For personal use only - ASX · 2008-10-24 · level 2, 6 Kings park road, West perth Wa 6005 telephone: (08) 9216 0900 facsimile: (08) 9216 0901 asX coDe: aXm acn: 098 612 974 WeB:

www.apexminerals.com.au

Apex Minerals NL ABN 22 098 612 974

Annual Report 30 June 2008

ApexCover08.indd 1 13/10/08 3:14:50 PM

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Directors

Mark Ashley Managing Director

Mark Bennett Exploration Director

Glenn Jardine Operations Director

Stephen Lowe Non Executive Director

Todd Bennett Non Executive Director

Kim Robinson Non Executive Chairman

company secretary

Graham Douglas Anderson

principal office

level 1, 10 ord streetWest perth Wa 6005po Box 682, West perth Wa 6872telephone: (08) 6311 5555facsimile: (08) 6311 5556email: [email protected]

registereD office

level 1, 10 ord streetWest perth Wa 6005po Box 682, West perth Wa 6872

share registry

advanced share registry services pty ltd110 stirling highway, nedlands Wa 6009po Box 1156, nedlands Wa 6909telephone: (08) 9389 8033facsimile: (08) 9389 7871

auDitors

stantons internationallevel 1, 1 havelock street, West perth Wa 6005telephone: (08) 9481 3188facsimile: (08) 9321 1204

solicitors

salter powerlevel 2, 6 Kings park road, West perth Wa 6005telephone: (08) 9216 0900facsimile: (08) 9216 0901

asX coDe: aXmacn: 098 612 974

WeB: www.apexminerals.com.au

Corporate Directory


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1Annual Report 08

Table of Contents

Managing Director’s Address 2

Apex Project Location Map 5

Overview 7

Operations Project Development 14

Exploration and Resources 18

Resource Table 30

Reserves Table 32

Directors’ Report 34

Independent Auditor’s Report 44

Independence Declaration 46

Director’s Declaration 47

Income Statements 48

Balance Sheets 49

Statement of Changes in Equity 50

Cash Flow Statements 51

Notes to Financial Statements 52

Corporate Governance Statement 86

Additional Information 91

A Year of Highlights

1Annual Report 08

Positive Completion of Wiluna Implementation study in June forecasts cash costs of A$560/oz;

A$62m equity raising completed in June;

A$60.5m raised in September via issuance of Bonds, Warrants and Gold Upside Participation Notes;

Major resource upgrades announced in February, June and September;

Maiden reserve announced in June;

Refurbishment of plant well advanced;

Mining at Wiluna commenced in October;

First gold pour expected in November;

Second Lawlers Nickel JV with Barrick announced in June.

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MD & CEO Address

Dear Fellow Shareholder,

It is with pleasure I present to you the Annual Report for 2008. Apex has had an exciting year, and we now stand on the cusp of beginning significant and profitable gold production at Wiluna. First gold production is scheduled to commence in November 2008. Production for the 2009 calendar year is expected to be around 130,000 ounces increasing to 200,000 ounces per annum in subsequent years.

The results of the Project Implementation Study announced in June and the imminent return to production have validated the integrated mine strategy adopted by Apex when it began consolidating the Wiluna, Wilsons and Youanmi projects in early 2007. As Apex moves into production, it will emerge as one of Australia’s largest domestically listed gold producers at competitive cash costs delivering substantial cash margins. We have significant growth opportunities ahead and are now fully funded.

We have had substantial exploration success since acquiring these deposits, particularly at Wiluna, where gold resources now stand at over 1.5 million ounces. When we acquired Wiluna mid 2007, we set our selves a target to increase the Reserve base from approximately 6 to 9 months at that time to 3-5 years by the time we get back into production.

On 29 September we announced a 70% increase in the Indicated Resource base in the Calais area of the Wiluna mine to around 600,000 ounces. We are currently re-calculating the Reserves there, but the new underground resource together with the new open pit resource at Wiluna will, I’m confident, result in our getting close to the 5 year target.

The exploration success that we have experienced at Wiluna in recent months has resulted in the process plant being able to be fed completely with the lower cost Wiluna ore and the requirement to truck supplementary feed from our nearby Wilsons deposit has been deferred such that commencement of the development of this deposit has been put back at least until the March 09 quarter.

Significant progress on the development of the Wiluna project was made throughout the year, with a number of development plans coming to fruition. We successfully finalised the consolidation all the required assets to commence our integrated mine strategy, with the purchase of Wiluna, Wilsons and Youanmi. Detailed metallurgical test work and engineering studies were undertaken for the project implementation study, culminating in the decision to commit to development in June 2008.

At this time the refurbishment of the Wiluna plant is nearing completion, with over 150 workers on site and production on schedule to recommence in November 2008.

Overall cash costs are estimated to be $560 per ounce, which will deliver a healthy cash margin based on the current gold price. Apex’s medium term goal is to reach 500,000 oz per annum of profitable gold production and multiple growth options are open to Apex to achieve this goal.

All necessary capital to develop the Wiluna Project has been raised. It is of great credit to Apex’s management team and the strength of the project that the funds, amounting to over $120 million were raised during the year at a time of extreme global financial conditions which is adversely affecting all businesses in raising development finance. A $62 million placement was achieved in March and a $60.5m Senior Secured Note with detaching warrants and a rather unique Gold Upside Participation Note announced on 29 September.

The funds from this raising now results in your company being fully funded and will enable the highly successful exploration program to be maintained at around $20 million per annum.

World economic conditions remain clouded, with many markets continuing to suffer extreme volatility. For centuries, gold has acted as the traditional store of wealth and safe haven for investors in troubled times. In these uncertain times, the outlook for gold remains extremely positive and this is an opportune time to be entering gold production.

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3Annual Report 08

I would like to thank the management team and staff at Apex for their hard work during 2008 and very much look forward to the culmination of all their efforts in our first gold pour in late 2008. I would also like to thank you, our shareholders for your loyalty and support over the past 12 months.

Kind Regards,

Mark Ashley

Managing Director and Chief Executive Officer

All the photographs that appear in this Report reflect the current refurbishment occuring at the Wiluna plant, new mining fleet vehicles purchased and continued drilling. The focus is to present this by showing all the people actively engaged in the process.

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Apex Project Locations Eastern GoldfieldsF

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Overview

THE REGIONAL GOLD STRATEGY

Apex has assembled a portfolio of gold assets capable of elevating the company to producer status by early 2009. The projects are located in the Eastern Goldfields of Western Australia as shown on page 5.

Apex’s regional gold development strategy is to consolidate the ownership of various high grade, but currently undeveloped, refractory gold deposits. Following the completion of the Implementation Study in June, Apex is set sequentially develop Wiluna, Wilsons and Youanmi lifting group production to 200,000 ounces per annum.

The Aphrodite project also has the potential to be an additional processing hub producing either a high grade gold concentrate for trucking to Wiluna for treatment through the BIOX® bacterial oxidation plant or, gold metal on site further increasing annual group gold production.

IMPLEMENTATION STUDY

The Implementation Study into the refurbishment of the Wiluna gold treatment plant and the development of the Wiluna, Wilsons and Youanmi high grade underground gold mines was completed in June 2008. The study used reserves estimated in June 2008 based upon resource estimates completed in May 2008.

The study showed that a minimum 3 year production life could be supported at each of the mines feeding the Wiluna plant. Formal Board approval to proceed with the development of the project was given in June 2008, just 12 months after Apex took control of the Wiluna mine.

Following the resource expansion at Wiluna announced in September 2008 additional studies will now be undertaken with a view to expanding the reserve and production base at Wiluna.

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Wiluna Project Location of New ResourcesF

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Overview continued

WILUNA

The Wiluna Gold Mine is located 1,000 kilometres northeast of Perth in the Eastern Goldfields of Western Australia. Apex took possession of the Wiluna operations with effect from 1 August 2007. The assets acquired as part the Wiluna transaction include all equipment necessary to operate a modern gold mining and processing facility, namely:

• 1Mtpa gold processing facility (including BIOX® bacterial oxidation plant);

• Fully equipped administration facilities;• 12MW gas power station;• 300 person accommodation village;• Borefields and associated pumping system;• Workshops and stores;• Fully developed and serviced underground mine;• Established roads.

Description

Wiluna has produced approximately four million ounces of gold to date. Early mining for gold at Wiluna commenced in the late 19th century through a series of shallow underground and open pit workings, and two million ounces of gold were produced from underground workings at East Lode and West Lode during the 1930’s to 1950.

Modern gold mining operations at Wiluna commenced in the 1980s with the treatment of tailings from historic workings and non-refractory open pit reserves through what is now conventional CIP/CIL technology.

Gold at Wiluna is predominantly contained within sulphide minerals, particularly arsenopyrite, and is not amenable to extraction via normal cyanide leaching. It is however readily amenable to extraction using bacterial oxidation and has been successfully extracted in the company’s BIOX plant over the past 15 years. The common term used for this style of gold mineralisation is “refractory”.

Wiluna also hosts gold mineralisation associated with quartz reefs which is “free milling”, that is, amenable to conventional cyanide leaching.

Geology and Title

The Wiluna project comprises granted Mining Leases and is situated at the northern end of the Norseman-Wiluna greenstone belt – the most highly gold endowed greenstone belt in Australia, which contains major gold mines such as those at Norseman, St.Ives, the Golden Mile, Leonora and Thunderbox.

At Wiluna, gold mineralisation is found where a series of northerly striking faults intersects a northwest striking and southwest dipping sequence of basalts and dolerites. This series of faults includes the East Lode, West Lode and Moonlight Lode, which together have produced approximately four million ounces of gold since their discovery (page 8).

Each of these lodes contains several orebodies, which have been previously mined by open pit or underground methods to a depth of up to 900 metres (page 19).

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Overview continued

WILSONS (GIDGEE)

Description

The Gidgee gold mine is located 640 kilometres northeast of Perth and approximately 130kilometres by road from Wiluna. Early mining for gold commenced in the 1930s through a series of shallow underground and open pit workings. Modern gold mining operations at Gidgee commenced in the late 1980s.

The assets acquired by Apex at Gidgee include:

• 600,000tpa conventional gold processing facility;• Underground pumping and electrical equipment;• 100 person accommodation village;• Airstrip;• Administration offices;• 1MW diesel power station;• Ready access to bore and pit water;• Workshop and Stores buildings; and• Established roads.

Geology and Title

The Gidgee project covers an area of approximately 2,500 square kilometres of the Gum Creek greenstone belt. The central core of the area is held as granted Mining Leases, which cover a 70 kilometre long structural corridor containing numerous occurrences of gold mineralisation (page 11).

Approximately twenty open pits have previously mined near surface gold mineralisation and underground mining was undertaken beneath the Swan Bitter and Kingfisher pits. Most of the gold is free milling, with the exception of the Wilsons deposit, which is refractory.

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Gidgee Project Proposed Infrastructure Location Wilsons Mine

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Overview continued

YOUANMI

Description

The Youanmi gold mine is located 480 kilometres northeast of Perth and approximately 330 kilometres by road from Wiluna. Early mining for gold commenced in the 1930s through a series of shallow underground and open pit workings.

Modern gold mining operations at Youanmi recommenced in the 1980s. Like Wiluna, the gold mineralisation at Youanmi is predominantly contained within the matrix of sulphide particles, particularly arsenopyrite, at a microscopic level.

Similarly to Wiluna, gold extraction of refractory ore at Youanmi was achieved by using bacteria following sulphide flotation. The bacterial oxidation process at Youanmi used BacTech® patented bacteria, which is proprietary technology owned by BacTech®, but essentially similar in nature toBIOX® technology.

The assets acquired by Apex at Gidgee include:

• 600,000tpa conventional gold processing facility (including BacTech®);

• 40 person accommodation village;• Airstrip;• Administration offices;• 1MW diesel power station;• Ready access to bore and pit water;• Ready access to bore and pit water;• Workshop and Stores buildings; and• Established roads.

Geology and Title

The Youanmi project covers 40 strike kilometres of the gold mineralised Youanmi shear zone, with known resources and infrastructure being situated on granted Mining Leases. The Youanmi deposit is a high grade narrow vein style deposit, with gold intimately associated with sulphide minerals.

The main Youanmi deposit plunges steeply to the south and remains open at depth (page 26). Several parallel plunging shoots have been mined historically, with limited exploration beneath them.

APHRODITE

Description

The Aphrodite gold deposit is located 65 kilometres north of Kalgoorlie on a tenement package which covers 51 square kilometres of the Bardoc Tectonic Zone – a highly prospective regional gold bearing shear zone.

The project contains two known refractory gold deposits, the Alpha lode and the Phi lode, which are located within 200 metres of each other and could potentially be accessible from a shared underground development in the event of a decision to mine.

Geology and Title

The Aphrodite project covers 50 square kilometres of prospective geology in the Bardoc Tectonic Zone – a part of the Boulder-Lefroy Fault which also hosts the nearby Paddington Gold Mine and the Golden Mile, some 65 kilometres to the south. Gold mineralisation occurs in two main zones, the Alpha and Phi lodes.

The Alpha lode is a porphyry-hosted shear zone, and the Phi lode is a sediment-hosted shear zone.

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Operations Project Development

WILUNA

Apex took control of the Wiluna mine in August 2007. Prior to the approval of the project by the Board in June 2008 the surface plant and infrastructure was on care and maintenance. The underground mine was kept fully serviced to allow diamond drilling activities to be undertaken. The company used the period ahead of Board approval to undertake detailed inspections and engineering reviews of the existing plant and infrastructure at Wiluna in order to develop a detailed refurbishment plan.

In addition, long lead time equipment items were ordered including the underground mobile equipment fleets for Wiluna and Wilsons, to eliminate any potential delays to the re-commencement of production.

Processing

Plant and Infrastructure Refurbishment

Infrastructure and plant refurbishment at Wiluna budgeted at $31M has included:

• Repair of the village wet and dry messes and accommodation units and facilities;

• Updating the engine management and control systems of the 13MW gas power station and undertaking repairs to the generators;

• Repair of the generators in the 8MW back-up diesel power station;

• Installation of new motor control centres (MCC’s) around the plant and improvement and replacement where necessary of high voltage (HV) and low voltage (LV) distribution and control systems around the plant, village and other surface installations;

• Semi automation and upgrading of the site water supply system;

• Removal, repair and re-installation of all crushers and screens within the crushing circuit;

• Inspection and replacement as necessary of all mill bearings and re-alignment of mill drives and gearboxes;

• Repair and re-adjustment of the flotation cells and the installation of a second flash flotation unit;

• Repair and replacement of rubber lining as well as internal and external cleaning of cooling coils in the BIOX tanks;

• Removal, repair and re-installation of all pumps (over 400) within the plant;

• Repair and upgrade of the plant monitoring and control system;

• Repair of plant tankage;• Expansion of the gold room; and• Refurbishment and expansion of the mine workshops

and pumping, water supply, power and communication systems.

Re-commissioning of the plant will be staged as the refurbishment of each circuit of the plant is completed. The first circuit to be re-commissioned will be the crushing circuit and this is expected to take place in the second week of October.

Bacteria

As previously advised bacteria from the Wiluna plant were retained at the cessation of operations in July 2007 and kept active at laboratories in Perth by being fed Wiluna concentrate retained from previous operations.

In mid 2008, the bacteria started being propagated in the laboratories in Perth and transported to the Wiluna site in 1 tonne batches. The bacteria is now being transferred into BIOX reactors on site and is being propagated using concentrate retained from previous operations and from a separate milling campaign conducted in April this year.

The company proposes to have 3 primary reactors full of live bacteria ready to receive ore by the start of November.

The bacteria propagation is being conducted on site by Apex employees all of whom have previously worked with the bacteria in the Wiluna plant. Work is proceeding on a 24 hour basis and using equipment that is not susceptible to interruption by power outages as a result of refurbishment of the electrical system.

Mining

Mining will commence at Wiluna at the East Pit open cut and Wiluna underground mine.

East Pit Open Cut

Mining of the East Pit open cut was temporarily suspended following the announcement of the acquisition of the Wiluna mine by Apex in April 2007. The pit was left with all waste pre-stripping having been completed and the next bench drilled out awaiting charging with explosives.F

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Operations Project Development continued

The contract for the mining of the East Pit open cut was awarded to Mining and Civil Australia Pty Ltd in September 2008. MACA commenced mobilisation to site in the week of 15 September and has now completed its mobilisation. Blasting of the next bench in East Pit is expected to occur in the second week of October. Accordingly the company expects that this will result in approximately 50,000 tonnes of broken ore stocks being available when the plant recomissions in November.

Wiluna Underground Mine

Underground mining will take place initially in the immediate vicinity of existing decline development in the Calais area. Activity will focus on the extraction of Calais reserves above the 600mRL and decline access to new zones at Henry V and Henry V North.

Underground Mobile Equipment Fleet

The underground mobile equipment fleet required for Wiluna has been delivered to site. The fleet has been acquired from Atlas Copco and is being financed under a finance lease arrangement also through Atlas Copco.

The fleet comprises:

• Jumbos – 2 x M2D and 1 x H104;• Production Drills – 2 x Simba M7 and 1 x Simba 1257;• LHD’s – 3 x ST1520 and 2 x 1030;• Trucks – 4 x MT6020;• Service Vehicles – 2 x Volvo IT.

Personnel

All operating activities at the mine with the exception of the East Pit open cut will be undertaken under an owner operator regime.

Accordingly, the company has embarked upon an extensive direct recruitment programme. Employees are initially being sought for the Wiluna operation and to date over 1200 applications have been received for approximately 150 positions.

The senior management team at Wiluna is in place.

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Operations Project Development continued

WILSONS (GIDGEE)

The Implementation Study showed the commencement of decline development at Wilsons occurring in October 2008 with full production being reached 6 months later in April 2009. However, the recent success of infill and extensional drilling programmes at Wiluna has allowed the timing of development and production from Wilsons to be deferred by up to 5 months.

Ore produced from Wilsons will be trucked to the Wiluna plant for treatment. Production is planned to be sourced from extensions to the Wilsons 1, 2 and 3 deposits immediately below existing open pit workings. Minimal dewatering is required of the existing pits.

Production at Wilsons will commence following:

• Establishment of surface mine infrastructure at Wilsons including offices, workshops and power station;

• Decline development off the Wilsons 3 pit to the first ore horizons and establishment of underground services including power, ventilation, pumping and communication systems; and

• Upgrade of the existing Wilsons to Wiluna road.

Works conducted for the development of Wilsons this year comprised refurbishment of the existing village and associated infrastructure at Gidgee. Studies will continue into opportunities for improving upon the existing robust base case at Wilsons between now and the re-scheduled commencement of decline development in March 2009.

YOUANMI

The Implementation Study showed production from the Youanmi mine being scheduled for mid 2009. However, the recent success of infill and extensional drilling programmes at Wiluna has allowed the timing of production from Youanmi to be deferred to mid 2010.

Ore produced from Youanmi will be trucked to the Wiluna plant for treatment. Production is planned to be sourced from extensions to the deposit immediately below existing workings.

Production at Youanmi will commence following:

• Dewatering of the Main Pit and existing underground workings;

• Refurbishment of the existing decline and services; and• Detailed infill drilling and extensional drilling of the

resource from underground.

Works conducted at Youanmi this year has comprised:

• Minor refurbishment of the existing village and associated infrastructure;

• Refurbishment of existing surface evaporation ponds;• nstallation of dewatering pumps and pipelines in the

Main Pit; and• Dewatering of the Main Pit.

Prior to the commencement of dewatering in January 2008 the Main Pit contained 1.8 million cubic metres of water. By mid year approximately 1.0 million cubic metres had been dewatered and dewatering of the Main Pit is on schedule for completion in December 2008.

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Exploration and Resources

WILUNA

Resources and Reserves

Since purchasing the Wiluna Mine in mid 2007 Apex has increased gold resources by 120%, from 700,000 ounces to over 1.5 million ounces of gold. This comprises Measured Resources of 550,000t @ 3.4g/t for 60,000 ounces in open pits, Indicated Resources of 3.5 million tonnes @ 6.5g/t for 741,000 ounces and Inferred Resources of 3.9 million tonnes @ 5.9g/t for 738,000 ounces of gold. A detailed breakdown of these resources is shown on pages 30 & 31.

Exploration and Resource Development

As detailed in the Company’s ASX announcements during the year, Apex has had considerable success in its program of resource definition drilling aimed at establishing sufficient mineral resources to underpin an initial ore reserve capable of sustaining production for a minimum of four years, sourced from within or close to existing underground development. The program of extensional drilling has significantly increased resources in the vicinity of the Calais zone, where the discovery of the Baldric zone has supplemented the Calais, Burgundy, Henry5 and Henry5 North zones. Infill drilling has been very successful in all zones and has enabled most of the resource to be classified as Indicated (pages 20 & 21).

Drilling has also commenced at the Crispin, East Lode North and Calvert zones, and an initial resource of over 200,000 ounces has been defined at East Lode North.

Grade control drilling in the East Lode open pit has discovered a significant additional zone of mineralisation, leading to a 70% increase in resources and a 94% conversion of Indicated Resources to the Measured category within the pit.

Drilling will continue with the aim of extending the limits of known mineralised zones, infilling these to Indicated Resource status and testing additional nearby targets. Several zones of mineralisation will be drilled to resource status as new underground drilling positions become available during the development of access to existing resources. These include the Brothers Reef and the newly discovered fault offset extension of the Golden Age Reef. Drilling will also continue to delineate additional mineralisation beneath the East Lode open pit adjacent to the historic East Lode workings. Historic production in this area exceeded 2 million ounces and there is considerable scope to identify additional resources close to, and in the immediate hanging wall of the old workings (page 19).

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Wiluna Project Long projection of the East Lode open pit and North Resources

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Wiluna Project Long projection of the East Lode 50 Lens in the Calais area, showing new resources

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Wiluna Project Long projection of the East Lode 100 Lens in the Calais area, showing new resources

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Exploration and Resources continued

WILSONS (GIDGEE)


Since purchasing the Gidgee Gold project in early 2007 Apex has increased gold resources by 33% from 490,000 ounces to 652,000 ounces. This is based on a doubling of the Wilsons resource from 164,000 ounces to 325,000 ounces of gold.

The new Wilsons resource comprises an Indicated Resource of 921,000t @ 7.2g/t for 215,000oz and an Inferred Resource of 535,000t @ 6.4g/t for 110,000 ounces of gold. A detailed breakdown of these resources is shown on pages 30 & 31.

The Indicated Resource at Wilsons underpins a Probable Ore Reserve of 826,000 tonnes @ 6.4g/t for a contained 170,000 ounces of gold, which supports an initial three year mine life.


The Wilsons ore reserve is based only on drilling within the uppermost 250m of the deposit (page 24). The deposit continues at depth and drilling is proceeding with the dual aim of identifying extensions and infilling successive 100m panels to a spacing sufficient to classify additional zones of the resource as Indicated as a prerequisite to estimating additional ore reserves and extending mine life.

In addition to this, drilling has commenced scoping the Premium and Cascade prospects, which comprise free milling quartz veins (page 25). These zones are small but high grade and ideal for trucking to the Wiluna plant.

A regional exploration program has commenced to create a pipeline of prospects to continue defining additional resources which could supplement ongoing production from Wilsons.

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Gidgee Project Wilsons Deposit Long ProjectionF

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Gidgee Project Premium Long Projection

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Youanmi Project 2400 N Cross Section

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YOUANMI


The Youanmi Gold Mine was purchased with a total resource inventory of 951,000 ounces of gold, estimated in compliance with JORC and NI 43-101 requirements. This includes an Indicated and Inferred resource of 2.4 million tonnes @ 8.5 g/t for 658,000 ounces of gold in the Youanmi Deeps gold deposit, estimated using a 4g/t lower cutoff.

Once infill drilling has been completed, the company intends to re-estimate the underground resource using a higher cutoff grade, in order to define a higher grade resource capable of sustaining the targeted production head grade of 11g/t, However, this will also reduce the tonnes and contained metal. A detailed breakdown of current resources is shown on pages 30 & 31.


An initial surface diamond drilling program, undertaken to provide confidence in the down dip continuity of mineralisation, succeeded in defining high grade mineralisation up to 180 metres down dip of previous drilling and 100 metres beneath the base of the current resource. Detailed resource definition drilling will be undertaken from underground positions once the decline has been dewatered and refurbished. Detailed evaluation of other prospects in the Youanmi tenement package will commence in calendar 2009.

APHRODITE


The Aphrodite deposit was purchased with an Inferred Resource of 1.44 million tonnes @ 6.2 g/t for 287,000 ounces of gold, estimated in compliance with the JORC code. This resource is based solely on the Alpha lode. In addition to this, a substantial amount of gold mineralisation exists within the Phi lode which is, as yet, unclassified. Resources are shown on pages 30 & 31.


An initial phase of resource definition drilling has been completed on the Phi lode and an initial resource estimate is scheduled for completion late in 2008. This program has also provided a comprehensive set of samples for metallurgical testwork. Further drilling is planned during 2009.

OTHER EXPLORATION

Apollo Hill

Apex withdrew from the Apollo Hill Joint Venture during the year and has no ongoing rights or obligations.

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Lawlers Nickel Project Electromagnetic Surveys and targets on Magnetics

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OTHER EXPLORATION continued

Lawlers Nickel Joint Venture

Apex has entered into a second agreement with Barrick Gold to earn an initial 56% interest in the nickel rights on Barrick’s tenements adjacent to ist first JV, extending its coverage to a 234 square kilometres of nickel prospective terrain in the Lawlers district of the North Eastern Goldfields of Western Australia.

The terms of the JV are identical to the first JV, as detailed in the company’s ASX announcement 11 December 2006. The Barrick tenements are part of Barrick’s Lawlers Gold Operations, and the two JV’s contain over 80 strike kilometres of relatively unexplored nickel sulphide prospective ultramafic rocks in the heart of the world class North Eastern Goldfields nickel province. The JV area is surrounded by Xstrata’s Cosmos, Prospero and Sinclair nickel mines, BHP Billiton’s Perseverance and Rockys Reward nickel mines, and Norilsk’s Waterloo nickel mine.

Importantly, no effective nickel sulphide exploration has been undertaken on these tenements since Selection Trust explored the area thirty years ago. Since then, nickel sulphide exploration has been very limited, with most exploration focussing on nickel laterite and gold.

During the year Apex has extended its electromagnetic (EM) geophysical survey, which has identified several EM targets. Future work will comprise further EM surveying and ongoing drill testing of targets (page 28).

Jillawarra

The Jillawarra Joint Venture (“JJV”) covers an area of approximately 1,500 square kilometres adjoining and to the west of Abra Mining’s namesake lead-zinc deposit, which is estimated to contain 50mt @ 5.5% lead. The project is managed by Abra Mining.

During the year, Abra earned a 70% interest in this project, and as per the terms of the farm in agreement, Apex elected to take a 10% free carried interest to the completion of a bankable feasibility study.

Abra Mining have completed induced polarisation (IP) geophysical surveys, geochemical sampling and several drilling programs at the Copper Chert and other prospects during the year. Exploration for Abra-style lead-zinc-copper-gold deposits is ongoing.

BUSINESS DEVELOPMENT

While Apex Minerals is now fully committed to the execution of its regional gold strategy and exploration of its other projects it intends to continue to use its unique in-house expertise to evaluate other assets complimentary to its strategy both regionally and abroad.

HEALTH AND SAFETY

The Company has existing health and safety systems in place for its exploration activities. That system will be expanded to cover operations activities ahead of production re-commencing in November at Wiluna. To date, no lost time injuries have been sustained during the care and maintenance, underground and surface diamond drilling and plant refurbishment activities.

ENVIRONMENT AND COMMUNITY RELATIONS

The Company has obtained all necessary environmental approvals for the commencement of development and production at its operations. Comprehensive environmental management, monitoring, rehabilitation and reporting processes have been implemented by a dedicated team of environmental professionals over the past 12 months.

Good relations with stakeholders including local councils, indigenous groups, community groups and land owners are being maintained through a variety of initiatives. These initiatives include sponsorship of:

• Clontarf Girls Academy;• Two doctors at the Wiluna Community Medical Centre;• Annual Wiluna Rodeo.

INVESTMENTS

Empire Resources

During the year Apex acquired 5 million shares at 17 cents per share in Empire Resources positioning Apex as a 6.95% stakeholder in Empire with the right to nominate a representative to join the Empire Board of Directors.

Empire is currently exploring for volcanogenic massive sulphide (VMS) style copper-gold occurrences within its Yuinmery tenements just 6.5km from Apex Minerals Youanmi Plant. Both companies have signed a Memorandum of Understanding (MoU) to enter into commercial negotiations relating to the Yuinmery Project. Under the MoU, Empire and Apex will investigate the possibility of future development and production for Yuinmery, including the use of the Youanmi plant and its flotation circuit to treat Yuinmery ore.

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30Apex Minerals NL

Resource Table as at 7 October 2008M

EASU

RED

IND

ICAT

EDIN

FERR

EDTO

TAL

Not

eTo

nnes

Gol

d, g

/tO

zTo

nnes

Gol

d, g

/tO

zTo

nnes

Gol

d, g

/tO

zTo

nnes

Gol

d, g

/tO

z

WIL

UN

A

Und

ergr

ound

Cala

is un

derg

roun

d0

0.0

02,

380,

000

6.8

520,

000

1,41

0,00

06.

228

0,00

03,

790,

000

6.6

800,

000

1

East

Lod

e N

orth

00.

00

440,

000

5.9

80,0

0067

0,00

05.

712

0,00

01,

110,

000

5.8

210,

000

1

East

& W

est L

ode

othe

r0

0.0

063

0,00

06.

212

0,00

078

0,00

05.

714

0,00

01,

400,

000

5.9

270,

000

2

Hap

py Ja

ck0

0.0

00

0.0

012

0,00

07.

630

,000

120,

000

7.6

30,0

002

Lone

Han

d-Ad

elai

de-M

oonl

ight

00.

00

00.

00

710,

000

6.3

140,

000

710,

000

6.3

140,

000

2

Tota

l Wilu

na u

nder

grou

nd0

0.0

03,

440,

000

6.6

730,

000

3,68

0,00

06.

172

0,00

07,

120,

000

6.3

1,44

0,00

0

Ope

n pi

t & st

ockp

iles

East

Pit

370,

000

4.1

50,0

000

0.0

030

,000

4.2

4,00

040

0,00

04.

153

,000

3

Nor

th P

it0

0.0

00

0.0

040

,000

3.0

4,00

040

,000

3.0

4,00

04

Lone

Han

d-Ad

elai

de-M

oonl

ight

00.

00

50,0

005.

79,

000

140,

000

2.5

11,0

0019

0,00

03.

321

,000

4

Mag

azin

e0

0.0

050

,000

3.6

6,00

010

,000

4.7

1,00

060

,000

3.8

7,00

04

Stoc

kpile

s18

0,00

01.

810

,000

00.

00

00.

00

180,

000

1.8

10,0

005

Tota

l Wilu

na o

pen

pit &

stoc

kpile

s55

0,00

03.

460

,000

100,

000

4.7

15,0

0022

0,00

02.

921

,000

870,

000

3.4

96,0

00

TOTA

L W

ILU

NA

550,

000

3.4

60,0

003,

540,

000

6.5

741,

000

3,90

0,00

05.

973

8,00

08,

000,

000

6.0

1,53

9,00

0

GID

GEE

Und

ergr

ound

Wils

ons

00.

00

920,

000

7.3

215,

000

540,

000

6.4

110,

000

1,46

0,00

06.

932

5,00

06

Oth

er30

,000

10.4

9,00

021

0,00

012

.080

,000

560,

000

7.4

134,

000

800,

000

8.7

223,

000

7

Tota

l Gid

gee

unde

rgro

und

30,0

0010

.49,

000

1,13

0,00

08.

129

4,00

01,

100,

000

6.9

245,

000

2,25

0,00

07.

654

8,00

0

Ope

n pi

t & st

ockp

iles

Oth

er0

0.0

01,

050,

000

3.1

103,

000

00.

00

1,05

0,00

03.

110

3,00

08

Tota

l Gid

gee

open

pit

& st

ockp

iles

00.

00

1,05

0,00

03.

110

3,00

00

0.0

01,

050,

000

3.1

103,

000

TOTA

L G

IDG

EE30

,000

10.4

9,00

02,

180,

000

5.7

398,

000

1,10

0,00

06.

924

5,00

03,

300,

000

6.1

652,

000

YOUA

NM

I

Und

ergr

ound

Youa

nmi u

nder

grou

nd0

0.0

081

0,00

08.

121

0,00

01,

610,

000

8.7

449,

000

2,41

0,00

08.

565

9,00

09

Tota

l You

anm

i und

ergr

ound

00.

00

810,

000

8.1

210,

000

1,61

0,00

08.

744

9,00

02,

410,

000

8.5

659,

000

Ope

n pi

t & st

ockp

iles

Vario

us o

pen

pits

20,0

005.

53,

000

4,62

0,00

01.

521

9,00

01,

180,

000

1.9

72,0

005,

820,

000

1.6

294,

000

10

Tota

l You

anm

i ope

n pi

t & st

ockp

iles

20,0

005.

53,

000

4,62

0,00

01.

521

9,00

01,

180,

000

1.9

72,0

005,

820,

000

1.6

294,

000

TOTA

L YO

UAN

MI

20,0

005.

53,

000

5,43

0,00

02.

542

9,00

02,

790,

000

5.8

521,

000

8,23

0,00

03.

695

3,00

0

APH

ROD

ITE

Und

ergr

ound

Alph

a Lo

de0

0.0

00

0.0

01,

440,

000

6.2

287,

000

1,44

0,00

06.

228

7,00

011

Tota

l Aph

rodi

te u

nder

grou

nd0

0.0

00

0.0

01,

440,

000

6.2

287,

000

1,44

0,00

06.

228

7,00

0

TOTA

L AP

HRO

DIT

E0

0.0

00

0.0

01,

440,

000

6.2

287,

000

1,44

0,00

06.

228

7,00

0

GLO

BAL

Und

ergr

ound

30,0

0010

.49,

000

5,38

0,00

07.

11,

231,

000

7,83

0,00

06.

71,

698,

000

13,2

30,0

006.

92,

938,

000

Ope

n Pi

t & S

tock

pile

s57

0,00

03.

463

,000

5,77

0,00

01.

833

7,00

01,

400,

000

2.1

93,0

007,

740,

000

2.0

493,

000

TOTA

L60

0,00

03.

872

,000

11,2

00,0

004.

41,

570,

000

9,20

0,00

06.

01,

790,

000

21,0

00,0

005.

13,

430,

000

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Competent Person’s statement for exploration results and Mineral Resources Estimates

Note

1. Resource estimated September 2008 by Andy Thompson at a 3.5g/t Au lower cut off.

2. Resource estimated June 2007 by Paul Tan at a 4.5g/t Au lower cut off.

3. Resource estimated September 2008 by Andy Thompson at a 1.0g/t Au lower cut off.



6. Resource estimated May 2008 by Andy Thompson at a 4.5g/t Au lower cut off.

7. Resource estimated June 2006 by Spero Carras at a 1.3g/t Au lower cut off.

8. Resource estimated June 2006 by Spero Carras at a 3.0g/t Au lower cut off.

9. Resource estimated July 2006 by Steve Hyland at a 4.0g/t Au lower cut off.

10. Resource estimated July 2006 by Steve Hyland at a 1.0g/t Au lower cut off.

11. Resource estimated December 2005 by Richard Allan at a 2.5g/t Au lower cut off.

The information in this report that relates to Exploration Results is based on information compiled by Mr. Andrew Thompson who is an employee of the company. The information in this report that relates to Mineral Resources at the Calais, East Lode North and East Pit zones at Wiiluna, and the Wilsons deposit at Gidgee is based on information compiled by Mr. Andrew Thompson who is an employee of the company. The information in this report that relates to other Mineral Resources at Wiluna is based on information compiled by Mr. Paul Tan who is a former employee of Agincourt and Oxiana at Wiluna. The information in this report that relates to Mineral Resources other than the Wilsons deposit at Gidgee is based on information compiled by Mr. Spero Carras who is a consultant. The information in this report that relates to Mineral Resources at the Youanmi project is based on information compiled by Mr. Steve Hyland who is a consultant. The information in this report that relates to Mineral Resources at the Aphrodite deposit is based on information compiled by Mr. Richard Allan who is an employee of Barrick Gold. Mr. Thompson, Mr. Tan, Mr. Carras, Mr. Hyland and Mr. Allan are Members of the Australasian Institute of Mining and Metallurgy and have sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as Competent Persons as defined in the 2004 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Thompson, Mr. Tan, Mr. Carras, Mr. Hyland and Mr. Allan consent to the inclusion in this report of the matters based on information in the form and context in which it appears.

Reverse circulation (RC) drill samples are obtained by collecting meter samples via a three stage riffle or cone splitter, and diamond drill hole results are obtained from half NQ core or quarter HQ core sampled to geological boundaries where appropriate.

Assay results are obtained from Intertek (formerly known as Genalysis) and ALS Chemex Laboratories in Perth. Samples are prepared using single stage pulverization of the entire sample. Gold assays are obtained using a 30g or 50g lead collection fire assay digest and atomic absorption spectrometry (AAS) analysis techniques. Multi-element analyses (arsenic, sulphur, iron, lead, zinc, bismuth, antimony and tellurium) are obtained using a four acid total digest and inductively coupled plasma optical emission spectrometry (ICP OES) analysis techniques. Full analytical quality assurance – quality control(QAQC) is achieved using a suite of certified standards, laboratory standards, field duplicates, laboratory duplicates, repeats, blanks and grind size analysis. Assays quoted in announcements may be of a preliminary nature. Assays used in resource estimates have undergone full QAQC.

The spatial location of samples from surface holes is derived using a combination of surveyed grid co-ordinates and 3D differential GPS collar survey pickups, and Reflex single shot and gyroscopic downhole surveys. The spatial location of samples from underground holes is derived using surveyed rig setups and Reflex multi-shot downhole surveys. True widths are calculated using the mean dip and strike of the mineralization from 3D wireframe models and downhole surveys.

Quoted drill intersections are based on situation specific criteria, which include using a lower cutoff of 1g/t or 2g/t gold and acceptable levels of internal dilution.

Mineral Resources have been estimated using standard accepted industry practices. All Resources have been estimated via Block Ordinary Kriging using 1m composite samples. Top cuts have been applied to the composites and are considered appropriate for the nature and style of mineralization in all cases. Directional grade variography was modeled for all zones based on 1m composites. Geological and mineralization modeling has been achieved by 3D modeling of footwall and hangingwall structures (a lower 2g/t Au cutoff was applied in the case of Wilsons Deposit). Block models have been developed for both deposits incorporating a suitable parent and sub block dimension to allow adequate volume resolution of modeled geology and mineralization. Grade interpolation (via Block Ordinary Kriging) was then undertaken using a multiple estimation pass strategy.

Where quoted, Mineral Resource and Ore Reserve tonnes and ounces are rounded to appropriate levels of precision, causing minor computational errors.

Mineral Resources are classified on the basis of drillhole spacing, geological continuity and predictability, geostatistical analysis of grade variability, sampling, analytical, spatial and density QAQC criteria and demonstrated amenability of mineralization style to proposed processing methods.

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Reserves Table as at 23 June 2008

Competent Person’s statement for Ore Reserves Estimates

Ore Reserves have been estimated in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition).

The information in this report which relates to the Wiluna and Wilsons Underground Ore Reserves is based on and accurately reflects the information compiled by Mr Blair Duncan a consultant to Apex Minerals NL and Principal of Arbitrage Consulting Australia Pty Ltd. The information in this report which relates to the Wiluna Open Pit Ore Reserve is based on and accurately reflects the information compiled by Mr Linton Putland a consultant to Apex Minerals NL and Principal of Linton Putland and Associates Pty Ltd. Mr. Duncan and Mr. Putland are members of The Australasian Institute of Mining and Metallurgy (“AusIMM”) and have sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a ‘Competent Person’ as defined in the 2004 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code fro reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Duncan and Mr. Putland consent to the inclusion in this report of the matters based on information in the form and context in which it appears.

Proved Probable Total

Ore Reserves000’s

tonnesGrade g/t Au

000’s oz Au

000’s tonnes

Grade g/t Au

000’s oz Au

000’s tonnes

Grade g/t Au

000’s oz Au

Wiluna u/g – Calais area 955 6.4 197 955 6.4 197

Wiluna East Lode pit 264 3.3 30 264 3.3 30

Wiluna total 1,219 5.8 227 1,219 5.8 227

Wilsons u/g 826 6.4 170 826 6.4 170

Total 2,045 6.0 397 2,045 6.0 397

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34Apex Minerals NL

Directors’ Report

The Directors present their report on the Company and its consolidated entity (referred to hereafter as the Group) for the year ended 30 June 2008.

DireCTorsThe names and details of the Company’s directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Mark Ashley – Managing DirectorFCMAHe is a Fellow of the Chartered institute of Management Accountants and has over 20 years experience in the resources industry.

in 1992, Mr Mark Ashley joined Forrestania Gold – which was subsequently acquired by Lionore in 1994 and was with the company through its emergence as a growing international nickel producer up until 31 March 2006. Mark who was a main board Director and Ceo of its Australian operations, left Lionore at that time to run Apex Minerals.

Within the prior three years, Mark is a Non-executive Director of Kagara Zinc and Metallica Minerals Limited, both AsX listed companies. He was also a Non-executive director for AsX listed company Tianshan Goldfields Limited appointed on 11 April 2006 and resigned on 7 september 2007. Mark is a Member of Council at the Curtin University of Technology and is a member of the university’s Finance Committee. He has also served as Chairman of the Major Gifts Committee for the royal Flying Doctor service and as a Director of the Australian Gold Council.

Glenn Jardine – Operations DirectorBEng FAusIMMMr Glenn Jardine has over 20 years experience in the mining industry and was most recently succeeded Mark Ashley as Managing Director of Lionore Mining international’s Australian operations, where he also held roles including Chief operating officer and prior to that, General Manager, New Business and Project Manager. During his time with Lionore Australia, Mr Jardine oversaw the successful development of the emily Ann, Maggie Hays and Waterloo nickel mines, leading teams whose work was subsequently recognised by the achievement of two separate major environmental awards.

Glenn graduated with a Be Mining from the University of Queensland in 1984 and is a member of the institute of Company Directors and a Fellow of the Aus iMM.

Within the prior three years, Mr Jardine has not been a director for any other public listed company.

Mark Bennett – Exploration DirectorBSc PhD MAusIMM FGSDr Bennett is a geologist with over 21 years experience, predominantly in gold, nickel and base metal exploration and mining. He holds a Bsc in Mining Geology from the University of Leicester, and a PhD from the University of Leeds, is a member of the Australasian institute of Mining and Metallurgy and an elected Fellow of the Geological society of London.

Mark has worked in europe, West Africa, and Australia, and has spent much of his career working for WMC resources and Lionore in Australia. Previous positions held include exploration Manager and Chief Geologist, including periods at WMC’s Kambalda Nickel operations, Gold Fields’ st.ives Gold Mines, Forrestania Gold’s Bounty Gold Mine, and WMC’s Melbourne head office.

in 2002, Mark received the Association of Mining and exploration Companies (AMeC) Prospector of the Year award in recognition of his contribution to the discovery of the Thunderbox gold and the Waterloo nickel deposits.

Within the prior three years, Mr Bennett has not been a director for any other public listed company.

Stephen Lowe – Non Executive DirectorBBus (ECU) GradDipAdvTax (UNSW) MTax (UNSW) FTIA MAICDMr stephen Lowe is a taxation specialist with over 15 years experience consulting to a wide range of corporate and private clients on a broad range of taxation issues including mining and international matters, GsT and CGT. He is a director of AsX listed Croesus Mining NL. He is also a director of the Perth based specialist taxation firm MKT – Taxation Advisors and has been a director of several other public unlisted companies. His qualifications include a Bachelor of Business, Post-Graduate Diploma in Advanced Taxation and a Master of Taxation from the University of New south Wales. steve is a Fellow of the Taxation institute of Australia and a Member of the Australian institute of Company Directors.

Within the prior three years Mr Lowe has not been a director of any other publicly listed company.

Kim Robinson – Non Executive ChairmanBSc (Geology)Mr Kim robinson is a founding Director of Kagara Zinc Limited and its current executive Chairman. Mr robinson graduated from the University of Western Australia in 1973 with a degree in Geology and has 29 years experience in the minerals exploration and mining industries, including 10 years as executive Chairman of Forrestania Gold NL. Mr robinson is also the Non-executive Chairman of Metex resources Ltd.

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35Annual report 08

Directors’ Report continued

Todd Bennett – Non Executive Director (appointed 18 July 2008)Mr Todd Bennett is the Managing Director of AMB Holdings, a private investment company associated with the Bennett family. Mr Bennett oversees the management of a broad portfolio of assets, which includes a significant share in the rhodes ridge iron ore project in the Pilbara, and AMB’s strategic relationships with the rio Tinto Group. Mr Bennett holds an MBA from The University of Western Australia (UWA) and is also an executive Director of unlisted Finance and energy exchange (FeX) a premium provider of energy and financial derivatives with a focus on Asia.

CoMPANY seCreTArY

Graham AndersonBBus CAMr Graham Anderson is a graduate of Curtin University and has over 20 years’ commercial experience as a Chartered Accountant. He operates his own specialist accounting and management consultancy practise, providing a range of corporate advisory services to both public and private companies. From 1990 to 1997 he was an audit partner at Duesburys and from 1997 to 1999 he was an audit partner at Horwath Perth. He is currently Director and Company secretary of APA Financial services Limited, echo resources Limited, Pegasus Metals Limited, Dynasty Metals Limited and Company secretary of Catalpa resources Ltd, iron road Limited, Westonia Mines Limited and Mamba Minerals Limited.

PriNCiPAL ACTiviTiesThe principal activity of the Group during the financial year was exploration for mineral resources.

resULTsThe consolidated loss for the year after income tax was $60,406,355 (2007 $5,906,489).

oPerATiNG revieWDuring the year ended 30 June 2008, the Company completed the following acquisitions:

• The Gidgee Gold Project, located 640 kilometres northeast of Perth and covering 90 kilometres of strike of the Gum Creek greenstone belt, comprising a total JorC compliant resource inventory of 490,000 ounces gold, including the Wilsons refractory gold deposit (Current resource: 734,000t @ 6.9g/t for 164,000oz), a 600,000 tpa gold treatment plant (currently not in operation), a 150 man camp, additional high-grade non-refractory resources close to the existing developments, and significant exploration upside;

• The Youanmi Gold Project, located 480 kilometres northeast of Perth and covering 40 kilometres of strike of the Youanmi shear zone, with a total JorC and Ni 43-101 compliant resource inventory of 951,000 ounces of gold, including the Youanmi Deeps refractory gold deposit (indicated and inferred resource of 2.4 million tonnes @ 8.5 g/t for 658,000 ounces of gold) plus a 600,000 tpa gold treatment plant, a 270,000tpa sulphide flotation plant and a Bactech bacterial oxidation treatment plant capable of treating the gold concentrate (currently not in operation) from TsXv-listed Goldcrest resources Ltd; and

• The Aphrodite Gold Project, located 65 kilometres north of Kalgoorlie and covering 51 square kilometres of the Bardoc Tectonic Zone, comprising a refractory gold deposit with a JorC compliant inferred resource of 1.44 million tonnes @ 6.2 g/t for 287,000 ounces of gold as well as a significant inventory of unclassified gold mineralisation, from Barrick (PD) Australia Limited; and

• The Wiluna Gold Project is situated 1,000 kilometres northeast of Perth and comprises granted mining leases covering approximately 50 square kilometres, as well as miscellaneous licences. The operation has access to the Goldfields Gas Pipeline and includes gold resources totalling over 700,000 ounces (see Table 1), a ~1Mtpa processing facility and a BioX® bacterial oxidation plant, along with other established infrastructure.

Further details in relation to the projects above are contained in announcements lodged with the AsX.

The Project implementation study was completed in June 2008 at which point project development commenced at the Wiluna Gold Project. The site has been kept under active care and maintenance immediately following its acquisition. Mining is scheduled to begin at Wiluna (underground) and east Pit (open pit) in october 2008 with ore being immediately accessible from these two sources. At the same time, decline development is scheduled to begin towards new zones at Wiluna and at Wilsons (Gidgee), where first ore is expected to be mined in February 2009. Commercial production is scheduled to begin in the first quarter of 2009 following a ramp-up phase.

siGNiFiCANT CHANGes iN THe sTATe oF AFFAirsDuring the financial year the Company raised $117,569,879 less capital raising costs of $6,683,602 on the issue of 147,755,445 shares.

other than the above there were no significant changes in the state of affairs of the Company during the financial year, not otherwise disclosed in the attached financial report.

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LiKeLY DeveLoPMeNTsThe Group will continue to develop, explore and assess its mineral projects and will also consider new projects that could provide growth for shareholders.

Further information on the likely developments and expected results of operations of the Group have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Group.

DiviDeNDsNo dividends have been paid during the year and the Directors have not recommended that any dividend be paid.

eveNTs sUBseQUeNT To rePorTiNG DATeon 7 July 2008, an announcement was made on the AsX that the Company was to be a substantial holder in empire resources Ltd. A total of 5,000,000 shares was purchased at 17 cents each and also entered into a signed Memorandum of Understanding thus giving the right to the Company to nominate a representative to join the empire Board of Directors.

on 18 July 2008, it was released to the AsX that the Company had appointed Todd Bennett to the Board as a Non-executive Director, further strengthening the Company’s access to international resource industry investors and project developers. Mr Bennett is the Managing Director of AMB Holdings, a private investment company associated with the Bennett family. Mr Bennett oversees the management of a broad portfolio of assets, which includes a significant share in the rhodes ridge iron ore project in the Pilbara, and the AMB’s strategic relationships with the rio Tinto Group.

on 3 August 2008, two partly paid shareholders had fully paid the remainder of their shares totalling $120,940 (605,000 shares at $0.1999). The total number of partly paid shares remaining is 19,125,000.

on 29 september 2008, the Group raised $58,500,000 gross of costs through the issue of Notes, Gold Upside Participation (“GUP”) Notes and Unsecured Warrants to investors.

The Notes have a coupon of 11.25% and a 3 year term. The GUP Notes are based on a floor price as at the date of and are for 500,000 units. The Warrants are exercisable at 33.5 cents and expire after 5 years. More details are contained in the offering Circular lodged with the AsX.

Options Issuedon 18 July 2007, the Company issued to:

(a) an entity associated with Director of the Company, Mark Ashley, 500,000 unlisted options in the Company, and

(b) an entity associated with Director of the Company, Mark Bennett, 500,000 unlisted options in the Company; and

(c) Director of the Company, Glenn Jardine, 1,000,000 unlisted options in the Company; and

(d) Non-executive Director of the Company, stephen Lowe, 300,000 unlisted options in the Company; and

(e) Non-executive Director of the Company, Kim robinson, 300,000 unlisted options in the Company, pursuant to a resolution of shareholders at general meeting. each option is exercisable at $0.65 and expires on 1 June 2012.

on 31 July 2007, the Company issued 2,050,000 options exercisable at $1.00 expiring 30 July 2012 pursuant to the Company’s employee share option Plan.

on 16 october 2007, the Company issued 350,000 options exercisable at $1.30 expiring 15 october 2012 pursuant to the Company’s employee share option Plan.

on 31 october 2007, the Company issued 200,000 options exercisable at $1.30 expiring 30 october 2012 pursuant to the Company’s employee share option Plan.

on 12 November 2007, the Company issued 350,000 options exercisable at $1.30 expiring 11 November 2012 pursuant to the Company’s employee share option Plan.

on 11 January 2008, 75,000 unlisted options that were issued pursuant to the Company’s employee share option Plan lapsed due to the relevant employees ceasing employment with the Company.

on 11 January 2008, the Company issued 50,000 options exercisable at $1.60 expiring 10 January 2013 pursuant to the Company’s employee share option Plan.

on 28 April 2008, the Company issued to:

(a) an entity associated with Director of the Company, Mark Bennett, 350,000 unlisted options in the Company; and

(b) a Director of the Company, Glenn Jardine, 350,000 unlisted options in the Company,

pursuant to a resolution of shareholders at general meeting. each option is exercisable at $1.30 and expires on 27 April 2013.

on 12 May 2008, the Company issued 1,911,000 options exercisable at $1.30 expiring on 11 May 2013 pursuant to the Company’s employee share option Plan.

on 20 June 2008, the Company issued 600,000 options exercisable at $1.30 expiring on 19 June 2013 pursuant to the Company’s employee share option Plan.

on 30 June 2008, the Company cancelled 50,000 unlisted options in the Company. The options had been exercisable at $1.30 expiring 19 June 2013.

on 18 July 2008, the Company issued 1,000,000 options exercisable at $0.70 expiring on 18 July 2013.

since 30 June 2008, the Directors are not aware of any other matter or circumstance that has significantly or may significantly affect the operations of the Company or the results of those operations, or the state of affairs of the Company in subsequent financial years.

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DireCTors’ iNTeresTsThe relevant interest of each director in the shares, debentures, interests in registered schemes and rights or options over such instruments issued by the companies within the Group and other related bodies corporate, as notified by the directors to the Australian securities exchange in accordance with s205G(1) of the Corporations Act 2001, at the date of this report is as follows:

Apex Minerals NL

Fully Paid shares options

M Ashley Direct – –

indirect 16,800,000 2,500,000

M Bennett Direct – –

indirect 1,472,471 2,850,000

G Jardine Direct 2,315,000 2,850,000

indirect – –

K robinson Direct 5,800,000 1,300,000

indirect – –

s Lowe Direct 186,201 800,000

indirect – –

T Bennett Direct 255,000 –

indirect – –

MeeTiNGs oF DireCTorsThe following table sets out the number of meetings of the Company’s Directors held during the year ended 30 June 2008.

There were a total of 6 Director’s Meetings held during the year.

Number eligible to Attend

Number Attended

Director

M Ashley 6 6

M Bennett 6 6

G Jardine 6 6

K robinson 6 6

s Lowe 6 6

reMUNerATioN rePorT (AUDiTeD)This remuneration report outlines the director and executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its regulations.

Details of key management personnel (including the five highest executives of the Company and the Group):

• Mark Ashley – Managing Director

• Mark Bennett – exploration Director

• Glenn Jardine – operations Director

• Grant Brock – Chief operating officer

• Anna Neuling – Chief Financial Controller

• William Dix – exploration Manager

Directors’ and Executives Emolumentsremuneration and other terms of employment of executives, including executive directors, are reviewed periodically by the Board having regard to performance, relevant comparative information and, where necessary, independent expert advice. remuneration packages which can include bonuses are set at levels that are intended to attract and retain executives capable of managing the Company’s operations.

Bonuses are paid at the discretion of the Board and currently are not directly linked to any key performance indicators.

The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with recommendations being made by the non-executive director. Where the remuneration of a particular executive director is to be considered, the director concerned does not participate in the discussion or decision-making.

The policy of the Company is to pay remuneration of directors and senior executives in cash and in amounts in line with employment market conditions relevant in the mining industry. Minor amounts of employee fringe benefits in the form of employee meals and entertainment are provided as a part of the executives’ way of conducting business.

The Company’s performance, and hence that of its directors and executives, is measured in terms of:

(i) Company share price growth;

(ii) Cash raised;

(iii) exploration carried out; and

(iv) Farm-in expenditure attracted.

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reMUNerATioN rePorT (AUDiTeD) continued

Directors’ and Executives Emoluments continuedThe emoluments of each Director and Key executive were as follows:

short term employee benefits Post employment benefitsshare based

payments

Percentage of remuneration by options %

Performance related %

salary and Directors’

Fees $ Bonuses $other

services $

Non-Monetary Benefits $

super-annuation $

retirement Benefit $ options $ Total $

Director

M Ashley

2008 300,000 100,000 – 31,720 36,000 – 400,357 868,077 46% 12%

2007 298,495 – – – 24,750 – 249,032 572,277 44% 0%

M Bennett

2008 304,167 100,000 – 34,525 36,375 – 415,178 890,245 47% 11%

2007 257,336 – – – 21,591 – 249,032 527,959 47% 0%

G Jardine

2008 304,167 100,000 – – 36,375 – 517,059 957,601 54% 10%

2007 29,375 – – – 2,250 – – 31,625 0% 0%

K robinson

2008 45,628 – – – 6,665 – 225,019 277,312 81% 0%

2007 28,424 – – – – – 118,891 147,315 81% 0%

s Lowe

2008 36,002 – – – 1,620 – 171,032 208,654 82% 0%

2007 33,511 – 9,293 – – – 59,445 102,249 58% 0%

s stone

2008 – – – – – – – – 0% 0%

2007 8,308 – – – – – 116,383 124,691 93% 0%

Total

2008 989,964 300,000 – 66,245 117,035 – 1,728,645 3,201,889

2007 655,449 – 9,293 – 48,591 – 792,783 1,506,116

Key Executives

G Anderson

2008 – – 66,000 – – – 32,823 98,823 33% 0%

2007 – – 66,000 – – – 2,798 68,798 4% 0%

G Brock

2008 137,820 – – – 2,250 – 3,086 143,156 2% 0%

2007 – – – – – – – – 0% 0%

A Neuling

2008 146,154 20,000 – 6,725 14,602 – 66,855 254,336 26% 8%

2007 – – – – – – – – 0% 0%

W Dix

2008 157,500 30,000 – 25,326 16,875 – 173,576 403,277 43% 7%

2007 – – – – – – – 0% 0%

Total

2008 441,474 50,000 66,000 32,051 33,727 – 276,340 899,592

2007 – – 66,000 – – – 2,798 68,798


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Directors’ and Executives Emoluments continued

Employment BenefitsThe details of the executive employment contracts are as follows:

The Managing Director, Mark Ashley, current employment contract is a 3 year contract that commenced on 18 April 2006 and terminates on 17 April 2009, unless earlier terminated in accordance with this agreement. Upon the expiration of the term of this agreement, the executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Ashley will be paid a minimum remuneration package of $300,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle.

• The Company may terminate this agreement by not less than three months’ notice in writing if the executive becomes incapacitated by illness or accident for an accumulated period of three months or the Company is advised by an independent medical officer that the executive’s health has deteriorated to a degree that it is advisable for the executive to leave the Company. on termination on notice by the Company, the Company is obliged to pay the executive a six month service fee.

• The Company may terminate the contract at any time without notice if serious misconduct has occurred. on termination with cause, the executive is not entitled to any payment.

The exploration Director, Mark Bennett, current employment contract is a 3 year contract that commenced on 9 May 2006 and terminates on 8 May 2009, unless earlier terminated in accordance with this agreement. Upon the expiration of the term of this agreement, the executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Bennett will be paid a minimum remuneration package of $350,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle.

• The Company may terminate this agreement by not less than three months’ notice in writing if the executive

becomes incapacitated by illness or accident for an accumulated period of three months or the Company is advised by an independent medical officer that the executive’s health has deteriorated to a degree that it is advisable for the executive to leave the Company. on termination on notice by the Company, the Company is obliged to pay the executive a six month service fee.


The operations Director, Glenn Jardine, current employment contract is a contract that commenced on 31 May 2007. Upon the expiration of the term of this agreement, the executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Jardine will be paid a minimum remuneration package of $350,000p.a. base salary plus superannuation.



The Chief operating officer, Grant Brock, commenced with the Company on a Contractor Agreement between 29 January 2008 and 31 May 2008. Mr Brock’s current employment contract is a contract that commenced on 1 June 2008. Upon the expiration of the term of this agreement, the executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Brock will be paid a minimum remuneration package of $300,000p.a. base salary plus superannuation. Mr Brock is entitled to claim reimbursement of costs associated with running his own vehicle including: fuel, insurance, registration, servicing, parking and other incidentals.

• either party may terminate this agreement by not less than one months’ notice in writing.


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Employment Benefits continued• The Company may terminate the contract at any time

without notice if serious misconduct has occurred. on termination with cause, the executive is not entitled to any payment.

The Chief Financial officer, Anna Neuling, current employment contract is a contract that commenced on 30 July 2007. Upon the expiration of the term of this agreement, the executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Ms Neuling will be paid a minimum remuneration package of $165,000p.a. base salary plus superannuation. Due to her existing lease agreement she is permitted to salary sacrifice a vehicle until the termination of the lease in May 2009.

• either party may terminate this agreement by not less than one months’ notice in writing.


The exploration Manager, William Dix, current employment contract is a contract that commenced on 7 May 2006. Upon expiration of the term of this agreement, the executive’s appointment that will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Dix will be paid a minimum remuneration package of $165,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle.



Share based paymentsThe Group has an ownership-based compensation scheme for executives and employees of the Group. each employee share option converts into one ordinary share of Apex Minerals NL on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends or voting rights. options may be exercised at any time from the date of vesting to the date of their expiry.

The following table summarises the value of options granted, exercised or lapsed during the annual reporting period to the identified directors and executives:

2008value of options

granted at the grant date $

value of options exercised at the exercise date $

value of options lapsed at the

date of lapse $

Directors

Mark Ashley 382,300 – –

Mark Bennett 553,800 – –

Glenn Jardine 936,100 – –

Kim robinson 229,380 – –

stephen Lowe 229,380 – –

Key Executives

Graham Anderson – – –

Grant Brock 225,000 – –

Anna Neuling 161,400 – –

William Dix 383,782 – –

3,101,142 – –

2007value of options

granted at the grant date $


value of options lapsed at the

date of lapse $

Directors

stephen stone 116,383 116,383 –



Glenn Jardine – – –

Kim robinson 232,766 – –

stephen Lowe 116,383 – –

Key Executives

Graham Anderson 68,260 – –

Grant Brock – – –

Anna Neuling – – –

William Dix – – –

1,464,856 116,383 –

1,500,000 options were issued to Glenn Jardine as a consultant but prior to him being an employee or director of the Company.


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Share based payments continuedThe terms of conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are as follows:

2008 series No. Number issue Date Grant Date expiry dateexercise

PriceFair value at Grant Date

vested No.

Directors options

Mark Ashley 12 500,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 –

Mark Bennett 12 500,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 –

Glenn Jardine 12 1,000,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 –

Kim robinson 12 300,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 –

stephen Lowe 12 300,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 –

Mark Bennett 18 350,000 28/04/2008 28/04/2008 27/04/2013 1.30 0.49 –

Glenn Jardine 18 350,000 28/04/2008 28/04/2008 27/04/2013 1.30 0.49 –

Key executive options

Anna Neuling 13 200,000 31/07/2007 31/07/2007 30/07/2012 1.00 0.72 –

Anna Neuling 19 40,000 12/05/2008 12/05/2008 11/05/2013 1.30 0.45 –

William Dix 19 40,000 12/05/2008 12/05/2008 11/05/2013 1.30 0.45 –

Grant Brock 20 500,000 20/06/2008 20/06/2008 19/06/2013 1.30 0.30 –

2007

Directors options

Mark Ashley 1 2,000,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 –

Mark Bennett 1 2,000,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 –

Kim robinson 1 1,000,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 –

stephen Lowe 1 500,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 –

Key executive options

Graham Anderson 11 200,000 1/06/2007 1/06/2007 1/06/2012 0.65 0.34 –

William Dix 11 400,000 1/06/2007 1/06/2007 1/06/2012 0.65 0.34 –

William Dix 3 1,000,000 20/07/2006 7/05/2006 20/07/2011 0.14 0.23 –

All of the options above vest two years after the date of issue. The expense is spread over the two year vesting period with $1,479,000 to be expensed in the year ended 30 June 2009 and $273,000 the year ended 30 June 2010.

options were priced using a Black scholes option pricing model using the inputs below.

series 1 series 3 series 11 series 12 series 13 series 18 series 19 series 20

Grant Date share Price ($)

0.30 0.30 0.56 1.06 1.10 0.88 0.83 0.62

exercise Price ($) 0.14 0.14 0.65 0.65 1.00 1.30 1.30 1.30

expected volatility 70% 70% 70% 70% 70% 70% 70% 70%

option life 20/07/2011 20/07/2011 1/06/2012 1/06/2012 30/07/2012 27/04/2013 11/05/2013 19/06/2013

Dividend yield 0% 0% 0% 0% 0% 0% 0% 0%

interest rate 6.50% 6.50% 6.50% 6.28% 6.27% 7.25% 7.25% 7.25%


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Directors’ Benefitssince the date of the last Directors’ report, no director of the Company has received, or become entitled to receive (other than a remuneration benefit included in Note 28 to the financial statements), a benefit because of a contract that:

(a) The director; or

(b) A firm of which the director is a member; or

(c) an entity in which the director has a substantial financial interest, has made (during the year ended 30 June 2008, or at any other time) with

(i) The Company; or

(ii) an entity that the Company controlled, or a body corporate that was related to the Company, when the contract was made or when the director received, or became entitled to receive, the benefit (if any).

Share Options

Options granted to Directors and officers of the CompanyDuring and subsequent to year ended 30 June 2008 the following options have been issued to directors and executives as part of their remuneration:

Number of options

issued pre 30 June 2008

Number of options

issued post 30 June 2008 Total

Director

Mark Ashley 2,500,000 – 2,500,000

Mark Bennett 2,850,000 – 2,850,000

Glenn Jardine 2,850,000 – 2,850,000

Kim robinson 1,300,000 – 1,300,000

stephen John Lowe 800,000 – 800,000

Graham Anderson 200,000 – 200,000

Grant Brock 500,000 – 500,000

Anna Neuling 240,000 – 240,000

Will Dix 1,440,000 – 1,440,000

Shares issued on exercise of optionsDuring the year no shares have been issued from the exercise of options.

Options outstandingThere are 24,136,000 options outstanding as at the date of this report.

Number of issue exercise Price $ expiry Date

1,500,000 0.20 3 July 2011

7,200,000 0.14 20 July 2011

250,000 0.30 17 August 2011

250,000 0.35 14 september 2011

300,000 0.20 31 May 2009

500,000 0.35 1 November 2011

1,000,000 0.35 1 November 2011

275,000 0.45 30 November 2011

300,000 0.45 30 November 2011

2,875,000 0.65 1 June 2012

2,600,000 0.65 1 June 2012

1,975,000 1.00 30 July 2012

350,000 1.30 15 october 2012

200,000 1.30 30 october 2012

350,000 1.30 11 November 2012

50,000 1.60 10 January 2013

700,000 1.30 27 April 2013

1,911,000 1.30 11 May 2013

550,000 1.30 19 June 2013

1,000,000 0.70 18 July 2013

24,136,000

option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any other related body corporate or in the interest issue of any other registered scheme.

eNviroNMeNTAL reGULATioNThe Group’s operations are subject to significant environmental regulations under both Commonwealth and state legislation in relation to its mineral exploration activities. At the date of this report the Group is not aware of any breach of those environmental requirements.

DireCTors’ iNsUrANCeDuring the year, the Company has paid a premium in respect of a contract insuring the directors of the Company (as named above) against liabilities incurred as such a director to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.


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CorPorATe GoverNANCein recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the Company support and have adhered to the highest principles of corporate governance. The Company’s corporate governance statement is contained in the Corporate Governance section on pages 84 to 90.

AUDiTor’s iNDePeNDeNCeA copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 46.

NoN-AUDiT serviCesDuring the year stantons international, the Group’s auditor, did not perform any other services in addition to their statutory duties.

This report is made in accordance with a resolution of the Directors.

Dated at sydney this 29th day of september 2008.

Mark AshleyManaging Director

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16

INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OFAPEX MINERALS NL

Report on the Financial Report and the AASB 124 remuneration disclosures contained inthe Directors’ Report

We have audited the accompanying financial report of Apex Minerals NL, which comprises thebalance sheet as at 30 June 2008, and the income statement, statement of changes in equity andcash flow statement for the year ended on that date, a summary of significant accounting policiesand other explanatory notes and the directors’ declaration of the consolidated entity comprising thecompany and the entities it controlled at the year’s end or from time to time during the financialyear.

We have also audited the remuneration disclosures contained in the Directors’ Report under theheading “remuneration report” on pages 37 to 42.

Directors’ responsibility for the Financial Report and the AASB 124 remuneration disclosurescontained in the Directors’ Report

The directors of the Company are responsible for the preparation and fair presentation of thefinancial report in accordance with Australian Accounting Standards (including the AustralianAccounting Interpretations) and the Corporations Act 2001. This responsibility includes designing,implementing and maintaining internal control relevant to the preparation and fair presentation ofthe financial report that is free from material misstatement, whether due to fraud or error; selectingand applying appropriate accounting policies; and making accounting estimates that arereasonable in the circumstances. In note 1, the directors also state, in accordance with AustralianAccounting Standard AASB 101 Presentation of Financial Statements, that the financial report ofthe Company and the Group, comprising the financial statements and notes, complies withInternational Financial Reporting Standards.

The directors of the Company are also responsible for the remuneration disclosures contained inthe Directors’ Report.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. Weconducted our audit in accordance with Australian Auditing Standards. These Auditing Standardsrequire that we comply with relevant ethical requirements relating to audit engagements and planand perform the audit to obtain reasonable assurance whether the financial report is free frommaterial misstatement. Our responsibility is also to express an opinion on the remunerationdisclosures contained in the Directors’ Report based on our audit.F

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17

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial report and the remuneration disclosures contained in the Directors’Report. The procedures selected depend on the auditor’s judgement, including the assessment ofthe risks of material misstatement of the financial report and the remuneration disclosurescontained in the Directors’ Report, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial report and the remuneration disclosures contained in the Directors’Report in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonablenessof accounting estimates made by the directors, as well as evaluating the overall presentation of thefinancial report and the remuneration disclosures contained in the Directors’ Report.

Our audit did not involve an analysis of the prudence of business decisions made by directors ormanagement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of theCorporations Act 2001.

Auditor’s opinion on the financial report

In our opinion:

(a) the financial report of Apex Minerals NL is in accordance with the Corporations Act 2001,including:

(i) giving a true and fair view of the company’s and consolidated entity’s financialposition as at 30 June 2008 and of their performance for the year ended on thatdate; and

(ii) complying with Australian Accounting Standards (including the AustralianAccounting Interpretations) and the Corporations Regulations 2001.

(b) the financial report of the Company and the Group also complies with International FinancialReporting Standards as disclosed in note 1.

Auditor’s opinion on the AASB 124 remuneration disclosures contained in the directors’ report

In our opinion the remuneration disclosures that are contained in pages 37 to 42 of the Directors’Report comply with section 300 A of the Corporations Act 2001.

STANTONS INTERNATIONAL(An Authorised Audit Company)

K G LingardDirector

West Perth, Western Australia29 September 2008

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18

29 September 2008

Board of DirectorsApex Minerals NLGround Floor31 Ventnor AvenueWEST PERTH WA 6005

Dear Directors

RE: APEX MINERALS NL

In accordance with section 307C of the Corporations Act 2001, I am pleased to providethe following declaration of independence to the directors of Apex Minerals NL.

As the Audit Director for the audit of the financial statements of Apex Minerals NL for theyear ended 30 June 2008, I declare that to the best of my knowledge and belief, therehave been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation tothe audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerelySTANTONS INTERNATIONAL(Authorised Audit Company)

K G LingardDirector

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The directors declare that:

1. The financial statements and notes set out on pages 48 to 83, are in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the financial position of the Company and the Group as at 30 June 2008 and of their performance, as represented by the results of their operations and cashflows, for the year ended on that date; and

(b) complying with Accounting standards and the Corporations regulations 2001; and

2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

3. The directors have been given the declarations required by section 295A of the Corporations Act 2001 from the chief executive officer and chief financial officer for the year ended 30 June 2008.

This statement is made in accordance with a resolution of the Directors.

Dated at sydney this 29th day of september 2008.

Mark Ashley Managing Director

Directors’ Declaration

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Consolidated Parent entity 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

Revenues from ordinary activities 3 2,025 202 1,834 183

Recovery from subsidiary – 22 – –

Other income 3 837 736 836 –

Marketing expenses (96) (56) (96) (57)

Occupancy expenses (199) (128) (193) (128)

Share based payments (3,456) (1,276) (2,942) (1,276)

Administrative expenses (4,749) (1,862) (4,610) (1,862)

Exploration expenditure written off (54,134) (3,251) (185) (1,420)

Provisions for writedowns – (293) (58,833) (3,475)

Finance costs 4 (634) – – –

(Loss) from ordinary activities before

related income tax expense 5 (60,406) (5,906) (64,189) (8,035)

Income tax attributable to operating loss 6 – – 279 –

Loss after income tax (60,406) (5,906) (63,910) (8,035)

Basic loss per share (cents) 18 (19.01) (3.69)

The accompanying notes form part of these financial statements.

Income Statements for the year ended 30 June 2008

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Balance Sheets as at 30 June 2008


Current AssetsCash and cash equivalents 25(a) 38,909 13,264 38,008 13,244Trade and other receivables 7 2,274 68 305 66Inventory 8 1,972 – – –Other financial assets 9 512 – – –

Total Current Assets 43,667 13,332 38,313 13,310

Non Current AssetsOther receivables 7 – – 51,778 –Property, plant and equipment 10 48,450 357 350 357Deferred tax assets – – 279 –Other financial assets 9 1,526 2,777 1,189 1,220Exploration acquisition costs 11 19,195 – – –Project development 12 27,737 – – –

Total Non Current Assets 96,908 3,134 53,596 1,577

Total Assets 140,575 16,466 91,909 14,887

Current Liabilities

Trade and other payables 13 12,305 2,407 1,867 2,407Provisions 15 471 117 276 117Loan Payable 33 – – 414 429Borrowings 14 17 – – –Deferred consideration 24 3,000 – – –

Total Current Liabilities 15,793 2,524 2,557 2,953

Non-Current Liabilities

Borrowings 14 69 – – –Provisions 15 29,722 – – –Other payables 16 21 – – –

Total Non-Current Liabilities 29,812 – – –

Total Liabilities 45,605 2,524 2,557 2,953

Net Assets 94,970 13,942 89,352 11,934

Equity

Issued capital 17 162,967 24,081 162,967 24,081Share based payments reserve 21 4,732 1,276 4,732 1,276Available for sale investments revaluation reserve 21 (208) 700 (193) 821Accumulated losses 19 (72,521) (12,115) (78,154) (14,244)

Total Equity 94,970 13,942 89,352 11,934


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Statement of Changes in Equity for the year ended 30 June 2008

Available for sale share Based investments issued Accumulated Payments revaluation Total Capital Losses reserve reserve equity $’000 $’000 $’000 $’000 $’000

CoNsoLiDATeD

Balance 1 July 2006 12,769 (6,209) – – 6,560Issue of share capital 11,960 – – – 11,960Capital raising costs (718) – – – (718)Issue of share based payments – – 1,276 – 1,276Exercise of options 70 – – – 70Net unrealised gain for the year – – – – –Revaluation to fair value – – – 700 700Loss for the year – (5,906) – – (5,906)

Balance 30 June 2007 24,081 (12,115) 1,276 700 13,942

Issue of share capital 145,570 – – – 145,570Capital raising costs (6,684) – – – (6,684)Issue of share based payments – – 3,456 – 3,456Exercise of options – – – – –Net unrealised gain for the year – – – – –Revaluation to fair value – – – (618) (618)Transfer to income statement on sale of investment – – – (290) (290)Loss for the year – (60,406) – – (60,406)

Balance 30 June 2008 162,967 (72,521) 4,732 (208) 94,970

PAreNT

Balance 1 July 2006 12,769 (6,209) – – 6,560Issue of share capital 11,960 – – – 11,960Capital raising costs (718) – – – (718)Issue of share based payments – – 1,276 – 1,276Exercise of options 70 – – – 70Revaluation to fair value – – – 821 821Loss for the year – (8,035) – – (8,035)

Balance 30 June 2007 24,081 (14,244) 1,276 821 11,934

Issue of share capital 145,570 – – – 145,570Capital raising costs (6,684) – – – (6,684)Issue of share based payments – – 3,456 – 3,456Exercise of options – – – – –Revaluation to fair value – – – (724) (724)Transfer to income statement on sale of investment – – – (290) (290)Loss for the year – (63,910) – – (63,910)

Balance 30 June 2008 162,967 (78,154) 4,732 (193) 89,352


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Cash Flow Statement for the year ended 30 June 2008


Cash flows from operating activities Receipts from customers 512 – – –Payments to suppliers and employees (53,089) (4,188) (4,477) (1,262)Interest received 1,751 183 1,597 183Interest paid (494) – (3) –Other income – 42 – –

Net cash flows (used in) operating activities (51,320) (3,963) (2,883) (1,079)

Cash flows from investing activities Proceeds on available for sale financial assets 398 2,223 398 –Payments for available for sale financial assets (53) (2,816) (53) (23)Proceeds from sale of fixed assets 4 – – –Payments for property, plant and equipment (1,293) (378) (262) (378)Payments for development of mining properties (1,238) – – –Payments for acqusitions of gold projects (26,249) – – –Payments for costs of acquisition of gold projects (3,899) – – –Amounts advanced to subsidiaries – – (82,574) (3,475)Payments relating to project costs – (350) – (350)

Net cash flows (used in) investing activities (32,330) (1,321) (82,491) (4,226)

Cash flows from financing activities Payments for costs of raising capital (7,401) (176) (7,401) (176)Payment for cash backed guarantees (215) – (31) –Proceeds from share issue 117,570 12,033 117,570 12,034Repayment of lease liability (659) – – –Repayment of loan – (550) – (550)

Net cash flows from financing activities 109,295 11,307 110,138 11,308

Net increase in cash and cash equivalents held 25,645 6,023 24,764 6,003Cash and cash equivalents at beginning of the year 13,264 7,241 13,244 7,241

Cash and cash equivalents at end of the year 25(a) 38,909 13,264 38,008 13,244

RECONCILIATION OF OPERATING LOSS AFTER INCOME TAX TO NET CASH OUTFLOW FROM OPERATING ACTIVITIESOperating (loss) after tax (60,406) (5,906) (63,910) (8,035)Depreciation 366 106 270 106Employee entitlements 354 106 160 106Share based payments 3,456 1,276 2,942 1,276Provision for non recovery of loan – 292 58,833 3,475Profit on sale of investments (837) (736) (836) –Tax expense – – (279) –Changes in assets and liabilities (Increase)/Decrease in receivables (2,205) (26) 66 (24) (Increase)/Decrease in other assets and liabilities (1,946) – – – Increase/(Decrease) in payables 9,898 925 (129) 2,017

(51,320) (3,963) (2,883) (1,079)


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52Apex Minerals NL

Notes to and forming part of the Financial Statements for the year ended 30 June 2008

Apex Minerals NL (the parent) is a company incorporated in Australia where shares are traded on the Australian Securities Exchange.

The financial statements were authorised for issue by the directors on 29 September 2008.

The significant policies which have been adopted in the preparation of this financial report are:

Statement of complianceThe financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law.

The financial report includes the separate financial statements of the Company and the consolidated financial statements of the Group.

Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). Compliance with A-IFRS ensures that the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards (‘IFRS’).

Basis of preparationThe financial report has been prepared in accordance with the hitorical cost convention except for the revaluation of certain non-current assets and financial instruments. All amounts are presented in Australian dollars, unless otherwise noted.

The Company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

Critical accounting, judgement and estimatesIn the application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the revision affects current and future periods. Refer to Note 2 for a discussion of critical judgements in applying the entity’s accounting policies, and key sources of estimation certainty.

Adoption of new and revised Accounting StandardsIn the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period. Details of the impact of the adoptions of these new accounting standards are set out in the individual accounting policy notes set out below. The Group has also adopted the following Standards as listed below which only impacted on the Group’s financial statements with respect to disclosure.

• AASB 101 ‘Presentation of Financial Statements’ (revised October 2006)

• AASB 7 ‘Financial Instruments: Disclosures’

• Accounting Standards of Interpretation issued but not yet effective as disclosed in note 1(w).

Going ConcernThe financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Group incurred a net loss of $60,406,000 for the year ended 30 June 2008 and had a net cash outflow from operations of $51,320,000 for the year. The Group has a net current asset position of $27,874,000 and a net asset position of $94,970,000. The Group have raised $58,500,000 gross of costs through the issue of Notes, GUP Notes and Warrants. These funds will supply the Group with working capital through the start of production and enable exploration to continue based on the cashflows forecast used by the Board for the project assessment. Further details on the structure of the financing is in Note 34.

Should the Company and the Group be unable to continue as going concerns, they may be required to realise their assets and extinguish their liabilities other than in the normal course of business and at amounts different from those stated in the financial reports. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary should the Company and the Group be unable to continue as going concerns.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Basis of consolidationThe consolidated financial statements incorporate the financial statements of Company and entities controlled by the Company (its subsidiaries) (referred to as ‘the Group’ in these financial statements). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

NoTe 1. CorPorATe iNForMATioN AND sUMMArY oF siGNiFiCANT ACCoUNTiNG PoLiCies

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(a) Basis of consolidation continuedThe results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. In the separate financial statements of the Company, intra-group transactions (‘common control transactions’) are generally accounted for by reference to the existing (consolidated) book value of the items. Where the transaction value of common control transactions differ from their consolidated book value, the difference is recognised as a contribution by or distribution to equity participants by the transacting entities.

(b) Revenue recognitionRevenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST). Exchanges of goods or services of the same nature without any cash consideration are not recognised as revenues.

Interest incomeInterest income is recognised as it accrues, taking into account the effective yield on the financial asset.

Sale of goodsRevenue from the sale of mineral production is recognised when the Group has passed risks and rewards of the mineral production to the buyer and a price has been set.

Sale of non-current assetsThe gross proceeds of non-current asset sales are included as revenue at the date control of the asset passes to the buyer, usually when an unconditional contract of sale is signed. The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal.

(c) Joint Venture OperationsThe Company’s interest in joint ventures is brought to account by including its proportionate share of the joint venture’s assets, liabilities and expenses and share of its output on a line-by-line basis.

(d) Share based payments

(i) Equity settled transaction:The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There is currently a Employee Share Option Plan (ESOP), which provides benefits to employees. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date which they are granted.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Apex Minerals NL (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees come fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had been vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earning per share.

NoTe 1. CorPorATe iNForMATioN AND sUMMArY oF siGNiFiCANT ACCoUNTiNG PoLiCies continued

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(e) Goods and Services TaxRevenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Balance Sheet. Cash flows are included in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(f) Income Tax

Deferred Income TaxDeferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

• except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:

• except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the

temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement.

Tax ConsolidationThe Company and all its wholly owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. Apex Minerals NL is the head in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary difference of the members of the tax-consolidated group are recognised in the separate financial statements of the of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts are recognised as payable or receivable by the company and each member of the group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax-consolidated group in accordance with the arrangement.

(g) Cash and cash equivalentsCash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(h) Trade and other receivablesTrade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.



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(i) Exploration and Evaluation ExpenditureExploration and evaluation costs are written off in the year they are incurred, apart from acquisition costs which are carried forward where right of tenure of the area of interest is current and the expenditure is expected to be recouped through sale or successful development and exploration of the area of interest. When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.

(j) Mining Development and ExpenditureMine development expenditure is recognised at cost less accumulated amortisation and any impairment losses. Where commercial production in an area of interest has commenced, the associated costs are amortised over the estimated economic life of the mine on a units of production basis.

Changes in factors such as estimates of proved and probable reserves that affect unit of production calculations are dealt with on a prospective basis.

(k) Property, Plant and EquipmentPlant and equipment is stated at cost less accumulated depreciation and any impairment in value. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

Plant and equipment is depreciated on the diminishing value method at the rate of 22.5% and computer equipment at 40% on the diminishing value method.

Impairment – The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period the item is derecognised.

(l) Recoverable amount of assetsAt each reporting date, the Company assesses whether there is any indication that an asset may be impaired.

Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount.Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(m) InvestmentsAll investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment.

After initial recognition, investments, which are classified as held for trading and available-for-sale, are measured at fair value. Gains or losses on investments held for trading are recognised in the income statement.

Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the income statement.

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification.



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(n) Operating leasesLease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability. Lease payments received reduce the liability.

(o) Finance leasesAssets held under finance leases are initially recognised at their value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly attributable to qualifying assets, in which they are capitalised in accordance with the Group’s general policy on borrowing costs.

(p) InvestmentsInvestments in controlled entities are carried in the Company’s financial statements at the lower of cost and recoverable amount.

(q) Accounts PayableLiabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Company. Trade accounts payable are normally settled within 60 days.

(r) Employee benefitsLiabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of the employee’s services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

(s) Provision for restoration and rehabilitationA provision for restoration and rehabilitation is recognised when there is a present obligation as a result of exploration, development and production activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and

the amount of the provision can be measured reliably. The estimated future obligations include the costs of removing facilities, abandoning sites and restoring the affected areas.

The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date.

The initial estimate of the restoration and rehabilitation provision relating to exploration, development and mining facilities is capitalised into the cost of the related asset and amortised on the same basis as the related asset.

Changes in the estimate of the provision for restoration and rehabilitation are treated in the same manner, except the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the costs of the related asset.

(t) Transactions Costs Arising on the Issue of Equity InstrumentsTransaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate.

(u) Earnings per Share

(i) Basic Earnings per ShareBasic earnings per share is determined by dividing the operating loss after income tax by the weighted average number of ordinary shares outstanding during the financial year.

(ii) Diluted Earnings per ShareDiluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of partly paid shares or options outstanding during the financial year.

(v) InventoriesInventories are stated at the lower of cost and net realisable value on a weighted average basis.

(w) Standards and Interpretations issued not yet effectiveAt the date of authorisation of the financial report, the Standards and Interpretations listed below were in issue but not yet effective.

Initial application of the following Standard will not affect any of the amounts recognised in the financial report, but will change the disclosures presently made in relation to the Group and the Company’s financial report:



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(w) Standards and Interpretations issued not yet effective continued• AASB 101 ‘Presentation of Financial Statements’

(revised September 2007)

– Effective for annual reporting periods beginning on or after 1 January 2009

• AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8

– AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or after 1 January 2009. AASB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of a ‘management approach’ to reporting on financial performance. The information being reported will be based on what the key decision makers use internally for evaluating segment performance and deciding how to allocate resources to operating segments. The Group has not yet decided when to adopt AASB 8. Application of AASB 8 may result in different segments, segment results and different types of information being reported in the segment note of the financial report. However, at this stage, it is not expected to affect any of the amounts recognised in the financial statements.

• Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12]

– The revised AASB 123 is applicable to annual reporting periods commencing on or after 1 January 2009. It has removed the option to expense all borrowing costs and – when adopted – will require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. There will be no impact on the financial report of the Group, as the Group does not have any borrowings (or already capitalises borrowing costs relating to qualifying assets).

The potential effect of the initial application of the expected issue of an Australian equivalent accounting standard to the following Standard has not yet been determined:

• IFRS 3 ‘Business Combinations’ and IAS 27 ‘Separate and Consolidated Financial Statements’

– Effective for annual reporting periods beginning on or after 1 July 2009

NoTe 2. CriTiCAL ACCoUNTiNG JUDGeMeNTs AND KeY soUrCes oF esTiMATioN UNCerTAiNTY

(a) Critical judgements in applying the entity’s accounting policiesThe following are the critical judgements (apart from those involving estimations, which are dealt with below), that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

Determination of mineral reserves and resourcesThe determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates, deferred stripping costs and provisions for decommissioning and restoration. The Group uses the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2004 (the ‘JORC code’) as a minimum standard. The information on mineral resources and ore reserves were prepared by or under the supervision of Competent Persons as defined in the JORC code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC code.

There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated.

(b) Key sources of estimation uncertaintyThe following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts within the next financial year:

(i) Useful lives of property, plant and equipmentAs described in note 2, the Group review the estimated useful lives of property, plant and equipment at the end of each annual reporting period. There have been no adjustments to the estimated useful lives that impact on the balance sheet values.

(ii) Impairment of capitalised mine development expenditureThe future recoverability of capitalised development expenditure is dependent on a number of factors, including the level of proved, probable and inferred mineral resources, future technological changes that could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.



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(b) Key sources of estimation uncertainty continued

(ii) Impairment of capitalised mine development expenditure continuedTo the extent that capitalised mine development expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.

(iii) Impairment of property, plant and equipmentProperty, plant and equipment is reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of ‘value in use’ (being the net present value of expected future cash flows of the relevant cash generating unit) and ‘fair value less costs to sell’.

In determining value in use, future cash flows are based on:

• estimates of the quantities of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction;

• future production levels;

• future commodity prices; and

• future cash costs of production and capital expenditure.

Variations to the expected future cash flows, and the timing thereof, could result in significant changes to any impairment losses recognised, if any, which could in turn impact future financial results.

(iv) Provision for decommissioning and restoration costsDecommissioning and restoration costs are a normal consequence of mining, and the majority of this expenditure is incurred at the end of the mine’s life. In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation.

The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates.

Changes to any of the estimates could result in significant changes to the level of provision required, which would in turn impact future financial results.

(v) Recoverability of potential deferred income tax assetsThe Group does not recognise deferred income tax assets in respect of tax losses to the extent that it is not probable that the future utilisation of these losses is considered probable. Assessing the future utilisation of these losses requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws. To the extent that future cash flows and taxable income differ significantly from estimates, this could result in significant changes to the deferred income tax assets recognised, which would in turn impact future financial results.


NoTe 2. CriTiCAL ACCoUNTiNG JUDGeMeNTs AND KeY soUrCes oF esTiMATioN UNCerTAiNTY continued

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Consolidated Parent entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000

NoTe 3. reveNUe

Revenue from outside the Operating Activities

Interest revenue 2,025 183 1,834 183Fair value of financial asset received from joint venture farminee as part of joint venture agreement – 19 – –

2,025 202 1,834 183

Recovery from subsidiary – 22 – –

Other income Other income (i) 785 – 785 –Reversal of gain/(loss) from equity on disposal of investments classified as available-for-sale 290 – 290 –(Loss)/Profit from sale of investments classified as available for sale (239) – (239) –(Loss)/Profit from sale of fixed assets 1 – – –(Loss)/Profit from sale of investments classified as held for trading – 736 – –

837 736 836 –

Total Revenue 2,862 960 2,670 183

(i) This relates to shares and options acquired in Maximus as consideration for the disposal of an interest in the Narndee JV to Maximus Resources NL as per ASX announcement dated 23 May 2007.

NoTe 4. FiNANCe CosTs

Interest on guarantees 473 – – –Interest on obligations under finance leases 2 – – –

Total Interest expense 475 – – –

Unwinding of discounts on provisions (note 15) 159 – – –

Total Finance costs 634 – – –

NoTe 5. oPerATiNG Loss

Operating loss from ordinary activities before income tax has been arrived at after charging the following items:

Depreciation of non-current assets 235 106 139 106Impairment of non-current assets 131 – 131 –Exploration expenditure written off 54,134 3,251 185 1,420Provision for non-recovery of loans to controlled entities – – 58,833 3,475


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NoTe 6. iNCoMe TAX

Income tax recognised in profit or loss

Current tax Current year – – – –Under/(Over) Provision for Prior Year – – – –

Deferred tax Origination and reversal of temporary differences 239 – (147) –Benefit on tax losses recognised – – – –Under/(Over) Provision for Prior Year of Temporary Differences (239) – (132) –

Total income tax expense/(benefit) per income statement – – (279) –

Numerical reconciliation between tax expense and pre-tax net loss

Net profit/(loss) before tax (60,406) (5,906) (64,189) (8,035)

Income tax expense/(benefit) on above at 30% (18,122) (1,772) (19,257) (2,411)

Increase in income tax due to:

Non-deductible expenses 1,170 387 1,011 389Sundry items – – – –Under/(Over) Provision for Prior Year of Temporary Differences – – – –Loan impairment in subsidiaries – – 17,650 1,042Tax effect of exploration on acquisition of subsidiary 1,491 – – –Tax effect of temporary differences not recognised 1,602 – – –Tax effect of current year capital loss not recognised 56 – 56 –Tax effect of previously recognised losses derecognised 320 – 320 –

Tax effect of current year tax losses derecognised 14,628 1,524 822 1,014Other – – – 29

Decrease in income tax expense due to: Under/(Over) Provision for Prior Year of Temporary Differences (239) – (132) –Tax effect of revaluations and transfers of investments from equity (262) – (293) –Tax effect of ARO temporary differences in acquired subsidiaries (189) – – –Deductible equity raising costs (456) (63) (456) (63)Other – (76) – –

Income tax expense attributable to entity – – (279) –

Deferred tax recognised directly in equity

Relating to equity raising costs – – – –Relating to available for sale investments – – – –

Deferred tax expense/(benefit) attributable to entity recognised in equity – – – –


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NoTe 6. iNCoMe TAX continued

Recognised deferred tax assets & liabilities

Deferred tax assets & liabilities are attributable to the following:

AssetsProperty, Plant and Equipment 39 – 40 –Mine Development 451 – – –Expensed Blackhole costs 13 – 13 –Provision for rehabilitation 8,917 – – –Provisions and Accruals 851 – 327 –Revenue Losses – 320 – 252Capital Losses – – – –

Deferred Tax Assets 10,271 320 380 252

Liabilities Accrued Income (74) – (73) –Investments (24) (210) (28) (247)Exploration (1,491) – – –Mine Development – (105) – –ARO Assets (8,681) – – –Provisions and Accruals – (5) – (5)Prepayments (1) – – –

Deferred Tax Liabilities (10,271) (320) (101) (252)

Net Deferred Tax Assets/(Liabilities) – – 279 –

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following:

Entity Deductible temporary differences 3,360 277 1,758 1,726Tax revenue losses 17,233 2,688 17,233 2,248Tax capital losses 56 – 56 –

20,649 2,965 19,047 3,974


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Consolidated

Balance at recognised recognised Balance at 1/07/2006 Under/over in income in equity other 30/06/07

Deferred Tax Assets & Liabilities

Property, Plant and Equipment – – – – – –Accrued Income – – – – – –Investments – – (210) – – (210)Exploration – – – – – –Mine Development – – (105) – – (105)Equity Raising Costs – – – – – –Expensed Blackhole costs – – – – – –ARO Assets – – – – – –Provision for rehabilitation – – – – – –Provisions and Accruals (5) – – – – (5)Prepayments – – – – – –Other – – – – – –Revenue Losses 5 – 315 – – 320Capital Losses – – – – – –

Net Deferred Tax Assets/(Liabilities) – – – – – –



Property, Plant and Equipment – – 39 – – 39Accrued Income – (2) (72) – – (74)Investments (210) (4) 190 – – (24)Exploration – – (8,762) – 7,272 (1,490)Mine Development (105) 176 7,652 – (7,272) 451Equity Raising Costs – – – – – –Expensed Blackhole costs – 20 (7) – – 13ARO Assets – – (524) – (8,156) (8,680)Provision for rehabilitation – – 760 – 8,156 8,916Provisions and Accruals (5) 49 806 – – 850Prepayments – – (1) – – (1)Other – – – – – –Revenue Losses 320 – (320) – – –Capital Losses – – – – – –

Net Deferred Tax Assets/(Liabilities) – 239 (239) – – –


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Movement in temporary differences during the year Parent



Property, Plant and Equipment – – – – – –Accrued Income – – – – – –Investments – – (247) – – (247)Exploration – – – – – –Mine Development – – – – – –Equity Raising Costs – – – – – –Expensed Blackhole costs – – – – – –ARO Assets – – – – – –Provision for rehabilitation – – – – – –Provisions and Accruals (5) – – – – (5)Prepayments – – – – – –Other – – – – – –Revenue Losses 5 – 247 – – 252Capital Losses – – – – – –

Net Deferred Tax Assets/(Liabilities) – – – – – –



Property, Plant and Equipment – – 39 – – 39Accrued Income – (1) (71) – – (72)Investments (247) (4) 222 – – (29)Exploration – – – – – –Mine Development – – – – – –Equity Raising Costs – – – – – –Expensed Blackhole costs – 20 (7) – – 13ARO Assets – – – – – –Provision for rehabilitation – – – – – –Provisions and Accruals (5) 49 284 – – 328Prepayments – – – – – –Other – – – – – –Revenue Losses 252 68 (320) – – –Capital Losses – – – – – –

Net Deferred Tax Assets/(Liabilities) – 132 147 – – 279

Tax consolidationThe Company and its wholly-owned Australian entities have formed a tax-consolidated group with effect from 1 June 2006 and therefore are taxed as a single entity from that date.

The head entity of the group is Apex Minerals NL. The members of the tax-consolidated group are as per the note 31.

Nature of tax funding arrangements and tax sharing agreementsEntities within the tax-consolidated group have entered into a tax funding arrangement and tax sharing agreement with the head entity. Under terms of the tax funding arrangements, Apex Minerals NL and each of the entities in the tax consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the tax consolidated group.

The tax sharing agreement entered into between members of the tax consolidated group provides for the determination of the allocation of income tax liabilities between entities should the head entity default on its tax payment obligations or if an entity should leave the tax consolidated group. The effect of the tax sharing agreement is that each member’s liability for tax payable by the tax consolidated group is limited to the amount payable to the head entity under the tax funding arrangement.


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NoTe 7. TrADe AND oTHer reCeivABLes

Current Trade receivables (i) 226 3 – 3Accrued interest 247 6 243 6GST receivable 976 34 39 31Prepayments 363 25 21 26Other (ii) 462 – 2 –

2,274 68 305 66

Non Current Loans to controlled entities – – 114,832 4,221Provision for non-recovery – – (63,054) (4,221)

– – 51,778 –

(i) The Company policy for accounts receivable is a 30 day trading term. $31,000 is current, $83,000 is outstanding greater than 30 days, $17,000 is outstanding greater than 90 days, $47,000 is outstanding greater than 120 days and $48,000 is outstanding greater than 180 days. The Company does not believe that the provision for doubtful debts is required on the basis that all these debts will be recovered as per prior collection history from these debtors.

(ii) Other receivables relate to cash advances to staff and diesel fuel rebate.

NoTe 8. iNveNTorY

At cost 1,972 – – –

1,972 – – –

NoTe 9. oTHer FiNANCiAL AsseTs

Current Bank guarantees (i) 512 – – –

512 – – –

Non Current Controlled entities – unlisted – – 1,241 727Less provision for diminution in value – – (727) (727)Investment in other entity – available for sale 859 1,276 494 1,070Deposits in relation to post balance sheet acquisitions – 1,000 – –Bank guarantees (i) 667 150 181 150Project costs in relation to post balance sheet date acquisitions – 351 – –

1,526 2,777 1,189 1,220

(i) Relates to office lease bond (2008 $93,296), credit card bond (2008 $87,700), gas contract bond (2008 $470,706), lease contract bond (2008 $512,127) and account bond (2008 $15,000).


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NoTe 10. ProPerTY, PLANT AND eQUiPMeNT

Plant and equipment at cost 49,057 500 764 500Accumulated depreciation and impairment (607) (143) (414) (143)

48,450 357 350 357

Consolidated Parent entity Leasehold Plant and Leasehold Plant and improvements equipment improvements equipment at cost at cost at cost at cost $’000 $’000 $’000 $’000

Movement during the year

Gross carrying amount

Balance at 1 July 2006 – 111 – 111Additions 181 208 181 208Disposals – – – –

Balance at 1 July 2007 181 319 181 319Additions (i) 10 1,411 10 254Additions to Rehabilitation asset – 27,975 – –Disposals – (3) – –Acquisitions through gold projects – 19,164 – –

Balance at 30 June 2008 191 48,866 191 573

Accumulated depreciation/amortisation

Balance at 1 July 2006 – (37) – (37)Depreciation expense (29) (77) (29) (77)

Balance at 1 July 2007 (29) (114) (29) (114)Depreciation expense (30) (205) (30) (109)Acquisitions through gold projects – (97) – –Impairment due to cessation of lease (132) – (132) –

Balance at 30 June 2008 (191) (416) (191) (223)

Net book value

As at 30 June 2007 152 205 152 205

As at 30 June 2008 – 48,450 – 350

(i) For additions by the Group during the period, an amount of $126,000 was in relation to assets under finance lease.


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NoTe 11. eXPLorATioN ACQUisiTioN CosTs

Exploration at cost 19,195 – – –

19,195 – – –


Balance at beginning of year – – – –Expenditure incurred during the year 54,134 3,252 (185) 1,420Exploration expenditure relating to acquisitions 43,434 – – –Exploration expenditure written off (54,134) (3,252) 185 (1,420)Transferred to Development (i) (24,239) – – –

Balance at end of year 19,195 – – –

(i) It was decided by the Board of Directors that projects Wiluna and Gidgee (Wilsons) would commence development from 23 June 2008. Exploration capitalised was then reclassified into project development also detailed in note 12.

NoTe 12. ProJeCT DeveLoPMeNT

Project development at cost 27,737 – – –

27,737 – – –


Balance at beginning of year – – – –Expenditure incurred during the year 3,498 – – –Transferred from exploration acquisition costs 24,239 – – –


NoTe 13. TrADe AND oTHer PAYABLes

Trade payables 4,509 187 1,054 187Accrued expenses 7,700 2,220 814 2,220Other (i) 96 – – –

12,305 2,407 1,867 2,407

(i) Relates to the non interest bearing repayment loans of $12,000 for fuel bowsers and $84,300 for generators.

NoTe 14. BorroWiNGs

Secured – at amortised cost

Current Finance lease liabilities (i) 17 – – –

Non current Finance lease liabilities (i) 69 – – –

86 – – –

(i) Secured over the assets leased. The borrowings are fixed interest rate debt with repayments of less than 5 years. The current weighted average effective interest rate on the finance lease liabilities is 9.8 % pa.


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NoTe 15. ProvisioNs

Current Employee benefits (i) 471 117 276 117

Non Current Restoration and Rehabilitation (ii) 29,722 – – –

30,194 117 276 117

(i) Number of employees 62 13 23 13

(ii) Restoration and Rehabilitation Balance at beginning of year – – – –Provision at acquisition 1,589 – – –Additional provision recognised 27,974 – – –Unwinding of discount and effect of changes in discount rate (note 4) 159 – – –


(i) The current provision for employee benefits relates to annual leave.

(ii) The provision for the restoration and rehabilitation of the mine sites operated by the Group represents the present value of the best estimate of the future sacrifice of economic benefits that will be required.

NoTe 16. oTHer PAYABLes

Non CurrentOther (i) 21 – – –

21 – – –

(i) Relates to non interest bearing repayment loan for fuel bowsers.

NoTe 17. CoNTriBUTeD eQUiTY

Issued CapitalFully paid ordinary shares 162,967 24,081 162,967 24,08119,730,000 shares partly paid to 0.001 cents each – – – –

162,967 24,081 162,967 24,081

Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore the company does not have a limited amount of authorised capital and issued shares do not have a par value.

Partly Paid Shares – Terms and Conditions(1) No calls may be made by the Company for the partly paid shares currently on issue to be fully paid up, for 5 years from the date

of the general meeting held on 22 June 2006.

(2) After the first anniversary of the date of this General Meeting, the holder of partly paid shares may request that a call be made by the Company to pay up the uncalled capital on no more than one half of the partly paid shares held by that shareholder.

(3) After the second anniversary of the date of this General Meeting, the holder of partly paid shares may request that call be made by the Company to pay up the uncalled capital on all of the remaining partly paid shares held by that shareholder or from time to time a proportion thereof.


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Number of shares 2008 2007 2008 2007 $’000 $’000

NoTe 17. CoNTriBUTeD eQUiTY continued

Movements in issued and paid up ordinary capital of the Company during the past year were as follows:

Balance at the beginning of the year: 182,119,755 158,619,755 24,081 12,769

Issues Placement at 52 cents per share 39,000,000 23,000,000 20,280 11,960Acquisition of Youanmi at $0.35 per share 14,285,714 – 5,000 –Payment of outstanding balance on partly paid shares of $0.19999 per share 618,750 – 124 –Acquisition of Aphrodite at $0.98 per share 2,051,272 – 2,000 –Placement at $1 per share 30,000,000 – 30,000 –Acquisition of Gidgee at $0.32 per share 34,000,000 – 11,000 –Placement at $1 per share 5,000,000 – 5,000 –Placement at $1.10 per share 1 – – –Wiluna Acquisition at $1.05 per share 9,536,526 – 10,000 –Placement at $0.85 per share 47,491,802 – 40,368 –Placement at $0.85 per share 25,644,892 – 21,798 –Cost of issues – – (6,684) (718)Options exercised – 500,000 – 70

Balance at year end 389,748,712 182,119,755 162,967 24,081

Consolidated Cents per share 2008 2007

NoTe 18. eArNiNGs/(Loss) Per sHAre

(a) Basic loss per share (19.01) (3.69)

$’000 $’000

(b) Net loss used in calculating– Basic loss per share (60,406) (5,906)

Number of shares

Weighted average number of ordinary shares outstanding during the year used in the calculation of basic earnings per share 317,737,672 160,000,577

Diluted earnings per share has not been disclosed as it does not result in an inferior position.


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NoTe 19. ACCUMULATeD Losses

Accumulated losses

Accumulated losses at beginning of year (12,115) (6,209) (14,244) (6,209)Net loss attributable to Apex Minerals NL (60,406) (5,906) (63,910) (8,035)

Accumulated losses at end of year (72,521) (12,115) (78,154) (14,244)

NoTe 20. CoMMiTMeNTs For eXPeNDiTUre

(a) Exploration CommitmentsThe Company must meet the following tenement expenditure commitments to maintain them in good standing until they are joint ventured, sold, reduced, relinquished, exemptions from expenditure are applied for or are otherwise disposed of. These commitments, net of farm outs, are not provided for in the financial statements and are:

Not later than one year 5,358 1,433 285 163After one year but less than two years 5,358 1,433 – 163After two years but less than five years 17,040 4,300 – 489After five years 4,850 1,433 – 163

32,606 8,599 285 978

(b) Lease CommitmentsSee operating and finance lease information at Note 23.

(c) Capital Expenditure commitmentsPlant and Equipment Not longer than 1 year 10,310 – – –

10,310 – – –

NoTe 21. reserves

Share-based payments reserve

Balance at beginning of year 1,276 – 1,276 –Options issued to consultants – 135 – 135Options issued to employees 3,456 1,141 2,942 1,141Options issued to subsidiaries’ employees – – 514 –

Balance at year end 4,732 1,276 4,732 1,276

The share based payments reserve is used to recognise the fair value of share based payments issued to employees and consultants.

Available-for-sale investments revaluation reserve

Balance at beginning of year 700 – 821 –Revaluation (618) 700 (724) 821Transfer to income statement on part sale of investment (290) – (290) –

Balance at year end (208) 700 (193) 821

The investments revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold that portion of the reserve which relates to that financial asset, and is effectively realised, is recognised in profit or loss. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in a profit or loss.


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NoTe 22. CoNTiNGeNT LiABiLiTies

There is a contingent consideration of $5,000,000 payable to Legend Mining Ltd within 30 days of 250,000 troy ozs of gold being produced and sold from the Gidgee tenements. As at the date of this report, it is not possible to accurately estimate the likelihood and timing of the production of the 250,000 ozs required to be produced before the contingent consideration is due. As at 30 June 2008, this consideration has not been accounted for as a liability.

The directors are of the opinion that there are no other contingent liabilities as at 30 June 2008.

NoTe 23. LeAses

Finance Leases

Leasing arrangementsFinance leases relate to plant and equipment purchased for the term of 5 years. The Group has options to purchase the equipment for a nominal amount at the conclusion of the lease agreements. The Group’s obligation under finance leases are secured by the lessor’s title to the leased assets. Minimum Future Present value of Minimum Lease Payments Future Lease Payments

Consolidated Parent entity 2008 2007 2008 2007 2008 2007 2008 2007 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

No later than 1 year 25 – – – 17 – – –

Later than 1 year and not later than 5 years 83 – – – 69 – – –

Later than 5 years – – – – – – – –

Minimum future lease payments 108 – – – 86 – – –Less future finance charges (22) – – – – – – –

Present value of minimum lease payments 86 – – – 86 – – –

Included in the financial statements as: (note 14)

Current Borrowings 17 – – –

Non-current borrowings 69 – – –

86 – – –

Operating leases

Leasing arrangementsOperating leases relate to head office premises and various items of office equipment. The lease terms for the office premises is1 June 2006 to 1 June 2012. The lease terms for the various items of office equipment vary between 2008 to 2011.


Not longer than 1 year 133 121 121 121Longer than 1 year and not longer than 5 years 404 476 354 476Longer than 5 years – – – –

537 597 475 597


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NoTe 24. ACQUisiTioNs

(a) Wiluna AcquisitionThe Wiluna acquisition was completed on 11 October 2007. The consideration was 9,536,526 shares valued at $10,000,000, $16,500,000 of cash, $3,000,000 of deferred consideration which is to be paid at first pour of gold dore bullion and $1,805,000 of costs including stamp duty.

The assets acquired were $2,045,000 of inventory, $15,451,000 of property, plant and equipment at Wiluna mine site and $13,809,000 of fair value of exploration potential.

An additional $737,000 of plant and equipment and the related liability were reassigned from Oxiana as part of the acquisition.

(b) Gidgee AcquisitionThe Gidgee acquisition completed on 10 August 2007. The consideration was 34,000,000 shares valued at $11,000,000 and $1,004,000 of costs including stamp duty. See Note 22 for further details on deferred consideration.

The assets acquired were $314,000 of inventory, $1,261,000 of property, plant and equipment at Gidgee mine site and $10,429,000 of fair value of exploration potential.

(c) Youanmi AcquisitionThe Youanmi acquisition completed on 31 July 2007. The consideration was 14,285,714 shares valued at $5,000,000, $5,000,000 cash and $2,530,000 of costs including stamp duty.

Two subsidiaries were acquired with a consolidated net asset deficiency of $2,488,000, $11,752,000 of fair value of exploration potential and $1,620,000 of property, plant and equipment.

(d) Aphrodite AcquisitionThe Aphrodite acquisition completed on 8 August 2007. The consideration was 2,051,272 shares valued at $2,000,000, $5,000,000 cash and $442,000 of costs including stamp duty. The assets acquired were $7,442,000 of fair value of exploration potential.

NoTe 25. NoTes To THe CAsH FLoW sTATeMeNT

(a) Reconciliation to the cash flow statementFor the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments inmoney market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shownin the cash flow statement is reconciled to the related items in the balance sheet as follows:


Cash and cash equivalents 38,909 13,264 38,008 13,244Bank overdraft – – – –

38,909 13,264 38,008 13,244

(b) Non-cash financing activities and investing activitiesSee the acquisitions note for detail on the non cash transactions relating to the acquisitions.

(c) Financing facilitiesUnsecured guarantee facility(i)Amount used – – – –Amount unused 2,055 – 2,055 –

(i) Government environmental bonds are guaranteed over assets owned by a third party. An agreement which ends in March 2009 with Mark Creasy enables the company to use third party assets to guarantee the bonds for an interest payment of 9.75% up to $2,057,000 and 10.25% from $2,057,000 to $8,057,000. There were no unsecured guarantee facilities entered into by the Group or Company in the year ended 30 June 2007.


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NoTe 26. FiNANCiAL iNsTrUMeNTs

(a) Capital Risk ManagementThe Group manages its capital to ensure that entities in the Group will be able to continue as a going concern whilst maximising the return to stakeholders through the optimisation of the debt and equity balance. Consolidated Parent entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Financial Instruments

Debt (i) (3,981) – – –Cash and cash equivalents – – – –

Net cash (3,981) 0 0 0

Equity 140,575 Net debt to equity ratio 0%

(i) Debt is defined as long- and short-term borrowings.

(b) Credit Risk ManagementThe credit risk on financial assets of the Company which have been recognised on the balance sheet is generally the carrying amount, net of any provisions for doubtful debts.

(c) Foreign Currency Risk ManagementThe Group has minimal transactional currency exposures as the majority of the Group’s transactions are in Australian dollars.

(d) Interest Rate Risk ManagementThe Group and Company are not materially exposed to interest rate risk although entities in the Group borrow funds at fixed interest rates. At reporting date, there are immaterial finance leases on fixed interest rates and the unsecured guarantee as detailed in note 25 (c).

The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out below.

Floating interest rate Fixed interest rate Non-interest Bearing Total

Consolidated 2008 2007 2008 2007 2008 2007 2008 2007 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Financial Assets Cash Assets 8,909 12,723 30,000 541 – – 38,909 13,264Other financial assets – – 1,164 – 874 1,426 2,038 1,426Receivables – – – – 1,911 43 1,911 43

8,909 12,723 31,164 541 2,785 1,469 42,858 14,733

Interest Rate 7.00% 4.00% 8.00% 5.00%

Financial Liabilities Payables – – – – 12,209 2,407 12,209 2,407Non Interest bearing – – – – 117 – 117 –Interest bearing liability – – 86 – – – 86 –Deferred Consideration – – – – 3,000 – 3,000 –

– – 86 – 15,326 2,407 15,412 2,407

Interest Rate 9.80%

Net Financial Assets/(Liabilities) 8,909 12,723 31,078 541 (12,541) (938) 27,446 12,326


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NoTe 26. FiNANCiAL iNsTrUMeNTs continued

(d) Interest Rate Risk Management continued

Floating interest rate Fixed interest rate Non-interest Bearing Total

Parent 2008 2007 2008 2007 2008 2007 2008 2007 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Financial Assets Cash Assets 8,008 12,703 30,000 541 – – 38,008 13,244Other financial assets – – 181 – 1,008 1,220 1,189 1,220Receivables – – – – 52,062 40 52,062 40

8,008 12,703 30,181 541 53,070 1,260 91,259 14,504

Interest Rate 7.00% 4.00% 8.00% 5.00%

Financial Liabilities Payables – – – – 2,281 2,836 2,281 2,836Non Interest bearing – – – – – – – –Interest bearing liability – – – – – – – –

– – – – 2,281 2,836 2,281 2,836

Interest Rate

Net Financial Assets/(Liabilities) 8,008 12,703 30,181 541 50,789 (1,576) 88,978 11,668

(e) Liquidity Risk ManagementThe Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

Weighted Average Less than 3 months effective interest rate 1 month 1-3 months to 1 year 1 to 5 years 5+ years

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 Consolidated % % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Financial Liabilities Non-interest bearing 11,726 2,293 466 113 3,113 1 20 – – –Finance lease liability 9.80% 1 – 2 – 13 – 70 – – –

11,727 2,293 469 113 3,126 1 90 – – –

Financial Assets Non-interest bearing 2,223 1,469 463 – 95 – 5 – – –Variable interest rate instruments 7.00% 4.00% 8,909 12,723 – – – – – – – –Fixed interest rate instruments 8.00% 5.00% – – 30,088 – – 541 1,076 – – –

11,132 14,192 30,550 – 95 541 1,081 – – –


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NoTe 26. FiNANCiAL iNsTrUMeNTs continued

(e) Liquidity Risk Management continued

Weighted Average Less than 3 months effective interest rate 1 month 1-3 months to 1 year 1 to 5 years 5+ years

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 Parent % % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Financial Liabilities Non-interest bearing 2,243 2,722 7 113 31 1 – – – –

2,243 2,722 7 113 31 1 – – – –

Financial Assets Non-interest bearing 52,828 1,260 242 – – – – – – –Variable interest rate instruments 7.00% 4.00% 8,008 12,703 – – – – – – – –Fixed interest rate instruments 8.00% 5.00% – – 30,088 – – 541 93 – – –

60,836 13,963 30,330 – – 541 93 – – –

(f) Net Fair Value of Financial Assets and LiabilitiesThe net fair value of the financial assets and liabilities are the same as their carrying amount.

(g) Commodity’s Price RiskThe Group’s exposure to price risk is minimal at the stage of project development as at 30 June 2008.


NoTe 27. AUDiTors reMUNerATioN

Amounts received or due and receivableby the auditors of parent entity:– auditing or reviewing the financial report 61 39 61 39– other services – – – –

61 39 61 39

NoTe 28. DireCTor AND eXeCUTive DisCLosUres

(a) Details of Directors and Key Executive

(i) DirectorsMark Ashley Managing Director – Appointed 18 April 2006Mark Bennett Exploration Director – Appointed 9 May 2006Glenn Jardine Operations Director – Appointed 16 June 2007Kim Robinson Chairman/Director (non-executive) – Appointed 26 September 2006Stephen John Lowe Director (non-executive)

(i) Key ExecutivesGraham Anderson Company SecretaryGrant Brock Chief Operating OfficerAnna Neuling Chief Financial OfficerWilliam Dix Exploration Manager


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NoTe 28. DireCTor AND eXeCUTive DisCLosUres continued

(b) Remuneration of Directors and Key Executive

short term employee benefits Post employment benefitsshare based

payments

Percentage of remuneration by options %

Performance related %

salary and Directors’

Fees $ Bonuses $other

services $

Non-Monetary Benefits $

super-annuation $

retirement Benefit $ options $ Total $

Director

M Ashley

2008 300,000 100,000 – 31,720 36,000 – 400,357 868,077 46% 12%

2007 298,495 – – – 24,750 – 249,032 572,277 44% 0%

M Bennett

2008 304,167 100,000 – 34,525 36,375 – 415,178 890,245 47% 11%

2007 257,336 – – – 21,591 – 249,032 527,959 47% 0%

G Jardine

2008 304,167 100,000 – – 36,375 – 517,059 957,601 54% 10%

2007 29,375 – – – 2,250 – – 31,625 0% 0%

K Robinson

2008 45,628 – – – 6,665 – 225,019 277,312 81% 0%

2007 28,424 – – – – – 118,891 147,315 81% 0%

S Lowe

2008 36,002 – – – 1,620 – 171,032 208,654 82% 0%

2007 33,511 – 9,293 – – – 59,445 102,249 58% 0%

S Stone

2008 – – – – – – – – 0% 0%

2007 8,308 – – – – – 116,383 124,691 93% 0%

Total

2008 989,964 300,000 – 66,245 117,035 – 1,728,645 3,201,889

2007 655,449 – 9,293 – 48,591 – 792,783 1,506,116

Key Executives

G Anderson

2008 – – 66,000 – – – 32,823 98,823 33% 0%

2007 – – 66,000 – – – 2,798 68,798 4% 0%

G Brock

2008 137,820 – – – 2,250 – 3,086 143,156 2% 0%

2007 – – – – – – – – 0% 0%

A Neuling

2008 146,154 20,000 – 6,725 14,602 – 66,855 254,336 26% 8%

2007 – – – – – – – – 0% 0%

W Dix

2008 157,500 30,000 – 25,326 16,875 – 173,576 403,277 43% 7%

2007 – – – – – – – 0% 0%

Total

2008 441,474 50,000 66,000 32,051 33,727 – 276,340 899,592

2007 – – 66,000 – – – 2,798 68,798


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(b) Remuneration of Directors and Key Executive continuedThe Managing Director, Mark Ashley, current employment contract is a 3 year contract that commenced on 18 April 2006 and terminates on 17 April 2009, unless earlier terminated in accordance with this agreement. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Ashley will be paid a minimum remuneration package of $300,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle.

• The Company may terminate this agreement by not less than three months’ notice in writing if the Executive becomes incapacitated by illness or accident for an accumulated period of three months or the Company is advised by an independent medical officer that the Executive’s health has deteriorated to a degree that it is advisable for the Executive to leave the Company. On termination on notice by the Company, the Company is obliged to pay the Executive a six month service fee.

• The Company may terminate the contract at any time without notice if serious misconduct has occurred. On termination with cause, the Executive is not entitled to any payment.

The Exploration Director, Mark Bennett, current employment contract is a 3 year contract that commenced on 9 May 2006 and terminates on 8 May 2009, unless earlier terminated in accordance with this agreement. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Bennett will be paid a minimum remuneration package of $350,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle.



The Operations Director, Glenn Jardine, current employment contract is a contract that commenced on 31 May 2007. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Jardine will be paid a minimum remuneration package of $350,000p.a. base salary plus superannuation.



The Chief Operating Officer, Grant Brock, commenced with the Company on a Contractor Agreement between 29 January and 31 May 2008. Mr Brock’s current employment contract is a contract that commenced on 1 June 2008. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Brock will be paid a minimum remuneration package of $300,000p.a. base salary plus superannuation. Mr Brock is entitled to claim reimbursement of costs associated with running his own vehicle including: fuel, insurance, registration, servicing, parking and other incidentals.

• Either party may terminate this agreement by not less than one months’ notice in writing.



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(b) Remuneration of Directors and Key Executive continuedThe Chief Financial Officer, Anna Neuling, current employment contract is a contract that commenced on 30 July 2007. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Ms Neuling will be paid a minimum remuneration package of $165,000p.a. base salary plus superannuation. Due to her existing lease agreement she is permitted to salary sacrifice a vehicle until the termination of the lease in May 2009.

• Either party may terminate this agreement by not less than one months’ notice in writing.


The Exploration Manager, William Dix, current employment contract is a contract that commenced on 7 May 2006. Upon expiration of the term of this agreement, the Executive’s appointment that will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract:

• Mr Dix will be paid a minimum remuneration package of $165,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle.



(c) Remuneration options: Granted and vested during the yearDirectors and key executives were granted options during the year.

The Group has an ownership-based compensation scheme for executives and employees of the Group. Each employee share option converts into one ordinary share of Apex Minerals NL on exercise. No amounts are paid or payable by the recipient on receipt of the option.

The following table summarises the value of options granted, exercised or lapsed during the annual reporting period to the identified directors and executives:

2008 value of options granted at the grant date $


value of options lapsed at the date of lapse $

Directors



Glenn Jardine 936,100 – –

Kim Robinson 229,380 – –

Stephen Lowe 229,380 – –

Key Executives

Graham Anderson – – –

Grant Brock 225,000 – –

Anna Neuling 161,400 – –

William Dix 383,782 – –

3,101,142 – –


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(c) Remuneration options: Granted and vested during the year continued

2007 value of options granted at the grant date $


value of options lapsed at the date of lapse $

Directors

Stephen Stone 116,383 116,383 –



Glenn Jardine – – –

Kim Robinson 232,766 – –

Stephen Lowe 116,383 – –

Key Executives

Graham Anderson 68,260 – –

Grant Brock – – –

Anna Neuling – – –

William Dix – – –

1,464,856 116,383 –

series 1 series 3 series 11 series 12 series 13 series 18 series 19 series 20

Grant Date Share Price ($) 0.30 0.30 0.56 1.06 1.10 0.88 0.83 0.62

Exercise Price ($) 0.14 0.14 0.65 0.65 1.00 1.30 1.30 1.30

Expected volatility 70% 70% 70% 70% 70% 70% 70% 70%

Option life 20/07/2011 20/07/2011 1/06/2012 1/06/2012 30/07/2012 27/04/2013 11/05/2013 19/06/2013

Dividend yield 0% 0% 0% 0% 0% 0% 0% 0%

Interest rate 6.50% 6.50% 6.50% 6.28% 6.27% 7.25% 7.25% 7.25%

Grant Date 22/06/2006 7/05/2006 1/06/2007 18/07/2007 31/07/2007 28/04/2008 12/05/2008 20/06/2008

Number 5,500,000 1,000,000 600,000 2,600,000 200,000 700,000 80,000 500,000

Fair value at Grant Date 0.23 0.23 0.34 0.76 0.49 0.72 0.45 0.30

All of the options above vest two years after the date of issue. The expense is spread over the two year vesting period with $1,479,000 to be expensed in the year ended 30 June 2009. See note 29 for the assumptions used in the Black Scholes valuation.

(d) Shareholdings of Directors and Key Executives

Fully Paid ordinary shares Held at 1 July 2007 Purchases sales Held at 30 June 2008

(i) Directors

Mark Ashley 16,250,000 550,000 – 16,800,000

Mark Bennett 1,450,000 22,471 – 1,472,471

Glenn Jardine 2,215,000 100,000 – 2,315,000

Kim Robinson 5,000,000 800,000 – 5,800,000

Stephen John Lowe 171,201 – – 171,201

(ii) Key Executives

Graham Anderson (i) 85,001 50,000 – 135,001

Grant Brock – 60,000 – 60,000

Anna Neuling – 5,000 – 5,000

William Dix 840,000 – – 840,000

(i) These shares were purchased in October 2005 and this disclosure was omitted from the figures in year ending for 30 June 2006 and 30 June 2007.


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(d) Shareholdings of Directors and Key Executives continued

options Held at 1 July 2007 Granted exercised Held at 30 June 2008

(i) Directors

Mark Ashley 2,000,000 500,000 – 2,500,000

Mark Bennett 2,000,000 850,000 – 2,850,000

Glenn Jardine 1,500,000 1,350,000 – 2,850,000

Kim Robinson 1,000,000 300,000 – 1,300,000

Stephen John Lowe 500,000 300,000 – 800,000

(ii) Key Executives

Graham Anderson 200,000 – – 200,000

Grant Brock – 500,000 – 500,000

Anna Neuling – 240,000 – 240,000

William Dix 1,400,000 40,000 – 1,440,000

Fully Paid ordinary shares Held at 1 July 2006 Purchases sales Held at 30 June 2007

(i) Directors

Mark Ashley 16,000,000 250,000 – 16,250,000

Mark Bennett 1,400,000 50,000 – 1,450,000

Glenn Jardine 215,000 2,000,000 – 2,215,000

Kim Robinson 4,800,000 200,000 – 5,000,000

Stephen John Lowe 171,201 – – 171,201

(ii) Key Executives

Graham Anderson 85,001 – – 85,001

options Held at 1 July 2006 Granted exercised Held at 30 June 2007

(i) Directors

Mark Ashley – 2,000,000 – 2,000,000

Mark Bennett – 2,000,000 – 2,000,000

Glenn Jardine – 1,500,000 – 1,500,000

Kim Robinson – 1,000,000 – 1,000,000

Stephen John Lowe – 500,000 – 500,000

(ii) Key Executives

Graham Anderson – 200,000 – 200,000

William Dix – 1,400,000 – 1,400,000

(e) Other transactions of Directors and Director-Related entitiesDuring the year the Company paid taxation and business consulting fees of $34,000 excluding GST to MKT at normal professional rates an accounting firm of which S J Lowe is a non-executive director.

Aggregate amounts of each of the above types of transactions with Directors and their Director-related entities are included in Directors’ remuneration disclosed above.


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(f) Remuneration PracticesRemuneration and other terms of employment of executives, including executive directors, are reviewed periodically by the Board having regard to performance, relevant comparative information and, where necessary, independent expert advice. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the Company’s operations.

The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with recommendations being made by the non-executive director. Where the remuneration of a particular executive director is to be considered, the director concerned does not participate in the discussion or decision-making.

The policy of the Company is to pay remuneration of directors and senior executives in cash and in amounts in line with employment market conditions relevant in the mining industry. Minor amounts of employee fringe benefits in the form of employee meals and entertainment are provided as a part of the executives’ way of conducting business.

The Company’s performance, and hence that of its directors and executives, is measured in terms of:

(i) Company share price growth;(ii) Cash raised;(iii) Exploration carried out; and(iv) Farm-in expenditure attracted.

Upon retirement no benefits will be paid to specified directors and executives.

NoTe 29. sHAre BAseD PAYMeNTs

Each share option converts into one ordinary share of Apex Minerals NL on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends or voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

The following share-based payments arrangements were in existence during the current and comparative reporting periods:

options series Number Grant Date expiry dateexercise

Price $Fair value at

Grant Date $

(1) Issued 20 July 2006 6,000,000 22/06/2006 20/07/2011 0.14 0.23

(2) Issued 20 July 2006 350,000 24/04/2006 20/07/2011 0.14 0.24

(3) Issued 20 July 2006 1,000,000 7/05/2006 20/07/2011 0.14 0.23

(4) Issued 20 July 2006 350,000 29/05/2006 20/07/2011 0.14 0.22

(5) Issued 18 August 2006 250,000 18/08/2006 17/08/2011 0.30 0.10

(6) Issued 15 September 2006 250,000 4/09/2006 14/09/2011 0.35 0.26

(7) Issued 1 November 2006 1,500,000 13/10/2006 1/11/2011 0.35 0.23

(8) Issued 15 November 2006 75,000 20/11/2006 30/11/2011 0.45 0.14

(9) Issued 15 November 2006 100,000 1/09/2006 30/11/2011 0.45 0.14

(10) Issued 23 January 2007 20,000 23/01/2007 12/01/2012 0.45 0.18

(11) Issued 1 June 2007 2,875,000 1/06/2007 1/06/2012 0.65 0.34

(12) Issued 18 July 2007 2,600,000 18/07/2008 1/06/2012 0.65 0.76

(13) Issued 31 July 2007 2,050,000 31/07/2007 30/07/2012 1.00 0.72

(14) Issued 16 October 2007 350,000 16/10/2007 15/10/2012 1.30 0.85

(15) Issued 31 October 2007 200,000 31/10/2007 30/10/2017 1.30 0.83

(16) Issued 12 November 2007 350,000 12/11/2007 11/11/2012 1.30 0.78

(17) Issued 11 January 2008 50,000 11/01/2008 10/01/2013 1.60 0.84

(18) Issued 28 April 2008 700,000 28/04/2008 27/04/2013 1.30 0.49

(19) Issued 12 May 2008 1,911,000 12/05/2008 11/05/2013 1.30 0.45

(20) Issued 20 June 2008 600,000 20/06/2008 19/06/2013 1.30 0.30


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NoTe 29. sHAre BAseD PAYMeNTs continued

All of the options above vest two years after the date of issue with the exception of 500,000 options in series 7 which vested immediately. The options are expensed over the two year vesting period and there is $3,340,000 to be expensed in the year ended 30 June 2009 and $827,000 in the year ended 30 June 2010. The 500,000 options which vested immediately were issued to a consultant were valued at $24,725 as the value of the service provided.

The weighted average fair value of the share options granted during the financial year is $0.41 (2007 $0.23).

Options were priced using a Black Scholes option pricing model using the inputs below.

Series 1 Series 2 Series 3 Series 4 Series 5 Series 6 Series 7 Series 8 Series 9 Series 10

Grant Date Share price 0.30 0.31 0.30 0.29 0.27 0.40 0.36 0.36 0.35 0.32

Exercise Price 0.14 0.14 0.14 0.14 0.30 0.35 0.35 0.45 0.45 0.40

Expected volatility 70% 70% 70% 70% 70% 70% 70% 70% 70% 70%

Option life 20/07/2011 20/07/2011 20/07/2011 20/07/2011 17/08/2011 14/09/2011 1/11/2011 30/11/2011 30/11/2011 12/01/2012

Dividend yield 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Interest rate 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50%

Series 11 Series 12 Series 13 Series 14 Series 15 Series 16 Series 17 Series 18 Series 19 Series 20

Grant Date Share price 0.56 1.06 1.10 1.33 1.30 1.24 1.38 0.88 0.83 0.62

Exercise Price 0.65 0.65 1.00 1.30 1.3 1.30 1.60 1.30 1.30 1.30

Expected volatility 70% 70% 70% 70% 70% 70% 70% 70% 70% 70%

Option life 1/06/2012 1/06/2012 30/07/2012 15/10/2012 30/10/2012 12/11/2012 11/01/2013 27/04/2013 11/05/2013 19/06/2013

Dividend yield 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Interest rate 6.50% 6.28% 6.27% 6.50% 6.50% 6.50% 6.75% 7.25% 7.25% 7.25%

The following reconciles the outstanding share options granted to employees and directors at the beginning and the end of the financial year: 2008 2007 Weighted Weighted Number average Number average of options exercise price of Options exercise price

Balance at the beginning of the financial year 12,270,000 0.29 – –Granted during the financial year 8,811,000 1.04 (12,770,000) 0.29Exercised during the financial year (i) – – (500,000) 0.14Cancelled during the financial year (ii) (145,000) 1.05 – –Expired during the financial year – – – –

Balance at the end of the financial year 20,936,000 0.60 12,270,000 0.29

Exercisable at end of the financial year 500,000 0.35 500,000 0.35

(i) Exercised during the yearNo options were exercised in the year.

(ii) Cancelled during the yearOptions cancelled in the year was 145,000 at a weighted average exercise price of $1.05. These options were cancelled due to employees leaving the Company before the vesting date.


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NoTe 30. iNTeresT iN JoiNT veNTUres

The Company has entered into unincorporated joint ventures where the joint venturer may earn its interest in mining and exploration tenements held by the Company, as set out in the various agreements. The joint ventures agreements are listed as follows:

Apex Minerals NL – Windimurra Resources Pty Ltd Farm-In and Joint Venture AgreementApex Minerals NL – Bernfried Gunter Franz Wasse Farm-In and Joint Venture AgreementApex Minerals NL – Tyson Resources Pty Ltd/ Wedgetail Resources Pty Ltd Sale and Joint Venture AgreementApex Minerals NL – Mark Gareth Creasy DeedApex Minerals NL – Mark Gareth Creasy 33.3% – Bruce Legendre (33.3%) – Voermans Geological Services Pty Ltd (33.3%)

Farm-In and Joint Venture AgreementApex Minerals NL – Maximus Resources Ltd Farm-In and Joint Venture AgreementApex Minerals NL – Abra Mining Farm-In and Joint Venture AgreementApex Gold Pty Ltd – Dalrymple Resources, Ajava Farm in and Joint Venture AgreementApex Nickel Pty Ltd – Forsayth NL – Plutonic Operations, Lawlers Joint Venture Agreement (I)Apex Nickel Pty Ltd – Forsayth NL – Plutonic Operations, Lawlers Joint Venture Agreement (II)Apex Minerals NL – Abra Mining Farm-In and Joint Venture AgreementGoldcrest Mines Ltd – Snowpeak Nominees, Agreement for sale and Joint Venture for the Snowpeak Tenements W.A.Hampton Hill Mining – Apollo Mining – Apex Minerals, Letter Agreement Earn-in and Joint Venture Apollo Hill.

NoTe 31. iNvesTMeNT iN CoNTroLLeD eNTiTies

Details of investments in the ordinary share capital of controlled entities is as follows: Cost of Parent Name of entity equity Holding entity’s investment 2008 2007 2008 2007 % % $’000 $’000

Parent Entity Apex Minerals NL (Incorporated Australia) (i) – – – –

Controlled Entities Apex Xinjiang NL (Incorporated Australia) (ii) 100 100 727 727Apex Nickel Australia Pty Ltd (Incorporated Australia) (ii) 100 100 – –Apex Gold Pty Ltd (Incorporated Australia) (ii)(iii) 100 100 514 –Sonax Investment Pty Ltd (Incorporated Australia) (ii) 100 100 – –Apex Greenstone Mountain Pty Ltd (Incorporated Australia) (ii) 100 100 – –

1,241 727

Subsidiaries of Apex Xinjiang NL Apex Copper Mountain Pty Ltd (Incorporated Australia) (ii) 100 100 – –

Subsidiaries of Apex Gold Pty Ltd Goldcrest Mines Pty Ltd 100 – 2,481 –

Subsidiaries of Goldcrest Mines Pty Ltd Youanmi Mines Pty Ltd 100 – – –

(i) Apex Minerals NL is the head entity within the tax consolidated group.

(ii) These companies are members of the tax-consolidated group.

(iii) The change in the year is due to the options issued by Apex Minerals NL to Apex Gold Pty Ltd employees.

NoTe 32. PLACe oF iNCorPorATioN

The Company and all subsidiaries are domiciled and incorporated in Australia.The principal place of business for the Company and the Group is Western Australia.


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NoTe 33. reLATeD PArTies

Apex Minerals NL provides working capital to its controlled entities. Transactions between Apex Mineral NL and other controlled entities in the wholly owned Group during the year ended 30 June 2008 consisted of:

(i) Working capital advanced by Apex Minerals NL;

(ii) Provision of management and other services by Apex Minerals NL;

(iii) Expenses paid by Apex Minerals NL on behalf of its controlled entities, and

(iv) Cash received by Apex Minerals NL on behalf of subsidiaries with no bank accounts.

The above transactions were made interest free with no fixed terms for the repayment of principal on the working capital advanced. At balance date amounts receivable from controlled entities totalled $114,831,721 (2007 $4,220,655) and the amounts payable to controlled entities was $413,394 (2007 $429,089).

NoTe 34. sUBseQUeNT eveNTs

On 7 July 2008, an announcement was made on the ASX that the Company was to be a substantial holder in Empire Resources Ltd. A total of 5,000,000 shares were purchased at 17 cents each and the Company also entered into a signed Memorandum of Understanding thus giving the right to the Company nominate a representative to join the Empire Board of Directors.

On 18 July 2008, it was released to the ASX that the Company had appointed Todd Bennett to the Board as a Non-Executive Director.

On 3 August 2008, two partly paid shareholders had fully paid the remainder of their shares totalling $120,940 (605,000 shares at $0.1999). The total number of partly paid shares remaining is 19,125,000.

On 29 September 2008, the Group raised $58,500,000 gross of costs through the issue of Notes, GUP Notes and Unsecured Warrants to investors.The Notes have a coupon of 11.25% and a 3 year term. The GUP Notes are based on a floor price as at the date of issue and are for 500,000 units. The Warrants are exercisable at 33.5 cents and expire after 5 years.More details of the issue are contained in the Offering Circular lodged with the ASX.


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The Board of Directors is responsible for corporate governance of the Company and its controlled entities (‘Group’ and ‘Company’). The Board considers good corporate governance a matter of high importance and aims for best practice in the area of corporate governance. This section describes the main corporate governance practices of the Company.

In reviewing the corporate governance structure of Apex, the Board have reviewed and considered the ASX Corporate Governance Council’s recommendations. Comment is made where key principles are not followed due to the size and nature of Apex.

BoArD resPoNsiBiLiTiesThe Board’s key responsibilities are:

• oversight of the operation of the Group including establishing, reviewing and changing corporate strategies;

• ensuring that appropriate internal control, reporting, risk management and compliance frameworks are in place;

• appointing, removing, reviewing and monitoring the performance of the Managing Director to whom the Board have delegated the day to day management of the Group;

• approval of the annual report (including the accounts), the budget and the business plan of the Group;

• regular (at present at least monthly) review of the Group’s performance against the budget and the business plan;

• approving material contractual arrangements including all major investments and strategic commitments;

• making decisions concerning the Group’s capital structure, the issue of any new securities and the dividend policy;

• establishing and monitoring appropriate committees of the Board;

• reporting to shareholders; and

• ensuring the Company’s compliance with all legal requirements including the ASX Listing Rules.

sTrUCTUre oF BoArDThe Company currently has 6 directors on the Board. A director may be appointed by resolution passed at a general meeting or, in the case of casual vacancies, by the directors.

Potential additions to the Board are carefully considered by the Board prior to being nominated to shareholders or appointed as casual vacancies.

The Company has a Remuneration Committee which consists of the 6 directors on the Board.

The skills, experience, expertise and period of office of each of the directors are set out in the Board and Management Section of the Annual Report.

The Board currently has 6 directors being Mark Ashley, Mark Bennett, Glenn Jardine, Kim Robinson, Stephen Lowe, Todd Bennett. The Company has a Managing Director, Mark Ashley, who is a shareholder of the Company. Mr Ashley’s appointment as Managing Director is based on his strong understanding and experience in the mining industry. His role is strongly supported by the presence of the other 5 directors and their strength, abilities and knowledge of the Company and mining industry. The Board believes that the benefits of these attributes have a greater impact on the Company’s performance at this stage in its development.

Under ASX guidelines none of the current Board is considered to be independent directors. The Board is satisfied that the structure of the Board is appropriate for the size of the Company and the nature of its operations and is a cost effective structure for managing the Company.

The Company facilitates and pays for directors and Board committee members to obtain professional independent advice if they require it.

CoDe oF CoNDUCTThe Company has a Code of Conduct as well as a number of internal policies and operating procedures aimed at providing guidance to directors, senior management and employees on the standards of personal and corporate behaviour required of all Apex personnel.

The Code of Conduct covers specific issues such as trading in Company securities by Directors, officers and employees and also provides guidance on how to deal with business issues in a manner that is consistent with the Company’s responsibilities to its shareholders.

AUDiT AND CorPorATe GoverNANCe CoMMiTTeeThe Board has an Audit and Corporate Governance Committee which consists of the 6 directors on the Board. The Committee members are responsible for ensuring:

• the system of internal control which management has established effectively safeguards the assets of the economic entity;

• accounting records are properly maintained in accordance with statutory requirements;

• financial information provided to shareholders is accurate and reliable; and

• the external audit function is effective.

The Committee is responsible for the appointment of the external auditor and ensures that the incumbent firm (and the responsible service team) has suitable qualifications and experience to conduct an effective audit.

The external audit partner will be required to rotate every five balance dates in accordance with Clerp 9 requirements.

Corporate Governance Statement

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Corporate Governance Statement continued

The Committee meets to review the half-year and annual results of the Group, and to review the audit process, and those representations made by management in support of monitoring the Group’s commitment to integrity in financial reporting.

DisCLosUreThe Company’s policy is that shareholders are informed of all major developments that impact on the Company. The Company treats its continuous disclosure obligations seriously and has a number of internal operating policies and principles (including the Code of Conduct referred to above) that are designed to promote responsible decision-making and timely and balanced disclosure.

The Board is ultimately responsible for ensuring compliance by senior management and employees of the Company with the Company policies and therefore requires that senior management and employees have an up to date understanding of ASX listing requirements.

The Company also ensures that the directors and senior management obtain timely and appropriate external advice where necessary.

The Company currently places all relevant announcements made to the market including all past annual reports together with related information on its website: www.apexminerals.com

Additionally, the Company ensures that its external auditor is represented at the annual general meeting to answer shareholder questions about the conduct of the audit and the preparation of the auditor’s report.

BUsiNess risK MANAGeMeNTThe Company endeavours at all times to minimise and effectively manage risk. The Board reviews the control systems and policies of the Company in relation to risk management on an ongoing basis and maintains a diagrammatic representation of the key operating and control systems of the company.

The Board reviews key matters of business risk management and ensures appropriate measures are in place to protect the assets of the Company including the security of its software,

the security of its premises and the appropriate provisioning of insurance policies.

In addition, the Board regularly provides specific advice or recommendations to the Board regarding the existence and status of business risks that the Company faces.

PerForMANCe AND reMUNerATioNThe Remuneration Committee monitors and reviews the performance of the Managing Director as well as the performance of management. The Remuneration Committee receives regular updates of the performance of the Group as a whole. The Remuneration Committee also has responsibility for ensuring that the Company:

• has coherent remuneration policies and practices to attract and retain executives and directors who will create value for shareholders;

• observes those remuneration policies and practices; and

• fairly and responsibly rewards executives having regard to the performance of the Group, the performance of the executives and the general pay environment.

The Remuneration Committee receives external assistance and advice to assist it in determining appropriate levels of remuneration for the directors of the Company.

Remuneration details of each of the directors and senior management are set out in the Financial Report.

ASX Core Principles of Corporate Governance and ASX GuidelinesAustralian Stock Exchange Ltd (ASX) has published 10 core principles of corporate governance which it believes underlie good corporate governance together with guidelines to satisfy those core principles. Under ASX listing rules, listed companies are required to provide a statement in their annual reports outlining the extent to which they have followed these best practice guidelines. In the following table the ASX core principles and guidelines are listed in the left hand column, and the Company’s comment/response is listed in the right hand column.

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ASX Principle 1: Lay Solid Foundations Recognise and publish the respective roles and responsibilities of the board and management

Comment/Response by Company

ASX Recommendations 1.1 Formalise and disclose the functions reserved to the Board

and those delegated to management

The Board is comprised of a Non-Executive Chairman, Managing Director, Exploration Director, Operations Director and two Non Executive Directors. Management of the Company is carried out by the Managing Director with the support from the other directors. The full board meets on a regular basis for both management and board meetings.

ASX Principle 2: Board Structure Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties


ASX Recommendations 2.1 A majority of Board members should be independent

directors

None of the six directors are independent in accordance to the ASX definition. In view of the size of the Company and the nature of its activities the Board considers that the current Board is a cost effective and practical method of directing and managing the Company.

2.2 The chairperson should be an independent director As stated above the chairman is not considered independent under the ASX definition. The Company is satisfied the current Board structure is appropriate for the size of the Company and the nature of its activities.

2.3 The roles of chairperson and chief executive officer should not be exercised by the same individual

Since April 2006, the roles of chairman and chief executive officer have been separated.

2.4 The Board should establish a nomination committee In view of the size of the Company and the nature of its activities, the nomination of new Directors and the setting, or review, of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest).

2.5 The information indicated in Guide to reporting on Principle 2 should be provided. (See Guide Notes at end of table)

Not applicable.

ASX Principle 3: Ethical and responsible decision-making Actively promote ethical and responsible decision-making


ASX Recommendations 3.1 The Company should establish a code of conduct

to guide the directors, the chief executive officer (or equivalent), the chief financial officer (or equivalent) and any other key executives as to the practices necessary to maintain confidence in the company’s integrity, and the responsibility and accountability of individuals for reporting or investigating reports of unethical practices

Apex has a Code of Conduct as well as a number of internal policies and operating procedures aimed at providing guidance to directors and employees on the standards of personal and corporate behaviour required of all Apex personnel.

3.2 Disclose the policy concerning trading in company securities by directors, officers and employees

The Code of Conduct covers specific issues such as trading in Company securities by Directors, officers and employees and also provides guidance on how to deal with business issues in a manner that is consistent with the Company’s responsibilities to its shareholders.

3.3 Provide the information indicated in Guide to Reporting on Principles. (See Guide Notes at end of table)

Not applicable – see above.


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ASX Principle 4: Financial reporting integrity Have a structure in place to independently verify and safeguard the integrity of the company’s financial reporting


ASX Recommendations 4.1 Require the chief executive officer (or equivalent) and the

chief financial officer (or equivalent) to state in writing to the Board that the company’s financial reports present a true and fair view, in all material respects, of the company’s financial condition and operational results and are in accordance with relevant accounting standards

The Managing Director and Chief Financial Officer are required to sign a declaration addressing the integrity of the financial statements and maintenance of financial records in accordance with s286 of the Corporations Act.

4.2 The Board should establish an audit committee An Audit & Corporate Governance Committee was established in the 2007 year. Accordingly audit matters are reviewed by the Committee as a whole and approved by resolution of the Committee (with abstentions from relevant Directors where there is a conflict of interest).

4.3 Structure the audit committee so that it consists of: – Only non-executive directors – A majority of independent directors – An independent chairperson who is not the chairperson of the Board – At least three members

The Audit and Corporate Governance Committee consists of all six members of the Board. In view of the size of the Company and the nature of its activities, this is felt to be appropriate.

4.4 Create a formal operating charter for the audit committee The Audit & Corporate Governance Committee Charter is available on the Company website.

4.5 Understand and provide the information indicated in the Guide to reporting on Principle 4. (See Guide Notes at end of table)

See above.

ASX Principle 5: Timely and balanced disclosure Promote timely and balanced disclosure of all material matters concerning the company


ASX Recommendations 5.1 Establish written policies and procedures designed to

ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance

Due to its size and structure the Board is able to meet on a regular basis for both management and board meetings to ensure compliance with ASX Listing Rule disclosure requirements. The full Board is accountable for ASX compliance.

5.2 Understand and provide the information indicated in the Guide to Reporting on Principle 5. (See Guide Notes at end of table)

See above.

ASX Principle 6: Shareholder rights Respect the rights of shareholders and facilitate the effective exercise of those rights


ASX Recommendations 6.1 Design and disclose a communications strategy to promote

effective communication with shareholders and encourage effective participation at general meetings

See the section on Communication to Market and Shareholders.

6.2 Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the audit and the preparation and content, of the auditor’s report

It is Company policy that the auditor attends the AGM and part of the agenda is the tabling of the accounts and inviting shareholders to ask the directors or the auditor any questions about the report including the audit report.


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ASX Principle 7: Risk Management Establish a sound system of risk oversight and management and internal control


ASX Recommendations 7.1 The Board or appropriate board committee should

establish policies on risk oversight and management

The Audit and Corporate Governance Committee consists of all six members of the Board and includes risk management in its’ charter. Accordingly risk oversight and management issues and policies are reviewed by the Committee and approved by resolution of the Committee (with abstentions from relevant Directors where there is a conflict of interest).

7.2 The chief executive officer (or equivalent) and the chief financial officer (or equivalent) should state to the Board in writing that:

7.2.1 the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the polices adopted by the Board

7.2.2 the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects

The Managing Director and Chief Financial Officer are required to sign a declaration addressing the integrity of the financial statements and maintenance of financial records in accordance with s286 of the Corporations Act.

As above

7.3 Information indicated in the Guide to Reporting on Principle 7 should be understood and provided. (See Guide Notes at end of table)

Not applicable for reasons stated above

ASX Principle 8: Enhanced Performance Fairly review and actively encourage enhanced board and management effectiveness


ASX Recommendations 8.1 Disclose the process for performance evaluation of the

Board, its committees and individual directors, and key executives

Due to the size and structure of the Board a formal evaluation process is not conducted.

The company uses consultants for geological and company secretarial functions and pays market rates for experienced professionals.


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89Annual report 08

ASX Principle 9: Remunerate fairly Ensure that the level and composition of remuneration is sufficient and reasonable and its relationship to corporate and individual performance is defined


ASX Recommendations 9.1 Provide disclosure in relation to the company’s

remuneration policies to enable investors to understand (i) the costs and benefits of these policies and (ii) the link between remuneration paid to directors and key executives and corporate performance.

The company does not have a remuneration policy other than to ensure that Directors, staff and consultants are paid market rates in accordance with their qualifications, experience and contribution to the company. Directors’ remuneration for both executive and non executive directors is compared to other “junior explorers” as a guide to industry rates. There are no schemes of retirement benefits.

9.2 The Board should establish a remuneration committee A Remuneration Committee has been established in the year and consists of all 6 directors. Accordingly remuneration matters are reviewed by the Committee and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest).

9.3 The structure of non-executive directors’ remuneration should be clearly distinguished from that of executives

Remuneration terms of all Executive directors are governed by formal contracts. Directors’ fees are paid separately to all Directors. The different types of remuneration including consulting fees and directors’ fees are all clearly outlined in the Annual Report.

9.4 Ensure equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders

All Directors, executives and staff equity-based remuneration has been made only in accordance with shareholder resolution.

9.5 Ensure information indicated in ASX Guide to Reporting on Principle 9 is understood and provided. (See Guide Notes at end of table)

See above

ASX Principle 10: Interest of Stakeholders Recognise the legal and other obligations of all legitimate stakeholders


ASX Recommendations 10.1 Establish and disclose a code of conduct to guide

compliance with legal and other obligations to legitimate stakeholders

In view of the size of the Company and the nature of its activities, the Board has considered that an informal code of conduct is appropriate to guide executives, management and employees in carrying out their duties and responsibilities. There is a formal Board Code of Conduct in place for the Board.


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AsX GUiDe To rePorTiNG oN PriNCiPLesASX rules requires that the following material should be included in the corporate governance section of the annual report:

• Principles 1 to 10 inclusive – an explanation of any departure from best practice recommendations 1.1 to 10.1.

• Principle 2 – the skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report.

• Principle 2 – The names of the directors considered by the board to constitute independent directors and the company’s materiality thresholds.

• Principle 2 – A statement as to whether there is a procedure agreed by the board for directors to take independent professional advice at the expense of the company.

• Principle 2 – The term of office held by each director in office at the date of the annual report.

• Principle 2 – The names of members of the nomination committee and their attendance at meetings of the committee.

• Principle 4 – Details of the names and qualifications of those appointed to the audit committee, or, where an audit committee has not been formed, those who fulfil the functions of an audit committee.

• Principle 4 – The number of meetings of the audit committee and the names of the attendees.

• Principle 8 – Whether a performance evaluation for the board and its members has taken place in the reporting period and how it was conducted.

• Principle 9 – Disclosure of the company’s remuneration policies referred to in best practice recommendation 9.1 and in Box 9.1.

• Principle 9 – The names of the members of the remuneration committee and their attendance at meetings of the committee.

• Principle 9 – The existence and terms of any schemes for retirement benefits, other than statutory superannuation, for non-executive directors.

ASX guidelines also recommend that the following material should be made publicly available, ideally by posting it to the company’s website in a clearly marked corporate governance section:

• Principle 1 – a statement of matters reserved for the board or a summary of the board charter or a statement of delegated authority to management.

• Principle 2 – A description of the procedure for the selection and appointment of new directors to the board.

• Principle 2 – The charter of the nomination committee or a summary of the role, rights, responsibilities and membership requirements for that committee.

• Principle 2 – The nomination committee’s policy for the appointment of directors.

• Principle 3 – Any applicable code of conduct or a summary of its main provisions. This disclosure may be the same as that required under principle 10.

• Principle 3 – The trading policy or a summary of its main provisions.

• Principle 4 – The audit committee charter.

• Principle 4 – Information on procedures for the selection and appointment of the external auditor, and for the rotation of external audit engagement partners.

• Principle 5 – A summary of the policies and procedures designed to guide compliance with Listing Rule disclosure requirements.

• Principle 6 – A description of the arrangements the company has to promote communication with shareholders.

• Principle 7 – A description of the company’s risk management policy and internal compliance and control system.

• Principle 8 – A description of the process for performance evaluation of the board, its committees and individual directors, and key executives.

• Principle 9 – The charter of the remuneration committee or a summary of the role, rights, responsibilities and membership requirements for that committee.

• Principle 10 – Any applicable code of conduct or a summary of its main provisions.


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Additional Information continued

DISTRIBUTION OF SHARES AS AT 23 SEPTEMBER 2008

Distribution of HoldingsFully paid

number of holdersPartly paid

number of holders

1 – 1,000 1,264 –

1,001 – 5,000 1,135 –

5,001 – 10,000 471 –

10,001 – 100,000 795 –

100,001 and over 213 3

20 LARGEST SHAREHOLDERS (BY REGISTERED HOLDER) AS AT 23 SEPTEMBER 2008

Fully Paid Shares

Rank Holder Shares %

1 HSBC Custody Nominees (Australia) Limited [GSI ECSA] 51,123,565 13.10%

2 National Nominees Limited 48,614,779 12.45%

3 HSBC Custody Nominees (Australia) Limited [A/C 2] 40,753,299 10.44%

4 Mr Mark Gareth Creasy 25,586,830 6.55%

5 Citicorp Nominees Pty Limited 25,359,873 6.50%

6 HSBC Custody Nominees (Australia) Limited 14,231,854 3.65%

7 J P Morgan Nominees Australia Limited 12,248,876 3.14%

8 Yandal Investments Pty Ltd 10,191,118 2.61%

9 ANZ Nominees Limited [Cash Income A/C] 9,642,202 2.47%

10 Oxiana Investments Pty Ltd 9,536,526 2.44%

11 Mark John Ashley & Maureen Sofia Ashley [The Mark Ashley Super Fund] 8,790,000 2.25%

12 Mr Kim Robinson 5,000,000 1.28%

13 Australian Gold Resources Pty Ltd 4,433,690 1.14%

14 Shelay Investments Pty Ltd 4,410,000 1.13%

15 Mr Roderick McKay & Mrs Kathleen McKay 4,020,000 1.03%

16 Lost Ark Nominees Pty Limited [RAS GFAM A/C] 3,745,200 0.96%

17 Mr Mark John Ashley & Mrs Maureen Sofia Ashley [Mark Ashley Super Fund A/C] 3,600,000 0.92%

18 Mr Stephen Stone & Ms Julia Pearl [The West One Super Fund A/C] 3,400,001 0.87%

19 Cogent Nominees Pty Limited [SMP Accounts] 3,266,053 0.84%

20 Merrill Lynch (Australia) Nominees Pty Ltd 2,493,284 0.64%

Partly Paid Shares

Holder Shares %

Mark Gareth Creasy 11,250,000 58.17%

Stephen Stone 4,000,000 20.92%

Stephen Stone [The Pearlstone Account] 4,000,000 20.92%For

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SUBSTANTIAL SHAREHOLDERS

Fully Paid Shares

Holder Shares %

Mr Mark G Creasy 40,655,162 11.17%

Pelagic Capital Advisors 19,495,000 5.00%

VOTING RIGHTSEach shareholder is entitled to receive notice of and attend and vote at general meetings of the Company. At a general meeting, every shareholder present in person or by proxy, representative or attorney will have one vote on a show of hands and on a poll, one vote for each share held. Any shares which are not fully paid shall be entitled to a fraction of a vote equal to that proportion of a vote that the amount paid on the relevant share bears to the total issue price of the share.

DISTRIBUTION OF OPTIONS AS AT 23 SEPTEMBER 2008

Exercise Price – Expiry Date

Distribution of holdings

20c 3/07/11

14c20/07/11

30c17/08/11

35c 3/09/11

20c31/05/09

35c 1/11/11

45c30/11/11

40c 17/01/12

65c1/06/12

1 – 1,000 0 0 0 0 0 0 0 0 0

1,001 – 5,000 0 0 0 0 0 0 0 0 0

5,001 – 10,000 0 0 0 0 0 0 0 0 0

10,001 – 100,000 0 0 0 0 0 0 2 0 3

10,0001 – over 1 7 1 1 1 1 1 0 12

Total Holders 1 7 1 1 1 1 3 0 15

Total Units 1,500,000 7,200,000 250,000 250,000 300,000 1,500,000 575,000 – 5,475,000

Exercise Price – Expiry Date

Distribution of holdings

$1.0030/07/12

$1.3015/10/12

$1.3030/10/12

$1.3011/11/12

$1.6010/01/13

$1.3027/04/13

$1.3011/05/13

$1.3019/06/13

70c17/07/13

1 – 1,000 0 0 0 0 0 0 0 0 0

1,001 – 5,000 0 0 0 0 0 0 0 0 0

5,001 – 10,000 0 0 0 0 0 0 0 0 0

10,001 – 100,000 26 3 0 6 1 0 59 1 0

10,0001 – over 2 1 1 0 0 2 0 1 1

Total Holders 28 4 1 6 1 2 59 2 1

Total Units 1,975,000 350,000 200,000 350,000 50,000 700,000 1,911,000 550,000 1,000,000


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TeNeMeNT sCHeDULe As AT 23 sePTeMBer 2008

Tenement Holder or Applicant status

Boundary Well

E 360611 Apex Nickel Pty Ltd Granted

Jillawara (iv)

E 521413 Creasy – Legendre – Voermans Granted

E 521970 Apex – Creasy – Legendre – Voermans

Granted


Granted


Granted

Lawlers (iii)

M 360273 Forsayth NL Granted




M 360366 Forsayth NL Application




M 360576 Plutonic Operations Ltd Granted







P 361122 Forsayth NL Granted













Lawlers 2 (iii)

M360171 Forsyth NL Granted



Lawlers 2 (iii) continued



P361184 Forsyth NL Granted





































E360156 Forsyth NL Granted

E360489 Forsyth NL Granted



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Lawlers 2 (iii) continued


M360369 Forsyth NL Application











P361545 Forsyth NL Application

Youanmi

E 570578 Goldcrest Mines Pty Ltd (i) Granted

E 570627 Goldcrest – Snowpeak Granted




M 570010 Youanmi Mines Pty Ltd (i) Granted

M 570051 Youanmi Mines Pty Ltd (i) Granted

M 570075 Goldcrest Mines Pty Ltd (i) Granted




M 570160A Goldcrest Mines Pty Ltd (i) Granted







M 570245 Goldcrest – Snowpeak Granted

P 571043 Goldcrest Mines Pty Ltd (i) Granted

P 571043 Goldcrest Mines Pty Ltd (i) Granted

P 571190 Goldcrest – Snowpeak Granted








Youanmi continued







Aphrodite (ii)

P 243130 Apex Gold Pty Ltd Granted

M 240662 Apex Gold – Dalrymple Granted

M 240779 Apex Gold Pty Ltd Granted

M 240681 Apex Gold Pty Ltd Application

M 240649 Apex Gold Pty Ltd Application


Gidgee

E 511144 Apex Gold Pty Ltd Granted






E 531270 Legend Mining Ltd (ii) Granted


E 531396 Apex Gold Pty Ltd Application




E 570588 Gidgee Resources Ltd (ii) Granted







L 530046 Apex Gold Pty Ltd Granted










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Gidgee continued






































M 570291 Legend Mining Ltd (ii) Application




P 531269 Legend Mining Ltd (ii) Granted



Gidgee continued








P 571050 Kiamora Pty Ltd (ii) Application


























Wiluna











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Wiluna continued





















Wiluna continued




M 530030 Apex – Jackson Granted















M 530797 Oxiana Wiluna Pty Ltd Granted


KeY:

Apex Apex Minerals NL and its subsidiaries

Creasy – Legendre – Voermans Mark Gareth Creasy (33.3%) – Bruce Legendre (33.3%) – Voermans Geological Services Pty Ltd (33.3%). Apex has a 70% beneficial interest in the tenement.

Apex – Creasy – Legendre – Voermans Apex Minerals (80%) – Mark Gareth Creasy (6.67%) – Bruce Legendre (6.67%) – Voermans Geological Services Pty Ltd (6.67%)

Wiluna – Jackson Wiluna Operations Ltd (98%) – James Murry Jackson (2%). Wiluna Operations Ltd share is being transferred to Apex Gold Pty Ltd following completion.

Goldcrest – Snowpeak Goldcrest Mines Pty Ltd (80%) – Snowpeak Nominees Pty Ltd (20%)

Oxiana Wiluna Pty Ltd Tenement is owned by Oxiana but Apex has 100% of the gold rights

(i) Subsidiary of Apex Minerals NL

(ii) In the process of being transferred to Apex Gold Pty Ltd following completion of acquisition.

(iii) Apex can earn up to 56% interest in the nickel rights on these tenements.

(iv) Apex recently converted its interest to a 10% free carried interest to the completion of a bankable feasibility study.

E Granted Exploration Licence or Exploration Licence Application

P Granted Prospecting Licence or Prospecting Licence Application

M Granted Mining Licence or Mining Licence Application

L Granted Miscellaneous Licence

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www.apexminerals.com.au

Apex Minerals NL ABN 22 098 612 974

Annual Report 30 June 2008


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Documents

For personal use only - ASX · 2008-10-24 · level 2, 6 Kings park road, West perth Wa 6005 telephone: (08) 9216 0900 facsimile: (08) 9216 0901 asX coDe: aXm acn: 098 612 974 WeB: