for personal use only · abn 66 140 475 921 centius gold limited financial report for the year...

ABN 66 140 475 921

Centius Gold Limited

Financial Report

for the year ended 31 December 2012

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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 ............................................................................................................... 27

Independent Audit Report ........................................................................................................ 28

Tenement Schedule .................................................................................................................. 30

Corporate Information.............................................................................................................. 31

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DIRECTORS’ REPORT


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 2012.

Review of operations

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).

The Company spent $1,493,262 on exploration and evaluation of mining tenements during the year. Some of the

highlights for the year include:

• The Company completing a significant drilling program at the Homeward Bound Prospect on the Croydon

Project. A total of 848 metres were drilled with the best result being 0.55 metres at 30g/t gold.

• A 20 hole drill program at Mary’s Dream on the Forbes Project was completed – with the best result of 1m at

2.45g/t.

• 10 aircore drill holes were completed at the Bimbi project.

• Geological mapping and soil sampling at the Carters Hill Prospect on the Junee Project defined a low level

anomaly.

• Reassaying of selected intervals on the Dead Horse Prospect on the Turon Project returned the best intervals of

1m at 1.77g/t and 1m at 1.45g/t.

Results of Operations

For the year ended 31 December 2012 Centius recorded an after tax loss of $3,197,805 (2011: loss of $1,153,559).

Significant changes in state of affairs

Shares in the company were issued in April 2012 (6,000,000 shares) and again in June 2012 (10,000,000 shares) which

raised funds of $770,000.

During the year the company expensed exploration and evaluation expenditure carried forward other than in respect of

the Croydon and Lunatic tenements.

Principal activities

The principal activity of the Company during the year was the exploration and evaluation of gold and base metal projects.

No change in the principal activity occurred during this period.

Directors

The Directors in office during the year and as at the date of this report are:

Scott Brown (appointed 1 April 2010)

Robert McLennan (appointed 9 November 2009)

Tiong Chiong Ee (appointed 15 March 2011)

John Robson (appointed 15 March 2011)

Christopher Tan (appointed as an alternative director to John Robson on 15 March 2011)

Chan Min Son (appointed as alternative director to Tiong Chiong Ee on 15 August 2012)

John Slade was removed as a director on 8 October 2012

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

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DIRECTORS’ REPORT


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the Institute of Chartered Accountants in Australia and the Petroleum Exploration Society of Australia (PESA). Currently

Scott is a directory of Real Energy Corporation Ltd. Scott is also a member of the Centius audit and remuneration

committees.

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, Magma

Mines Ltd, Horizon Mines Ltd, Dagon Oil Ltd and Nationwide Metals Ltd.

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 was an executive director of RH

Petrogas Limited (a listed company in Singapore) from Aug 2009 to Jan 2013. 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. Tiong 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 of 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.

At Ivory John is focused on capital markets financing transactions for small and mid-cap companies in Asia and Australia.

Prior to Ivory, John was Asia-Pacific Head of Structured Product Sales and Marketing at JP Morgan, he 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.

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.

Chan Min Son- Alternate Director to Tiong Chiong Ee

BEng (Hons) Civil Engineering (University of Birmingham, UK)

MBA (Universiti Putra Malaysia)

Mr. Chan is the Chief Investment Officer of RH Mining Resources Ltd (“RH Mining”) since April 2011. He has more than 12

years of experience in engineering, management consulting, direct investments and investment banking, including

mergers and acquisitions, initial public offering and project finance. Prior to joining RH Mining, he worked for Macquarie

Group, where his last position was a vice president with Macquarie Investment Advisory (Beijing) Company Limited. Prior

to the role, Mr. Chan was a management consultant with PA Consulting Group, a management and information

technology consulting and technology firm. Before joining PA Consulting Group Mr Chan was a water & waste water

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DIRECTORS’ REPORT


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design engineer with Envitech Sdn Bhd, a member of Salcon Berhad. Mr. Chan is a Fellow of the Financial Services

Institute of Australasia.

Company Secretary

Mr Pip Tang is the Company Secretary. He has over 30 years of 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 2012 (2011: 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 2012 are:

Shares Options2

Director

Direct Indirect Total

Scott Brown 4,216,288 2,538,954 6,755,242 250,000

Tiong Chiong Ee - 18,000,000 18,000,000 1,250,000

Robert McLennan1 20,000 17,453,333 17,473,333 6,700,000

John Robson - 750,000 750,000 4,125,000

Christopher Tan - 1,000,000 1,000,000 4,125,000

Total 4,236,288 39,742,287 43,978,575 16,450,000

1. Robert McLennan has 5,000,000 options which are exercisable at 40 cents each and expire on 30 June 2013 and 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 (each) options 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.

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:

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DIRECTORS’ REPORT


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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 2012 (2011: 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) $0.200

Year ended 31 December 2011 (1,153,559) (1.53) $0.045

Year ended 31 December 2012 (3,197,805) (3.76) $0.039

Directors’ remuneration

Your directors received the following payments / benefits for services as indicated:

Director Director Other Share option Total

Fees ($) Services ($) benefit ($) Value ($)

For the year ended 31 December 2012

Scott Brown1 42,100 - - 42,100

John Slade2 181,667 - - 181,667

Tiong Chiong Ee4 25,000 - - 25,000

Robert McLennan3 25,000 20,220 - 45,220

John Robson6 25,000 - - 25,000

Total 298,767 20,220 - 318,987

For the period 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

1. Includes payments made to Connect Capital Pty Ltd (an entity related to Scott Brown) for services and excludes GST charged in addition to the

amounts shown if applicable;

2. Includes payments made to Geophysical Consulting Services (an entity related to John Slade) for services and excludes GST charged in addition to

the amount shown if applicable;

3. Includes payments made to Mineral Exploration Consultants Pty Ltd (an entity related to Robert McLennan) for services and excludes GST

charged in addition to the amount shown if applicable;

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 Tiong Chiong Ee) for services;

6. Includes payments made to Excel Group Ltd (an entity related to John Robson) for services;

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Share options

During the year ended 31 December 2012 the company issued the following options to an employee under the Premium

Option Plan on 8 October 2012. The options were forfeited on 31 December 2012 due to the employee failing to meet

continuous period of employment condition and therefore never vested.

1,000,000 options expiring 9 July 2015 at an exercise price of $0.075




Details of the options granted during the previous financial year ended 31 December 2011:

Grant Expiry Number Exercise Stock Days to Term Fair Total

Issued to: Date Date Granted Price Price Expiration Years Volatility Value Fair Value

Comenti

Investments Ltd 24/02/2011 31/12/2013 3,500,000 0.25 0.190 1,041 3 53.00% 0.0591 206,850

Tiong Chiong Ee 25/02/2011 31/12/2013 1,250,000 0.25 0.190 1,040 3 53.00% 0.0591 73,875

John Robson 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1,040 3 53.00% 0.0591 125,588

Christopher Tan 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1,040 3 53.00% 0.0591 125,588

Christopher Tan 25/02/2011 31/12/2013 2,000,000 0.40 0.190 1,040 3 53.00% 0.0286 57,200

Robert McLennan 23/06/2011 31/12/2013 1,700,000 0.25 0.125 922 3 64.00% 0.0311 52,870

Scott Brown 23/06/2011 31/12/2013 250,000 0.25 0.125 922 3 64.00% 0.0311 7,774

John 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 granted in 2011 vested at grant date. All options are over unissued ordinary shares.

Employee contracts of senior executives

Mr John Slade was engaged under an employment contract with an annual remuneration of $250,000 plus 9%

superannuation paid monthly in arrears. The contract commenced on 1 July 2011 and was terminated on 8 August 2012.

Mr Peter Williamson, CEO, was engaged under an employment contract commencing from 9 July 2012 with an annual

remuneration of $272,500 (including 9% superannuation). Mr Williamson ceased employment on 31 December 2012.

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 2012 and the numbers of meetings attended by each

director are as follows:

Director Directors' Audit Committee Remuneration & Nomination

Meetings Meetings Committee Meetings

Eligible Eligible Eligible

to attend Attended to attend Attended to attend Attended

Scott Brown 13 13 1 1 - -

Tiong Chiong Ee 13 4 - - - -

Robert McLennan 13 13 - - - -

John Robson 13 12 1 1 - -

John Slade 10 10 - - - -

Christopher Tan 13 6 - - - -

Chan Min Son 7 6 - - - -

As well as formal Directors meetings, executive and non-executive directors are in frequent communication by

telephone, email and fax.

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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 2012 the total registry fees were $16,835 (2011: $22,941). 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 2012 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 27th day of March 2013

Scott Brown

Chairman

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27 March 2013 The Board of Directors Centius Gold Limited Level 3, Walker Street North Sydney NSW 2060 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 2012, 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

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CENTIUS GOLD LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

Year ended Year ended

Notes 31 Dec 2012 31 Dec 2011

$ $

Revenue from ordinary activities 2 90,449 190,559

Less expenses:

Accounting and secretarial expenses 99,835 60,866

Audit fees 29,933 36,590

Computer and related operating expenses 19,237 12,161

Consulting and exploration fees 49,930 17,692

Depreciation 12,458 741

Director's fees 317,187 202,574

Due diligence costs 39,757 81,989

Exploration and evaluation costs expensed 6 2,186,839 53,926

Finance costs 2 - 411

Financial Advisers 12,669 -

Insurance 44,406 28,557

Legal fees 2,792 6,182

Marketing and public relation expenses 21,680 22,529

Office supplies and printing and stationery 13,733 40,685

Rent & Parking 87,033 52,335

Salaries & other employment costs 299,813 -

Share option expense 11 - 631,675

Share registry costs and ASX fees 28,343 45,723

Travel and accommodation expenses 2,060 29,165

Other expenses from ordinary activities 20,549 20,317

Total Expenses 3,288,254 1,344,118

Loss from continuing operations before income tax (3,197,805) (1,153,559)

Income tax expense 3 - -

Loss from continuing operations after income tax (3,197,805) (1,153,559)

Other comprehensive income for the year - -

Total comprehensive loss for the year (3,197,805) (1,153,559)

Earnings per share

Basic - cents per share 21 (3.76) (1.53)

Diluted - cents per share 21 (3.76) (1.53)

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

notes.

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STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012


Note 31 Dec 2012 31 Dec 2011

CURRENT ASSETS $ $

Cash and cash equivalents 4 1,056,356 2,625,290

Trade and other receivables 5 9,179 67,029

Other assets 7 113,562 20,688

TOTAL CURRENT ASSETS 1,179,097 2,713,007

NON-CURRENT ASSETS

Exploration and evaluation assets 6 822,582 1,598,961

Other assets 7 30,000 120,000

Property, plant and equipment 8 28,464 5,978

TOTAL NON-CURRENT ASSETS 881,046 1,724,939

TOTAL ASSETS 2,060,143 4,437,946

CURRENT LIABILITIES

Trade and other payables 9 151,088 80,442

TOTAL CURRENT LIABILITIES 151,088 80,442

TOTAL LIABILITIES 151,088 80,442

NET ASSETS 1,909,055 4,357,504

EQUITY

Contributed equity 10 5,871,290 5,121,934

Share option reserve 11 684,545 684,545

Accumulated losses 12 (4,646,780) (1,448,975)

TOTAL EQUITY 1,909,055 4,357,504

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

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STATEMENT OF CASH FLOWS



Notes 31 Dec 2012 31 Dec 2011

$ $

CASH FLOW FROM OPERATING ACTIVITIES

Payments to suppliers and employees (959,539) (908,475)

Interest received 90,449 190,559

Interest paid - (411)

Net cash used in Operating Activities 13b (869,090) (718,327)

CASH FLOW FROM INVESTING ACTIVITIES

Payments for environmental bonds - (7,000)

Payments for exploration and evaluation (1,410,460) (1,153,861)

Payments for plant and equipment (38,739) (6,719)

Net cash used in Investing Activities (1,449,199) (1,167,580)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from share issue 770,000 -

Proceeds from investors refunded - (23,000)

Capital raising and listing costs (20,645) (161,028)

Net cash (used in) / provided by financing activities 749,355 (184,028)

Net (decrease) / increase in cash held (1,568,934) (2,069,935)

Cash at beginning of financial year 2,625,290 4,695,225

Cash at end of financial year 13a 1,056,356 2,625,290

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

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STATEMENT OF CHANGES IN EQUITY


Contributed Share option Accumulated

Equity ($) Reserve ($) Losses ($) Total ($)

Balance at 1 January 2011 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

Balance at 1 January 2012 5,121,934 684,545 (1,448,975) 4,357,504

Loss for the year - - (3,197,805) (3,197,805)

Issue of shares 770,000 - - 770,000

Share based payments expense - - - -

Share issue costs (20,645) - - (20,645)

Balance at 31 December 2012 5,871,289 684,545 (4,646,779) 1,909,055

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 2012


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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. Going Concern

The Company incurred a loss after tax of $3,197,805 for the year ended 31 December 2012, including expensing

$2,186,839 of capitalised exploration expenditure. Net cash used in operating activities during the year was $869,090.

Whilst the company had $1,000,000 cash at March 2013 and anticipates a decreased spend during the forthcoming

year to March 2014, the continued operation of the company beyond that period is inherently dependent upon raising

further capital to fund exploration.

These matters give rise to an uncertainty that may cast doubt upon the Company's ability to continue as a going

concern.

The directors have prepared cash flow projections to March 2014 that support the ability of the company to continue

as a going concern. These cash flow projections assume net proceeds from share issues of $500,000 to maintain the

company's resources.

In the event that the Company is unable to raise further funds, it may not be able to continue exploration activities

past March 2014 or realise its assets and extinguish its liabilities in the ordinary course of operations and at the

amounts stated in the financial statements.

No adjustments have been made to the recoverability and classification of recorded asset values and the amount and

classification of liabilities that might be necessary should the company not continue as a going concern.

C. 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

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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.

D. 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.

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.

E. 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.

F. 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.

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G. 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 end 31 December 2012 the Company capitalised exploration and evaluation expenditure of $1,410,460

(2011: $1,106,343) 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.

H. Interest income

Interest revenue is recognised using the effective interest rate method taking into account rates applicable to the

financial assets.

I. 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.

J. 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.

K. 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.

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Computer equipment is depreciated at the rate of 33% per annum.

Furniture and fittings are 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.

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*

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 13

Fair Value Measurement

(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

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.

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Date*

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 2010-10 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 2011-2 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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Date*

AASB2011-9 Amendments to Australian Accounting Standards – Presentation of

Other Comprehensive Income.

The main change arising from this Standard is the requirement for

entities to group items presented in other comprehensive income (OCI)

on the basis of whether they are potentially reclassifiable to profit or

loss subsequently.

This Standard effects presentation only and is therefore not expected to

significantly impact the company.

1 July 2012

AASB 2012-2 Amendments to Australian Accounting Standards - Disclosures -

Offsetting Financial Assets and Liabilities .

AASB 2012-2 principally amends AASB 7 Financial Instruments:

Disclosures to require entities to include information that will enable

users of their financial statements to evaluate the effect or potential

effect of netting arrangements, including rights to set-off associated

with the entities recognised financial assets and recognised liabilities, on

the entity's financial position.

1 Jan 2013

AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial

Assets and Financial Liabilities.

This standard adds application guidance to AASB 132: Financial

Instruments: Presentation to address the potential inconsistencies

identified in applying some of the offsetting criteria of AASB 132,

including clarifying the meaning of "currently has a legal enforceable

right to set-off" and that some gross settlement systems may be

considered equivalent to net settlement.

1 Jan 2014

AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual

Improvements 2009-2011 Cycle.

This standard amends a number of Australian Accounting Standards as

a consequence of the issuance of Annual Improvements to IFRSs 2009-

2011 Cycle by the International Accounting Standards Board, including:

- AASB 101: Presentation of Financial Statements and AASB 134:

Interim Financial Reporting to clarify the requirements for presenting

comparative information.

- AASB 116: Property, Plant & Equipment to clarify the accounting

treatment of spare parts, stand-by and servicing equipment.

- AASB 134 to facilitate consistency between the measure of total

assets and liabilities an entity reports for its segments in its interim and

annual financial statements.

1 Jan 2013

*Annual reporting periods beginning on or after

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31 Dec 2012 31 Dec 2011

$ $

NOTE 2: LOSS BEFORE INCOME TAX EXPENSE

Loss before income tax expense has been determined after:

a) Income

- Bank interest 90,449 190,559

b) Expenses

- Bank interest - 411

- Share option expense - 631,675

c) Directors fees capitalised to deferred exploration

expenditure - 228,282

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% (959,342) (346,068)

Add:

Tax effect of:

- Share based payments expense - 189,503

- Share issue costs (53,543) (48,308)

- Exploration and Evaluation costs expensed 656,052 -

- Tax losses not recognized 356,833 204,873

Income tax expense - -

(b) Deferred income tax

Deferred tax liabilities comprise:

Exploration and prospecting expenditure 194,914 463,827

Share issue costs (71,874) (95,550)

Accruals (20,394) (4,500)

Tax losses brought to account (102,646) (363,777)

Deferred tax liability - -

Deferred tax assets not brought to account (gross):

Tax losses 557,651 388,336

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 149,980 625,290

Term deposit maturing on 4 March 2013 906,376 2,000,000

Total 1,056,356 2,625,290

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31 Dec 2012 31 Dec 2011

$ $

NOTE 5: TRADE AND OTHER RECEIVABLES

2,726 60,576

Rental deposit on premises 6,453 6,453

Total 9,179 67,029

NOTE 6: EXPLORATION AND EVALUATION ASSETS - NON CURRENT

Opening balance 1,598,961 492,618

Capitalised during the year - refer also Note 2(c) 1,410,460 1,160,269

Expensed during year (2,186,839) (53,926)

Closing Balance 822,582 1,598,961

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 23,562 20,688

Environmental bond deposits (Tenements to be relinquished) 90,000 -

Total Current 113,562 20,688

Non-current

Environmental bond deposits 30,000 120,000

Total Non-Current 30,000 120,000

Total Other Assets 143,562 140,688

NOTE 8: PLANT AND EQUIPMENT

Equipment – at cost 41,663 6,719

Accumulated depreciation (13,199) (741)

Total Plant and Equipment 28,464 5,978

Movements during the year:

Plant and equipment

Cost

Opening Balance 6,719 -

Additions during the year 38,280 6,719

Disposals during the year (3,336) -

Closing Cost 41,663 6,719

Depreciation

Opening balance (741) -

Charge during the year (12,458) (741)

Closing depreciation (13,199 (741)

Net Book Value 28,464 5,978

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31 Dec 2012 31 Dec 2011

$ $

NOTE 9: TRADE AND OTHER PAYABLES

Trade creditors 37,643 1,650

Accruals 20,059 77,110

Sundry payables 93,386 1,682

Total trade and other payables 151,088 80,442

NOTE 10: CONTRIBUTED EQUITY

Issued capital comprises 91,205,999 Ordinary shares, fully paid

(31 December 2011: 75,205,999)

Number on

Issue

Number on

Issue

(a) Ordinary Shares Number

Balance at the beginning of the year 75,205,999 75,205,999

Share issued during the year

Shares issued to Investor 20 April 2012 6,000,000 -

Shares issued to Investor 4 June 2012 10,000,000 -

-

Balance at the end of the financial year 91,205,999 75,205,999

Value ($) Value ($)

(b) Ordinary Shares Value

Balance at the beginning of the year 5,121,934 5,151,434

Share issued during the year

Shares issued to Investor 20 April 2012 270,000 -

Shares issued to Investor 4 June 2012 500,000 -

-

Share issue costs (20,645) (29,500)

Balance at the end of the financial year 5,871,289 5,121,934

NOTE 11: SHARE OPTION RESERVE

During the year ended 31 December 2012 the company issued the following options to an employee under the

Premium Option Plan on 8 October 2012. The options were forfeited on 31 December 2012 due to the employee

failing to meet continuous period of employment condition:





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Details of the options granted during the financial year end 31 December 2011 are as follows:

Grant Expire Number Exercise Stock Days to Term Fair Total

Issued to: Date Date Granted Price Price Expiration In Years Volatility Value Fair Value

Comenti

Investments Ltd 24/02/2011 31/12/2013 3,500,000 0.25 0.190 1041 3 53.00% 0.0591 206,850

Tiong Chiong Ee 25/02/2011 31/12/2013 1,250,000 0.25 0.190 1040 3 53.00% 0.0591 73,875

John Robson 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1040 3 53.00% 0.0591 125,588

Christopher Tan 25/02/2011 31/12/2013 2,125,000 0.25 0.190 1040 3 53.00% 0.0591 125,588

Christopher Tan 25/02/2011 31/12/2013 2,000,000 0.40 0.190 1040 3 53.00% 0.0286 57,200

Robert McLennan 23/06/2011 31/12/2013 1,700,000 0.25 0.125 922 3 64.00% 0.0311 52,870

Scott Brown 23/06/2011 31/12/2013 250,000 0.25 0.125 922 3 64.00% 0.0311 7,774

John 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.


31 Dec 2012 31 Dec 2011

$ $

NOTE 12: ACCUMULATED LOSSES

Accumulated losses at the beginning of the financial year (1,448,975) (295,416)

Net loss attributable to members of the entity (3,197,805) (1,153,559)

Accumulated losses at the end of the financial year (4,646,780) (1,448,975)

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 149,980 625,290

Term deposit 906,376 2,000,000

Total 1,056,356 2,625,290

(b) Reconciliation of cash flow from operations with loss from

ordinary activities after income tax

Loss from ordinary activities after income tax (3,197,805) (1,153,559)

Adjustment for non-cash items

- depreciation 12,458 741

- provisions 20,054 -

- impairment 2,186,839 -

- disposals 3,336 -

- share option expense - 631,675

Add: Changes in working capital

(Increase) in trade and other receivables, other assets 3,306 (65,257)

(Decrease) / Increase in trade and other payables 102,721 (131,927)

Cash outflow from operations (869,091) (718,327)

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31 Dec 2012 31 Dec 2011

$ $

NOTE 14: AUDITORS REMUNERATION

Auditing or reviewing the financial reports 29,933 36,590

Other Services - share registry expense 16,835 22,941

Total 42,678 59,531

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

Directors Position

Scott Brown Chairman – Non-executive

Tiong Chiong Ee Director - Non-executive

Robert McLennan Director - Non-executive

John Robson Director - Non-executive

John Slade Managing Director - removed on 8 October 2012

Christopher Tan Alternate Director to John Robson

Chan Min Son Alternate Director to Tiong Chiong Ee

Directors Interests as at 31 December 2012

Shareholding Direct Indirect Options

Scott Brown 4,216,288 2,538,954 250,000

Tiong Chiong Ee - 18,000,000 1,250,000

Robert McLennan 20,000 17,453,333 6,700,000

John Robson - 750,000 4,125,000

Christopher Tan - 1,000,000 4,125,000

Total 4,236,288 39,742,287 16,450,000

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.


31 Dec 2012 31 Dec 2011

$ $

NOTE 17: RELATED PARTY TRANSACTIONS

Rent received from Ark Mines Limited 9,160 9,660

Ark Mines Limited (a director related entity) 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. The agreement was terminated in June 2012.

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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:


31 Dec 2012 31 Dec 2011

$ $

Within 1 year 390,000 920,000

More than 1 year but not later than two years 50,000 350,500

Total 440,000 1,270,500

Operating Expenditure Commitment (Administration premises)

Not later than one year 93,579 82,269

Later than one year but not later than two years 23,395 102,836

116,974 185,105

Total commitments 556,974 1,455,605

b) Contingent assets and liabilities

Contingent liabilities

During October 2010 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 2012 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 2012.

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. Financial risk management is carried

Directors. The Directors provide written principles for overall risk management.

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The below table summarises interest rate receivable or payable for the Company:

Note

Current

Interest

Rate %

Floating

interest rate

Amount

Non

Interest

Bearing

Total

2012 $ $ $

Financial assets

Cash and cash equivalents 4 4.10% 1,056,356 - 1,056,356

Trade and other receivables 5 - 9,180 9,180

Other financial assets 7 - 143,562 143,562

Financial liabilities

Trade and other payables 9 - 151,088 151,088

2011

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


Trade and other payables 9 - 80,442 80,442

(a) Credit risk

Credit risk refers to the risk that a counter-part 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.

(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.


31 Dec 2012 31 Dec 2011

Potential impact on post-tax loss: $ $

Interest rate -1% (10,563) (26,252)

Interest rate +1% 10,563 26,252

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(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.

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.


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

Ordinary share number 2012 financial year Number Weighted Average

Balance at beginning of year 75,205,999 75,205,999

Shares issued during the year

20/4/2012 6,000,000 4,191,781

4/6/2012 10,000,000 5,753,425

Balance at end of year 91,205,999 85,151,204

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

2012 2011

Total comprehensive (loss) for the year (3,197,805) (1,153,559)

Earnings per share

Basic - cents per share (3.76) (1.53)

Diluted - cents per share (3.76) (1.53)

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NOTE 22: COMPANY DETAILS

The registered office of the Company is:

Centius Gold Limited

Level 3, 32 Walker Street

North Sydney

NSW 2060

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Directors' Declaration

The directors of Centius Gold Limited declare that:

1. The financial statements and notes, as set out on pages 8 to 26 are in accordance with the

Corporations Act 2001, and:

(i) give a true and fair view of the financial position as at 31 December 2012 and the

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

(ii) comply with Australian 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 Chief Executive

Officer and the Chief Financial Officer in compliance with section 295A of the Corporations

Act 2001 for the financial year ended 31 December 2012.

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 27th day of March 2013

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TENEMENT SCHEDULE


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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 2012, 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 2012 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 2012 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. Emphasis of Matter

Without modifying our conclusion expressed above, we draw attention to note 1B Going Concern in the financial statements, which identifies that the company had a loss of $3,197,805 and net cash used in operations of $869,090 during the year ended 31 December 2012. These conditions, together with other matters set forth in Note 1B indicates the existence of uncertainty that may cast doubt about the Company's ability to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements.

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 2012. 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 2012, complies with section 300A of the Corporations Act 2001. GOULD RALPH ASSURANCE Chartered Accountants

GREGORY RALPH, M.Com, FCA Partner Sydney Dated 27 March 2013

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Licence Licence State / Area ML Date

Name Number Territory (Units) Ref Expires

Spiral – Bethungra

7454 NSW 26 16/02/2014

Junee

7458 NSW 31 26/02/2014

Lunatic

7460 NSW 31 1/03/2014

Bobo

7462 NSW 34 4/03/2014

Copeland

7486 NSW 34 24/03/2014

Bimbi – Berendebba

7589 NSW 74 4/08/2012

(a)

Pullabooka

7590 NSW 99 4/08/2012

(a)

Forbes

7591 NSW 90 4/08/2012

(a)

Turon

7592 NSW 97 4/08/2012

(a)

Gympie

18447 QLD 15 14/04/2014

Croydon

18448 QLD 18 18/04/2013

(b)

Croydon Goldfield

Extended (Application) 19739 QLD 6

Homeward Bound

(Application Withdrawn) 30229

Dittmer

(Offer rejected) 14255 QLD 10340/1

Cascade

(Application Withdrawn) 4388 NSW 17

La-De-Da

(Application Withdrawn) 19340 QLD 50

Temora

(Relinquished) 7459 NSW 4 26/02/2012

(a) Two year renewal lodged to 2014

(b) One year renewal lodged to 2014

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CORPORATE INFORMATION


ABN 66 140 475 921

Directors Scott Brown

Tiong Chiong Ee

Robert McLennan

John Robson

Christopher Tan (Alternate to John Robson)

Chan Min Son (Alternate to Tiong Chiong Ee)

Company Secretary Pipvide Tang

Corporate Office Level 3, 32 Walker Street

North Sydney NSW 2060

Telephone +61 2 8958 2226

Facsimile +61 2 9954 6408

Registered Office Level 3, 32 Walker Street

North Sydney NSW 2060

Telephone +61 2 8958 2226

Facsimile +61 2 9954 6408

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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