For personal use only - ASX · For personal use only Chris Tan was appointed as an alternative director to John Robson on 15 March 2011. DIRECTOR’S REPORT Centius Gold Limited ABN

ABN 66 140 475 921

Centius Gold Limited

Financial Report

for the year ended 31 December 2011

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Centius Gold Limited ABN 66 140 475 921

CONTENTS Directors’ Report.......................................................................................................... 1 Auditor’s Independence Declaration ........................................................................ 7 Statement of Comprehensive Income ....................................................................... 8 Statement of Financial Position ................................................................................. 9 Statement of Cash Flows ..........................................................................................10 Statement of Changes in Equity...............................................................................11 Notes to the Financial Statements ...........................................................................12 Directors’ Declaration................................................................................................30 Independent Audit Report.........................................................................................31 Tenement Schedule ...................................................................................................33

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DIRECTOR’S REPORT

Centius Gold Limited ABN 66 140 475 921 Page 1

The Directors of Centius Gold Limited (“Centius” or “the Company”) have pleasure in submitting their directors’ report for the year ended 31 December 2011. Review of operations On 28 January 2011 Centius Gold Limited shares were listed on the ASX following a successful initial public offer (IPO). In December 2010 Centius issued 25,206,000 ordinary fully paid shares pursuant to its IPO, raising a total of $5,041,200 at a price of $0.20 per share. The principal activity of the company is the exploration and evaluation of gold and base metal projects. During the year, the company capitalised $1,106,343 in exploration and evaluation of mining tenements. Centius’ projects are located in New South Wales and Queensland, within established mining districts, with adjacent long standing mines and proven mineral deposits. These districts include several large operating mines – Northparkes, Cadia-Ridgeway and Cowal. Centius holds 100% of the following tenements: EL7454 – Spiral, EL7458 – Junee, EL7459 – Temora, EL7460 – Lunatic, EL7462 – Bobo, EL 7486 – Copeland, EL7589 – Bimbi, EL7590 – Pullabooka, EL7591 – Forbes, EL7592 – Turon, all in the State of New South Wales (NSW) and EPM18447 – Gympie and EPM 18448 – Croydon in the State of Queensland (Qld). During the year Centius was granted Exploration Licence EPM18448 – Croydon (Qld) and applied for ELA4388 – Cascade (NSW) and EPM 19340 – La-de-da (Qld). Centius also filed a Mining Lease Application (MLA) for MLA30229 over the Homeward Bound Prospect on the Croydon EPM18448. Results of Operations For the year ended 31 December 2011 Centius recorded an after tax loss of $1,153,559 (2010: loss of $295,416). Principal activity The principal activity of the Company during the year ended 31 December 2011 was the exploration and evaluation of gold and mineral projects. No change in the principal activity occurred during this period. Directors The Directors in office at the date of this report are: Scott Brown (appointed 1 April 2010) John Slade (appointed 9 November 2009) Robert McLennan (appointed 9 November 2009) Tiong Chiong Ee (appointed 15 March 2011) John Robson (appointed 15 March 2011) Chris Tan was appointed as an alternative director to John Robson on 15 March 2011.

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DIRECTOR’S REPORT


Scott Brown – Chairman B Bus (University of Technology Sydney, Australia) M Com (University of New South Wales, Australia) Mr Scott Brown has an extensive background in finance and the management of public companies including guiding numerous companies through the listing process. Scott has held a variety of senior roles in public companies including Mosaic Oil NL, Objective Corporation Limited, Turnbull & Partners Limited (unlisted public), Allegiance Mining NL, FTR Holdings Limited and Garratt's Limited. Scott also worked at accounting firms Ernst Young and KPMG. He is member of the Institute of Chartered Accountants in Australia and the Petroleum Exploration Society of Australia (PESA). Scott is a member of the audit and remuneration committees. John Slade – Managing Director B Sc (Australian National University) M Sc (Australian National University) Mr John Slade is a Member of the Australasian Institute of Mining and Metallurgy. John has worked in the mineral exploration and mining industry in eighteen (18) different countries, including Australia, over the last 40 years. John is a very experienced geophysicist who has worked for many companies including BHP, CRA, Comalco and MIM. John has also developed a number of unique geophysical technology. Robert McLennan – Director B Sc (Hons.) (Melbourne University) M Sc (Melbourne University) Mr Robert McLennan is a Fellow of the Australasian Institute of Mining and Metallurgy. Robert has worked in the mineral exploration and mining industry in Australia and internationally for over 40 years for Companies including C.R.A.E., M.I.M., Pacific Islands Gold and Dome Mines. Robert co-founded a number of ASX listed companies including Robust Resources, Augur Resources Ltd, Pacific Islands Gold Ltd, Range Resources Ltd, Dome Mines Ltd, Ark Mines Ltd and Magma Mines Ltd. Robert is based in Sydney and fills the supervisory role in the exploration and development programme of Centius Gold Limited. Mr Tiong Chiong Ee – Director B Arts (University of Melbourne, Australia) B Com (University of Melbourne, Australia) Mr. Tiong is the Executive Director of RH Mining Resources Ltd ("RH Mining") since May 2010, and subsequently the Chief Executive Officer since September 2010. Prior to his appointment at RH Mining, he was the deputy general manager overseeing the mineral resources business of RH Group's China operations. From June 2004 to June 2007, he was the commercial director of a RH Group company in Japan and the Russian Federation managing sales, business development, mergers and acquisitions and fund raising for the timber group in North East Asia. He is also an executive director of RH Petrogas Limited (a listed company in Singapore). He served as an executive member of the China National Petroleum Corporation Joint Management Committee of Fuyu 1 Block, the RH Group's first oil and gas project from February 2008 to September 2010. Tony is a member of the remuneration committee. John Robson – Director B Arts (Econ)(University of Melbourne, Australia) John Robson is Managing Director of Ivory Capital, an investment advisory firm. John Robson has 20 years experience working with investment banks in Europe and Asia. Prior to joining Ivory Capital, John worked in both debt and equity capital markets with Bankers Trust, Merrill Lynch, Nomura, and JP Morgan. His area of expertise is structured investment products and until September 2007 John was Asia-Pacific Head of Structured Product Sales and Marketing at JP Morgan. Prior to JP Morgan, John spent 2 years at Nomura in Hong Kong as Co-head of the Equity Derivative Business, and 12 years at Merrill Lynch in Hong Kong and London developing the structured investments business for the firm. John is a member of the audit committee.

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DIRECTOR’S REPORT


Christopher Tan - Alternate Director to John Robson Christopher Tan is Managing Director of Ivory Capital, an investment advisory firm he founded in 2002. Prior to Ivory Capital, he was Head of Lehman Brothers’ Investment Banking Group for Singapore and Malaysia (1999 – 2002), and Director of the Southeast Asian Investment Banking Group for Deutsche Morgan Grenfell (1996 – 1999). Over the past 20 years, he worked on strategic advisory, M&A, corporate restructuring and capital markets financing transactions in Singapore, Malaysia, Indonesia, the Philippines, Thailand, Hong Kong, China and Taiwan. Company Secretary Mr Pip Tang is Company Secretary. Pip is currently the finance director and company secretary of Hydromet Corporation Limited and has over 30 years experience working in accounting, corporate finance and company secretarial roles. Environmental Regulations The Company is subject to significant environmental regulations under legislation of the Commonwealth of Australia. The Company aims to ensure that it complies with the identified regulatory requirements in each jurisdiction in which it operates. There have been no known material breaches of the environmental obligations of the Company’s contracts or licences. Dividends No dividends have been declared in respect of the year ended 31 December 2011 (2010: Nil). Events subsequent to balance date The Directors are not aware of any matter or circumstance not otherwise dealt with in the report or in the financial statements that has significantly or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the company in subsequent financial years. Directors' interest The Directors' beneficial interest in shares and options as at 31 December 2011 are:

Shares Options2 Direct Indirect Total

Scott Brown 2,749,854 2,548,954 5,298,808 250,000Tiong Chiong Ee - 2,500,000 2,500,000 1,250,000Robert McLennan1 20,000 17,206,333 17,226,333 6,700,000John Robson - 750,000 750,000 4,125,000John Slade1 10,000 14,008,333 14,018,333 5,000,000Christopher Tan - 1,000,000 1,000,000 4,125,000Total 2,779,854 38,013,620 40,793,474 21,450,000

1. John Slade and Robert McLennan have 5,000,000 options each, which are exercisable at 40 cents each and expire on 30 June

2013 and Robert McLennan has 1,700,000 options which are exercisable at 25 cents each and expire on 31 December 2013. 2. All remaining options are exercisable at 25 cents each and expire on 31 December 2013, with the exception of 2,000,000

options, each, issued to Christopher Tan and John Robson which are exercisable at 40c and expire on the 31 December 2013.The options were issued in February 2011 and May 2011 following the annual General Meeting.

Remuneration Report (Audited) This report details the nature and amount of remuneration for each director of the Company and for the executives receiving the highest remuneration.

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DIRECTOR’S REPORT


Remuneration policy The board’s policy for determining the nature and amount of remuneration for board members and senior executives of the Company is as follows: The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the remuneration committee and approved by the board. All executives receive remuneration based on factors such as length of service and experience. The remuneration committee reviews executive packages annually by reference to the Company’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The objective of this policy is to secure and retain the services of suitable individuals capable of contributing to the consolidated entities strategic objectives. The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The remuneration committee determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. There were no bonuses paid or proposed to be paid for the year ended 31 December 2011 (2010: Nil). Below is a table summarising key performance and shareholder wealth indicators for the Company.

Period Loss after tax EPS

Cents Share Price at year end

9 November 2009 to 31 December 2010 (295,416) (0.65) $0.200Year ended 31 December 2011 (1,153,559) (1.53) $0.045

Directors’ remuneration Your director’s received the following payments / benefits for services as indicated: Director Other Share option Total Fees Services benefit For the year ended 31 December 2011 $ $ $ $ Scott Brown1 43,600 17,000 7,774 68,374 John Slade2 267,977 - - 267,977 Tiong Chiong Ee5 19,792 - 73,875 93,667 Robert McLennan3 29,521 16,040 52,870 98,431 Lan Nguyen4 17,134 - - 17,134 John Robson6 19,792 - 160,388 180,180 Christopher Tan - - 182,788 182,788 Total 397,816 33,040 477,695 908,551 Total For the period ended 31 December 2010 $ Scott Brown1 41,800 John Slade2 308,745 Robert McLennan3 252,370 Lan Nguyen4 13,625 Total 616,540 1. Includes payments made to Connect Capital Pty Ltd (an entity related to Scott Brown) for services; 2. Includes payments made to Geophysical Consulting Services (an entity related to John Slade) for services; 3. Includes payments made to Mineral Exploration Consultants Pty Ltd (an entity related to Robert McLennan) for services; 4. Includes payments made to Tanvinh Resources (Asia) Pty Ltd (an entity related to Lan Nguyen) for services; 5. Includes payments made to Greenwell Investment Ltd (an entity related to Tony Chiong Ee) for services; 6. Includes payments made to Excel Group Ltd (an entity related to John Robson) for services;

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DIRECTOR’S REPORT


Share options During the year ended 31 December 2011 the company issued a total of 14,950,000 options over ordinary shares to directors. The fair value of these options has been calculated at $684,545 of which $631,675 has been recognised as a period expense in the statement of comprehensive income and the remaining balance of $52,870 has been capitalised to deferred exploration and evaluation expenditure. Details of the options granted are as follows:

Grant Expiry Number Exercise Stock Days to Term Fair Total Date Date Granted Price Price Expiration In Volatility Value Fair Years Value

Comenti Investments Limited 24/02/2011 31/12/2013 3,500,000 0.25 0.190 1,041 3 53.00% 0.0591 206,850Tiong Chiong Ee 25/02/2011 31/12/2013 1,250,000 0.25 0.190 1,040 3 53.00% 0.0591 73,875John Robson 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1,040 3 53.00% 0.0591 125,588Christopher Tan 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1,040 3 53.00% 0.0591 125,588Christopher Tan 25/02/2011 31/12/2013 2,000,000 0.40 0.190 1,040 3 53.00% 0.0286 57,200Robert McLennan 23/06/2011 31/12/2013 1,700,000 0.25 0.125 922 3 64.00% 0.0311 52,870Scott Brown 23/06/2011 31/12/2013 250,000 0.25 0.125 922 3 64.00% 0.0311 7,774John Robson 23/06/2011 31/12/2013 2,000,000 0.40 0.125 922 3 64.00% 0.0174 34,800

Total 14,950,000 684,545

The options have been valued using a binomial option pricing model known as the Cox, Ross and Rubenstein model. All options vested immediately at grant date. All options are over unissued ordinary shares. Employee contracts of senior executives The Managing Director, Mr Slade is engaged under contract. The current employment contract provides an annual amount of $250,000 in remuneration plus 9% superannuation which shall be paid monthly in arrears. The contract commenced on 1 July 2011 for a term of 12 months. The contract may be terminated by either party providing 90 days written notice or 20 days if there is a breach of the agreement. Significant changes in state of affairs In December 2010 Centius issued 25,206,000 ordinary fully paid shares pursuant to its IPO, raising a total of $5,041,200 at a price of $0.20 per share The company’s shares were listed for trade on the ASX on 28 January 2011. There have been no other significant changes. Directors’ meetings The number of directors’ meetings and meetings of committees of directors of Centius Gold Limited (including by way of circular resolution) held during the year ended the 31 December 2011 and the numbers of meetings attended by each director are as follows: Directors' Audit Committee Remuneration & Nomination Meetings Meetings Committee Meetings Number Number Number Number Number Number Eligible Eligible Eligible

Director to attend Attended to attend Attended to attend Attended Scott Brown 9 9 2 2 1 1Tiong Chiong Ee 8 8 - - 1 1Robert McLennan 9 9 - - - -Lan Nguyen 5 4 - - - -John Robson 8 8 2 2 - -John Slade 9 9 - - - -Christopher Tan 8 7 - - - -

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DIRECTOR’S REPORT


As well as formal Directors’ meetings, executive and non-executive directors are in frequent communication by telephone, email and fax. Likely developments The Company will continue to undertake its activities described in this report with major emphasis on early commercialisation of the Company’s projects. Further information as to likely developments in the operations of the Company and the expected results of those operations in subsequent years has not been included in this report because, in the opinion of the Directors, it could prejudice the interests of the Company. Indemnifying officers and auditor During the financial period the Company paid premiums to insure all directors and officers of the Company against claims brought against the individual while performing services for the Company and against expenses relating thereto, other than conduct involving a wilful breach of duty in relation to the Company. The amount of insurance premium paid during the period has not been disclosed as it would breach the confidentiality clause in the insurance policy. The Company has indemnified directors to the extent possible under the Corporations Law against any liabilities incurred by the person as an officer of the Company. The Company has not indemnified the auditor. Non audit services A related entity of the auditor, Gould Ralph Pty Limited provides share registry services. During the year ended 31 December the total registry fees were $22,941 (2010: $7,581). The auditor also provided services in relation to the Independent Investigating Accountant’s Report included in the prospectus during the period ended 31 December 2010. The total fee for this work was $17,000. The directors are satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services did not compromise the external auditor’s independence for the following reasons:

• all non-audit services are reviewed and approved by the board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

• the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Profession and Ethical Standards Board.

Auditor independence declaration The auditor’s independence declaration for the year ended 31 December 2011 has been received and a copy is reproduced on page 7. Proceedings on behalf of the Company No person has applied to the Court for leave to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any of those proceedings. The Company was not a party to any such proceedings during the year. Signed in accordance with a resolution of the Board of Directors. Dated this 7th day of February 2012

Scott Brown Chairman

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Page 7

7 February 2012 The Board of Directors Centius Gold Limited Suite C, Level 4 140 William Street WOOLLOOMOOLOO NSW 2011 Dear Members of the Board

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

As lead auditor for the audit of Centius Gold Limited for the year ended 31 December 2011, I declare that, to the best of my knowledge and belief, there have been: • No contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit; and • No contraventions of any applicable code of professional conduct in relation to the audit. Yours faithfully GOULD RALPH ASSURANCE Chartered Accountants

GREGORY RALPH, M.Com., F.C.A. Partner F

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STATEMENT OF COMPREHENSIVE INCOME


CENTIUS GOLD LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011

Year ended Period ended 31 December 31 December

Notes 2011 2010 $ $

Revenue from ordinary activities 2 190,559 26,709 Less expenses: Accounting and secretarial expenses 60,866 17,390 Audit fees 36,590 19,000 Computer and related operating expenses 12,161 -Consulting and exploration fees 17,692 -Depreciation 741 -Director's fees 202,574 139,050 Due diligence costs 81,989 -Finance costs 2 411 -Insurance 28,557 -Legal fees 6,182 -Marketing and public relation expenses 22,529 30,330 Office supplies and printing and stationery 40,685 7,765 Rent 52,335 3,000 Share option expense 11 631,675 -Share registry costs and ASX fees 45,723 56,863 Tenement relinquished 53,926 -Travel and accommodation expenses 29,165 45,951 Other expenses from ordinary activities 20,317 2,776 Total Expenses 1,344,118 322,125 Loss from continuing operations before income tax (1,153,559) (295,416)Income tax expense 3 - -Loss from continuing operations after income tax (1,153,559) (295,416)Other comprehensive income for the year - -Total comprehensive loss for the year (1,153,559) (295,416) Earnings per share Basic - cents per share 21 (1.53) (0.65)Diluted - cents per share 21 (1.53) (0.65)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

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STATEMENT OF FINANCIAL POSITION


CENTIUS GOLD LIMITED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011 31 December 31 December

Notes 2011 2010 $ $ CURRENT ASSETS Cash and cash equivalents 4 2,625,290 4,695,225 Trade and other receivables 5 67,029 22,460 Other assets 7 20,688 -TOTAL CURRENT ASSETS 2,713,007 4,717,685 NON-CURRENT ASSETS Exploration and evaluation assets 6 1,598,961 492,618 Other assets 7 120,000 113,000 Property, plant and equipment 8 5,978 -TOTAL NON-CURRENT ASSETS 1,724,939 605,618 TOTAL ASSETS 4,437,946 5,323,303 CURRENT LIABILITIES Trade and other payables 9 80,442 467,285 TOTAL CURRENT LIABILITIES 80,442 467,285 TOTAL LIABILITIES 80,442 467,285 NET ASSETS 4,357,504 4,856,018 EQUITY Contributed equity 10 5,121,934 5,151,434 Share option reserve 11 684,545 -Accumulated losses 12 (1,448,975) (295,416)TOTAL EQUITY 4,357,504 4,856,018

The above statement of financial position should be read in conjunction with the accompanying notes.

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STATEMENT OF CASH FLOWS


CENTIUS GOLD LIMITED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2011 Year ended Period ended 31 December 31 December

Notes 2011 2010 $ $ CASH FLOW FROM OPERATING ACTIVITIES Payments to suppliers and employees (908,475) (195,781)Income tax payments - (147)Interest received 190,559 26,709 Interest paid (411) -Net cash used in Operating Activities 13b (718,327) (169,219) CASH FLOW FROM INVESTING ACTIVITIES Payments for environmental bonds (7,000) (113,000)Payments for exploration and evaluation (1,153,861) (390,628)Payments for plant and equipment (6,719) -Net cash used in Investing Activities (1,167,580) (503,628) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from share issue - 5,661,201 Proceeds from investors refunded (23,000) 23,000 Capital raising and listing costs (161,028) (316,129)Net cash (used in) / provided by financing activities (184,028) 5,368,072 Net (decrease) / increase in cash held (2,069,935) 4,695,225 Cash at beginning of financial year 4,695,225 -Cash at end of financial year 13a 2,625,290 4,695,225

The above statement of cash flow should be read in conjunction with the accompanying notes. F

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STATEMENT OF CHANGES IN EQUITY


CENTIUS GOLD LIMITED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2011 Contributed Share option Accumulated equity Reserve Losses Total $ $ $ $ Balance at 10 November 2009 (date of incorporation) - - - - Loss for the period - - (295,416) (295,416) Ordinary shares issued 5,661,201 - - 5,661,201 Share issue costs (509,767) - - (509,767) Balance at 31 December 2010 5,151,434 (295,416) 4,856,018 Loss for the year - - (1,153,559) (1,153,559) Share based payments expense - 684,545 - 684,545 Share issue costs (29,500) - - (29,500) Balance at 31 December 2011 5,121,934 684,545 (1,448,975) 4,357,504

The above statement of changes in equity should be read in conjunction with the accompanying notes.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011


NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES This general purpose financial report has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report is for the entity Centius Gold Limited as an individual entity. Centius Gold Limited is a company limited by shares incorporated and domiciled in Australia. The principal activity of the Company during the year was the exploration for gold and other mineral deposits. The financial statements have been approved by the board on the date of signing. The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. A. Basis of accounting The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. The financial statements of the Company comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (‘IASB’). The financial report has been expressed in Australian Dollars ($A) which is the functional currency of the entity. B. Income tax The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted at the reporting date. Deferred tax is accounted for using the statement of financial position method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. C. Financial instruments Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less.

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Payables Payables represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are generally settled between 7 days and 30 days terms. D. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a net basis. E. Exploration and evaluation expenditure Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Once an area of interest enters a development phase, historical capitalised exploration expenditure is transferred to capitalised development expenditure. Accumulated costs in relation to an abandoned area are written off in the statement of comprehensive income in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Expenditure relating to pre-exploration activities is written-off to the statement of comprehensive income during the period in which the expenditure is incurred. F. Critical accounting estimates and judgments

The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company. i) Exploration and evaluation expenditure During the year the Company capitalised exploration and evaluation expenditure of $1,106,343 (2010:$492,618) on the basis that the Company believes that the tenements that the Company owns are prospective for commercial quantities of mineral reserves. ii) Share based payments The company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a binomial model. The related assumptions are detailed in note 11. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity. The company measures the cost of cash-settled share-based payments at fair value at the grant date using the Cox, Ross and Rubinstein valuation methodology, taking into account the terms and conditions upon which the instruments were granted. G. Interest income Interest revenue is recognised using the effective interest rate method taking into account rates applicable to the financial assets.

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H. Foreign currency transactions and balances Foreign currency transactions during the year are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currencies at the balance date are converted at the rates of exchange ruling at that date. The gains and losses from conversion of short-term assets and liabilities, whether realised or unrealised, are included in the statement of comprehensive income as they arise. I. Contributed equity Ordinary shares are classified as equity. Fully paid ordinary shares carry one vote per share and carry the right to dividends. Incremental costs directly attributable to the issue of new shares or options are shown in the equity as a deduction net of tax, from the proceeds. J. Property, plant and equipment Computer equipment and furniture and fittings are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation Items of office equipment have limited lives and are depreciated on a straight line basis over their estimated useful lives. Depreciation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments are reflected prospectively in current and future periods only. Depreciation is expensed to the statement of comprehensive income. Computer equipment is depreciated at the rate of 25% per annum. Furniture and fittings is depreciated at the rate of 5% per annum. De-recognition and disposal An item of computer equipment, or furniture and fittings, is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between net disposal proceeds and the carrying amount of the asset) is included in statement of comprehensive income in the year the asset is de-recognised. K. New, revised or amending accounting standards and interpretations adopted The Company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Any significant impact on the accounting policies of the Company from the adoption of these Accounting Standards and Interpretations are disclosed in the relevant accounting policy.

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The adoption of these Accounting Standards and Interpretations did not have any impact on the financial performance or position of the Company. The following Accounting Standards and Interpretations are most relevant to the Company: AASB 2 Share-based Payment Transactions - amendments for Group Cash-settled Share-based Payment Transactions The Company has applied the amendments to AASB 2 from 1 July 2010. The amendments clarified the scope of AASB 2 by requiring an entity that receives goods or services in a share-based payment arrangement to account for those goods or services no matter which entity in the Company settles the transaction, and no matter whether the transaction is settled in shares or cash. Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments The Company has applied Interpretation 19 from 1 July 2010. The interpretation clarified that equity instruments issued to a creditor to extinguish a financial liability qualifies as consideration paid. The equity instruments issued are measured at their fair value, or if not reliably measured, at the fair value of the liability extinguished, with any gain or loss recognised in profit or loss. AASB 2009-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Project The Company has applied AASB 2009-5 amendments from 1 July 2010. The amendments result in some accounting changes for presentation, recognition or measurement purposes, while some amendments that relate to terminology and editorial changes had no or minimal effect on accounting. AASB 101 'Presentation of Financial Statements' - classification is not affected by the terms of a liability that could be settled by the issuance of equity instruments at the option of the counterparty; AASB 107 'Statement of Cash Flows' - only expenditure that results in a recognised asset can be classified as a cash flow from investing activities; AASB 117 'Leases' - removal of specific guidance on classifying land as a lease; AASB 118 'Revenue' - provides additional guidance to determine whether an entity is acting as a principal or agent; and AASB 136 'Impairment of Assets' - clarifies that the largest unit permitted for allocating goodwill, acquired in a business combination, is the operating segment as defined in AASB 8 'Operating Segments' before aggregation for reporting purposes. AASB 2009-10 Amendments to AASB 132 - Classification of Rights Issues The Company has applied AASB 2009-10 from 1 July 2010. The amendments clarified that rights, options or warrants to acquire a fixed number of an entity's own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants pro-rata to all existing owners of the same class of its own non-derivative equity instruments. The amendment therefore provides relief to entities that issue rights in a currency other than their functional currency from treating the rights as derivatives with fair value changes recorded in profit or loss. AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project The Company has applied AASB 2010-3 amendments from 1 July 2010. The amendments result in some accounting changes for presentation, recognition or measurement purposes, while some amendments that relate to terminology and editorial changes had no or minimal effect on accounting.

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AASB 127 'Consolidated and Separate Financial Statements' and AASB 3 Business Combinations - clarifies that contingent consideration from a business combination that occurred before the effective date of revised AASB 3 is not restated; the scope of the measurement choices of non-controlling interest is limited to when the rights acquired include entitlement to a proportionate share of net assets in the event of liquidation; requires an entity in a business combination to account for the replacement of acquiree's share-based payment transactions, unreplaced and voluntarily replaced, by splitting between consideration and post combination expenses. L. New Accounting Standards and Interpretations not yet mandatory or early adopted The following standards and amendments were available for early adoption but have not been applied by the Company in these financial statements. The Company does not anticipate early adoption of any of the following reporting requirements and does not expect these requirements to have any material effect on the Company’s financial statements.

AASB amendment Outline of amendment

Operative Date

(Annual reporting periods

beginning on or after)

AASB 9

Financial Instruments

Simplifies the classifications of financial assets into two categories:

• Those carried at amortised cost; and

• Those carried at fair value.

Simplifies requirements related to embed derivatives that exist in financial assets that are carried at amortised cost, such that there is no longer a requirement to account for the embedded derivative separately.

Removes the tainting rules associated with held-to-maturity assets.

Investments in equity instruments that are not held for trade can be designated at fair value through other comprehensive income, with only dividends being recognised in profit and loss.

Investments in unquoted equity instruments (and contracts on those investments that must be settled by delivery of the unquoted equity instrument) must be measured at fair value. However, in limited circumstances, cost may be an appropriate estimate of fair value.

1 Jan 2013

AASB 10

Consolidation

AASB 10 replaces AASB 127 and 3 key elements of control. According to AASB 10 an investor controls an investee if and only if the investor has all the following:

(a) power over the investee;

(b) exposure, or rights, to variable returns from its involvement with the investee; and

(c) the ability to use its power over the investee to affect the amount of the investor’s returns.

Additional guidance is provided in how to evaluate each of the three limbs above. While this is not a wholesale change from the current definition of control within AASB 127 (and for many entities no change in practice will result) some entities may be impacted by the change. The limbs above are more principle based rather than hard and fast rules.

1 Jan 2013

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Operative Date



AASB 11

Joint Arrangements

AASB 11 replaces the AASB 131 Interests in Joint Ventures. The previous standard had 3 types of Joint ventures whereas AASB 11 only has two. These are:

• Joint Operations; and

• Joint Ventures.

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers.

Joint ventures must now be accounted for using the equity method of accounting. The option to proportionately consolidate a joint venture entity has been removed.

1 Jan 2013

AASB 12

Disclosure of Interests in Other Entities

AASB 12 provides the disclosure requirements for entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. As such, it pulls together and replaces disclosure requirements from many existing standards.

The AASB requires an entity to disclose information that enables users of financial statements to evaluate:

(a) the nature of, and risks associated with, its interests in other entities; and

(b) the effects of those interests on its financial position, financial performance and cash flows.

1 Jan 2013

AASB 13

Fair Value Measurement

AASB 13:

(a) defines fair value;

(b) sets out in a single IFRS framework for measuring fair value; and

(c) requires disclosures about fair value measurements.

Fair value is defined as:

“the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price)”

1 Jan 2013

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Operative Date



AASB 1053

Application of Tiers of Australian Accounting Standards

This Standard establishes a differential financial reporting framework consisting of two Tiers of reporting requirements for preparing general purpose financial statements:

(a) Tier 1: Australian Accounting Standards; and

(b) Tier 2: Australian Accounting Standards – Reduced Disclosure

Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 and substantially reduced disclosures corresponding to those requirements.

For-profit entities in the private sector that have public accountability (as defined in this Standard) would apply Tier 1 requirements in preparing general purpose financial statements.

For-profit private sector entities that do not have public accountability would apply either Tier 2 or Tier 1 requirements in preparing general purpose financial statements.

Public accountability means accountability to those existing and potential resource providers and others external to the entity who make economic decisions but are not in a position to demand reports tailored to meet their particular information needs. A for-profit private sector entity has public accountability if:

(a) its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or

(b) it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. This is typically the case for banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks.

1 July 2013

AASB 2009-12 This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB.

These amendments have no major impact on the requirements of the amended pronouncements.

1 Jan 2011

AASB 2010-2 This Standard gives effect to Australian Accounting Standards – Reduced Disclosure Requirements. AASB 1053 provides further information regarding the differential reporting framework and the two tiers of reporting requirements for preparing general purpose financial statements.

1 July 2013

AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project are set out below:

AASB 7 Financial Instruments: Disclosures Clarification of disclosures

AASB 101 Presentation of Financial Statements Clarification of statement of changes in equity

AASB 134 Interim Financial Reporting Significant events and transactions

1 Jan 2011

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Operative Date



AASB 2010-5 The Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB.

These amendments have no major impact on the requirements of the amended pronouncements.

1 Jan 2011

AASB 2010-6 The Standard adds and amends disclosure requirements about transfers of financial assets, including in respect of the nature of the financial assets involved and the risks associated with them.

1 July 2011

AASB 2010-7 The Standard makes numerous amendments to Australian Accounting Standards and Interpretations listed above as a result of the amendments to AASB 9.

1 Jan 2013

AASB 2010-8 The amendments provide a practical approach for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model in AASB 140 Investment Property. Under AASB 112, the measurement of deferred tax liabilities and deferred tax assets depends on whether an entity expects to recover an asset by using it or by selling it. However, it is often difficult and subjective to determine the expected manner of recovery when the investment property is measured using the fair value model in AASB 140.

To provide a practical approach in such cases, the amendments introduce a presumption that an investment property is recovered entirely through sale.

Interpretation 121 Income Taxes – Recovery of Revalued Non-Depreciable Assets addresses similar issues involving non-depreciable assets measured using the revaluation model in AASB 116 Property, Plant and Equipment. The amendments incorporate Interpretation 121 into AASB 112 after excluding investment property measured at fair value from the scope of the guidance previously contained in Interpretation 121.

1 Jan 2012

AASB 2010-9 The amendments in respect of severe hyperinflation provide guidance for entities emerging from severe hyperinflation either to resume presenting Australian-Accounting-Standards financial statements or to present Australian-Accounting-Standards financial statements for the first time.

1 July 2011

AASB 2010-10 The amendments to AASB 2009-11 will only affect early adopters of AASB 2009-11 (and AASB 9 Financial Instruments as issued in December 2009) as it has been superseded by AASB 2010-7 for annual reporting periods beginning on or after 1 January 2013.

1 Jan 2013

AASB 2011-1 These amendments are a consequence of Phase 1 of the joint Trans-Tasman Convergence project of the AASB and the FRSB. Phase 1 has addressed the harmonisation of financial reporting requirements across the Tasman in relation to for-profit entities that assert compliance with International Financial Reporting Standards (IFRSs). The Boards were keen to first address differences from IFRSs and between Australian and New Zealand Standards as they apply to for-profit entities, on the basis that such entities are the most likely to claim compliance with IFRSs and trade across the Tasman.

I July 2011

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Operative Date



AASB 2011-2 AASB 1054 contains the Australian-specific disclosures that are in addition to International Financial Reporting Standards. AASB 2011-1 contains the related amendments to other Australian Accounting Standards. For example, some of the disclosure requirements previously in paragraphs Aus15.1-Aus15.3 and other paragraphs of AASB 101 are now included in AASB 1054 instead.

This Standard makes amendments to AASB 1054 to introduce reduced disclosure requirements to that Standard for entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements. These reflect the reduced disclosure requirements originally specified in AASB 2010-2 for AASB 101 disclosures that are now in AASB 1054.

1 July 2013

AASB 2011-4 This Standard makes amendments to Australian Accounting Standard AASB 124 Related Party Disclosures.

These amendments arise from a decision of the AASB to remove the individual key management personnel (KMP) disclosures from AASB 124 on the basis they:

• are not part of International Financial Reporting Standards (IFRSs), which include requirements to disclose aggregate (rather than individual) amounts of KMP compensation;

• are not included in New Zealand accounting standards and, accordingly, their removal is consistent with meeting the 2010 Outcome Proposal of the Australian and New Zealand governments that for-profit entities are able to use a single set of accounting standards and prepare only one set of financial statements;

• are considered by the AASB to be more in the nature of governance disclosures that are better dealt with as part of the Corporations Act 2001;

• were originally included in AASB 124 when fewer similar disclosure requirements were included in the Corporations Act and, in many respects, relate to similar disclosure requirements currently in that Act and therefore detract from the clarity of the requirements applying in this area; and

• could be considered (during the transition period for this Amending Standard) for inclusion in the Corporations Act or other legislation to the extent they presently go beyond the requirements in legislation and are considered appropriate in light of government policy.

1 July 2013

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2011 2010 $ $ NOTE 2: LOSS BEFORE INCOME TAX EXPENSE

Loss before income tax expense has been determined after: (a) Income - Bank interest 190,559 26,709 (b) Expenses - Bank interest 411 -- Share option expense 631,675 -

NOTE 3: INCOME TAX EXPENSE (a) The prima facie tax benefit on loss before income tax is reconciled to the income tax expense as follows: Prima facie income tax credit on loss at 30% (346,068) (88,625)Add: Tax effect of: - Share based payments expense 189,503 -- Share issue costs (48,308) (94,839)- Tax losses not recognised 204,873 183,464 Income tax expense - - (b) Deferred income tax Deferred tax liabilities comprise: Exploration and prospecting expenditure 463,827 147,785 Share issue costs (95,550) (75,871)Accruals (4,500) (27,743)Tax losses brought to account (363,777) (44,171)Deferred tax liability - - Deferred tax assets not brought to account (gross): Tax losses 388,336 183,463 Temporary difference - -

The tax losses and deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not yet probable that future taxable profit will be available against which the Company can utilise the benefits. NOTE 4: CASH AND CASH EQUIVALENTS

Cash at bank 625,290 4,695,225 Term deposit maturing on the 5 March 2012 2,000,000 -Total 2,625,290 4,695,225

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2011 2010 $ $ NOTE 5: TRADE AND OTHER RECEIVABLES GST recoverable 51,522 22,313Interest receivable 8,907 -PAYG deducted from income but refundable 147 147Rental deposit on premises 6,453 -Total 67,029 22,460 NOTE 6: EXPLORATION AND EVALUATION ASSETS - NON CURRENT Opening balance 492,618 -Capitalised during the year 1,160,269 492,618 Expensed during year (53,926) -Closing Balance 1,598,961 492,618

The ultimate recoupment of costs carried forward for exploration and evaluation expenditure is dependent on the successful development and commercial exploitation or sale of the respective areas. The Company reviews annually the carrying value of the capitalised exploration and evaluation expenditure, and will capitalise the expenditure if it considers the area of interest to be prospective. Should the particular area of interest no longer be considered prospective, then the company will make a provision in the accounts for the carrying value of the project. The list of tenements in which the company has an interest is disclosed on page 33. NOTE 7: OTHER ASSETS Current Prepaid insurances and rent 20,688 -Non-current Environmental bond deposits 120,000 113,000 NOTE 8: PROPERTY, PLANT AND EQUIPMENT Computer equipment at cost 5,628 -Accumulated depreciation (704) - 4,924 - Furniture and fittings at cost 1,091 -Accumulated depreciation (37) - 1,054 - Total plant and equipment 5,978 - F

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NOTE 8: PROPERTY, PLANT AND EQUIPMENT (CONT) Computer Furniture and Equipment Fittings Total $ $ $ Cost Cost Cost Opening balance - - -Additions during the year 5,628 1,091 6,719 Disposals during the year - - -Closing cost 5,628 1,091 6,719 Depreciation Depreciation DepreciationOpening balance - - -Charge during the year (704) (37) (741)Closing depreciation (704) (37) (741) Net book value 4,924 1,054 5,978 2011 2010 $ $ NOTE 9:TRADE AND OTHER PAYABLES Trade creditors 1,650 158,169 Accruals 77,110 286,116 Sundry payables 1,682 23,000 Total trade and other payables 80,442 467,285

NOTE 10: CONTRIBUTED EQUITY Issued capital comprises 75,205,999 Ordinary shares fully paid (31 December 2010: 75,205,999) (a) Ordinary Shares Number Number Number Balance at the beginning of the year 75,205,999 -Share issued during the year

Shares issued to founders on 10 November 2010 - 31,666,666 Shares issued to seed investors on 5 April 2010 - 5,725,808 Shares issued to seed investors on 23 June 2010 - 12,607,525 Shares issued pursuant to IPO on 29 December 2010 - 25,206,000

Balance at the end of the financial year 75,205,999 75,205,999 (b) Ordinary Shares Value $ $ Balance at the beginning of the year 5,151,434 -Share issued during the year

Shares issued to founders on 10 November 2009 (1) - 1 Shares issued to seed investors on 5 April 2010 (2) - 130,000 Shares issued to seed investors on 23 June 2010 (2) - 490,000 Shares issued pursuant to IPO on 29 December 2010 (3) - 5,041,200 Share issue costs (29,500) (509,767)

Balance at the end of the financial year 5,121,934 5,151,434 1. The shares issued on 10 November 2009 were for a total consideration of $1 2. The Shares issued on the 5 April 2010 and the 23 June 2010 were for a total consideration of $620,000 (approximately $0.034

each). 3. The shares issued on the 29 December 2010 were for a total consideration of $5,041,200 ($0.20 each).

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NOTE 11: SHARE OPTION RESERVE During the year ended 31 December 2011 the company issued a total of 14,950,000 options over ordinary shares to directors. The fair value of these options has been calculated at $684,545 of which $631,675 has been recognised as a period expense in the statement of comprehensive income and the remaining balance of $52,870 has been capitalised to deferred exploration and evaluation expenditure. Details of the options granted are as follows:

Grant Expire Number Exercise Stock Days to Term Fair Total Date Date Granted Price Price Expiration in Volatility Value Fair years Value

Comenti Investments Limited 24/02/2011 31/12/2013 3,500,000 0.25 0.190 1,041 3 53.00% 0.0591 206,850Tiong Chiong Ee 25/02/2011 31/12/2013 1,250,000 0.25 0.190 1,040 3 53.00% 0.0591 73,875John Robson 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1,040 3 53.00% 0.0591 125,588Christopher Tan 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1,040 3 53.00% 0.0591 125,588Christopher Tan 25/02/2011 31/12/2013 2,000,000 0.40 0.190 1,040 3 53.00% 0.0286 57,200Robert McLennan 23/06/2011 31/12/2013 1,700,000 0.25 0.125 922 3 64.00% 0.0311 52,870Scott Brown 23/06/2011 31/12/2013 250,000 0.25 0.125 922 3 64.00% 0.0311 7,774John Robson 23/06/2011 31/12/2013 2,000,000 0.40 0.125 922 3 64.00% 0.0174 34,800

Total 14,950,000 684,545

The options have been valued using a binomial option pricing model known as the Cox, Ross and Rubenstein model. The volatility has been calculated using historical share prices over a period commensurate to that of the option term. All options vested immediately at grant date. 2011 2010 $ $ NOTE 12: ACCUMULATED LOSSES Accumulated losses at the beginning of the financial year (295,416) -Net loss attributable to members of the entity (1,153,559) (295,416)Accumulated losses at the end of the financial year (1,448,975) (295,416)

NOTE 13: CASH FLOW INFORMATION (a) Reconciliation of cash Cash at the end of the financial period as shown in the Statement of Cash Flows is reconciled to the related items in the statement of financial position. Cash at bank 625,290 4,695,225 Term deposit 2,000,000 -Total 2,625,290 4,695,225

(b) Reconciliation of cash flow from operations with loss from ordinary activities after income Loss from ordinary activities after income tax (1,153,559) (295,416)Adjustment for non-cash items - depreciation 741 -- share option expense 631,675 -Add: Income tax payments - (147)Add: Changes in working capital (Increase) in trade and other receivables, other assets (65,257) (22,313)(Decrease) / Increase in trade and other payables (131,927) 148,657 Cash outflow from operations (718,327) (169,219)

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2011 2010 $ $ NOTE 14: AUDITORS REMUNERATION Auditor’s remuneration Auditing or reviewing the financial reports 36,590 19,000 Other Services - investigating accountants report - 17,000 - share registry expense 22,941 7,581 Total 59,531 43,581

NOTE 15: SEGMENT INFORMATION Primary reporting - business segments The company operates wholly within the gold and minerals exploration industry. Secondary reporting - geographic reporting The company operates wholly within Australia. NOTE 16: KEY MANAGEMENT PERSONNEL DISCLOSURES Key Management Person Directors Position Scott Brown Chairman – Non-executive Tiong Chiong Ee Director - Non-executive Robert McLennan Director - Non-executive Lan Nguyen Resigned 29 July 2011 John Robson Director - Non-executive John Slade Managing Director Chris Tan Alternate Director to John Robson Directors Interests as at 31 December 2011 Shareholding Direct Indirect Options Scott Brown 2,749,854 2,548,954 250,000Tiong Chiong Ee - 2,500,000 1,250,000Robert McLennan 20,000 17,206,333 6,700,000John Robson - 750,000 4,125,000John Slade 10,000 14,008,333 5,000,000Christopher Tan - 1,000,000 4,125,000Total 2,779,854 38,013,620 21,450,000 Transactions with directors Transactions with key management personnel are conducted at arms-length and in the ordinary course of business. The company has paid fees to entities related to the directors for services. These are disclosed in full in the remuneration report contained within the Director’s Report.

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2011 2010 $ $ NOTE 17: RELATED PARTY TRANSACTIONS Rent received from Ark Mines Limited 9,660 - Ark Mines Limited rents a portion of the offices rented by the Company for $1,610 a month payable monthly in arrears which commenced in July 2011. This transaction is considered an arms length transaction carried out on commercial terms and conditions. NOTE 18: COMMITMENTS AND CONTINGENCIES a) Commitments The Company is required to meet minimum committed expenditure requirements to maintain current rights of tenure to exploration licences. These obligations may be subject to re-negotiation, may be farmed-out or may be relinquished and have not been provided for in the statement of financial position. A summary of aggregate commitments is as follows: Within 1 year 920,000 688,500 More than 1 year but not later than two years 350,500 833,500 Total 1,270,500 1,522,000 Operating Expenditure Commitment (Administration premises) Not later than one year Later than one year but not later than two years 82,269 - 82,269 - Total commitments 1,352,769 1,522,000

b) Contingent assets and liabilities Contingent liabilities The company has received a demand from a third party claiming fees in relation to fund raising in conjunction with the company’s IPO. The claim is for a total of $254,400 and 12,700,000 options to subscribe for shares in the company at $0.25 cents each. The company will vigorously defend this matter and the directors believe the claim is without merit. The company has provided an amount of $50,000 in the financial statements as at 31 December 2011 in relation to this matter. Contingent assets No contingent assets exist as at the date of this report. NOTE 19: FINANCIAL RISK MANAGEMENT The Company's financial instruments consist mainly of deposits with banks, accounts receivable and payable. Exposure to interest rate risk, commodity price risk and liquidity risk arises in the normal course of the business. The Company’s overall financial risk management strategy is to seek to ensure that the Company is able to fund its business plans. The Company does not have derivative financial instruments as at 31 December 2011. The Company uses various measures dependent on the types of risk to which it is exposed. These methods include cash flow at risk analysis in the case of interest rate and foreign exchange risk.

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Financial risk management is carried out by the Managing Director under policies approved by the Directors. The Directors provide written principles for overall risk management. The following table summarises interest rate receivable or payable for the Company. Note % Amount $ Amount $ Amount $ 2011 Current Floating Non Interest Interest rate Interest rate Bearing Total Financial assets Cash and cash equivalents 4 5.83% 2,625,290 - 2,625,290 Trade and other receivables 5 - 67,029 67,029 Other financial assets 7 - 140,688 140,688 Financial liabilities Trade and other payables 9 - 80,442 80,442 Note % Amount $ Amount $ Amount $ 2010 Current Floating Non Interest Interest rate Interest rate Bearing Total Financial assets Cash and cash equivalents 4 4.25% 4,695,225 - 4,695,225Trade and other receivables 5 - 22,460 22,460 Other financial assets 7 - 113,000 113,000Financial liabilities Trade and other payables 9 - 467,285 467,285 (a) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s credit risk exposure is limited to cash, cash equivalents and trade receivables. Management have reduced this risk by depositing cash with financial institutions with a credit rating of AA or higher. Trade receivables which include GST refundable by the Australian Taxation Office are similarly rated AA. (b) Interest rate risk The Company’s main interest rate risk arises from interest earnings on its surplus cash. The Company is exposed to interest rate risk to the extent its interest earnings may fluctuate. Below is a table of impact of a 1% movement in the interest rate on the funds invested when all other variables are held constant. 2011 2010 $ $ Potential impact on post-tax loss: Interest rate -1% (26,253) (6,284)Interest rate +1% 26,253 6,284 (c) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding to meet ongoing operational requirements, exploration expenditure, and small to medium sized opportunistic projects and investments, by keeping surplus cash available. The company’s objective is to safeguard its ability to continue as a going concern and to maintain a conservative capital structure so that management can focus on running its core business together with being an attractive company for shareholders and potential investors.

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The Company will consider the most appropriate use of debt and equity to maximise its returns while maintaining a low risk capital structure. (d) Fair values The financial assets and liabilities of the Company are recognised in the statement of financial position at their fair value in accordance with the accounting policies in note 1. The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments: Trade and other receivables The carrying value less impairment provision of trade receivables is a reasonable approximation of their fair values due to the short term nature of trade receivables. Financial liabilities Fair value is calculated based on the present value of future principal and interest flows, discounted at the market rate of interest at the report date. NOTE 20: EVENTS AFTER BALANCE SHEET DATE No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. NOTE 21: EARNINGS PER SHARE Number Number Weighted Ordinary share number 2010 financial period Average Balance at beginning of period - -Shares issued during the period

on 10 November 2009 31,666,666 31,666,666on 5 April 2010 18,333,333 13,561,644 on 29 December 2010 25,206,000 138,115

Balance at end of year 75,205,999 45,366,425 Ordinary share number 2011 financial year Balance at beginning of year 75,205,999 75,205,999 Shares issued during the year - -Balance at end of year 75,205,999 75,205,999 Total comprehensive (loss) for the year (1,153,559) (295,416) 2011 2010 Earnings per share Basic - cents per share (1.53) (0.65)Diluted - cents per share (1.53) (0.65)

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NOTE 22: COMPANY DETAILS The registered office of the Company is: Centius Gold Limited Level 11, 37 Bligh Street Sydney NSW 2011

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DIRECTORS’ DECLARATION


Directors' Declaration The directors of Centius Gold Limited declare that:

1. The financial statements and notes, as set out on pages 8 to 29 are in accordance with the Corporations Act 2001, and:

(i) give a true and fair view of the financial position as at 31 December 2011 and the

performance for the year ended on that date of the company; and

(ii) comply with Accounting Standards and the Corporations Regulations 2001; and

(iii) the financial statements also comply with International Financial Reporting Standards as disclosed in Note 1.

2. This declaration has been made after receiving declarations from the Managing Director and the

Chairman to the Directors in compliance with section 259A of the Corporations Act 2001 for the financial year ended 31 December 2011.

3. In the directors opinion there are reasonable grounds to believe that the company will be able to pay

its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors.

Scott Brown Chairman Sydney, dated this 7th day of February 2012

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INDEPENDENT AUDIT REPORT TO THE MEMBERS OF CENTIUS GOLD LIMITED Report on the financial statements We have audited the accompanying financial statements of Centius Gold Limited which comprises the statement of financial position as at 31 December 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes to the financial statements and the directors' declaration of the company. Directors’ responsibility for the financial statements The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditors’ responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. Our audit did not involve an analysis of the prudence of business decisions made by directors or management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Matters Relating to Electronic Publication of the Audited Financial Report This audit report relates to the financial report of Centius Gold Limited for the year ended 31 December 2011 included on the website of Centius Gold Limited. The directors of the company are responsible for the integrity of the website and we have not been engaged to report on this integrity. This audit report refers only to the subject matter described above. It does not provide an opinion on any other information which may have been hyperlinked to or from the financial report. If users of the financial report are concerned with the inherent risk arising from publication on a website, they are advised to refer to the hard copy of the audited financial report to confirm the information contained in the website version of the financial report.

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Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report. In addition to our audit of the financial statements we were engaged to undertake services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence. Auditors’ opinion In our opinion: 1. the financial statements of Centius Gold Limited is in accordance with: (a) the Corporations Act 2001, including:

(i) giving a true and fair view of the entity’s financial position as at 31 December 2011 and of its performance for the year ended on that date; and

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

2. the financial statements also comply with International Financial Reporting Standards as

disclosed in Note 1. Report on The Remuneration Report We have audited the Remuneration Report included on pages 3 to 4 of the directors' report for the year ended 31 December 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s Opinion on The Remuneration Report In our opinion the Remuneration Report of Centius Gold Limited for the year ended 31 December 2011, complies with section 300A of the Corporations Act 2001. GOULD RALPH ASSURANCE Chartered Accountants

GREGORY RALPH, M.Com, FCA Partner Sydney Dated this 7th day of February 2012

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TENEMENT SCHEDULE


Licence Licence State / Area ML Date Expenditure

to Name Number Territory (Units) Ref Expires 31/12/2011

Spiral - Bethungra 7454 NSW 52 16/02/12 128,061 Junee 7458 NSW 63 26/02/12 96,678 Temora 7459 NSW 4 26/02/12 -Lunatic 7460 NSW 63 01/03/12 91,232 Bobo 7462 NSW 70 04/03/12 215,111 Copeland 7486 NSW 71 24/03/12 69,605 Bimbi - Berendebba 7589 NSW 74 04/08/12 103,613 Pullabooka 7590 NSW 99 04/08/12 136,288 Forbes 7591 NSW 90 04/08/12 352,452 Turon 7592 NSW 97 04/08/12 104,745 Gympie 18447 QLD 15 14/04/12 105,531 Croydon 18448 QLD 18 30229 18/04/13 195,645 Dittmer (Due Diligence) 14255 QLD 10340/1 -Cascade (Application) 4388 NSW 17 La-De-Da (Application) 19340 QLD 50 -Totals 1,598,961 Agrees to DPI records As per DPI report 1/1/12

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CORPORATE INFORMATION

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ABN 66 140 475 921 Directors Scott Brown John Slade Tiong Chiong Ee Robert McLennan John Robson Chris Tan (Alternate to John Robson) Company Secretary Pipvide Tang Corporate Office Suite C, Level 4, 140 William Street Woolloomooloo NSW 2011 Registered Office Level 11 37 Bligh Street SYDNEY NSW 2011 Telephone +61 2 8249 4384 Facsimile +61 2 8249 4964 Auditors Gould Ralph Assurance Chartered Accountants Level 42, Suncorp Place 259 George Street SYDNEY NSW 2000 Legal Advisor Websters Solicitors & Barristers, Notaries Level 11 37 Bligh Street SYDNEY NSW 2000

Share Registry Gould Ralph Pty Limited Level 42, Suncorp Place 259 George Street SYDNEY NSW 2000 Telephone +61 2 9032 3000 Facsimile +61 2 9032 3088

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Documents

For personal use only - ASX · For personal use only Chris Tan was appointed as an alternative director to John Robson on 15 March 2011. DIRECTOR’S REPORT Centius Gold Limited ABN