected anomalies identified from the extensive airborne EM survey. The ground surveys are expected to be completed during the Q3 2010 and should provide drill-ready targets. Initial work will concentrate on VMS targets within the eastern felsic volcanic units and nickel–PGM targets within the Milgoo ultramafic belt in the south west. Following an extensive structural and geophysical review, the Company has effected an extensive tenement reduction. WINDIMURRA URANIUM PROJECT Maximus 100% The Windimurra Uranium Deposit is located about 70 km to the ESE of Mount Magnet, Western Australia (Figure 1 and 5). In December 2007, Maximus announced an Inferred Mineral Resource at the Windimurra Uranium deposit of 19 million tonnes at an average grade of 180 parts per million U3O8. The estimate used a cut off grade of 100 ppm U3O8 for a U3O8 content of 3,400 tonnes (7.5 million pounds). This resource is located between the surface and a depth of 6.5 metres. No significant ground based exploration activities were undertaken at the Windimurra Uranium Project throughout the year. YANDAL 90% Maximus The Yandal project area comprises two tenement packages situated near Wiluna and located within the highly prospective Yandal Greenstone Belt (Figure 1). Prospecting on behalf of Maximus’ partner near the Moilers Thrust Zone BIF during the December Quarter identified several areas shedding small gold nuggets. Follow up work is planned. Several companies have maintained a dialogue with Maximus regarding possible acquisition of Maximus’ Yandal project, although no formal offers have been submitted. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 9 NORTHERN TERRITORy WOOLANGA PROJECT Maximus 100%, diluting in part to 51%, subject to the Strangways Agreement The Woolanga project area comprises five exploration licences covering 1700 square kilometres that are located 100 km northeast of Alice Springs (Figure 1). Part of the tenure is the subject of an ‘Energy Metals’ specific exploration agreement with NuPower Resources Limited (NuPower). Subsequent to 30 June 2010, the agreement was amended to include all minerals, other than diamonds. NuPower has advised that, during the reporting period, no activities were undertaken on the Strangways joint venture area. RANKIN PROJECT Maximus 95% The Rankin project area is contiguous with the Woolanga project (Figure 1) and comprises two exploration licences 9529 and 22729, and Mineral Claim South 38 enclosing previously identified base metal gossans. Following the withdrawal of Minotaur Exploration Limited, no activities were undertaken on the tenements pending a review of the project. CORPORATE During the reporting period, the company announced a Share Purchase Plan (SPP), with a target raising of $1.5 million. The SPP was well supported and closed oversubscribed, raising $1.71 million. A further $362,000 was injected from a placement to clients of the Adelaide office of national stockbroking firm, StoneBridge Group. The capital raising success is considered a strong vote of confidence in the Company’s renewed exploration focus, which encompasses gold in the Adelaide Hills as well as the highly prospective Narndee-Windimurra base metals project east of Mount Magnet in Western Australia. 10 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 10 TENEMENT SCHEDuLE For the year ended 30 June 2010 Tenement number Tenement name Date granted / applied for Expiry date Area (sq km) Registered holder / applicant Related agreement WESTERN AUSTRALIA Narndee Project E57/728 E57/729 E58/237 E58/240 E58/270 E58/273 E58/274 E58/281 E58/294 E58/295 E58/309 E58/356 E58/373 E59/908 E59/1083 E59/1085 E59/1087 E59/1088 E59/1173 E59/1174 E59/1230 E59/1231 E59/1237 E59/1238 E59/1252 E59/1335 E59/1365 E59/1370 E59/1415 E59/1561 P58/1199 P58/1201 P58/1333 P58/1418 P58/1419 P58/1420 P58/1421 P58/1422 P58/1423 P58/1424 P59/1872 P58/1444 P58/1450 Watson Well 4/03/2010 3/03/2015 200.0 Maximus Resources Ltd Corporate Group Agreement Youanmi Downs 4/04/2008 3/04/2013 75.0 Maximus Resources Ltd Naluthanna Hill 22/03/2002 21/03/2011 50.0 Maximus Resources Ltd Windimurra 11/03/2002 10/03/2011 50.0 Maximus Resources Ltd Wondinong Hill 28/10/2005 27/10/2010 48.0 Maximus Resources Ltd Wagoo Hills Paynesville 4/05/2007 3/05/2012 196.0 Maximus Resources Ltd 5/03/2003 4/03/2010 98.0 Maximus Resources Ltd Boundary Well 28/06/2006 27/06/2011 42.0 Maximus Resources Ltd Wondinong Windsor Brailia South Mount Ford 7/06/2006 6/06/2011 87.0 Maximus Resources Ltd 7/06/2006 6/06/2011 6.0 Maximus Resources Ltd 22/01/2007 21/01/2012 17.0 Maximus Resources Ltd 25/02/2010 24/02/2015 212.0 Maximus Resources Ltd Kantie Murdana Hill 17/11/2009 16/11/2014 212.0 Maximus Resources Ltd Narndee 8/09/2000 7/09/2010 48.0 Maximus Resources Ltd Narndee West 14/11/2002 13/11/2011 53.0 Maximus Resources Ltd Budnee Bricky Bore Dunns Tank 14/11/2002 13/11/2011 54.0 Maximus Resources Ltd 6/06/2007 5/06/2012 196.0 Maximus Resources Ltd 24/10/2006 23/10/2011 98.0 Maximus Resources Ltd Narndee Homestead 23/11/2006 22/11/2011 60.0 Maximus Resources Ltd Mulermurra Well 23/11/2006 22/11/2011 20.0 Maximus Resources Ltd Dromedary Hills 8/02/2007 7/02/2012 200.0 Maximus Resources Ltd Corporate Group Agreement Boodanoo 8/02/2007 7/02/2012 200.0 Maximus Resources Ltd Corporate Group Agreement Yalanga Tank 25/01/2007 24/01/2012 43.0 Maximus Resources Ltd Corporate Group Agreement Carwoola Dam 22/01/2007 21/01/2012 20.0 Maximus Resources Ltd Corporate Group Agreement Boodanoo Well 21/06/2007 20/06/2012 48.0 Maximus Resources Ltd 4 Corner Bore 17/04/2008 16/04/2013 50.0 Maximus Resources Ltd Kurrajong Bore 4/03/2010 3/03/2015 6.0 Maximus Resources Ltd Warramboo Milgoo Well Corner Well 4/03/2010 3/03/2015 3.0 Maximus Resources Ltd 3/03/2010 2/03/2015 27.0 Maximus Resources Ltd Corporate Group Agreement 26/03/2010 25/03/2015 211.0 Maximus Resources Ltd 3/04/2007 2/04/2011 0.7 Maximus Resources Ltd 3/04/2007 2/04/2011 0.2 Maximus Resources Ltd Brailia Southeast 18/09/2006 17/09/2010 1.3 Maximus Resources Ltd 4/03/2010 3/03/2014 1.7 Maximus Resources Ltd 4/03/2010 3/03/2014 0.2 Maximus Resources Ltd 4/03/2010 3/03/2014 0.8 Maximus Resources Ltd 4/03/2010 3/03/2014 0.2 Maximus Resources Ltd 4/03/2010 3/03/2014 0.2 Maximus Resources Ltd 21/09/2007 21/09/2007 21/09/2007 1.7 Maximus Resources Ltd 0.2 Maximus Resources Ltd 0.9 Maximus Resources Ltd 4/03/2010 3/03/2014 0.2 Maximus Resources Ltd 4/03/2010 3/03/2014 1.2 Maximus Resources Ltd MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 11 TENEMENT SCHEDuLE For the year ended 30 June 2010 Tenement number Tenement name Date granted / applied for Expiry date Area (sq km) Registered holder / applicant Related agreement P58/1453 P59/1616 P59/1757 P59/1811 P59/1812 P59/1813 P59/1856 P59/1868 P59/1869 P59/1870 P59/1871 P59/1900 5/03/2010 4/03/2014 0.8 Maximus Resources Ltd 3/04/2007 2/04/2011 1.3 Maximus Resources Ltd Warnambar Soak 22/01/2007 21/01/2011 0.4 Maximus Resources Ltd Corner Bore 1 28/12/2007 27/12/2011 1.5 Maximus Resources Ltd Corner Bore 2 28/12/2007 27/12/2011 1.0 Maximus Resources Ltd Corner Bore 3 28/12/2007 27/12/2011 1.0 Maximus Resources Ltd Joes Gap 9/07/2008 8/07/2012 0.7 Maximus Resources Ltd 8/03/2010 7/03/2014 1.2 Maximus Resources Ltd 8/03/2010 7/03/2014 0.2 Maximus Resources Ltd 8/03/2010 7/03/2014 0.5 Maximus Resources Ltd 8/03/2010 7/03/2014 0.7 Maximus Resources Ltd 8/03/2010 7/03/2014 0.2 Maximus Resources Ltd Ironstone Well Project E53/1223 Ironstone Well 25/01/2007 24/01/2012 188.0 Maximus Resources Limited (90) Nemex Agreement Nemex Pty Ltd (10) E53/1224 Flushing Meadows 25/01/2007 24/01/2012 56.0 Maximus Resources Limited (90) Nemex Agreement Nemex Pty Ltd (10) P53/1308 Outcamp Well 1 12/06/2008 11/06/2012 1.8 Mark Gareth Creasy (30) Nemex and Creasy Agreements Newmont Yandal Operations P/L (70)## P53/1309 Outcamp Well 2 12/06/2008 11/06/2012 1.8 Mark Gareth Creasy (30) Nemex and Creasy Agreements Newmont Yandal Operations P/L (70)## P53/1310 Outcamp Well 3 12/06/2008 11/06/2012 1.4 Mark Gareth Creasy (30) Nemex and Creasy Agreements Newmont Yandal Operations P/L (70)## P53/1311 Outcamp Well 4 12/06/2008 11/06/2012 1.0 Mark Gareth Creasy (30) Nemex and Creasy Agreements P53/1312 Outcamp Well 5 4/12/2008 3/12/2012 1.8 P53/1313 Outcamp Well 6 21/11/2008 20/11/2012 1.2 P53/1314 Outcamp Well 7 21/11/2008 20/11/2012 1.1 P53/1315 Outcamp Well 8 12/06/2008 11/06/2012 P53/1316 Outcamp Well 9 12/06/2008 11/06/2012 P53/1317 Outcamp Well 10 12/06/2008 11/06/2012 P53/1318 Outcamp Well 11 12/06/2008 11/06/2012 P53/1319 P53/1320 P53/1321 P53/1322 P53/1323 Outcamp Well 12 12/06/2008 11/06/2012 Outcamp Well 13 12/06/2008 11/06/2012 Outcamp Well 14 12/06/2008 11/06/2012 Outcamp Well 15 12/06/2008 11/06/2012 Outcamp Well 16 12/06/2008 11/06/2012 1.9 1.8 1.8 1.9 1.7 1.6 1.9 1.4 0.3 Newmont Yandal Operations P/L (70)## Australian Metals Corporation P/L (20) Eagle Mining P/L (51) Hunter Resources P/L (29)# Australian Metals Corporation P/L (20) Eagle Mining P/L (51) Hunter Resources P/L (29)# Australian Metals Corporation P/L (20) Eagle Mining P/L (51) 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)# Eagle Mining P/L (71) Hunter Resources P/L (29)# Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Nemex Agreement Newmont Yandal Operations P/L# Nemex Agreement Newmont Yandal Operations P/L# Nemex Agreement Newmont Yandal Operations P/L# Nemex Agreement Newmont Yandal Operations P/L# Nemex Agreement Newmont Yandal Operations P/L# Nemex Agreement 12 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 Tenement number Tenement name Date granted / applied for Expiry date Area (sq km) Registered holder / applicant Related agreement SOUTH AUSTRALIA Adelaide Hills Project EL4303 EL 3425 EL3534 EL 4091 EL 4131 EL 4227 EL 4464 MC 4113 EL4193 EL4194 EL4222 EL 3920 Lobethal Echunga Mt Pleasant Mt Barker Kapunda Brukunga Tarlee Bird in Hand Mount Monster Williamstown Tepko Mount Rufus Billa Kalina Project Francis Margaret Billa Kalina EL 3526 EL 3525 EL 4463 Pt EL 3170 (ELA33/10) 1/09/09 19/10/05 30/03/06 25/02/08 28/04/08 25/02/09 13/04/10 11/11/08 27/10/08 27/10/08 11/02/09 3/09/07 23/02/06 23/02/06 13/04/10 Flinders Agreement Flinders Agreement Flinders Agreement Flinders Agreement Flinders and Copper Range Agreements Flinders Agreement Flinders Agreement 31/08/10 18/10/10 29/03/11 333.0 Flinders Mines Ltd 253.0 Flinders Mines Ltd 690.0 Flinders Mines Ltd 24/02/2010* 162.0 Flinders Mines Ltd 27/04/2010* 721.0 Flinders Mines Ltd 24/02/2010* 176.0 Flinders Mines Ltd 12/04/11 105.0 Flinders Mines Ltd 11/11/2009*** 2.0 Maximus Resources Ltd 26/10/10 26/10/10 378.0 Maximus Resources Ltd 20.0 Maximus Resources Ltd 10/02/2010* 121.0 Maximus Resources Ltd 2/09/10 51.0 Maximus Resources Ltd 22/02/2010* 345.0 Flinders Mines Ltd Flinders and Billa Kalina Agreements 22/02/2010* 477.0 Flinders Mines Ltd Flinders and Billa Kalina Agreements 12/04/11 1,023.0 Flinders Mines Ltd Flinders and Billa Kalina Agreements Bamboo Lagoon 17/02/10 412.0 Flinders Mines Ltd Flinders and Billa Kalina Agreements EL 3338 (ELA78/10) Millers Creek 19/05/05 18/05/2010* 771.0 Flinders Mines Ltd Flinders and Billa Kalina Agreements Eromanga Project EL 3579 EL 3601 EL 3602 Calcutta Black Hill Dam Mt Anthony 21/06/06 17/07/06 17/07/06 QUEENSLAND Sellheim Project 20/06/2010* 984.0 Maximus Resources Ltd Eromanga Basin Agreement 16/07/10 16/07/10 485.0 Maximus Resources Ltd Eromanga Basin Agreement 409.0 Maximus Resources Ltd Eromanga Basin Agreement ML10269 ML10270 ML10328 EPM 13499 EPM 15778 EPM 17573 EPM18021 Slim Chance Next Chance Sellheim 13/11/2003 30/11/2013 0.1 Maximus Resources Limited Sellheim Agreement 13/11/2003 30/11/2013 0.5 Maximus Resources Limited Sellheim Agreement 1/12/2006 30/11/2026 3.3 Maximus Resources Limited Sellheim Agreement Mount Richardson 1/03/2004 28/02/2012 11.0 Maximus Resources Limited Sellheim Agreement Sellheim River 19/12/2007 18/12/2012 63.0 Maximus Resources Limited Sellheim Agreement Douglas Creek 21/04/2008 Mount Wyatt 2/03/2009 39.0 Maximus Resources Limited 69.0 Maximus Resources Limited NORTHERN TERRITORY Woolanga Project SEL25055 SEL25056 Strangways 13/06/06 12/06/10 1,118.0 Flinders Mines Limited Flinders and NuPower Agreements Mud Tank-Alcoota 13/06/06 12/06/10 520.0 Flinders Mines Limited Flinders and NuPower Agreements # Transfer of Ownership not yet registered; actually 90% Maximus, 10% Nemex ## Transfer of Ownership not yet registered; actually 63% Maximus, 7% Nemex *** MC4113 is still current pending grant of Retention Licence application lodged on 10 November 2009 * Renewal or replacement pending MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 13 FINANCIAL REPORT For the year ended 30 June 2010 MAXIMUS RESOURCES LIMITED ABN 74 111 977 354 These financial statements cover both the separate financial statements of Maximus Resources Limited as an individual entity and the consolidated financial statements for the consolidated entity consisting of Maximus Resources Limited and its subsidiaries. The financial statements are presented in the Australian currency. Maximus Resources Limited is a company limited by shares, incorporated and domiciled in Australia. The registered office and principal place of business is: Maximus Resources Limited 62 Beulah Road Norwood South Australia 5067 Registered postal address is: Maximus Resources Limited PO Box 3126 Norwood SA 5067 The financial statements were authorised for issue by the directors on 30 September 2010. The directors have the power to amend and reissue the financial statements. Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases, financial reports and other information are available on our website: www.maximusresources.com. 14 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 Table of contents DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION CORPORATE GOVERNANCE STATEMENT FINANCIAL STATEMENTS STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF FINANCIAL POSITION STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT ASX ADDITIONAL INFORMATION 15 24 25 30 30 31 32 34 35 62 63 66 DIRECTORS’ REPORT Your directors present their report on the consolidated entity REVIEW OF OPERATIONS (referred to hereafter as the consolidated entity) consisting of Maximus Resources Limited and the entities it controlled at the end of, or during, the year ended 30 June 2010. DIRECTORS The 09/10 financial year was one of consolidation whilst Maximus Resources Limited (Maximus) re assessed its strategy and re focused its projects. This root and branch process commenced at the beginning of the year and was strongly supported by shareholders via a fully subscribed The following persons were directors of Maximus Resources Share Purchase Plan (SPP) and limited private placement Limited during the whole of the financial year and up to the which, in total, raised $2.06 million. This support enabled the date of this report: Robert Michael Kennedy Ewan John Vickery Leigh Carol McClusky (since 1 September 2010) Nicholas John Smart (Alternate for E J Vickery) Simon Andrew Booth (since 13 July 2009, ceased 31 August 2010) Kevin John Anson Wills (ceased 30 September 2009) Roseanne Celeste Healy (Alternate for K J A Wills, ceased 30 September 2009) The directors have been in office since the start of the financial year to the date of this report unless otherwise stated. PRINCIPAL ACTIVITIES During the year the principal activities of the consolidated entity consisted of natural resources exploration and development. Company to proceed with its short term goal of obtaining approvals and then commence drill exploration of its Deloraine and Eureka gold prospects in the Adelaide Hills. Maximus’ most valuable asset remains its Adelaide Hills Gold Project containing the Bird in Hand gold deposit. The combined Indicated and Inferred Resource at Bird in Hand now totals some 237,000 contained ounces of gold with high probabilities for lateral and down dip extensions. The average grade for Bird in Hand of 12.3 g/t gold makes it one of the highest grade undeveloped gold resources in Australia. During 2008, Maximus undertook a scoping study for the potential development of the Bird in Hand deposit. This study was reviewed strategically within the context of Maximus’ broader review and although the development of Bird in Hand was financially viable, it was concluded that enhanced shareholder value could be achieved through the discovery of additional gold resources. To that end, our efforts have been focused towards evaluation of Deloraine and Eureka prospects. With this change, Maximus has deferred proceeding with its application to the Government for a water pumping test at Bird in Hand until it has completed its wider exploration in the OPERATING RESULTS AND FINANCIAL POSITION Adelaide Hills. The consolidated net result of operations for the financial year The corporate strategic review included Maximus’ Sellheim was a loss of $10,108,828 (2009: $13,388,667). The net assets of the Consolidated entity have decreased by $6,038,376 during the financial year from $30,143,505 at 30 June 2009 to $24,105,129 at 30 June 2010. DIVIDENDS Maximus Resources Limited There were no dividends declared or paid during the year. gold project, located about 140 kilometres southeast of Charters Towers in north Queensland. This review concluded that additional infill sampling was required in order to better understand the distribution of gold within the alluvial systems within ML 10328 and to provide the necessary information to complete the most cost effective mine plan and the design of a commercial production plant. Procurement and fabrication of a 25 bcm/hr test sampling plant was completed late in the September 2009 Quarter, on budget, at a cost of approximately $85,000 and the infill sampling programme has commenced. The sampling plant comprised a scrubber/ trommel with metal detector on the oversize discharge conveyor to recover nuggets. A gravel pump transfers the trommel undersize and to feeds a Knelson concentrator which removes the lighter fraction. The concentrate from the Knelson concentrator is then further concentrated by a Knudsen bowl and Gemini table. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 15 DIRECTORS’ REPORT Following completion of the infill sampling program and review The Company’s projects in Western Australia focused on our of results, Board approval was given to move into production. Windimurra Narndee Project, located near Mount Magnet. Modifications to the existing test plant were made to bring it Prior to conducting in 2008 a new state of the art helicopter to production capability and capacity. As an interim stage, the borne electromagnetic (EM) survey over the entire layered test plant currently on site was upgraded to achieve a regular mafic complex, Maximus established a strong ground holding. throughput of approximately 25 bcm (bank cubic metres) per This survey located a number of first order conductive hour. Site works were affected to a minor degree by the passage of Cyclone Ului in late March 2010, which temporarily restricted access to the site and also caused minor damage to camp facilities due to wind damage. Following the end of the March 2010 Quarter, plant modifications and test work were completed and the plant commenced operation in late April. Feed was initially sourced from the Golden Triangle area as this has a lower clay component, compared with Jacks Patch anomalies which have been evaluated and which has enabled the Company to progressively rationalise tenements. Planning for ground EM follow up surveys is well advanced. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR Mr Simon Andrew Booth resigned from Maximus Resources Limited with effect from 31 August 2010, having been Managing Director since 13 July 2009. or Boulder Run and therefore more amenable to processing Ms Leigh Carol McClusky was appointed as a non executive during the end of the wet season. Director effective from 1 September 2010. Maximus already has the necessary mobile equipment in place Other than the above, there has not arisen in the interval to mine and feed the plant and no additional plant is required since the end of the financial year and the date of this report, in the short to medium term. During the June 2010 Quarter, 6,839 lcm (loose cubic metres) were treated for the recovery of 76.8 ounces gold doré. This equates to a recovered grade of 0.35 g/lcm which is in line with forecast. Gold fineness is generally high, at around 92%. During the quarter production was sourced from each of the three resource areas, namely Jacks Patch, Boulder Run and Golden Triangle, to gain experience of the performance of each of the resource wash material through the modified trommel plant. Plant operation has been reviewed to identify areas to improve throughput. Opportunities have been identified and modifications planned. This should lead to fewer stoppages due to wash material hold up. We will operate the plant in its current configuration to gain confidence in our resource estimates and operational performance prior to moving to construct the main plant of 40–50 bcm per hour throughput. The interim stage is expected to take approximately four months. any item, transaction or event of material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years. FUTURE BUSINESS DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES During the coming year, Maximus intends to maintain its renewed focus on the Adelaide Hills Gold Project. At Bird in Hand, we have already delineated a mineral resource of nearly a quarter of a million ounces at an impressive grade of just over 12 g/t gold. Drilling has commenced at the historic high grade Deloraine gold mine about 25 kilometres north of Bird in Hand. The drilling programme for Deloraine is focused on drilling beneath the historic mine workings, similar to the approach used at our nearby Bird in Hand deposit. The Deloraine and Deloraine Queen mines operated in the early to mid 1900s and produced around 33,000 ounces gold at a The mining plan has been developed for an annual production grade of approximately 20 g/t Au. If our exploration programs of approximately 2,200 ounces gold from around 120,000 bcm are successful, Maximus may be in a position to develop these treated alluvial wash. Maximus anticipates the commercial historic gold mines. operation at Sellheim will generate a significant cash flow for the company in excess of $1 million annually. This cash flow will help underpin corporate cash requirements for further exploration. At our Sellheim gold project in north Queensland, we are now moving towards a sustainable commercial operation. The intention is to operate the modified test plant to gain confidence in our resource estimates and operational performance prior to moving to construct the main plant of 40–50 bcm per hour throughput. The interim stage is expected to have a duration of approximately four to six months. We continue to assess both plant performance and grade reconciliation against our new resource model. We are pleased with our resource reconciliation. 16 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 We have completed the interrogation and evaluation of the airborne electromagnetic (EM) survey conducted over our Narndee and Windimurra tenements in Western Australia. We are now moving to completing ground EM surveys over the better targets identified. This will enable Maximus to move towards drill testing of selected anomalies during the second half of 2010–2011. ENVIRONMENTAL REGULATION The consolidated entity’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 consolidated entity on any of its tenements. The consolidated entity 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 Experience and expertise A Chartered Accountant and a consultant to Kennedy & Co, Ewan John Vickery Non executive Director – LLB Experience and expertise 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. He is a 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 Australian Institute of Company Directors and is a past national president of Australian Mining and Petroleum Law Association (AMPLA Limited). Other current directorships Mr Vickery is a Non executive Director of Flinders Mines Limited (since 2001) and ERO Mining Limited (since 2006). Special responsibilities Chairman of the Audit Committee. Chartered Accountants, a firm he founded. Mr Kennedy has Interests in shares and options been a director since incorporation 17 December 2004. 794,458 ordinary shares in Maximus Resources Limited. 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. Other current directorships Mr Kennedy is also a Director of ASX listed companies Beach Energy Limited (Director since 1991, Chairman since 1995), ERO Mining Limited (since 2006), Flinders Mines Limited (since 2001), Marmota Energy Limited (since 2007), Monax Mining Limited (since 2004), Ramelius Resources Limited (since 2004) and Somerton Energy Limited (since 2010). Special responsibilities Chairman of the Board. Member of the Audit Committee. Interests in shares and options 6,920,000 ordinary shares in Maximus Resources Limited. Leigh Carol McClusky Non executive Director Experience and expertise Appointed as a Director on 1 September 2010, Leigh McClusky is an experienced and respected media personality with a media career spanning almost 30 years in newspapers, radio and television across Australia. Most recently Leigh hosted a top rating current affairs program in South Australia for 13 years, until she left in 2008 to develop her boutique Public Relations consultancy, McClusky & Co Public Relations and Communications, which now services a wide variety of clients and is continuing to expand into a diverse range of portfolios. Leigh has amassed a huge range of experience across Sydney, Adelaide and Melbourne with Australian Associated Press, The Sun newspaper, the Weekly Times, ABC Television, and the Nine Network, presenting and hosting television and breakfast radio programs. Leigh is currently Chair of the Australian International 3 Day Event and a Board member of the Women’s and Children’s Hospital Foundation. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 17 DIRECTORS’ REPORT Nicholas John Smart Alternate Director for E J Vickery Experience and expertise Kevin John Anson Wills Non executive Director – BSc, PhD, ARSM, FAusIMM Experience and expertise An Alternate Director since 9 May 2005. Mr Smart has held A Director from incorporation 17 December 2004 to positions as a General Manager in France and Australia in 30 September 2009. Dr Wills is a geologist with 36 years the wool, textile, leather and meat industries. Responsibilities experience in multi commodity mineral exploration including included human resources, factory operations, currency feasibility studies and mine operations in Australasia. Dr Wills movements and commodity trading. He was a full Associate spent seven years with CRA Exploration Pty Ltd, the highlight Member of the Sydney Futures Exchange, then became of which was involvement with the location and evaluation of Managing Director of D&D Tolhurst Ltd (Sharebrokers) as the Argyle Diamond Deposit. Later, with Penarroya Australia a client advisor and in the corporate area including capital Pty Ltd, his work led to an expansion of reserves at Thalanga raising. He has been involved in start up companies in and the discovery of the Waterloo base metals deposit. 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 companies and is a director of GTL Energy Limited. Simon Andrew Booth Formerly Managing Director – BA (Hons) (Econ Geol & Min Econ), MAusIMM, MAICD 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 Murchison Region of Western Australia. In the early 1990s Dr Wills was regional exploration manager with Dominion Mining Limited, 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. Experience and expertise Interests in shares and options Managing Director since 13 July 2009 until 31 August 2010. 3,678,278 ordinary shares in Maximus Resources Limited. Mr Booth has over 31 years experience in gold and base metals resources including mine operations, exploration, mine management and strategic planning. He has held executive management positions with Crew Gold Corporation (Executive Roseanne Celeste Healy Alternate Director for K J A Wills (Non executive) – BA (Econ), MBA, MAICD Vice President and Chief Operating Officer), Normandy Mining Experience and expertise Limited Group and Newmont Australia Limited Group. Mr Booth has extensive experience in gold and base metals mining through the management and operation of mines in Australia and internationally. He is a Member of the Australasian Institute of Mining and Metallurgy and a former Vice President of the Northern Territory Minerals Council. Interests in shares and options An Alternate Director from 12 March 2009 to 30 September 2009. Ms Healy is an experienced company director and Chair of Government, industry, not for profit and private sector boards in the areas of resources and energy, research and development, agribusiness and wine, racing and general practice. Ms Healy regularly advised boards and executive management on strategy, corporate governance and social responsibility and business management. Ms Healy is currently 3,000,000 options over ordinary shares in Maximus Resources a director of Tidewater Funds Management Limited, Cheviot Limited. Kirribilly Vineyard Property Group and Rural Industries Research and Development Corporation and an alternate director of Marmota Energy Limited. 18 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 COMPANY SECRETARY INSURANCE PREMIUMS David Wayne Godfrey BCom (Fin), GradDipAcc, ASA, FFin, CFTP (Snr), MAICD Mr Godfrey has more than 25 years experience in the resources and finance industries and is a member of Australian Society of CPAs, Finance & Treasury Association, Chartered Secretaries Australia, Australian Institute of Company Directors and is a Fellow of the Financial Services Institute. He has previously held senior finance roles in major corporations and for the Treasury of New Zealand and has served as secretary of numerous publicly listed and subsidiary companies for the Normandy Mining Limited Group, Newmont Australia Limited Since the end of the previous year the Company has paid insurance premiums of $16,500 to insure the Directors and Officers in respect of Directors and Officers’ liability and legal expenses insurance contracts. PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of Court under section 237 of the Corporations Act 2001 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. Group and Uranium Exploration Australia Limited. Mr Godfrey The Company was not a party to any such proceedings during has been the Company Secretary and Chief Financial Officer the financial year. since 11 November 2008 and to the date of this report. NON AUDIT SERVICES The Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision on 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. There were no fees for non audit services paid/payable to the external auditors during the year ended 30 June 2010. Interests in shares and options 53,334 options in Maximus Resources Limited. MEETINGS OF DIRECTORS During the financial year, 10 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: Full meetings of Directors Audit committee meetings A 10 10 – – 9 – – B 10 10 – – 9 – – A 2 2 – – – – B 2 2 – – – – Robert Michael Kennedy Ewan John Vickery Leigh Carol McClusky Nicholas John Smart Simon Andrew Booth Kevin John Anson Wills Roseanne Celeste Healy A = Number of meetings attended B = Number of meetings held during the time the director held office or was a member of the committee during the year INDEMNIFICATION AND INSURANCE OF OFFICERS The Company is required to indemnify the Directors and other officers of the company against any liabilities incurred by the Directors and officers that may arise from their position as Directors and officers of the Company. No costs were incurred during the year pursuant to this indemnity. The Company has entered into deeds of indemnity with each Director whereby, to the extent permitted by the Corporations Act 2001, the Company agreed to indemnify each Director against all loss and liability incurred as an officer of the Company, including all liability in defending any relevant proceedings. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 19 DIRECTORS’ REPORT REMUNERATION REPORT – AUDITED The Company does not presently emphasise payment for The remuneration report is set out under the following main headings: A Principles used to determine the nature and amount of remuneration B Details of remuneration C Service agreements D Share based compensation The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. A Principles used to determine the nature and amount of remuneration The Company’s policy for determining the nature and amounts of emoluments of board members and senior executive officers of the Company is as follows: results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of the Company given the nature of the Company’s business as a recently listed mineral exploration entity and the current status of its activities. However the Board may approve the payment of cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board. The Company also has an Employee Share Option Plan approved by shareholders that enables the Board to offer eligible employees options to acquire ordinary fully paid shares in the Company. Under the terms of the Plan, options for ordinary fully paid shares may be offered to the Company’s eligible employees at no cost unless otherwise determined by the Board in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by providing employees of the Company with the opportunity to participate in the equity of the Company as an incentive to achieve greater success and The Company’s Constitution specifies that the total amount profitability for the Company and to maximise the long term of remuneration of Non executive Directors shall be fixed performance of the Company. from time to time by a general meeting. The current maximum aggregate remuneration of Non executive Directors has been set at $300,000 per annum. Directors may apportion any amount up to this maximum amount amongst the Non executive Directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as Directors. The remuneration of the Managing Director is determined by the Non executive Directors on the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of other executive officers and employees is determined by the Managing Director The employment conditions of the Managing Director, were formalised in a contract of employment. The base salary as set out in the employment contract is reviewed annually. The Managing Director’s contract may be terminated at any time by mutual agreement. The Company may terminate these contracts without notice in serious instances of misconduct. B Details of remuneration This report details the nature and amount of remuneration for each key management person of the Group and for the executives receiving the highest remuneration. subject to the approval of the Board. The names and positions held by Directors and key Non executive Director remuneration is by way of fees and statutory superannuation contributions. Non executive management personnel of the Group during the financial year are: Directors do not participate in schemes designed for Mr R M Kennedy Chairman, Non executive remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than salary sacrifice and statutory superannuation. The Company’s remuneration structure is based on a number of factors including the particular experience and performance of the individual in meeting key objectives of the Company. The Board is responsible for assessing relevant employment market conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. Mr E J Vickery Director, Non executive Ms L C McClusky Director, Non executive (since 1 September 2010) Mr K J Lines Mr N J Smart Mr S A Booth Dr K J A Wills Ms R C Healy Managing Director – ERO Mining Limited Alternate Director, Non executive Former Managing Director – Maximus Resources Limited (ceased 31 August 2010) Director, Non executive (ceased 30 September 2010) Alternate Director, Non executive (ceased 30 September 2010) Mr D W Godfrey Chief Financial Officer and Company Secretary 20 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 Key management personnel of the consolidated entity and other executives of the company and the consolidated entity 2010 Name Robert Michael Kennedy Ewan John Vickery* Leigh Carol McClusky Kevin James Lines Nicholas John Smart Simon Andrew Booth Kevin John Anson Wills Roseanne Celeste Healy David Wayne Godfrey** Short term employee benefits Short term employee benefits Post employment benefits Share based payments Directors fees Salary Superannuation Options $ 154,465 93,333 - - 5,000 - - 5,000 - $ - - - 231,269 - 222,300 12,156 - 178,899 $ 13,902 3,000 - 20,814 - 20,007 1,094 - 16,101 $ – – – – – 16,330 – - - Total $ 168,367 96,333 - 252,083 5,000 258,637 13,250 5,000 195,000 Total key management personnel compensation (consolidated entity) 257,798 644,624 74,918 16,330 993,670 * For part of the year, director fees for Mr Vickery were paid to a related entity of the Director. ** Mr Godfrey 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 Ltd. The management fees paid by Maximus Resources Limited are outlined in Note 24. This agreement was formalised 3 August 2006. The Directors conclude that there are no executives requiring disclosure other than those listed. Key management personnel of the consolidated entity and other executives of the Company and the consolidated entity 2009 Name Robert Michael Kennedy Ewan John Vickery Kevin John Anson Wills Gary Eric Maddocks Kevin James Lines David Wayne Godfrey Richard Walter Cumming Willson Roseanne Celeste Healy Nicholas John Smart Total key management personnel compensation (consolidated entity) Short term employee benefits Short term employee benefits Post employment benefits Share based payments Directors fees Salary Superannuation Options $ 121,526 72,500 48,624 – – – – – – $ – – 64,893 57,422 253,293 104,975 95,520 – – $ 9,299 – 7,687 – 22,707 9,358 6,865 – – $ – – – – – 1,769 – – – Total $ 130,825 72,500 121,204 57,422 276,000 116,102 102,385 – – 242,650 576,103 55,916 1,769 876,438 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 21 DIRECTORS’ REPORT Key management personnel and other executives of the parent entity 2010 Name Robert Michael Kennedy Ewan John Vickery* Leigh Carol McClusky Nicholas John Smart Simon Andrew Booth Kevin John Anson Wills Roseanne Celeste Healy David Wayne Godfrey** Short term employee benefits Short term employee benefits Post employment benefits Share based payments Directors fees Salary Superannuation Options $ 99,358 60,000 – 5,000 – – 5,000 – $ – – – – $ 8,942 2,250 – – $ – – – – 222,300 20,007 16,330 – – – – 178,899 16,101 – – – Total $ 108,300 62,250 – 5,000 258,637 – 5,000 195,000 Total key management personnel compensation (parent entity) 169,358 401,199 47,300 16,330 634,187 * For part of the year, director fees for Mr Vickery were paid to a related entity of the Director. ** Mr Godfrey 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 Ltd. The management fees paid by Maximus Resources Limited are outlined in Note 24. This agreement was formalised 3 August 2006. The Directors conclude that there are no executives requiring disclosure other than those listed. Key management personnel and other executives of the parent entity 2009 Name Robert Michael Kennedy Ewan John Vickery Kevin John Anson Wills Gary Eric Maddocks David Wayne Godfrey Richard Walter Cumming Willson Roseanne Celeste Healy Nicholas John Smart Total key management personnel compensation (parent entity) Short term employee benefits Short term employee benefits Post employment benefits Share based payments Directors fees Salary Superannuation Options $ 37,362 22,500 – – – – – – $ – – 62,614 57,422 104,975 95,520 – – $ 3,363 – 5,590 – 9,358 6,865 – – $ – – – – 1,769 – – – Total $ 40,725 22,500 68,204 57,422 116,102 102,385 – – 59,862 320,531 25,176 1,769 407,338 22 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 C Service agreements AUDITORS INDEPENDENCE DECLARATION During the financial year, Dr Wills resigned as Managing The lead auditor’s independence declaration for the year Director and was replaced by Mr Simon Booth. The Board ended 30 June 2010 has been received and can be found on negotiated a contract with Mr Booth with no fixed term at a page 24. Dated at Adelaide this 30th day of September 2010 and signed in accordance with a resolution of the Directors. RobeRt M Kennedy Director salary of $250,000 per annum inclusive of superannuation guarantee contributions to be reviewed annually and with termination on three month’s notice. Mr Booth was also granted a sign on bonus of the issue of 3 million options exercisable at 5 cents within 3 years. Messrs Kennedy and Vickery and Ms McClusky are engaged as directors without formal employment agreements. D Share based compensation Options The Company has an Employee Share Option Plan approved by shareholders that enables the Board to offer eligible employees options to acquire ordinary fully paid shares in the Company. Under the terms of the Plan, options to acquire ordinary fully paid shares may be offered to the Company’s eligible employees at no cost unless otherwise determined by the Board in accordance with the terms and conditions of the Plan. During the year 3,000,000 options with a fair value of $16,330 were issued to employees at no cost. The issue was not based on any performance criteria. No employee share options were issued to the Directors during the year. Options granted as remuneration Apart from the options granted under the Company’s Employee Share Option Plan as detailed above, no other options were granted to Directors or key management personnel of the Company during the financial year. Shares issued on exercise of remuneration options No shares were issued to Directors as a result of the exercise of remuneration options during the financial year. Directors interests in shares and options Directors’ relevant interests in shares and options of the Company are disclosed in Note 22 to the accounts. Shares under option Unissued ordinary shares of Maximus Resources Limited under option at the date of this report are as follows: Date options granted Expiry date Exercise price Number under option 21 October 2005 20 April 2010 10 April 2007 20 March 2012 2 July 2007 2 July 2010 2 July 2007 2 July 2012 27 August 2009 26 August 2012 17 March 2008 17 March 2013 4 February 2009 3 February 2014 $0.20 $0.14 $0.50 $0.50 $0.05 $0.18 $0.04 1,000,000 380,000 2,000,000 3,000,000 3,000,000 605,000 1,735,000 11,720,000 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 23 AUDITOR’S INDEPENDENCE DECLARATION 24 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 CORPORATE GOVERNANCE STATEMENT The Board of Directors of Maximus Resources Limited are committed to improving and achieving good standards of corporate governance and has established corporate government policies and procedures, where appropriate and practicable, consistent with the revised Corporate Governance Principles and Recommendations – 2nd Edition issued by the ASX Corporate Governance Council (“ASX Recommendations”). The following statement sets out a summary of the Company’s corporate governance practices that were in place during the financial year and how those practices relate to the revised ASX Recommendations. The Company elected to undergo an early transition to the revised ASX Recommendations and as such has reported against these for the financial years ending 30 June 2008, 30 June 2009 and 30 June 2010. These recommendations are not intended to be prescriptions to be followed by all ASX listed companies, but rather guidelines designed to produce an effective, quality and integrity outcome. The Corporate Governance Council has recognised that a “one size fits all” approach to Corporate Governance is not required. Instead, it states aspirations of good practice for optimising corporate performance and accountability in the interests of shareholders and the broader economy. A company may consider that a recommendation is inappropriate to its particular circumstances and has flexibility not to adopt it and explain why. In ensuring a good standard of ethical behaviour and accountability, the Board has included in its corporate governance policies those matters contained in the ASX Recommendations where applicable. However, the Board also recognises that full adoption of the ASX Recommendations may not be practical nor provide the optimal result given the particular circumstances and structure of the Company. The Board is, nevertheless, committed to ensuring that appropriate Corporate Governance practices are in place for the proper direction and management of the Company. This statement outlines the main Corporate Governance practices of the Company disclosed under the ASX Recommendations, including those that comply with good practice and which unless otherwise disclosed, were in place during the whole of the financial year ended 30 June 2010. its responsibilities, the Board is supported by an Audit Committee to deal with internal control, ethical standards and financial reporting. The Board appoints 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. The board has not adopted a formal statement of matters reserved to them or a formal board charter that details their functions and responsibilities nor a formal statement of the areas of authority delegated to senior executives. RECOMMENDATION 1.2 Recommendation followed The Board takes responsibility for monitoring the composition of the Board and reviewing the performance and compensation of the Company’s Executive Directors and senior management with the overall objective of motivating and appropriately rewarding performance. The Board considers the Company’s present circumstances and goals ensure maximum shareholder benefits from the attraction and retention of a high quality Board and senior management team. The Board on a regular basis reviews the performance of and remuneration for Executive Director’s and senior management including any equity participation by such Executive Directors and senior management. The Board evaluates the performance of the Managing Director and Company Secretary on a regular basis and encourages continuing professional development. RECOMMENDATION 1.3 Recommendation followed During the period the Board undertook an informal performance evaluation of the Managing Director, Company Secretary and senior management. The evaluation was in accordance with the Company’s process for evaluation of senior executives. Principle 2: Structure the board to add value Principle 1: Lay solid foundations for management and oversight RECOMMENDATION 2.1 Recommendation followed RECOMMENDATION 1.1 Recommendation followed The composition of the Board consists of three directors all of whom, including the Chairman, are Independent Directors. The Board is governed by the Corporations Act 2001, ASX Listing Rules and a formal constitution adopted by the company in 2006. The Audit Committee currently consists of two Independent directors. The role of the Board is to provide leadership and direction to management and to agree with management the aims, strategies and policies 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. 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. In fulfilling RECOMMENDATION 2.2 Recommendation followed The Chairman, Mr Kennedy is an Independent Director RECOMMENDATION 2.3 Recommendation followed Mr Kennedy’s role as Chairman of the Board is separate from that of the Managing Director, who is responsible for the day to day management of the Company and is in compliance with the ASX Recommendation that these roles not be exercised by the same individual. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 25 CORPORATE GOVERNANCE STATEMENT RECOMMENDATION 2.4 Recommendation not followed Principle 3: Promote ethical and responsible decision making The Board believes that given the size of the Company and the stage of the entity’s life as a publicly listed junior exploration company that the cost of establishing a nomination committee in line with ASX Recommendation 2.4 and establishing a formal charter as recommended by ASX Recommendation 2.4 cannot be justified by the perceived benefits of doing so. As such, the whole Board currently carries out this function. It is anticipated that a formal charter will be developed in the coming year, as the Company develops further. RECOMMENDATION 2.5 Recommendation not followed The Board recognises that as a result of the Company’s size and the stage of the entity’s life as a publicly listed junior exploration company, the assessment of the Board’s overall performance and its own succession plan is conducted on an ad hoc basis. Whilst this is at variance with the ASX Recommendation 2.5, the Directors consider that at the date of this report an appropriate and adequate process for the evaluation of Directors is in place. A more formal process of Board assessment will be considered in the future as the Company develops. RECOMMENDATION 2.6 Recommendation followed The names of the directors of the Company and terms in office at the date of this Statement together with their skills, experience, expertise and financial interests in the Company are set out in the Directors’ Report section of this report. RECOMMENDATION 3.1 Recommendation not followed While the Company does not have a formal code of conduct, as the Board believes that given the size of the Company and the stage of the entity’s life as a publicly listed junior exploration company that the cost of establishing and managing a formal code of conduct cannot be justified, the Company requires all its directors and employees to abide by good standards of behaviour, business ethics and in accordance with the law. In discharging their duties, Directors of the Company are required to: y act in good faith and in the best interests of the Company; y exercise care and diligence that a reasonable person in that role would exercise; y exercise their powers in good faith for a proper purpose and in the best interests of the Company; y 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; y disclose material personal interests and avoid actual or potential conflicts of interests; y keep themselves informed of relevant Company matters; y keep confidential the business of all directors meetings; and Messrs Kennedy, Vickery and Ms McClusky are considered to be independent. y observe and support the Board’s Corporate Governance practices and procedures. The Company has no relationships with any of the independent directors which the company believes would compromise the independence of these directors. All directors are entitled to take such legal advice as they require at any time and from time to time on any matter concerning or in relation to their rights, duties and obligations as directors in relation to the affairs of the Company at the expense of the Company. 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. The tenure for executive directors is linked to their holding of executive office. As the board does not have a nominations Committee, the functions of this Committee in its absence are deal with by the Board as a whole. An assessment of the Board’s overall performance and its own succession plan is conducted on an ad hoc basis and was done so during the year by the Chairman. Directors also 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 within the meaning of section 9 of the Corporations Act 2001 and details of all contracts, other than contracts to which the Company is a party to which the director is a party or under which the director is entitled to a benefit, and that confer a right to call for or deliver shares in the Company and the nature of the director’s interest under the contract. Directors are required to disclose to the Board any material contract in which they may have an interest. In accordance with Section 195 of the Corporations Act 2001, a director having a material personal interest in any matter to be dealt with by the Board, will not be present when that matter is considered by the Board and will not vote on that matter. RECOMMENDATION 3.2 Recommendation followed Directors, officers and employees are not permitted to trade in securities of the Company at any time whilst in possession of price sensitive information not readily available to the market. Section 1043A of the Corporations Act 2001 also prohibits the acquisition and disposal of securities where a person possess information that is not generally available and which may reasonably be expected to have a material effect on the price of the securities if the information was generally available. A securities trading policy has been established and all employees and Directors are obliged to comply. 26 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 All directors have signed agreements with the Company which require them to provide the Company with details of all securities registered in the director’s name or an entity in which the director has a relevant interest within the meaning of section 9 of the Corporations Act 2001 and details of all contracts, other than contracts to which the Company is a party to which the director is a party or under which the director is entitled to a benefit, and that confer a right to call for or deliver shares in the Company and the nature of the director’s interest under the contract. Directors are required to disclose to the Board any material contract in which they may have an interest. In accordance with Section 195 of the Corporations Act 2001, a director having a material personal interest in any matter to be dealt with by the Board, will not be present when that matter is considered by the Board and will not vote on that matter. RECOMMENDATION 3.3 Recommendation followed A summary of the Company’s Trading Policy can be found at www.maximus resources.com/governance. Principle 4: Safeguard integrity in financial reporting RECOMMENDATION 4.1 Recommendation followed The Company has established an Audit Committee to oversee corporate governance over internal controls, ethical standards, financial reporting, and external accounting and compliance procedures. Also, the Board as a whole addresses the governance aspects of the full scope of Maximus’ activities to ensure that it adheres to appropriate ethical standards. The main responsibilities of the Audit and Corporate Governance Committee include; y reviewing, assessing and making recommendations to the Board on the annual and half year financial reports released to the market by the Company; y overseeing establishment, maintenance and reviewing the effectiveness of the Company’s internal control and ensuring efficacy and efficiency of operations, reliability of financial reporting and compliance with applicable Accounting Standards and ASX Listing Rules; y y 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. RECOMMENDATION 4.2 Recommendation not followed The Audit Committee consists of two non executive, independent Board directors, Messrs Vickery & Kennedy, and is chaired by Mr Vickery. The Board believes that given the size of the Company and the stage of the entity’s life as a publicly listed junior exploration company that the cost of establishing an audit committee with at least three members in line with ASX Recommendation 4.2 cannot be justified by the perceived benefits of doing so. The existing composition of the Audit Committee is such that review and authorisation of the integrity of the Company’s financial reporting and the independence of the external auditor is via the exercise of independent and informed judgment. RECOMMENDATION 4.3 Recommendation followed A formal Audit Committee Charter has been adopted, that details the functions and responsibilities of the Audit Committee. RECOMMENDATION 4.4 Recommendation followed Mr Kennedy is a qualified Chartered Accountant. Details of the Audit Committee member’s qualifications and attendance at meetings are set out in the Directors’ Report section of this report. The Committee meets at least twice 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. Principle 5: Make timely and balanced disclosure RECOMMENDATIONS 5.1 & 5.2 Recommendations followed The Company has adopted a continuous disclosure policy and operates under the continuous disclosure requirements of the ASX Listing Rules and ensures that all information which may be expected to affect the value of the Company’s securities or influence investment decisions is released to the market in order that all investors have equal and timely access to material information concerning the Company. The information is made publicly available on the Company’s website, following release to the ASX, www.maximusresources.com/governance. Principle 6: Respect the rights of shareholders RECOMMENDATIONS 6.1 & 6.2 Recommendations not followed The Board aims to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs. In accordance with the ASX Recommendations, information is communicated to shareholders as follows: y y 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; y 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; y notices of all meetings of shareholders; y publicly released documents including full text of notices of meetings and explanatory material made available on the Company’s web site; and y 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. Important issues are presented to the shareholders as single resolutions. The external auditor of the Company is also invited to the Annual General Meeting of shareholders and is available to answer any questions concerning the conduct, preparation and content of the auditor’s report. Pursuant to section 249K of the Corporations Act 2001 the external auditor is provided with a copy of the notice of meeting and related communications received by shareholders. Due to the size of the Company and the stage of life of the entity as a publicly listed junior exploration company, the Board does not believe a formal policy for shareholder communication is required. However, a summary describing how the Company will communicate with its shareholders is posted on the Company’s website, www.maximusresources.com/governance. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 27 CORPORATE GOVERNANCE STATEMENT Principle 7: Recognise and manage risk RECOMMENDATIONS 7.1, 7.2 & 7.4 Recommendations not followed 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. No formal report in relation to the Company’s management of its material business risk is presented to the Board. Due to the size of the Company and the stage of life of the entity as a publicly listed junior exploration company, and the inherent risks associated with the industry it operates in, the Board does not believe formal policies for oversight and management of risk is required nor a mechanism for formal review be established. A summary describing how the Company manages risk by procedures established at Board and executive level can be found posted on the Company’s website, www.maximusresources.com/governance. RECOMMENDATION 7.3 Recommendation followed In accordance with ASX Recommendation 7.3 the Chief Executive Officer and Chief Financial Officer have provided assurances that the written declarations under s295A of the Corporations Act are founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. Both the Chief Executive Officer and Chief Financial Officer provided said assurances at the time the s295A declarations were provided to the Board. Principle 8: Remunerate fairly and responsibly RECOMMENDATION 8.1 Recommendation not followed The Board believes that given the size of the Company and the stage of the entity’s life as a publicly listed junior exploration company that the cost of establishing a formal remuneration committee in line with ASX Recommendation 8.1 cannot be justified by the perceived benefits of doing so. The Board takes responsibility for monitoring the composition of the Board and reviewing the compensation of the Company’s Executive Directors and senior management with the overall objective of motivating and appropriately rewarding performance. RECOMMENDATIONS 8.2 & 8.3 Recommendations followed In accordance with ASX Recommendation 8.2 the Company’s remuneration practices are set out as follows. The Company’s Constitution specifies that the total amount of remuneration of non executive directors shall be fixed from time to time by a general meeting. The current maximum aggregate remuneration of non executive directors has been set at $300,000 per annum. Directors may apportion any amount up to this maximum amount amongst the non executive directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties as directors. Non executive director remuneration is by way of fees and statutory superannuation contributions. Non executive directors do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and are not provided with retirement benefits other than salary sacrifice and statutory superannuation. The 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. The Company’s remuneration structure is based on a number of factors including the particular experience and performance of the individual in meeting key objectives of the Company. The Board is responsible for assessing relevant employment market conditions and achieving the overall, long term objective of maximising shareholder benefits, through the retention of high quality personnel. The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other incentive payments based on key performance indicators of the Company given the nature of the Company’s business as a recently listed mineral exploration entity and the current status of its activities. However the Board may approve the payment of cash bonuses from time to time in order to reward individual executive performance in achieving key objectives as considered appropriate by the Board. The Company also has an Employee Share Option Plan approved by shareholders that enables the Board to offer eligible employees options to ordinary fully paid shares in the Company. Under the terms of the Plan, options to ordinary fully paid shares may be offered to the Company’s eligible employees at no cost in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of employees and shareholders by providing employees of the Company with the opportunity to participate in the equity of the Company as an incentive to achieve greater success and profitability for the Company and to maximise the long term performance of the Company. The non executive directors are not eligible to participate in the Plan. The employment conditions of the Managing Director are formalised in a contract of employment. The Managing Director’s contract may be terminated at any time by mutual agreement or without notice in serious instances of misconduct. Further details of director’s remuneration, superannuation and retirement payments are set out in the Remuneration Report section of the Directors’ Report. The Company’s Corporate Governance Policies can be found at www.maximusresources.com/governance 28 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2010 Revenue from continuing operations Cost of goods sold Other expenses Marketing expense Administrative expenses Finance costs Exploration expenditure written off Impairment of financial assets (Loss) before income tax Income tax expense (Loss) from continuing operations Note Consolidated group Consolidated group Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 316,327 (460,896) (87,255) (158,640) 684,460 (902,749) (161,986) (295,285) 93,495 (123,637) (47,428) (96,434) 425,921 (902,749) (161,100) (168,241) (1,525,834) (1,851,833) (719,387) (1,004,583) (3,975) (4,671) (2,878) (3,513) (8,759,982) (11,503,828) (6,097,181) (3,487,273) – – – (6,386,286) (10,680,255) (14,035,892) (6,993,450) (11,687,824) 571,428 647,225 78,796 2,376,291 (10,108,827) (13,388,667) (6,914,654) (9,311,533) 4 5 5 5 6 (Loss) for the year (10,108,827) (13,388,667) (6,914,654) (9,311,533) Other comprehensive income Changes in the fair value of available for sale financial assets (net of tax) 21(a) Other comprehensive income for the year, net of tax - - - - (566,600) (566,600) (1,739,300) (1,739,300) Total comprehensive income for the year 21(a) (10,108,827) (13,388,667) (7,481,254) (11,050,833) (Loss) is attributable to: Total comprehensive income for the year is attributable to: Owners of Maximus Resources Limited (7,628,993) (7,949,558) (7,481,254) (11,050,833) Non controlling interest (2,479,834) (5,439,109) - (10,108,827) (13,388,667) (7,481,254) (11,050,833) Cents Cents Earnings per share for (loss) from continuing operations attributable to the ordinary equity holders of the parent entity: Basic earnings per share Diluted earnings per share 29 29 (4.17) (4.17) (7.94) (7.94) The above statement of comprehensive income should be read in conjunction with the accompanying notes. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 29 STATEMENT OF FINANCIAL POSITION As at 30 June 2010 ASSETS Current assets Cash and cash equivalents Trade and other receivables Inventories Other current assets Total current assets Non current assets Investments accounted for using the equity method Available for sale financial assets Property, plant and equipment Exploration and evaluation Mine properties Security deposit Total non current assets Total assets LIABILITIES Current liabilities Trade and other payables Provisions Total current liabilities Non current liabilities Provisions Total non current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Retained earnings Note Consolidated group Consolidated group Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 7 8 9 10 14 15 16(a) 16(b) 17 18 19 20 21 1,696,836 893,529 111,325 98,841 1,650,254 946,342 - 98,841 1,335,541 483,002 70,239 98,841 892,069 459,964 - 98,841 2,800,531 2,695,437 1,987,623 1,450,874 2 - 2 - 1,584,608 1,733,064 1 713,714 762,112 1 1,508,143 912,763 16,449,313 24,793,046 14,483,097 21,015,582 3,802,431 1,346,026 1,476,000 17,750 17,750 - - - 21,854,104 27,889,888 17,434,924 23,436,489 24,654,635 30,585,325 19,422,547 24,887,363 487,793 31,358 519,151 30,355 30,355 403,609 38,211 441,820 220,445 3,193 223,638 253,826 4,014 257,840 - - 2,282 2,282 - - 549,506 441,820 225,920 257,840 24,105,129 30,143,505 19,196,627 24,629,523 31,373,928 29,341,900 31,373,928 29,341,900 1,319,605 1,368,875 (426,420) 123,851 (17,449,350) (10,494,894) (11,750,881) (4,836,228) Capital and reserves attributable to owners of Maximus Resources Limited 15,244,183 20,215,881 19,196,627 24,629,523 Non controlling interests 8,860,946 9,927,624 - - Total equity 24,105,129 30,143,505 19,196,627 24,629,523 The above statement of financial position should be read in conjunction with the accompanying notes. 30 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2010 Note Issued capital Option reserve Available-for- sale reserves Retained earnings Non- controlling interest Total equity $ $ $ $ $ $ CONSOLIDATED Balance at 1 July 2008 27,046,405 1,208,755 - (2,545,826) 15,336,785 41,046,119 Total comprehensive income for the year Profit/ (loss) for the period Profit/ (loss) attributed to non controlling interest - - Transactions with owners in their capacity as owners: Contributions of equity 20 2,332,943 Options issued during the period Movements in non controlling interest Shares issued to non controlling interest Non controlling interest in option reserve - - - - Transaction costs (net of tax) (37,448) - - - 160,718 (598) - - - Subtotal 2,295,495 160,120 Balance at 30 June 2009 29,341,900 1,368,875 Balance at 1 July 2009 29,341,900 1,368,875 Total comprehensive income for the year Profit/ (loss) for the period Profit/(loss) attributed to non controlling interest Movement in non controlling interest - - - Transactions with owners in their capacity as owners: Contributions of equity Options issued during the period Movements in non controlling interest Transaction costs (net of tax) 20 20 31 2,061,800 - - (29,772) - - - - 16,329 (65,599) - Subtotal 2,032,028 (49,270) Balance at 30 June 2010 31,373,928 1,319,605 - - - - - - - - - - - - - - - - - - - - (7,949,560) - (7,949,560) - (5,439,108) (5,439,108) - - 492 - - - - - 2,332,943 160,718 106 7,373 22,468 - 7,373 22,468 - (37,448) 492 29,947 2,486,054 (10,494,894) 9,927,624 30,143,505 (10,494,894) 9,927,624 30,143,505 (7,628,993) - (7,628,993) - (2,479,834) (2,479,834) 674,537 (674,537) - - - - - - 2,053,199 4,114,999 - 16,329 65,599 (31,105) - (60,877) 2,087,693 4,070,451 (17,449,350) 8,860,946 24,105,129 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 31 STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2010 Note Issued capital Option reserve Available-for- sale reserves Retained earnings Non- controlling interest Total equity $ $ $ $ $ $ PARENT ENTITY Balance at 1 July 2008 27,046,405 1,154,890 (3,910,800) 4,475,306 - 28,765,801 Total comprehensive income for the year Profit/ (loss) for the period Revaluation of financial assets (net of tax) Restated total comprehensive income for the year - - - Transactions with owners in their capacity as owners: Contributions of equity 20 2,332,943 Impairment to statement of comprehensive income Options issued during the period 21 Transaction costs (net of tax) Subtotal - - (37,448) - - - - - 148,511 - - (9,311,533) (1,739,300) - (1,739,300) (9,311,533) - 4,470,550 - - - - - - - 2,295,495 148,511 4,470,550 Balance at 30 June 2009 29,341,900 1,303,401 (1,179,550) (4,836,227) Balance at 1 July 2009 29,341,900 1,303,401 (1,179,550) (4,836,227) Profit/ (loss) for the period Revaluation of financial assets (net of tax) Restated total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity Options issued during the period Transaction costs (net of tax) Subtotal 20 21 - - - 2,061,800 - - - - - 16,329 (29,772) - 2,032,028 16,329 - (6,914,654) (566,600) - (566,600) (6,914,654) - - - - - - - - Balance at 30 June 2010 31,373,928 1,319,730 (1,746,150) (11,750,881) The above statement of changes in equity should be read in conjunction with the accompanying notes. 32 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 - - - - - - - - - - - - - - - - - - (9,311,533) (1,739,300) (11,050,833) 2,332,943 4,470,550 148,511 (37,448) 6,914,556 24,629,524 24,629,524 (6,914,654) (566,600) (7,481,254) 2,061,800 16,329 (29,772) 2,048,357 19,196,627 STATEMENT OF CASH FLOWS For the year ended 30 June 2010 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Income tax received Note Consolidated group Consolidated group Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 220,716 339,783 28,259 339,783 (1,878,819) (3,499,703) (884,652) (2,383,178) 102,558 663,274 442,374 - 71,872 333,824 86,138 - Net cash (outflow) inflow from operating activities 28 (892,271) (2,717,546) (450,697) (1,957,257) CASH FLOWS FROM INVESTING ACTIVITIES Payment for purchase of subsidiary, net of cash acquired 31 - (2,645,328) - - Payments for property, plant and equipment Payments for development assets Proceeds from sale of property, plant and equipment Proceeds from sale of available for sale financial assets Proceeds from sale of tenements Repayment of loans by related parties Purchase of investments Payment of security bonds (276,102) (270,084) (81,370) (252,663) (1,104,363) 170,998 - - 75,000 - - - 101,509 973,326 200,000 275,000 - 76,132 - - - - (15,000) - 101,509 973,326 200,000 175,000 - (60,341) - (60,341) Payments for exploration and evaluation (1,956,416) (7,225,929) (1,104,863) (4,760,723) Net cash (outflow) inflow from investing activities (3,090,883) (8,651,847) (1,125,101) (3,623,892) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issues of shares and other equity securities 4,114,999 2,286,820 2,061,800 2,279,446 Payments of issue costs (85,263) - (42,531) - Net cash inflow (outflow) from financing activities 4,029,736 2,286,820 2,019,269 2,279,446 Net increase (decrease) in cash and cash equivalents 46,582 (9,082,573) Cash and cash equivalents at the beginning of the financial year 1,650,254 10,732,827 443,471 892,070 (3,301,703) 4,193,772 Cash and cash equivalents at end of year 7 1,696,836 1,650,254 1,335,541 892,069 The above statement of cash flows should be read in conjunction with the accompanying notes. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 33 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements include separate financial statements for Maximus Resources Limited as an individual entity and the consolidated entity consisting of Maximus Resources Limited and its subsidiaries. (a) Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. Compliance with IFRS The consolidated financial statements of the Maximus Resources Limited consolidated entity and the separate financial statements of Maximus Resources Limited also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). (b) Accounting standards not previously applied The Company has adopted the following new and revised Australian Accounting Standards issued by the AASB which are mandatory to apply to the current year. Disclosures required by these Standards that are deemed material have been included in these financial statements on the basis that they represent a significant change in information from that previously made available. Presentation of Financial Statements AASB 101 prescribes the contents and structure of the financial statements. Changes reflected in these financial statements include: y the replacement of Income Statement with Statement of Comprehensive Income. Items of income and expense not recognised in profit or loss are now disclosed as components of ‘other comprehensive income’. In this regard, such items are no longer reflected as equity movements in the Statement of Changes in Equity; y the adoption of the separate income statement/single statement approach to the presentation of the Statement of Comprehensive Income; y other financial statements are renamed in accordance with the Historical cost convention Standard; and These financial statements have been prepared on an accrual basis, under the historical cost convention, as modified by the revaluation of available for sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property. Critical accounting estimates 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. y presentation of a third Statement of Financial Position as at the beginning of a comparative financial year where relevant amounts have been affected by a retrospective change in accounting policy or material reclassification of items. Third statement of financial position Two comparative periods are presented for the statement of financial position when the Company: (i) Applies an accounting policy retrospectively, (ii) Makes a retrospective restatement of items in its financial statements, or (iii) Reclassifies items in the financial statements. We have determined that only one comparative period for the statement of financial position was required for the current reporting period as the application of the new accounting standards have had no material impact on the previously presented primary financial statements that were presented in the prior year financial statements. Operating Segments From 1 January 2009, operating segments are identified and segment information disclosed on the basis of internal reports that are regularly provided to, or reviewed by, the group’s chief operating decision maker which, for the Group, is the board of directors. In this regard, such information is provided using different measures to those used in preparing the Statement of Comprehensive Income and the Statement of Financial Position. Reconciliations of such management information to the statutory information contained in the financial reports have been included. 34 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 (c) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Maximus Resources Limited (‘’company’’ or ‘’parent entity’’) as at 30 June 2010 and the results of all subsidiaries for the year then ended. Maximus Resources Limited and its subsidiaries together are referred to in this financial report as the consolidated entity. Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the consolidated entity controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de consolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the consolidated entity (refer to note 1(z)). Intercompany transactions, balances and unrealised gains on transactions between consolidated entity companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. (d) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors. The chief operating decision maker has been identified as the Board of Directors. (e) Revenue recognition (i) Revenue from the sale of goods Revenue from sale of refined gold production and internet sales of gold nuggets. Recognition is at point of sale of the product, when the risks and rewards of ownership are transferred. (ii) Interest income Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. (f) Income tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset or deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply for the period when the asset is realised or the liability is settled, based on tax rates enacted or substantially enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. (g) Impairment of non financial assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 35 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 (h) Cash and cash equivalents Subsequent measurement For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. (i) Trade receivables Trade receivables are recognised initially at fair value and are generally due for settlement within 30 days. (j) Investments in associates Associates are all entities over which the consolidated entity has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. The consolidated entity’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition (refer to note 13). (k) Joint ventures The consolidated entity’s share of the assets, liabilities, revenue and expenses of joint venture operations are included in appropriate items of the consolidated financial statements. Details of the consolidated entity’s interests are shown at note 26. The consolidated entity’s interests in joint venture entities are brought to account using the equity method accounting in the consolidated financial statements. The parent entity’s interests in joint venture entities are brought to account using the cost method. (l) Investments and other financial assets Recognition and derecognition Regular purchases and sales of financial assets are recognised on trade date the date on which the consolidated entity commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When securities classified as available for sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss as gains and losses from investment securities. Loans and receivables and held to maturity investments are carried at amortised cost using the effective interest method. Available for sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in profit or loss within other income or other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss as part of revenue from continuing operations when the consolidated entity’s right to receive payments is established. Changes in the fair value of monetary securities denominated in a foreign currency and classified as available for sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income. Changes in the fair value of other monetary and non monetary securities classified as available for sale are recognised in other comprehensive income. Details on how the fair value of financial instruments is determined are disclosed in note 2. Fair value The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the consolidated entity establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity specific inputs. Impairment The consolidated entity assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available for sale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is reclassified from equity and recognised in the profit or loss as a reclassification adjustment. Impairment losses recognised in profit or loss on equity instruments classified as available for sale are not reversed through profit or loss. 36 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 (m) 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. 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 can be measure reliably. All other repairs and maintenance are charged to the income statement during the financial period in which 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 entity commencing from the time the asset is held ready for use. The depreciation rates used for plant & equipment are from 12.5 to 40%. 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 e stimated 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. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of financial performance. When revalued assets are sold, it is consolidated entity policy to transfer any amounts included in other reserves in respect of those assets to retained earnings. (n) Trade and other payables These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. (o) Employee benefits (i) Short term obligations Provision is made for the group’s liability for employee benefits arising from services rendered by employees to balance date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. 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 discounted using the government bond rate closest to expiry date. (ii) Other long term employee benefit obligations The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. (iii) Share based payments Share based compensation benefits are provided to employees via the Maximus Resources Limited Employee Option Plan and an employee share scheme. Information relating to these schemes is set out in note 30. 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. (p) Earnings per share (i) Basic earnings per share Basic earnings per share is calculated by dividing: • the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares • by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares (note 20. (ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: • • the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 37 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 (q) Exploration and evaluation expenditure (s) Mine properties Exploration and evaluation costs related to an area of interest are written off as incurred except they may be carried forward as an item in the statement of financial position where the rights of tenure of an area are current and one of the following conditions is met: Mine properties represent the accumulation of all exploration, evaluation and development expenditure incurred by or on behalf of the consolidated entity in relation to areas of interest in which mining of a mineral resource has commenced. When further development expenditure is incurred in respect of a mine property after the commencement of production, such expenditure is carried forward as part of the mine property only when it is probable that the additional future economic benefits associated with the expenditure will flow to the consolidated entity. Otherwise such expenditure is classified as part of the cost of production. Mine properties are tested for impairment in accordance with the policy in note 1(g). (t) Decommissioning and site rehabilitation An obligation to incur decommissioning and site rehabilitation costs occurs when environmental disturbance is caused by the exploration, development or ongoing production. Costs are estimated on the basis of a formal closure plan and are subject to regular review. The costs for restoration of site damage, which is created on an ongoing basis during production, are provided at their net present values and charged against operating profits as extraction progresses. Changes in the measurement of a liability relating to site damage created during production is charged against operating profit. (u) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. (v) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. y the costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and y exploration and/or evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Capitalised costs include costs directly related to exploration and evaluation activities in the relevant area of interest. General and administrative costs are allocated to an exploration or evaluation asset only to the extent that those costs can be related directly to operational activities in the area of interest to which the asset relates. Capitalised exploration and evaluation expenditure is written off where the above conditions are no longer satisfied. Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the requirements of AASB 3 Business Combinations. Exploration and evaluation expenditure incurred subsequent to the acquisition in respect of an exploration asset acquired is accounted for in accordance with the policy outlined above. All capitalised exploration and evaluation expenditure is assessed for impairment if facts and circumstances indicate that an impairment may exist. Exploration and evaluation assets are also tested for impairment once commercial reserves are found, before the assets are transferred to development properties. (r) Development properties Development expenditure incurred by or on behalf of the consolidated entity is accumulated separately for each area of interest in which economically recoverable reserves have been identified to the satisfaction of the directors. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure having a specific nexus with the development property. Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the area of interest is aggregated with the cost of development and classified under non current assets as ‘’development properties’’. A development property is reclassified as ‘’mine property’’ at the end of the commissioning phase, when the production reaches a previously determined capacity. No amortisation is provided in respect of development properties until they are reclassified as ‘’mine properties’’. Development properties are tested for impairment in accordance with the policy in note 1(g). 38 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 (w) Inventories Raw materials, stores and finished goods Refined gold production and gold nuggets on hand at year end, are stated at the lower of cost and net realisable value. Cost of goods sold comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. (x) Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. (y) Key estimates Impairment The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value in use calculations performed in assessing recoverable amounts incorporate a number of key estimates. Exploration and Evaluation The consolidated entity’s policy for exploration and evaluation is discussed in Note 1(q). 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 statement of comprehensive income. (z) Business combinations Business combinations occur where control over another business is obtained and results in the consolidation of its assets and liabilities. All business combinations, including those involving entities under common control, are accounted for by applying the purchase method. The purchase method requires an acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent liabilities to be determined as at acquisition date, being the date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and liabilities assumed in exchange for control together with costs directly attributable to the business combination. Any deferred consideration payable is discounted to present value using the entity’s incremental borrowing rate. Goodwill is recognised initially at the excess of cost over the acquirer’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities recognised. If the fair value of the acquirer’s interest is greater than cost, the surplus is immediately recognised in profit or loss. (aa) New accounting standards and interpretations The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Company has decided against early adoption of these standards. A discussion of those future requirements and their impact on the consolidated entity follows: The Company does not anticipate the early adoption of any of the below Australian Accounting Standards. AASB 9: Financial Instruments and AASB 2009–11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] (applicable for annual reporting periods commencing on or after 1 January 2013). These standards are applicable retrospectively and amend the classification and measurement of financial assets. The Company has not yet determined the potential impact on the financial statements. The changes made to accounting requirements include: y simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value; y simplifying the requirements for embedded derivatives; y y removing the tainting rules associated with held to maturity assets; removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost; y allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument; and y reclassifying financial assets where there is a change in an entity’s business model as they are initially classified based on: (a) the objective of the entity’s business model for managing the financial assets; (b) the characteristics of the contractual cash flows. AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011). This standard removes the requirement for government related entities to disclose details of all transactions with the government and other government related entities and clarifies the definition of a related party to remove inconsistencies and simplify the structure of the standard. No changes are expected to materially affect the consolidated entity. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 39 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 AASB 2009–4: Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 2 and AASB 138 and AASB Interpretations 9 & 16] (applicable for annual reporting periods commencing from 1 July 2009) and AASB 2009 5: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139] (applicable for annual reporting periods commencing from 1 January 2010). These standards detail numerous non urgent but necessary changes to accounting standards arising from the IASB’s annual improvements project. No changes are expected to materially affect the consolidated entity. AASB 2009–8: Amendments to Australian Accounting Standards — Group Cash settled Share based Payment Transactions [AASB 2] (applicable for annual reporting periods commencing on or after 1 January 2010). These amendments clarify the accounting for group cash settled share based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the share based payment transaction. The amendments incorporate the requirements previously included in Interpretation 8 and Interpretation 11 and as a consequence, these two Interpretations are superseded by the amendments. These amendments are not expected to impact the consolidated entity. AASB 2009–9: Amendments to Australian Accounting Standards — Additional Exemptions for First time Adopters [AASB 1] (applicable for annual reporting periods commencing on or after 1 January 2010). These amendments specify requirements for entities using the full cost method in place of the retrospective application of Australian Accounting Standards for oil and gas assets, and exempt entities with existing leasing contracts from reassessing the classification of those contracts in accordance with Interpretation 4 when the application of their previous accounting policies would have given the same outcome. These amendments are not expected to impact the consolidated entity. AASB 2009–10: Amendments to Australian Accounting Standards — Classification of Rights Issues [AASB 132] (applicable for annual reporting periods commencing on or after 1 February 2010). These amendments clarify that rights, options or warrants to acquire a fixed number of an entity’s own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all existing owners of the same class of its own non derivative equity instruments. These amendments are not expected to impact the consolidated entity. AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011). This standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of International Financial Reporting Standards by the IASB. The standard also amends AASB 8 to require entities to exercise judgment in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. These amendments are not expected to impact the consolidated entity. AASB 2009–13: Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB 1] (applicable for annual reporting periods commencing on or after 1 July 2010). This standard makes amendments to AASB 1 arising from the issue of Interpretation 19. The amendments allow a first time adopter to apply the transitional provisions in Interpretation 19. This standard is not expected to impact the consolidated entity. AASB 2009–14: Amendments to Australian Interpretation — Prepayments of a Minimum Funding Requirement [AASB Interpretation 14] (applicable for annual reporting periods commencing on or after 1 January 2011). This standard amends Interpretation 14 to address unintended consequences that can arise from the previous accounting requirements when an entity prepays future contributions into a defined benefit pension plan. These amendments are not expected to impact the consolidated entity. AASB Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments (applicable for annual reporting periods commencing on or after 1 July 2010). This Interpretation deals with how a debtor would account for the extinguishment of a liability through the issue of equity instruments. The Interpretation states that the issue of equity should be treated as the consideration paid to extinguish the liability, and the equity instruments issued should be recognised at their fair value unless fair value cannot be measured reliably in which case they shall be measured at the fair value of the liability extinguished. The Interpretation deals with situations where either partial or full settlement of the liability has occurred. This Interpretation is not expected to impact the consolidated entity. 40 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 2 FINANCIAL RISK MANAGEMENT The consolidated entity’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The consolidated entity’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. Risk management is carried out by a central treasury department (group treasury) under policies approved by the board of directors. Group treasury identifies, evaluates and hedges financial risks in close co operation with the consolidated entity’s operating units. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non derivative financial instruments, and investment of excess liquidity. The consolidated entity and the parent entity hold the following financial instruments: Consolidated group Consolidated group Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 1,696,835 893,529 1,650,254 946,342 1,335,541 483,002 892,069 459,964 2 - - 2 - - 2,590,366 2,596,598 1 - 1 - 713,714 2,532,258 1,508,143 2,860,177 487,792 487,792 403,609 403,609 220,445 220,445 253,826 253,826 FINANCIAL ASSETS Cash and cash equivalents Trade and other receivables Investments accounted for using the equity method Derivative financial instruments Available for sale financial assets FINANCIAL LIABILITIES Trade and other payable (a) Market risk (i) Foreign exchange risk The consolidated entity is not exposed to foreign exchange risk. (ii) Price risk The consolidated entity is not exposed to any material price risk. (iii) Cash flow and fair value interest rate risk Interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted interest rates on classes of financial assets and financial liabilities. Interest rate risk is managed by the Company with the use of rolling short term deposits. The consolidated entity has no long term financial liabilities upon which it pays interest. Parent entity 30 June 2010 30 June 2010 30 June 2009 30 June 2009 Cash and cash equivalents Net exposure to cash flow interest rate risk Weighted average interest rate Balance Weighted average interest rate % 5.5% $ 1,335,541 1,335,541 % 3.1% Balance $ 892,069 892,069 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 41 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 (iv) Interest rate sensitivity analysis At 30 June 2010, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows: Interest rate risk Interest rate risk Interest rate risk Interest rate risk Increase 2% Increase 2% Decrease 2% Decrease 2% Carrying amount $ 1,696,835 Profit $ 33,937 33,937 Equity $ Profit $ Equity $ 33,937 33,937 (33,937) (33,937) (33,937) (33,937) 1,650,254 33,005 33,005 33,005 33,005 (33,005) (33,005) (33,005) (33,005) 30 June 2010 FINANCIAL ASSETS Cash and cash equivalents Total increase/ (decrease) 30 June 2009 FINANCIAL ASSETS Cash and cash equivalents Total increase/ (decrease) (b) Credit risk Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. Sales to retail customers are required to be settled in cash or using major credit cards, mitigating credit risk. (c) Liquidity risk Liquidity risk is the risk that the Company may encounter difficulty in settling it’s debts or otherwise meeting it’s obligations. The consolidated entity manages liquidity risk by monitoring cash flows and ensuring that adequate funds are available to meet cash demands. At the reporting date the consolidated entity held deposits at call of $1,000,000 (2009: $2,612,000) that are expected to readily generate cash inflows for managing liquidity risk. 42 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 (d) Fair value measurements The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. As of 1 July 2009, Maximus Resources Limited has adopted the amendment to AASB 7 Financial Instruments: Disclosures which requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) (b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2),and (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3) The following table presents the parent entity’s assets and liabilities measured and recognised at fair value at 30 June 2010. Level 1 $ 713,714 1 713,715 1,508,143 1 1,508,144 Level 2 Level 3 $ - - - - - - $ - - - - - - Total $ 713,714 1 713,715 1,508,143 1 1,508,144 Assets PARENT ENTITY – as at 30 June 2010 Available for sale financial assets ERO Mining Limited FME Exploration Services Pty Ltd PARENT ENTITY – as at 30 June 2009 Available for sale financial assets ERO Mining Limited FME Exploration Services Pty Ltd 3 SEGMENT INFORMATION (a) Description of segments Identification of reportable segments Maximus Resources Limited has identified it’s operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. Maximus Resources Limited is managed primarily on the basis of geographical area of interest, since the diversification of Maximus Resources Limited operations’ inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following: y external regulatory requirements y geographical and geological styles. Mining The Sellheim segment will mine for alluvial gold. Further listed segmented assets for Maximus Resources Limited including development costs and costs associated with the mining lease are reported on in this segment. Accounting policies developed Unless stated otherwise, all amounts reported to the Board of Directors as chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of Maximus Resources Limited. Comparative Information This is the first reporting period in which AASB 8: Operating segments has been adopted. Comparative information has been stated to conform to the requirements of the standard. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 43 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 Total segment liabilities - - - - 2010 Segment revenue Adjusted EBITDA Cost of goods sold Impairement Segment assets Inter segment elimination Total Segment asset movements for the period Capital expenditure Amortisation Impairment Total movement Total segment assets Unallocated assets Total assets Unallocated liabilities Total liabilities 2009 Segment revenue Adjusted EBITDA Cost of goods sold Impairment Segment assets Inter segment elimination Total Segment asset movements for the period Capital expenditure Acquisitions Impairment Total movement Total segment assets Unallocated assets Total assets Sellheim Adelaide Hills Province Narndee Other ERO Mining Total $ 28,259 (1,206,295) (460,896) (585,533) $ - - - - $ - $ - $ $ 192,457 220,716 (5,242,092) (99,792) (2,377,537) (8,737,591) - - - (460,896) (5,242,092) (99,792) (2,569,994) (8,497,411) 1,866,364 6,931,179 5,235,742 1,996,051 12,675,428 28,704,764 - - - - (8,341,695) (8,341,695) 1,866,364 6,931,179 5,235,742 1,996,051 4,333,733 20,363,069 545,658 (188,125) (585,533) (228,000) 90,558 227,169 71,549 1,863,274 2,798,208 - - - - - (188,125) (5,242,092) (99,792) (2,569,994) (8,497,411) 90,558 (5,014,923) (28,243) (706,717) (5,887,325 Sellheim Adelaide Hills Province Narndee Other ERO Mining Total $ 339,783 (3,020,123) (902,749) (2,457,157) $ - - - - $ - - - - $ - - - - $ - $ 339,783 (7,589,893) (10,610,016) (902,749) (7,589,893) (10,047,050) 1,900,000 6,840,621 10,250,665 2,024,297 13,465,184 34,480,767 - - - - (8,341,695) (8,341,695) 1,900,000 6,840,621 10,250,665 2,024,297 5,123,489 26,139,072 1,418,235 961,832 901,616 133,728 2,037,659 5,453,070 - (2,457,157) - - - - - - 2,157,976 2,157,976 (7,589,893) (10,047,050) (1,038,922) 961,832 901,616 133,728 (3,394,258) (2,436,004) 20,363,069 4,291,565 24,654,634 - 549,505 549,505 26,139,072 4,446,253 30,585,325 - 441,820 441,820 Total segment liabilities - - - - - Unallocated liabilities Total liabilities 44 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 (i) Segment revenue Segment revenue reconciles to total revenue from continuing operations as follows: Total segment revenue Gold sales Interest revenue Total revenue from continuing operations (note 4) (ii) Adjusted EBITDA Consolidated Consolidated 30 June 2010 30 June 2009 $ $ 220,716 95,611 316,327 339,783 344,677 684,460 A reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows: Adjusted EBITDA Allocated adjusted EBITDA Unallocated: Interest revenue Other expenses Marketing expenses Administrative expenses Finance costs Exploration expenditure written off Consolidated Consolidated 30 June 2010 30 June 2009 $ $ (8,737,591) (10,610,016) 95,611 (87,255) (158,640) 344,677 (161,986) (295,285) (1,525,834) (1,851,833) (3,975) (262,571) (4,671) (1,456,778) Profit before income tax from continuing operations (10,680,255) (14,035,892) (iii) Segment assets Reportable segments’ assets are reconciled to total assets as follows: Segment assets Allocated segment assets Unallocated: Cash and cash equivalents Trade and other receivables Other assets Investments accounted for using the equity method Property, plant and equipment Security deposit Consolidated Consolidated 30 June 2010 30 June 2009 $ $ 20,363,069 26,139,072 1,696,835 1,650,254 893,529 98,841 2 1,584,608 17,750 946,342 98,841 2 1,733,064 17,750 Total assets as per the statement of financial position 24,654,634 30,585,325 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 45 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 (iv) Segment liabilities Reportable segments’ liabilities are reconciled to total liabilities as follows: Consolidated Consolidated 30 June 2010 30 June 2009 $ - $ - 487,792 61,713 403,609 38,211 549,505 441,820 Segment liabilities Allocated segment liabilities Unallocated: Trade and other payables Provisions Total liabilities as per the statement of financial position 4 REVENUE From continuing operations Gold sales Interest received 5 EXPENSES Marketing Marketing and promotion Administration Compliance Depreciation Administration costs Employment costs Legal fees Other Exploration expenses General exploration expenditure written off Loss on disposal of tenement expenditure Capitalised exploration expenditure impaired Total Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 220,716 95,611 316,327 339,783 344,677 684,460 28,259 65,236 93,495 339,783 86,138 425,921 Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 158,640 158,640 290,851 86,122 310,800 684,820 18,687 134,554 295,285 295,285 364,831 35,798 505,902 403,015 53,445 488,842 1,525,834 1,851,833 262,571 - 8,497,411 8,759,982 669,683 787,095 10,047,050 11,503,828 96,434 96,434 150,802 8,346 111,000 260,850 7,377 181,012 719,387 169,764 - 5,927,417 6,097,181 168,241 168,241 237,577 33,497 270,208 230,420 51,775 181,106 1,004,583 243,021 787,095 2,457,157 3,487,273 46 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 6 INCOME TAX EXPENSE (a) Income tax expense Current tax Deferred tax Research and development tax offset Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ - 26,091 (597,519) (571,428) $ - 16,050 (663,275) (647,225) $ - 255,587 (334,383) (78,796) $ 16,050 (2,058,517) (333,824) (2,376,291) (b) Numerical reconciliation of income tax expense to prima facie tax payable Profit from continuing operations before income tax expense (10,680,255) (14,035,892) (6,993,450) (11,687,824) Prima facie tax payable on profit from ordinary activities before income tax at 30% (2009: 30%) consolidated entity parent entity Add: Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Non allowable items Share options expensed during year Share placement issue costs (3,204,077) (4,210,768) - - - - (2,098,035) (3,506,347) 4,899 - 29,772 2,053 30,356 16,050 4,899 - 12,759 2,053 19,954 16,050 Temporary differences not brought to account 3,195,497 4,178,359 2,335,964 1,568,453 Income tax attributable to entity 26,091 16,050 255,587 (1,899,837) Less: Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Recognition of timing differences not previously brought to account Research and development tax offset Income tax attributable to the entity - (597,519) (571,428) - (663,275) (647,225) - (334,383) (78,796) (142,630) (333,824) (2,376,291) Total income tax expense (571,428) (647,225) (78,796) (2,376,291) Deferred tax assets on the timing differences have not been recognised as they do not meet the recognition criteria as outlined in Note 1(f) in the financial statements. Deferred Tax Asset (DTA) arising from tax losses of a controlled entity is not recognised at reporting date as realisation of the benefit is not regarded as probable: y timing differences at 30% y tax losses at 30%. The conbsolidated entity has deferred tax assets arising in Australia of $6,827,980 (2009: $7,673,809) that are available indefinitely for offset against future taxable profits of the companies in which the losses arise. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 47 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 7 CURRENT ASSETS – CASH AND CASH EQUIVALENTS Cash at bank and in hand Term deposits Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 596,836 1,100,000 1,696,836 $ 1,400,254 250,000 1,650,254 $ 235,541 1,100,000 1,335,541 $ 842,069 50,000 892,069 (a) Reconciliation to cash at the end of the year The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows: Balance as per statement of cash flows (b) Risk exposure Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 1,696,836 1,696,836 $ 1,650,254 1,650,254 $ 1,335,541 1,335,541 $ 892,069 892,069 The consolidated entity’s exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above. (c) Deposits at call The deposits are bearing an interest rate of 5.46% (2009: 3.1%). This deposit has a period to repricing of 16 days. 8 CURRENT ASSETS – TRADE AND OTHER RECEIVABLES Net trade receivables Trade receivables GST paid on purchases Net receivable from associated company Receivable from FME Exploration Services Pty Ltd* Prepayments Pre paid insurance Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 701,929 (2,629) 699,300 150,000 150,000 44,229 44,229 893,529 721,342 - 721,342 225,000 225,000 - - 946,342 380,605 3,065 383,670 75,000 75,000 24,332 24,332 483,002 384,964 - 384,964 75,000 75,000 - - 459,964 * The entity advanced this amount to assist in the funding of working capital. The entity provides support to the associated company to ensure it can pay its debts as and when they fall due and payable. (a) Past due but not impaired As at 30 June 2010, there are no material trade and other receivables that are considered to be past due and impaired. (b) Associated company receivable This receivable from the associated company is repayable at call and interest at market rates can be charged at the discretion of the Directors of Maximus. 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. 48 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 9 CURRENT ASSETS – INVENTORIES Finished goods at net realisable value Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 111,325 111,325 $ - - $ 70,239 70,239 $ - - 10 NON CURRENT ASSETS – INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 2 2 $ 2 2 $ 1 1 $ 1 1 Shares in associates (note 13) (a) Shares in associates Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are carried at cost by the parent entity. 11 CONTINGENCIES Contingent liabilities The consolidated entity had no known contingent liabilities as at 30 June 2010 (2009: nil). 12 COMMITMENTS Commitments for exploration and joint venture expenditure In order to maintain current rights of tenure to exploration tenements Maximus Resources Limited will be required to outlay in the year ending 30 June 2011 amounts of approximately $2,882,000 (2010: $2,478,000) in respect of tenement lease rentals and to meet minimum expenditure requirements pursuant to various joint venture requirements. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 49 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 13 INVESTMENTS IN ASSOCIATES Interest are held in the following associated company: FME Exploration Services Pty Ltd Current assets Share Non current assets Total assets Current liabilities Total liabilities Net assets Shares of associate’s profit after tax (a) Contingent liabilities of associates Share of contingent liabilities incurred jointly with other investors Parent entity Parent entity 30 June 2010 30 June 2009 $ 512,545 341,159 853,704 853,701 853,701 3 - $ 386,586 428,969 815,555 815,552 815,552 3 - 85,028 85,028 83,334 83,334 14 NON CURRENT ASSETS – AVAILABLE FOR SALE FINANCIAL ASSETS (a) Fair values Available for sale financial assets include the following classes of financial assets: Investments (b) Listed securities Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ - - $ - - $ 713,714 713,714 $ 1,508,143 1,508,143 Maximus Resources Limited holds 44,607,143 (2009: 44,357,143) shares in ERO Mining Limited. These are held as available for sale and the value marked to market at financial year end. 50 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 15 NON CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT Consolidated Year ended 30 June 2009 Opening net book amount Acquisition through business combination Additions Disposals Depreciation charge Closing net book amount At 30 June 2009 Cost or fair value Accumulated depreciation Net book amount Year ended 30 June 2010 Opening net book amount Additions Disposals Depreciation charge Closing net book amount At 30 June 2010 Cost or fair value Accumulated depreciation Net book amount Plant and equipment Furniture, fittings and equipment Machinery and vehicles Computer equipment and software Total $ $ $ $ $ 741,780 363,574 237,973 (3,942) (126,201) 1,213,184 1,397,411 (184,227) 1,213,184 1,213,184 130,357 (138,127) (135,252) 1,070,162 1,389,641 (319,479) 1,070,162 18,820 - 7,423 (2,231) (3,235) 20,777 25,699 (4,922) 20,777 20,777 927 (4,908) (1,938) 14,858 21,718 (6,860) 14,858 537,706 102,136 (131,251) (51,457) 457,634 592,180 (134,546) 457,634 457,634 170,700 (31,891) 490,985 657,422 (166,437) 490,985 48,410 1,346,716 500 25,620 - (32,561) 41,469 465,710 271,516 (137,424) (213,454) 1,733,064 - - 100,733 (59,264) 2,116,023 (382,959) 41,469 1,733,064 41,469 1,733,064 301,984 (273,497) (176,943) 1,584,608 (7,862) 8,603 75,728 (67,125) 2,144,509 (559,901) 8,603 1,584,608 (105,458) (25,004) MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 51 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 Parent entity Year ended 30 June 2009 Opening net book amount Additions Disposals Depreciation charge Closing net book amount At 30 June 2009 Cost or fair value Accumulated depreciation Net book amount Year ended 30 June 2010 Opening net book amount Additions Disposals Depreciation charge Closing net book amount At 30 June 2010 Cost or fair value Accumulated depreciation Net book amount Plant and equipment Furniture, fittings and equipment Machinery and vehicles Computer equipment and software Total $ $ $ $ $ 603,589 220,643 (2,510) (105,209) 716,513 856,413 (139,900) 716,513 716,513 81,369 (47,761) (100,114) 650,007 890,022 (240,015) 650,007 16,467 7,423 (2,231) (2,912) 18,747 23,119 (4,372) 18,747 284,055 500 (131,251) (13,992) 139,312 190,335 (51,023) 139,312 44,679 24,096 - (30,584) 38,191 92,911 (54,720) 38,191 18,747 139,312 38,191 - (4,927) (1,473) 12,347 18,191 (5,844) 12,347 - - (45,867) (25,004) (623) 92,822 144,468 (51,646) 92,822 (6,251) 6,936 67,907 (60,971) 6,936 948,790 252,662 (135,992) (152,697) 912,763 1,162,778 (250,015) 912,763 912,763 81,369 (123,559) (108,461) 762,112 1,120,588 (358,476) 762,112 52 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 16 NON CURRENT ASSETS – EXPLORATION AND EVALUATION, DEVELOPMENT AND MINE PROPERTIES (a) Exploration and evaluation Opening balance Expenditure incurred Disposals of exploration assets Transfer to mine properties Additions through business combination Impairment Exploration and evaluation: 100% owned Exploration and evaluation phases: joint ventures (b) Mine properties Opening balance Additions through normal acquisition Transferred from exploration and evaluation Additions through business combination Less: Accumulated amortisation Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 24,793,046 1,693,678 - (1,540,000) 29,477,822 6,637,419 (2,087,095) 21,015,582 934,932 - - (1,540,000) - 811,950 (8,497,411) (10,047,050) 16,449,313 24,793,046 - (5,927,417) 14,483,097 20,960,076 4,599,758 (2,087,095) - - (2,457,157) 21,015,582 8,968,393 7,480,920 16,449,313 13,517,511 11,275,535 24,793,046 6,047,507 8,435,590 12,705,561 8,310,021 14,483,097 21,015,582 1,346,026 1,104,530 1,540,000 - 3,990,556 (188,125) (188,125) - - - 1,346,026 1,346,026 - - - - 1,540,000 - 1,540,000 (64,000) (64,000) - - - - - - - - Total mine properties 3,802,431 1,346,026 1,476,000 17 CURRENT LIABILITIES – TRADE AND OTHER PAYABLES Trade payables Accrued expenses Credit cards GST collected on sales Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 272,230 170,810 27,804 16,949 487,793 $ 158,904 222,818 21,887 - 403,609 $ 159,401 50,938 10,095 11 220,445 $ 73,332 174,125 6,369 - 253,826 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 53 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 18 CURRENT LIABILITIES – PROVISIONS Annual leave 19 NON CURRENT LIABILITIES – PROVISIONS Long service leave 20 CONTRIBUTED EQUITY (a) Share capital Ordinary shares Fully paid (b) Movements in ordinary share capital: Date Details 1 July 2008 Opening balance Shares issued during the year Less: Transaction costs arising on share issue 30 June 2009 Balance 1 July 2009 Opening balance 30 September 2009 Share purchase plan Proceeds received 30 September 2009 Share placement Proceeds received Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 31,358 31,358 $ 38,211 38,211 $ 3,193 3,193 $ 4,014 4,014 Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 30,355 30,355 $ - - $ 2,282 2,282 $ - - Parent entity Parent entity Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 Shares Shares $ $ 261,245,035 184,882,136 31,373,928 29,341,900 Number of shares Issue price $ 143,840,792 41,041,344 184,882,136 184,882,136 62,955,493 13,407,406 27,046,406 2,332,943 (37,449) 29,341,900 29,341,900 $0.027 1,699,800 $0.027 362,000 31,403,700 (42,531) 12,759 31,373,928 Less: Transaction costs arising on share issue Deferred tax credit recognised directly in equity 30 June 2010 Balance 261,245,035 (c) Ordinary shares 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. 54 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 (d) Options For information relating to the Maximus Resources Limited Employee Share Option Plan including details of options issued and exercised during the financial year and the options outstanding at year end refer to note 30. (e) Capital risk management The group has no debt capital. There are no externally imposed capital requirements. The consolidated entity’s debt and capital includes ordinary share capital, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the consolidated entity’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the group since the prior year. This strategy is to ensure that the group has no debt. 21 RESERVES Reserves Available for sale investments revaluation reserve Options (a) Nature and purpose of reserves i. Available for sale reserve Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ - $ - 1,319,605 1,319,605 1,368,875 1,368,875 $ $ (1,746,151) (1,179,550) 1,319,731 (426,420) 1,303,401 123,851 Changes in the fair value and exchange differences arising on translation of investments, such as equities, classified as available for sale financial assets, are recognised in the statement of comprehensive income, as described in note 1(l) and accumulated in a separate reserve within equity. Amounts are reclassified to profit or loss when the associated assets are sold or impaired. ii. Options 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. 22 KEY MANAGEMENT PERSONNEL DISCLOSURES (a) Directors The following persons were directors of Maximus Resources Limited during the 2010 financial year: (i). Chairman – non executive R M Kennedy (ii) Executive directors S A Booth (resigned 31 August 2010) (iii) Non executive directors E J Vickery L C McClusky (since 1 September 2010) N J Smart, Alternate for E J Vickery K J A Wills (ceased 30 September 2010) R C Healy (Alternate for K J A Wills, ceased 30 September 2010) MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 55 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 (b) Other key management personnel The following persons also had authority and responsibility for planning, directing and controlling the activities of the consolidated entity, directly or indirectly, during the financial year: D W Godfrey, Chief Financial Officer/ Company Secretary, FME Exploration Services Pty Ltd Short term employee benefits Post employment benefits Share based payments Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ 801,826 68,114 16,330 886,270 $ 818,753 55,916 1,769 876,438 $ 570,557 50,882 16,330 637,769 $ 384,175 21,394 1,769 407,338 Details of the remuneration of each director of Maximus Resources Limited and the specified executives of the consolidated entity, are included in sections A to D of the Remuneration Report. (c) Equity instrument disclosures relating to key management personnel (i) Option holdings The numbers of options over ordinary shares in the company held during the financial year by each director of Maximus Resources Limited and other key management personnel of the consolidated entity, including their personally related parties, are set out below. Balance at start of the year Issued as remuneration Exercised (expired/ purchased) Acquired during the year Balance at end of the year Vested and exercisable Unvested Name 2010 Options R M Kennedy E J Vickery L C McClusky K J Lines N J Smart S A Booth K J A Wills R C Healy - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3,000,000 3,000,000 3,000,000 - - - - - - - 53,334 53,334 D W Godfrey 53,334 All vested options are exercisable at the end of the year. 2009 Options R M Kennedy K J A Wills E J Vickery G E Maddocks D W Godfrey K J Lines R W C Wilson R C Healy N J Smart 690,001 650,001 79,934 510,001 - - 186,400 - - - - - - 53,334 - - - - (3,901,251) 3,211,250 (1,462,502) (477,163) (1,147,501) - - (16,400) - - 812,501 397,229 637,500 - - - - - - - - - - - - - 53,334 53,334 - - 170,000 170,000 - - - - 56 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 - - - - - - - - - - - - - - - - - - (ii) Share holdings The numbers of shares in the company held during the financial year by each director of Maximus Resources Limited and other key management personnel of the consolidated entity, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation. Name 2010 Ordinary shares R M Kennedy E J Vickery L C McClusky K J Lines N J Smart S A Booth K J A Wills R C Healy D W Godfrey 2009 Ordinary shares R M Kennedy K J A Wills E J Vickery G E Maddocks S A Booth D W Godfrey K J Lines R C Healy N J Smart R W C Wilson Balance at the start of the year Received as compensation Exercise of options Acquired/ (disposed) Balance at the end of the year 6,920,000 794,458 - - - - 3,678,278 - - 4,945,000 3,250,001 529,639 2,550,001 - - - - - 82,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3,080,000 - - - - - - - - 1,975,000 428,277 264,819 - - - - - - - 10,000,000 794,458 - - - - 3,678,278 - - 6,920,000 3,678,278 794,458 2,550,001 - - - - - 82,000 23 REMUNERATION OF AUDITORS During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non related audit firms: Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ 54,563 54,563 47,750 47,750 26,313 26,313 26,750 26,750 (a) Grant Thornton Audit and review of financial reports Total auditors’ remuneration 24 RELATED PARTY TRANSACTIONS 2010 Transactions with related parties The following transactions occurred with related parties: y Administrative services were provided by FME Exploration Services Pty Ltd to Maximus Resources Limited for $111,000 (2009: $270,208). y The total receivable from FME Exploration Services Pty Ltd at year end is $75,000 (2009: $75,000). y Maximus Resources Limited sold two vehicles to Flinders Mines Limited for $98,207. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 57 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 25 SUBSIDIARIES The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance with the accounting policy described in note 1(c): Name of entity Country of incorporation Class of shares Equity holding* Equity holding* ERO Mining Limited Australia Ordinary 2010 % 27.85 2009 % 35.29 * Maximus Resources Limited holds 27.85% of the Issued Capital of ERO Mining Limited. A slight dilution occurred during the year due to an issue of shares in ERO Mining Limited. Additionally, two of the Directors of Maximus Resources Limited are also Directors of ERO Mining Limited (a Board currently consisting of three Directors). As a result, ERO Mining Limited has been consolidated with Maximus Resources Limited for the purposes of these financial statements. 26 INTERESTS IN JOINT VENTURES Maximus Resources Limited has the following interests in unincorporated joint ventures: State WA SA & NT SA SA WA QLD Agreement name Parties Summary Nemex Agreement Maximus Resources Ltd (MXR) and Nemex Pty Ltd MXR purchased a 90% interest in the Nemex Ironstone Lagoon project tenements. Production royalties payable to third parties Eromanga Basin Joint Venture ERO Mining Ltd (ERO) and Maximus Resources Ltd ERO can earn a 50% interest in the non diamond mineral rights of MXR’s Billa Kalina project tenements by spending $3million on the tenements within 6 years Billa Kalina Joint Venture ERO Mining Ltd and Maximus Resources Ltd ERO can earn a 50% interest in the non diamond mineral rights of MXR’s Billa Kalina project tenements by spending $3m on the tenements within 6 years Kapunda Joint Venture Flinders Diamonds Limited, Maximus Resources Ltd and Copper Range (SA) Pty Ltd Copper Range can earn a 51% interest in MXR’s rights to base and precious metals in EL4131 by spending $500,000 over 5 years with an option to earn a 75% interest by further expenditure of $500,000 Canegrass Sellheim NT Strangway Agreement WA Narndee – Corporate Group Agreement A net smelter royalty will be payable to MXR on all product sold MXR has purchased the tenements but production royalties are still payable to Stiff, Budge and Harvey NuPower has expended the required $200,000 in the first 12 months. NuPower may now earn 51% interest in Energy Minerals by expenditure of $3 million from commencement over 4 years and 70% by expenditure of a further $2 million over 2 years MXR has purchased a 90% interest in an exploration licence package in the Narndee Windimurra region Maximus Resources Ltd and Flinders Mines Ltd Maximus Resources and Alan Stiff and Colleen Budge and Peter L Harvey Maximus Resources Ltd and NuPower Resources Ltd Maximus Resources Ltd and Corporate Resource Consultants Pty Ltd and Bruce Robert Legendre and TE Johnston and Associates Pty Ltd 27 EVENTS OCCURRING AFTER THE REPORTING PERIOD Mr Simon Andrew Booth resigned from Maximus Resources Limited with effect from 31 August 2010, having been Managing Director since 13 July 2009. Ms Leigh Carol McClusky was appointed as a non executive Director effective from 1 September 2010. Apart from the above, no further events have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years. 58 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 28 RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES Profit/ (loss) for the year (10,108,827) (13,388,667) (6,914,654) (9,311,533) Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ $ $ $ Non cash flows in profit Depreciation Amortisation Issue of options to employees General exploration expenditure written off Exploration and evaluation expenditure written off Impairment of financial assets – gross Impairment of financial assets – tax effect 176,943 188,125 16,329 - - - - 213,455 - 101,187 669,683 - - - 108,461 64,167 16,329 - - - - Impairment of capitalised exploration expenditure 8,759,982 10,047,050 6,097,181 Loss on disposal of tenements Loss on disposal of assets Tax effect on transaction costs Tax effect on investments Change in operating assets and liabilities Decrease (Increase) in inventories (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Increase (decrease) in deferred tax liabilities Increase/ (decrease) in provisions Net cash inflow (outflow) from operating activities 29 EARNINGS PER SHARE - 76,619 24,383 - (111,325) (5,238) 67,236 - 23,502 (892,271) 787,095 161,986 16,048 - - (131,597) (1,184,040) - (9,746) - 47,428 12,759 242,828 (70,239) (23,037) (33,381) - 1,461 152,697 - 66,511 243,021 2,457,157 6,386,286 (1,915,886) - 787,095 161,100 16,048 - - (14,481) (822,895) (142,627) (19,750) (2,717,546) (450,697) (1,957,257) Consolidated Consolidated 30 June 2010 30 June 2009 $ $ (a) Basic earnings per share From continuing operations attributable to the ordinary equity holders of the company (10,108,827) (13,388,667) Weighted average number of ordinary shares outstanding during the year used to calculate basic EPS 242,206,614 168,542,284 (b) Diluted earnings per share From continuing operations attributable to the ordinary equity holders of the company (10,108,827) (13,388,667) Weighted average number of options outstanding during the year used to calculate diluted EPS - - Weighted average number of ordinary shares outstanding during the year used to calculate diluted EPS 242,206,614 168,542,284 (i) Options Options granted to employees under the Maximus Resources Limted Employee Share Option Plan are considered to be potential ordinary shares. These have a dilutive effect on the weighted average number of ordinary shares. As the consolidated entity has reported a loss of ($10,108,827) this financial year, the options have not been included in the determination of diluted earnings per share. Details relating to the options are set out in note 29. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 59 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2010 30 SHARE BASED PAYMENTS (a) Employee Option Plan The following share based payment arrangements existed at 30 June 2010: 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. All options are un listed and non transferable. On 10 April 2007 930,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are exercisable at 14 cents on or before 20 March 2012. The options hold no voting or dividend rights. On 17 March 2008 890,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are exercisable at 18 cents on or before 17 March 2013. The options hold no voting or dividend rights. On 4 February 2009 1,965,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are exercisable at 4 cents on or before 3 February 2014. The options hold no voting or dividend rights. On 29 May 2009 40,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are exercisable at 4 cents on or before 3 February 2014. The options hold no voting or dividend rights. On 27 August 2009 3,000,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are exercisable at 5 cents on or before 26 August 2012. The options hold no voting or dividend rights. 2010 Outstanding at the beginning of the year Granted Exercised Expired Outstanding at the end of the year 2009 Balance Granted Exercised Expired Outstanding at the end of the year Fair value of options granted Number of options Weighted average exercise price $ 0.315 0.050 - 0.123 0.378 0.232 0.166 0.189 0.176 0.315 9,665,000 3,000,000 - (945,000) 11,720,000 35,206,032 62,713,423 (739,687) (87,514,768) 9,665,000 The options outstanding at 30 June 2010 had a weighted average exercise price of $0.378 (2009: $0.315) and a weighted average remaining contractual life of 22 months (2009: 34 months). Exercise prices range from $0.04 to $0.50 in respect of options outstanding at 30 June 2010. The weighted average fair value of the options granted during the year was $0.05. This price was calculated by using a Black Scholes option pricing model applying the following inputs: (a) Weighted average exercise price $0.05 (b) Weighted average life of the options 3 years (c) Underlying share price (d) Expected share price volatility (e) Risk free interest rate $0.029 46.5% 4.82% 60 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 31 BUSINESS COMBINATION (a) Summary of acquisition On 10 June 2009 ERO Metals Pty Ltd, a wholly owned subsidiary of ERO Mining Ltd, acquired 100% of the issued capital of Douglas Resources Pty Ltd. Consideration for the acquisition was $2,650,001 and included mining leases and the associated development assets, stationary and mobile plant and equipment, workshop and accommodation. Purchase consideration (refer to Note (b) below) Cash paid Fair value of net identifiable assets acquired (refer to Note (c) below) (b) Cash flow information $ 2,650,001 2,650,001 Outflow of cash to acquire subsidiary, net of cash acquired Cash consideration Less: Balances acquired Less: cash acquired Outflow of cash (c) Assets and liabilities acquired Consolidated Consolidated Parent entity Parent entity 30 June 2010 30 June 2009 30 June 2010 30 June 2009 $ - - - $ 2,650,001 4,672 2,645,329 $ - - - $ - - - The assets and liabilities recognised as a result of the acquisition are as follows: Cash and cash equivalents Trade receivables Property, plant and equipment Development assets Mining leases EPM deposit Net identifiable assets acquired 32 GOING CONCERN $ 4,673 3,892 465,710 1,346,026 811,950 17,750 2,650,001 The financial report has been prepared on the basis of going concern. The cash flow projections of the company and consolidated entity evidence that the company will require positive cash flows from gold mining operations and/or additional capital for continued operations. The company and consolidated entity’s ability to continue as a going concern is contingent upon obtaining additional capital or generating sufficient cashflows from gold mining operations. If additional capital is not obtained, the going concern basis may not be appropriate, with the result that the company may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and in amounts different from those stated in the financial report. No allowance for such circumstances has been made in the financial report. MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 61 DIRECTORS’ DECLARATION In the directors’ opinion: (a) the financial statements and notes set out on pages 29 to 61 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and (ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2010 and of their performance for the financial year ended on that date, and (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, and (c) the financial statements also comply with International Financial Reporting Standards as discussed in note 1. The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors. RobeRt M Kennedy Director Adelaide 30 September 2010 62 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 INDEPENDENT AUDITOR’S REPORT MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 63 INDEPENDENT AUDITOR’S REPORT 64 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 65 ASX ADDITIONAL INFORMATION The shareholder information set out below was applicable as Unquoted equity securities at 1 October 2010. Unlisted options over ordinary shares A Distribution of equity securities Analysis of numbers of equity security holders by size of Number on issue Number of holders holding: Holding 1–1,000 1,001–5,000 5,001–10,000 10,001–100,000 100,001 and over Shares Options 115 295 334 1,143 422 2,309 - 1 - 15 14 30 Options @ $0.14, expiring 20 March 2012 Options @ $0.50, expiring 2 July 2012 Options @ $0.05, expiring 26 August 2012 Options @ $0.18, expiring 17 March 2013 Options @ $0.04, expiring 3 February 2014 380,000 3,000,000 3,000,000 605,000 1,735,000 7 5 1 13 17 There were 1,162 holders of less than a marketable parcel of ordinary shares. At a share price of 2.3 cents, an unmarketable No person holds 20% or more of these securities. parcel is 21,740 shares. B Equity security holders Twenty largest quoted equity security holders The names of the twenty largest holders of quoted equity securities are listed below: C Substantial holders Substantial holders in the company are set out below: Number held Percentage Name Ordinary shares Ordinary shares Flinders Mines Limited 16,305,555 6.24% Ordinary shares Number held Percentage of issued shares D Voting rights The voting rights attaching to each class of equity securities are set out below: (a) Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. (b) Options No voting rights. Flinders Mines Limited 16,305,555 Yandal Investments Pty Ltd Triple Eight Gold Pty Ltd Ms Yue Li Geosolutions Pty Ltd Kesli Chemicals Pty Ltd K J Exploration Pty Ltd Chaffey Consulting Pty Ltd Mr Wenming Zhu and Mrs Xiaohong Yuan Mr Colin Hough Mr Gary Maddocks and Ms Paula Maddocks Apex Minerals NL RMK Super Pty Ltd Mr De Min Zhang Mr Fanqiu Zeng Jorac Pty Ltd Mr Scott Sheard Mr Nicholas Kenos and Mrs Pauline Kenos Mr Robert Cameron Citicorp Nominees Pty Ltd 8,611,161 8,019,445 6,000,000 5,000,000 3,277,797 3,100,000 3,066,951 3,000,000 2,550,000 2,550,000 2,000,000 1,980,555 1,975,000 1,806,089 1,786,296 1,752,500 1,575,555 1,550,000 1,466,000 6.24 3.30 3.07 2.30 1.91 1.25 1.19 1.17 1.15 0.98 0.98 0.77 0.76 0.76 0.69 0.68 0.67 0.60 0.59 0.56 77,372,904 29.62 66 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2010 Location of Maximus’ resource projects.