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MUTINY GOLD LTD ABN 72 101 224 999

ANNUAL REPORT

FOR THE YEAR ENDED 30 JUNE 2010

Corporate Directory Board of Directors Corporate Advisors Chairman Jackson Greeve

Frank Lawson 29 Charles Street

Managing Director South Perth WA 6151

John Robert Greeve

Non-executive Directors Solicitors Allan Richard George Brown Steinepreis Paganin

Donald Kevin Hardman GPO Box 2799

Benedict Kusni Perth WA 6001

Company Secretary Auditors Cecilia Tyndall Grant Thornton (WA) Partnership

Level 1, 10 Kings Park Road

West Perth WA 6005

Registered Office Share Registry 29 Charles Street Security Transfer Registrars Pty Ltd

South Perth WA 6151 770 Canning Highway

Applecross WA 6153

Contact Details Stock Exchange Listing Mutiny Gold Ltd Australian Securities Exchange PO Box 284 (Home Exchange: Perth, Western Australia)

South Perth WA 6951 ASX Code: Ordinary Shares - MYG

Options June 2011 - MYGO

Tel: +61 89368 2722

Fax: +61 89367 9043 Bankers Email: [email protected] National Australia Bank Ltd

Capital Office WA

50 St George’s Terrace

Perth WA 6000

mailto:[email protected]

MUTINY GOLD LTD A.B.N. 72 101 224 999 INDEX

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Contents Page Chairman’s Report 3

Review of Operations 4

Directors' Report 9

Shareholder Information 21

Interest in Mining and Exploration Tenements 24

Corporate Governance 25

Directors' Declaration 30

Statement of comprehensive income 31

Statement of financial position 32

Statement of Changes in Equity 33

Statement of cash flows 34

Notes to the Financial Statements 35

Auditor’s Independence Declaration 69

Independent Auditor’s Report to Members 70

MUTINY GOLD LTD A.B.N. 72 101 224 999 CHAIRMAN’S REPORT

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Dear Shareholders, The company has made significant advances since the last AGM, with the purchase of the Gullewa Project from ATW Gold Corporation Ltd. This is the most important acquisition that Mutiny Gold has made since listing and is potentially company transforming. The acquisition has increased Mutiny’s gold assets from 110,000 ounces at White Well to now a total of 760,000 ounces (measured, indicated and inferred). The Board made the decision to purchase the Project since it was known that the tenement contained significant amounts of gold and copper but in addition, believed that there is a high probability of discovering additional gold-bearing deposits in the near mine vicinity. The major mine at Gullewa is the Deflector Deposit, containing Resource of 560,000 ounces of gold, 140,000 ounces of silver and 6,300 tonnes of copper. Drilling is currently being undertaken to convert much of this indicated resource into the measured category. Mine studies by AMC Consultants Pty Ltd concluded that mining at Deflector would be profitable and that the project was financially robust. The mine studies for Deflector, call for open pit mining for the first two years, then continue with operations underground. Metallurgical testwork has shown that acceptable recoveries of gold, silver and copper can be achieved using a combination of gravity separation and differential froth flotation. Two saleable products are to be produced, a gold-silver gravity concentrate containing about half the gold and a copper-gold-silver flotation concentrate. The concentrates will be transported to the port city of Geraldton some 160 km to the west of Gullewa for export. The Gullewa tenements also contain significant iron mineralization within numerous banded iron formation (BIF) units which stretch for some 150 km. At the two locations where drilling has been conducted (Rocksteady and Brandy Hill) significant iron intersections of iron mineralization were made. Deposits of hematite and magnetite have been identified. Gullewa is seen as the processing centre for not only Deflector and any other gold/copper bearing regions in the vicinity but also for concentrates from the White Well deposit. However the exciting Gullewa Project is not Mutiny’s only area of interest. When possible the company intends to drill the George Anomaly on its Widgiemooltha South nickel tenement and further explore the Bounty and Bligh prospects at White Well for additional gold resources. All of these have the potential of greatly increasing the company’s value. Sincerely,

Dr Frank Lawson Chairman

MUTINY GOLD LTD A.B.N. 72 101 224 999 REVIEW OF OPERATIONS

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Mutiny Gold Ltd’s focus is on the exploration and evaluation of its gold, copper and nickel tenements in Western Australia. Summary of Main Areas of Interest Western Australia Projects White Well - Murchison Region This tenement is situated 30km east of Cue in the Tuckabianna mineral field. In the 2009 financial year Mutiny completed resource definition drilling programs utilizing both reverse circulation and diamond drill rigs. The completed drilling programs validated the historic drill inventory which in turn allowed the utilizations of historic drilling in the calculation of a JORC resource. Upon completion of the drilling and laboratory test work Mutiny released an indicated and inferred resource totaling 113,000 oz Au. Mutiny followed up with the release of a scoping study in early 2009 showing the project was economic and robust. The Bounty Zone – Murchison Region The Bounty Zone is adjacent to White Well and as part of the White Well data due diligence Mutiny were able to delineate a series of gold anomalies. The gold anomalies occur within the mapped basalt-BIF interbedded horizons of the Tuckabianna Belt, which has produced over 500,000 oz Au and has in excess of 500,000 oz Au in resources, which are yet to be exploited, lie along strike from the Bounty Zone. Phase one of the drill program commenced in September 2009. Widgie South – Widgemooltha District During the financial year, Mutiny executed a farm-in agreement to earn a 51% interest in the highly prospective Widgie South Prospect. The Project lies within the Widgemooltha komatiite which is host to world class nickel sulphide ore bodies having produced over 83,000 tonnes of Ni metal. Donnelly’s Copper - Ashburton Region Mutiny holds 100% ownership of exploration leases on the Donnelly’s prospect. Gold and copper grades from Mutiny rock chips include 8.37 g/t Au and 4.69% Cu from BM011 and 3.58 g/t Au and 1.57% Cu from BM064. Post balance date acquisition Gullewa - Murchison Region On 20 July 2010, the Company reached agreement to purchase the Gullewa Gold Project from ATW Gold Corp. The acquisition complements Mutiny’s existing assets and provides near term production and cash flow. Key milestones to achieve this are: • Increase the measured resource at the Deflector Deposit by in- fill drilling to upgrade indicated resource. • Complete a Bankable Feasibility Study • Exploration down-dip at the Deflector where encouraging grades include 9m for 65g Au and 4% Cu. • Exploration along strike at the Deflector Corridor The project is located about 450km north of Perth WA, 160km east of the port city of Geraldton, (see Figure 1) within the Greenstone Belt, in the Murchison Province of the Archean Yilgarn Block. The project contains substantial existing resources totalling 650,000oz Au and 25,000 tonnes Cu including Measured and Indicated resources from the Deflector deposit, of 230,000oz Au and 17 000 tonnes Cu. A further 90 000oz Au have been inferred in four other deposits that have been only partially explored. There exists very significant potential to increase these reserves. The assets at Gullewa include a 300,000Tpa mill, camp, offices, power station, water field, tailings dams and haulage roads.


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Mine studies indicate that mining and processing operations at Deflector would be profitable with the project financially robust. Metallurgical testwork has shown that, using a combination of gravity concentration and differential flotation, acceptable recoveries of both gold and copper can be obtained. However, it is believed that modelled recoveries can be increased further. Initial activities will be to drill at Deflector to upgrade the indicated resource. Future exploration will be down-dip at the Deflector where encouraging grades include 9m for 65g/t Au and 4% Cu, and along strike in the Deflector Corridor where encouraging anomalies are located.

Figure 1. Victorian Project In December of 2009 Mutiny entered into a contract to sell its non-core Victorian mining and exploration tenements for $300,000. In addition to the sale price Mutiny will receive $80,000 in environmental bonds from the Victorian DPI, and retain a royalty over the project of $1.00 per tonne for every tonne of ore extracted from the assets within 5 years from the date of the contract, up to a maximum of 100,000 tonnes.


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Recent Activities Western Australia White Well Upon completion of drill programs at White Well Mutiny were able to release its initial resource of 80,000oz Au for the White Well deposit. The resource was upgraded to 113,000oz Au in January 2009 following further metallurgical test work. Also, the metallurgical test work confirmed the ability to separate gold bearing quartz from the weathered kaolin rich clays that provide the bulk of the ore body. This separation of the quartz from the clay to produce an 8 g/t concentrate allowed the cut off grade to be lowered which in turn allowed for additional ounces to be added to the resource. (See table 1)

Table 1 White Well Resources

Resource Inferred Resource Indicated Resource Total

Mt Grade

(g/t Au) oz Mt Grade

(g/t Au) oz oz Oxide Zone 4.2 0.67 91,000* 91,000 Stockpile 0.07 1 2,000 2,000 Transitional Zone 0.30 2 20,000 20,000 Total Inferred 22,000 Total Indicated 91,000* Total Resources 113,000

* Indicated Resource is 4.2Mt @ 0.65g/t for 88,000oz Au if an upper-cut of 40 g/t Au is used. Once the resource estimation was completed the next step that Mutiny undertook was the preparation of a Scoping Study. The Scoping Study released on 17 February 2009 contained a preliminary model for the deposit which detailed a positive cash flow of ranging from A$22 million at a gold price of A$1,300 through to A$47 million at a gold price of A$1,600. The Scoping Study combined both in house Mutiny personnel along with independent mining industry consultants ranging from resource estimation through to mining engineering. The Bounty Zone During the year Mutiny designed and embarked on an eleven hole 1554m reverse circulation (RC) drill program of the Bounty Zone. The drill program targeted the strike and dip extensions of mineralisation defined in historic drilling. Mineralised intersections occurred in both quartz veining associated with Banded Iron Formations and sheared ultra mafic and grantiod contacts. Both these mineralised units are known regional hosts to over 1,000,000 oz Au throughout the Tuckbainna Belt. Mutiny had previously discovered 5 anomalous zones within a mafic-BIF layered sequence, which is the regional mineralization host throughout the Tuckabianna Greenstone Belt. This unit is the host to over 500,000 oz Au in undeveloped resources and has produced over 500,000 oz in historic production. It was this mafic-BIF unit that Mutiny concentrated on for the drilling program and tested all 5 zones of the mineralized zones. Geological observations in the eastern most holes included quartz veining up to 8m within the hanging wall of a mafic unit with a small BIF unit providing the footwall contact, this sequence repeated on several occasions over 65m. Geology sited in drill chips from the southern holes included a strongly sheared and altered ultramafic unit witch showed strong carbonate and pyrite alteration with associated quartz veining over several meters. Best intercepts from the drilling included;

• 7m @ 1.81 g/t Au from 90m (including 1m @ 9.61 g/t Au) and 10m @1.20 g/t Au (including 1m @ 5.77 g/t Au) from 60m in hole BZRC006, and

• 2m @ 2.66 g/t Au from 44m in hole BZRC007 The interpretation of the drilling results coupled with regional geophysical data has allowed a significant increase in the understanding of the geology of the White Well area. This understanding has allowed Mutiny to


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delineate a exploration target for the Bounty of between 400,000 and 750,000 oz Au at grades between 2 to 4 g/t. This exploration target is in line with resources defined throughout the Tuckabianna Greenstone Belt. Mutiny continued the development of what it believes is becoming a significant gold project, with MMI geochemical testing on the portions of the Bounty Zone confirming a new exploration discovery called “Bligh”. The Bligh prospect adds to the potential for significant mineralisation of the Bounty Zone, where grades to date are similar to those achieved by ASX listed Silver Lake Resources Limited (ASX: SLR) at the Genesis and Exodus gold discoveries 5km to the south. The MMI soil program consisted of 200m line spacing and 20m sample stations, totalling 190 samples. It specifically tested three known mineralisation hosts. Targets included previously untested extensions of granitic porphyries defined by the Bounty Zone phase one drill program and the 4km of interpreted Banded Iron Formations (BIF) that runs north-south along the eastern half of the tenement, along with a series of palaeochannels, known for their near surface high grade gold expressions. MMI response ratios in the southern portion averaged over four (4) times the background results calculated from over 70 samples taken and assayed (see Figure 3). The highest response ratio was over 17 times the background results in this area and also defined a strike length of over 500m of a greater than 7.5 response ratio anomaly called the Bligh prospect. The sampling in the south targeted interpreted BIF horizons defined previously from Total Magnetic Intensity (TMI) interpretation. These BIF units are a significant host to mineralisation throughout the Tuckabianna Belt, a belt that is host to over 1,000,000 oz gold in both resources and historic production. It is also significant that the strike length of the interpreted BIF units extends to the south. The BIF units in the south appear to be an important factor in the newly discovered Genesis and Exodus prospects defined by Silver Lake Resources Ltd only 5km to the south of the White Well tenement. Grades reported from both these prospects by Silver Lake Resources Ltd included 9m @ 1.8 g/t from Genesis and 6m @ 1.70 g/t from Exodus, it is these grades that Mutiny remains confident of replicating with further testing of the anomalies. In accordance with section 18 of the JORC Code, the Company wishes to state that the potential quantity and quality of the Bounty mineralization target is conceptual in nature, with insufficient verification of previous exploration to define a mineral resource. It is uncertain if further exploration will result in the determination of a mineral resource. The potential mineralization target is based on historical estimates, recently compiled drill results and the Company’s increased understanding ot the host lithologies within the Tuckabianna Greenstone Belt (and its application to the Bounty Prospect) which, although in existence and available in the public domain, will require verification to meet JORC requirements for a resource statement. Widgie South During the financial year Mutiny continued to increase its portfolio of highly prospective WA projects, agreeing to a farm-in agreement with a private group that will see it earn an interest in the Widgie South nickel sulphide project (“Widgie South”), located approximately 2km south of the township of Widgiemooltha in the Eastern Goldfields region of Western Australia. The Widgie South nickel sulphide project, within the Widgiemooltha district, lies wholly within E15/1025 on the NE edge of the Widgiemooltha Dome, an area that hosts a large number of promising nickel projects. The Widgiemooltha area is host to the Widgiemooltha Komatiite, a formation of komatiite in the Yilgarn Craton of Western Australia, which is host to no less than 15 individual channeliesed Kambalda type komatiitic nickel ore deposits. Of these deposits, five have produced nickel mines, including the Miitel mine which has produced over 47,000 Ni tonnes, Mariners Mine with over 15,500 Ni tonnes in resources and Redross with 12,453 Ni tonnes (compiled from historic data). It is these deposits within the immediate area of Widgie South that has given Mutiny confidence the project they are farming into is highly likely to host economic resources of nickel. Under the terms of the Farm-in Agreement Mutiny will earn a 51% interest in the project through the expenditure of A$300,000. Mutiny may increase this interest to 80% through a further expenditure of A$700,000 on the project. Further potential also exists on the tenement for the identification of gold mineralisation, with the historic Cardiff Castle open pit located only 500m to the northeast of the George anomaly and several historic shafts along the ultramafic and sediment contact throughout the tenement.


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Native title heritage clearance by the Goldfields Land and Sea Council (GLSC) was completed in the first week of April 2010. The findings of the heritage clearance confirmed that there are no native title impediments to conducting ground penetrative work within the vicinity of the George Anomaly. The Company also completed a secondary native title clearance for the remainder of the tenement which will allow Mutiny to actively assess the gold potential of the entire tenement It was concluded through consultation with industry experts that the best way to progress the George Anomaly is to conduct a second TEM survey. The survey planned in conjunction with GPX Surveys will define the shape and dimensions of anomaly and most importantly define the dip of the anomaly. Once the dip is defined, Mutiny will rapidly progress the anomaly, targeting the heart of the anomaly through a combined reverse circulation (RC) and diamond drill program aimed at assessing the thickness and grade of any nickel sulphide ore systems within the George Anomaly. The GPX Surveys team was mobilised in late June 2010. Donnelly’s Copper

This 100% owned tenement is located in the Ashburton region of WA. Mutiny has identified a significant copper mineralized field with a length greater than 1500m with an apparent width of up to 30m and rock chip samples show up to 26% Cu. Mutiny will be evaluating the deposit with hope of extending the strike length.

Competent Person’s Statement Mr Adrian Dellar, an independent consultant geologist to Mutiny Gold Ltd, has compiled the information within this report that relates to exploration. Mr. Dellar is a member of the Australasian Institute of Mining & Metallurgy and has sufficient experience relevant to the style of mineralisation and deposit type under consideration and the activity currently being undertaken to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” and consents to the inclusion of this information in the form and context in which it appears in this report. Forward-Looking Statement This release may include forward-looking statements. These forward-looking statements are based on management’s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risk, uncertainties and other factors, many of which are outside the control of Mutiny Gold Ltd, that could cause actual results to differ materially from such statements. Mutiny Gold Ltd makes no undertaking to subsequently update or revise the forward-looking statements made in this report to reflect events or circumstances after the date of this report.

MUTINY GOLD LTD A.B.N. 72 101 224 999 DIRECTORS’ REPORT

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Your Directors present this report on the Company and its Controlled Entities for the year ended 30 June 2010. Directors The names of each person who has been a Director during the year and to the date of this report are: Frank Lawson Chairman John Greeve Managing Director Allan Brown Non-Executive Kevin Hardman Non-Executive Benedict Kusni Non-Executive FRANK LAWSON Appointed 26 May 2003 CHAIRMAN Dr Frank Lawson is a Chemical Engineer by training. He received the academic qualifications of ASTC (from the Sydney Technical College), BSc (from the University of New South Wales) and PhD and DEng (from Monash University). He is a Fellow of the Australian Academy of Technological Sciences and Engineering, a Fellow of the Institution of Chemical Engineers (UK) and a Fellow of the Australian Institute of Mining and Metallurgy. Dr Lawson has worked in the Chemical and Mining Industries for many years. He now provides consultancy services in chemical engineering. Interest in shares and options: 4,030,185 ordinary shares in and options to acquire a further 1,100,000

ordinary shares in Mutiny Gold Ltd Special Responsibilities: member of the Audit, Remuneration, Technical & Environmental and the Occupational Health & Safety Committees. JOHN ROBERT GREEVE Appointed 9 February 2005 MANAGING DIRECTOR As Managing Director, Mr Greeve took the Company to a successful listing on the Australian Securities Exchange on 10 July 2006. Recently, he led the Company’s investment into the White Well Project and was instrumental in the further capital raising. Mr Greeve has a Bachelor of Business (Accounting) degree from Edith Cowan University. He is a Chartered Accountant, Certified Practicing Accountant, Fellow of the Taxation Institute of Australia and Tax Agent. He has 24 years experience in public practice and is currently the senior partner at the firm of Jackson Greeve, providing business advisory services. As a professional accountant, he has been involved with a wide range of industries. In particular, since the mid-1980s, he has been involved in providing financial, taxation and secretarial advice to a number of public mining companies. Mr Greeve also acts as Australian agent for USA Investment Fund, Cornell Capital Ltd and has assisted their investment in several mining companies. Interest in shares and options: 17,826,916 ordinary shares and options to acquire a further 7,899,929

ordinary shares in Mutiny Gold Ltd Special Responsibilities: member of the Audit, Remuneration, and the Technical & Environmental Committees. ALLAN RICHARD GEORGE BROWN Appointed 21 July 2003 NON-EXECUTIVE DIRECTOR Mr Brown is a Metallurgist with over 40 years experience in a range of Australian metallurgical operations including base metals, refractory gold and diamonds. Mr Brown was the Resident Mine Manager of the Golden


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Grove Copper-Zinc mine from the start up in 1988. In 1993, he joined Wiluna Mines as the Resident Mine Manager of the Wiluna Gold Mine. In 1998, he formed Allan R.G. Brown and Associates, a metallurgical consulting business and since then has provided metallurgical consulting services to companies in Australia, Sweden, Finland, Uganda and China. Mr Brown has a BSc (Hons) in Metallurgy from the University of NSW, is a Fellow of the Australasian Institute of Mining and Metallurgy, a Chartered Professional (Metallurgy) and a Member of the Mineral Industry Consultants Association. Interest in shares and options: 2,148,033 ordinary shares and options to acquire a further 500,000 ordinary

shares in Mutiny Gold Ltd Special Responsibilities: member of the Remuneration, Occupational Health & Safety and the Technical & Environmental Committees. Directorships held in other listed entities: Redbank Copper Limited, appointed 4 December 2009 and Swan Gold Limited, appointed 23 February 2010. DONALD KEVIN HARDMAN Appointed 12 January 2005 NON-EXECUTIVE DIRECTOR Mr Hardman is a foundation shareholder of the Company and as such serves as a representative for members on the Board. Mr Hardman is an experienced business man having managed his own businesses and he is also an active investor with interests in both the mining and property industries. He has a background in Aeronautical Engineering and Instrument Science. Interest in shares and options: 5,138,073 ordinary shares and options to acquire a further 750,000 ordinary

shares in Mutiny Gold Ltd Special Responsibilities: member of the Audit, Remuneration, and the Occupational Health & Safety Committees. BENEDICT KUSNI Appointed 27 January 2006 NON-EXECUTIVE DIRECTOR Mr Kusni has spent more than 18 years in funds management with various institutions in South East Asia and his previous roles include research, key financial calculations and quality control on comparables analysis of various industries and companies for pre-merger and acquisition target screening. He has considerable expertise in corporate finance matters; he has contributed to the depth analysis and intensive profiling of numerous industries for the equity research divisions of several major investment banks. Interest in shares and options: 2,523,073 ordinary shares and options to acquire a further 750,000 ordinary

shares in Mutiny Gold Ltd Special Responsibilities: member of the Remuneration Committee. COMPANY SECRETARY Cecilia Tyndall Appointed 27 September 2004 Mrs Tyndall has over 15 years experience working as an accounting and finance professional in public practice, publicly listed companies and other private organisations. Roles include responsibilities as a company secretary, financial controller and advisor to the Board and senior management.


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She has a Bachelor of Business in Accounting and Finance and is a Member of the Institute of Chartered Accountants and a Member of the Chartered Secretaries Australia. Directors' Meetings During the year, 8 Directors' meetings were held, Attendances were: Directors’ Meetings No. Eligible to

attend Number attended

Frank Lawson 8 8

John Greeve 8 8

Allan Brown 8 6 Kevin Hardman 8 8 Benedict Kusni 8 4

Remuneration Committee Meetings

Frank Lawson 1 1 John Greeve 1 1 Allan Brown 1 1

Kevin Hardman 1 1 Benedict Kusni 1 1

Audit Committee Meetings

Frank Lawson 1 0 John Greeve 1 1

Kevin Hardman 1 1 Technical & Environmental Committee

Meetings Frank Lawson 10 10 John Greeve 10 10 Allan Brown 10 10

Operating Result The loss of the Group for the financial year after providing for income tax amounted to: Year ended Year ended 30 June 2010 30 June 2009 $ $ (1,374,277) (5,455,141) The consolidated loss of the Group amounted to $1,374,277 after providing for income tax. This represents a decrease of 75% on the losses reported for the year ended 30 June 2010. The decrease in the operating loss was mainly due to a lower level of exploration write offs and impairments. The Victorian exploration assets were fully impaired in the year ended 30 June 2009.


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Financial Position The net assets of the Group have increased by $279,507 from $1,947,999 at 30 June 2009 to $2,227,507 at 30 June 2010. This increase was largely the result of the following factors:

• fundraising to a total of $1,567,466 (net of share issue cost) with a majority of those funds spent on exploration activities; and

• increase in cash and cash equivalents related to fundraising. Review of Operations The operations of the Group during the financial year focused on developing the White Well Project including:

(a) Drilling of Bounty Zone, White Well; and (b) MMI geochemical testing on Bounty Zone soil

The Group also acquired an interest in a project called Widgie South and commissioned a TEM survey on that holding in late June 2010. Significant Changes in the State of Affairs The following significant changes in the state of affairs of the Company occurred during the financial year:

(i) On 13 July 2009 shareholders in a general meeting approved the issue of 5,367,499 shares at a total value of $182,435 in lieu of remuneration for Directors for the period 1 November 2008 – 30 June 2009. The shares were issued to Directors on 30 July 2009.

(ii) On 21 August 2009 Mutiny announced the closure of fundraising under a prospectus approved by

shareholders in a general meeting held on 13 July 2009. The Company raised $612,500 and issued 17,500,000 fully paid ordinary shares and 8,750,001 options (ex date 30/06/11, ex price $0.10) on the basis of one free attaching option for two shares subscribed to.

(iii) On 28 August 2009 the Company announced that as a result of the very keen interest from

sophisticated investors in the Company’s potential to establish a sustainable future in the Murchison Goldfields, the Board resolved to utilise ASX Listing Rule 7.1 which allows the Company to issue shares up to 15% of capital without obtaining shareholder approval. Mutiny raised $300,000 from the placements and issued 8,571,428 shares at $0.035 each and 4,285,714 options (ex date 30/06/11, ex price $0.10) on the basis of one free attaching option for every two shares subscribed to.

(iv) At the AGM held on 30 November 2009 shareholders approved the issue of 2,047,304 shares at a

total value of $90,870 in lieu of remuneration for Directors for the period 1 July 2009 – 31 October 2009. The shares were issued to Directors on 11 December 2009. Shareholders also approved the issue of 4,500,000 unlisted Director Options (ex price $0.10, ex date 30/11/12). The Director Options were issued on 11 December 2009.

(v) On 18 February 2010 the Company issued 200,000 fully paid ordinary shares to unrelated external

consultants for services rendered.

(vi) On 3 June 2010 the Company announced that, with the assistance of Mac Equity Partners, it had raised $474,500 by way of placement of 18,980,000 ordinary shares (at $0.025 per share) to professional and sophisticated investors.


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Principal Activities There have been no significant changes in the nature of the Group’s principal activities, which remain as exploration for, and evaluation of gold and other economic mineral deposits. Significant Events After Balance Date Purchase of Gullewa Gold Project from ATW Gold Corp. On 22 July 2010 Mutiny Gold Ltd announced that it had executed an agreement to purchase the Gullewa Gold Project from Canadian Miner ATW Gold Corp (ATW), (TSX V: ATW). The acquisition is in line with Mutiny’s previously stated objective of becoming a gold producer in the Murchison region of WA. The acquisition is also complementary to the Company’s White Well project, where the scoping study called for the gold ore to be concentrated on site and then transported for processing. The Gullewa project has infrastructure in place that with some upgrades will be able to process ore from the White Well project. Project Highlights:

• Mutiny to farm into ATW Gold Corp’s Gullewa Gold Project by paying $9m to earn 70% in a Company transforming transaction

• The project contains substantial existing resources totaling 650,000oz gold (Au) and 25,000 tonnes of copper (Cu) including Measured and Indicated Resources of 230,000oz Au and 17,000 tonnes Cu

• There is significant potential through near mine exploration to increase these resources • Infrastructure includes 300kt pa mill, camp, offices and other facilities • One of the most prospective tenement holdings in the WA goldfields • Significant pre-approvals, agreements and permits in place to commence mining • Focus on bankable feasibility and mining ramp up planned for 2010/11 • Preliminary Mine Studies indicate operation would be profitable

For further details of the Project, refer to Review of Operations. Issue of Placement Options and Mandate Options On 23 July 2010 shareholders in a general meeting approved the issue of 18,980,000 free Options (ex price $0.05, ex date 23/07/2013) to participants in the placement that took place in June 2010. Approval was also given to issue 5,000,000 free Options (ex price $0.05, ex date 23/07/2013) to the lead broker in the June 2010 placement. Approval by Shareholders to purchase the Gullewa Gold Project At a general meeting of shareholders held on 8 September 2010, shareholders passed a resolution to approve Mutiny’s purchase of the Gullewa Gold Project. The meeting also passed a resolution allowing the Company to issue up to 70,000,000 shares together with one free option for every share subscribed to (ex price $0.05, ex date 23/07/2013) to fund the first payment due to the vendor ATW Gold Corp. and further development and exploration of the Company’s tenements. Issue of Placement Shares and Options Pursuant to the resolution passed at the General Meeting held on 8 September 2010, on 21 September 2010 the Company had raised $2,400,000 from the issue of 68,571,429 fully paid ordinary shares and 34,285,714 options on the basis of 1 free option for every 2 shares allotted. Future Developments Likely developments in the operations of the Group and the expected results of those operations in future financial years have not been included in this report, as the inclusion of such information is likely to result in unreasonable prejudice to the Group.


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Environmental Issues The Group’s operations are subject to significant environmental regulation under Commonwealth and West Australian legislation in relation to its exploration and future mining and development activities. Company directors and consultants are committed to achieving a high standard of environmental performance and in this regard the Board has established a Technical & Environmental Committee. The Group is not aware of any matter which requires disclosure with respect to any significant environmental regulation in respect of its operating activities. Dividends No dividends were declared or paid since the start of the financial year. No recommendation for payment of dividends has been made. Share Capital Ordinary Fully Paid Shares At the date of this report, there were 216,084,706 ordinary shares on issue, made up of: Balance at 30/06/2010 147,513,277 Allotment 21/09/2010 68,571,429 Total 216,084,706

See Significant Event After Balance Date above for further explanation. Options There have been no unissued shares or interests under option of any controlled entity within the Group during or since reporting date. For details of options issued to directors and executives as remuneration, refer to the Remuneration Report. During the year ended 30 June 2010, there were no shares issued on the exercise of options granted. At the date of this report, the unissued ordinary shares of Mutiny Gold Ltd under option are as follows: Grant Date Date of Expiry Exercise Price Number under Option

26/11/07 31/12/2010 $0.20 600,000 04/04/08 31/12/2010 $0.20 100,000 14/08/08 30/09/2010 $0.20 1,000,000 21/11/08 31/12/2010 $0.20 100,000 26/08/09 30/06/2011 $0.10 8,750,001 28/08/09 30/06/2011 $0.10 4,285,714 30/11/09 30/11/2010 $0.10 4,500,000 23/07/10 23/07/2013 $0.05 23,980,000 21/09/10 23/07/2013 $0.05 34,285,714

77,601,429


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Option holders do not have any rights to participate in any issues of shares or other interests in the Company or any other entity. Auditor’s Independence Declaration The auditor’s independence declaration for the year ended 30 June 2010 which forms part of the Directors’ Report can be found on page 69. Non-Audit Services Grant Thornton (WA) Partnership did not provide non-audit services to the Company during 2010. Indemnification and Insurance of Officers or Auditor Each of the Directors of the Company has entered into a Deed with the Company whereby the Company has provided certain contractual rights of access to books and records of the Company to those Directors. The Company has insured all the Directors of Mutiny Gold Ltd. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and the amount of the premium paid. The Corporations Act 2001 does not require disclosure of the information in these circumstances. Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. RENUMERATION REPORT - AUDITED Directors and other key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and the Group. The required Corporations Act S300A remuneration and entitlement information is provided below. a) Remuneration Practices Fixed Remuneration Comprises base salary, statutory superannuation and, if applicable, FBT charges related to employee benefits. Fixed remunerations are reviewed annually by the Board. Performance Linked Remuneration and Entitlements The Board may from time to time approve cash bonuses and/or options designed to reward or incentivise executives, contractors and staff on such terms and conditions determined appropriate at the time of payment or issue. Often this will be linked to the achievement of Company objectives with a direct link to the creation of shareholder value. Director Remuneration and Incentives The Board policy is to remunerate Non-Executive Directors at market rates for time commitment and responsibilities. Independent external advice is sought where required. The maximum aggregate of fees payable to Non-Executive Directors is subject to approval by Shareholders (currently $250,000). All securities issued to Directors and related parties must be approved by Shareholders. In addition to Directors’ fees, it is a


Page 16

policy of the Company that a Director may be paid fees or other amounts as the Directors determine appropriate where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties. Post-Employment Benefits The Company does not provide this type of benefit besides making the statutory superannuation guarantee contributions as required. Remuneration Committee Currently, the full Board together with the Company Secretary, will consider all Nomination and Remuneration matters. The objective when the Board is convened to consider these matters is to ensure that the Company adopts and complies with remuneration policies that: § attract, retain and motivate high caliber executives and directors so as to encourage enhanced

performance by the Company; § are consistent with the human resource needs of the Company; § motivate directors and management to pursue long-term growth and success of the Company with an

appropriate framework; and § demonstrate a clear relationship between key executive performance and remuneration.

d) Contracts and Agreements The Company is operating in an environment where there is significant competition for skilled staff and contractors. To help ensure project continuity the following arrangements are current: John Greeve Managing Director The current remuneration of the Managing Director commenced on 1 July 2007. Mr Greeve is paid a salary of $275,000 per annum (plus superannuation). In addition the Managing Director may, at the discretion of the Board, be paid a bonus. Allan Brown Non-Executive Director Mr Brown was on 13 February 2006 appointed to provide certain consultancy services to the Company. A summary of the key terms of the Agreement are as follows:

• Mr Brown is entitled to a fee of $200 per hour plus GST for providing the services. • The services to be provided are technical advice and direction with respect to exploration,

assessment, development and operation of the Company’s tenements. The contract does not have an expiry date. There are no other agreements or contracts in place with other directors.


Page 17

Employment Details of Members of Key Personnel and Other Executives The following table provides detail of persons, who were, during the financial year, members of key management personnel of the Group, and to the extent different, among the Group executives or Company executives receiving the highest remuneration.

Group Key Management Personnel

Position held as at 30 June 2010 and any change during the year

Contract details (duration & termination)

Proportions of elements of remuneration not related to performance

Non-salary cash-based incentives

%

Shares/Units %

Options/Rights %

Fixed

Salary/Fees %

Total %

Frank Lawson Chairman (Non-executive)

No fixed term - 26 23 51 100

John Greeve Managing Director

(Executive)

Contract No fixed term

3 months notice to terminate

- 7 11 82 100

Allan Brown Director (Non-executive)

No fixed term -

26 15 59 100

Kevin Hardman Director (Non-executive)

No fixed term - 26 15 59 100

Benedict Kusni Director (Non-executive)

No fixed term - 26 15 59 100

Patrick O’Neill Group Accountant


- - - 100 100

Cecilia Tyndall Company Secretary


- - - 100 100

Adrian Dellar Senior Exploration Geologist

No fixed term 4 weeks notice

to terminate

- - - 100 100


Page 18

Remuneration Details for the Year Ended 30 June 2010 The following table of benefits and payments detail, in respect to the financial year, the components of remuneration for each member of the key management personnel of the Group, and to the extent different, the Group executives receiving the highest remuneration.

Short-Term Benefits Post-Employment

Accrued/Unpaid

Equity-settled share-based

payments

Group Key Management Personnel

Salary, Fees &

Commission $

Contract Payments

$

Pension and Super-

annuation $

* Salary & Fees

Shares/ Units

$

Options/ Rights

$

Total $

Frank Lawson 2010 2009

- -

- -

- -

40,000 -

20,000 70,000

17,994 -

77,994 70,000

John Greeve 2010 2009

200,000 205,769

3,300 1,400

24,750 27,635

50,000 25,000 96,346

35,988 109

339,038 331,259

Allan Brown 2010 2009

- -

38,000 36,025

4,128 4,148

30,582 -

15,290 55,852

8,997 -

96,997 96,025

Kevin Hardman 2010 2009

- -

- -

4,128 4,148

30,582 -

15,290 55,852

8,997 -

58,997 60,000

Benedict Kusni 2010 2009

- -

- -

4,128 4,148

30,582 -

15,290 55,852

8,997 -

58,997 60,000

Total Key Management Personnel

2010 2009

200,000 205,769

41,300 37,425

37,134 40,079

181,746 -

90,870 333,902

80,973 109

632,023 617,284

Other Executives

Patrick O’Neill 2010 2009

- -

27,470 36,108

- -

- -

- -

- -

27,470 36,108

Cecilia Tyndall 2010 2009

- -

44,850 33,132

- -

- -

- -

- -

44,850 33,132

Adrian Dellar 2010 2009

190,144 174,312

- -

16,050 15,688

- -

- -

- -

206,194 190,000

Total Other Executives

2010 2009

190,144 174,312

72,320 69,240

16,050 15,688

- -

- -

- -

278,514 259,240

There were no long-term, Cash settled share-based payments or termination benefits paid to Key Management Personnel or Other Executives. Salary, Fees & Commissions The Board agreed that in order to preserve the cash in the Company, the non-executive Directors would, subject to shareholder approval accept shares in lieu of fees. The managing director agreed to take a portion of his salary as shares, subject to shareholder approval. At the AGM held on 30 November 2009 shareholders approved the issue of shares in lieu of fees for the period 1 July 2009 – 31 October 2009. * Due to new Income Tax Legislation introduced during 2009, in relation to the taxation of share based payments, this Company policy is currently under review. At this date, the directors’ fees owing have been accrued in the financial statements pending the outcome of the Company’s remuneration review.


Page 19

Contract Payments Mr Greeve is a partner of the accounting firm Jackson Greeve which is appointed as the Group’s Corporate Advisors on normal commercial terms and conditions. $3,300 (2009: $1,400) was paid to an entity associated with Mr Greeve for translation service, accounting and taxation advice. These amounts are included in the table above. Mr Brown is a principal of Allan RG Brown & Associates Pty Ltd which provides metallurgical and other technical advice to the Group on normal commercial terms and conditions. $38,000 (2009: $36,025) was paid to an entity associated with Mr Brown for technical advice. These amounts are included in the table above. Mrs Tyndall is a principal of PC Tyndall Pty Ltd which provides Company Secretarial services on normal commercial terms and conditions. $44,850 (2009: $33,132) was paid to an entity associated with Mrs Tyndall for Company Secretarial services. These amounts are included in the table above. Mr O’Neill is a partner of the accounting firm Jackson Greeve which is appointed as the Group’s Corporate Advisors. For the financial year $27,470 (2009: $36,108) was paid to an entity associated with Mr O’Neill for accounting and corporate services. These amounts are included in the table above. Related Party Mr Greeve and Mr O’Neill are partners of the accounting firm Jackson Greeve which sublease their leased offices to Mutiny Gold Ltd. $75,217 (2009: $65,537) was paid to an entity associated with Mr Greeve and Mr O’Neill as a reimbursement of rent and services provided. These amounts are included Note 24 to the Financial Statements. Cash Bonuses, Performance-related Bonuses and Share-based Payments The terms and conditions relating to options and bonuses granted as remuneration during the year to key management personnel and other executives during the year are as follows:

Remuneration type

Grant date

Reason for Grant (Note 1)

Percentage vested/paid during year %

Percentage forfeited during year

Percentage remaining as unvested

Expiry date for vesting or payment

Range of possible values relating to future payments

Frank Lawson Shares Options

30/11/09 30/11/09

(a) (b)

100 100

- -

- -

30/11/09 30/11/12

n/a n/a

John Greeve Shares Options

30/11/09 30/11/09

(a) (b)

100 100

- -

- -

30/11/09 30/11/12

n/a n/a

Allan Brown Shares Options

30/11/09 30/11/09

(a) (b)

100 100

- -

- -

30/11/09 30/11/12

n/a n/a

Kevin Hardman Shares Options

30/11/09 30/11/09

(a) (b)

100 100

- -

- -

30/11/09 30/11/12

n/a n/a

Benedict Kusni Shares Options

30/11/09 30/11/09

(a) (b)

100 100

- -

- -

30/11/09 30/11/12

n/a n/a

Note 1(a) The primary purpose of the grant of Director Remuneration Shares (shares in lieu of salary/fees) is to provide a cost

effective way of paying Directors fees owed to them whilst maintaining cash reserves. Note 1(b) The primary purpose of the grant of Director Options is to provide a cost effective incentive for their continued efforts

and achievements whilst maintaining cash reserves.


Page 20

Options As at 30 June 2010 no Options granted to Key Management Personnel have been exercised or lapsed. Option holders do not have any rights to participate in any issue of shares or other interests in the Company or any other entity. This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors:

John Greeve Director Dated: 24 September 2010

MUTINY GOLD LTD A.B.N. 72 101 224 999 SHAREHOLDER INFORMATION

Page 21

Additional information required by the Australian Securities Exchange Ltd (ASX) and not shown elsewhere in this report is as follows. The information is current as at 24 September 2010. (a) Distribution of Equity Securities The number of holders, by size of holding, in each class of listed security are: Listed Securities

Ordinary Shares Listed $0.10 options exercisable on or before

30 June 2011 Number of Number of Number of Number of holders shares holders options 1 – 1,000 5 2,905 1001 – 5,000 35 134,581 2 10,000 5001 – 10,000 132 1,253,431 3 30,000 10,001 – 100,000 338 14,631,405 83 4,337,215 100,001 and above 231 200,062,384 25 8,658,500 Total 741 216,084,706 113 13,035,715 The number of shareholders holding less than a marketable parcel of shares is 186 (1,562,297 ordinary shares). The number of option holders holding less than a marketable parcel of options is 73 (2,877,215 options). (b) Twenty Largest Holders The names of the twenty largest holders, in each class of security are: Ordinary Shares: 1 BARNES GREGORY BENNETT <WINSTON TAN A/C> 11,956,000 5.53% 2 LERAT PL 11,563,897 5.35% 3 NUMBER 7 INV PL 10,000,000 4.63% 4 PROFIT BILLION GRP LTD 10,000,000 4.63% 5 STAND POWER INV LTD 10,000,000 4.63% 6 TRANSCRETE AUST PL 7,142,857 3.31% 7 BROWN CHRISTOPHER R 6,649,596 3.08% 8 LERAT PL <JOHN GREEVE F/T> 6,263,019 2.90% 9 MENG MARK WILLIAM LING L 4,983,333 2.31% 10 LAWSON FRANK 4,030,185 1.87% 11 HUSSIN RAJA ZAINAL A R 3,933,333 1.82% 12 URIO INV PL <URIO FAM A/C> 3,450,000 1.60% 13 BARNES GREGORY B + A <A & G BARNES S/F A/C> 2,831,742 1.31% 14 CITICORP NOM PL 2,714,721 1.26% 15 CHIAM KIA CHEE 2,656,245 1.23% 16 HARDMAN DONALD K + P M <HARDMAN S/F A/C> 2,515,000 1.16% 17 NATURALIST HLDGS PL <DHU FISH INV A/C> 2,300,000 1.06% 18 MILLER JUSTIN 2,000,000 0.93% 19 GIANNAKOPOULOS A + A 2,000,000 0.93% 20 CLASSIC CATERERS PL <HARDMAN S/F A/C> 1,773,073 0.82%


Page 22

Options: Listed options exercisable at $0.10 on or before 30 June 2011: 1 LERAT PL <JOHN GREEVE F/T> 2,128,500 16.33% 2 BARNES GREGORY B + A < A & G BARNES S/F A/C> 1,254,371 9.62% 3 BRIEN ALAN + MELINDA <A & M BRIEN S/F A/ C> 670,000 5.14% 4 STEGEN UDO <RETTMER TRADING A/C> 390,000 2.99% 5 TOTH ATTILA 350,000 2.68% 6 CRAWFORD JOHN C + P M <CRAWFORD S/F A/C> 300,000 2.30% 7 BOVELL DAVID JOHN 300,000 2.30% 8 TEPPER ROBERT 285,700 2.19% 9 KNAPP ROBERT 276,067 2.12% 10 ALLCREST NOM PL <RIEMER A/C> 275,000 2.11% 11 JACOBS CORP PL 225,000 1.73% 12 JAYVEE INV PL <JAYVEE SP - PEN A/C> 225,000 1.73% 13 LAWRENCE CROWE CONS PL <L C C S/F A/C> 200,000 1.53% 14 BANKS KENNETH TERENCE 200,000 1.53% 15 MADDREN MICHAEL 191,362 1.47% 16 CRAWFORD JOHN CORRAN 150,000 1.15% 17 BURFORD MATTHEW DAVID 150,000 1.15% 18 SKALECKI MARIO + CAROL A <SKALECKI FAM SUPER A/C> 150,000 1.15% 19 HARLAND STEVEN RONALD 150,000 1.15% 20 YOUNGS TERRENCE C + E A <TECAY S/F A/C> 142,500 1.09%

(c) Unlisted Securities

i) 1,000,000 unlisted $0.20 options exercisable on or before 30 September 2010 all held by Fletcher Nominees Pty Ltd.

ii) 800,000 unlisted $0.20 options exercisable on or before 31 December 2010. There are 3 holders

of this security. Holders of 20% or more of class of security: Hardman Donald K & PM <Hardman S/F A/C 250,000 Kusni Ben 250,000

iii) 4,500,000 unlisted $0.10 options exercisable on or before 30 November 2012. There are 5 holders

of this security. Holders of 20% or more of class of security: Lerat Pty Ltd <John Greeve Family Trust> 2,500,000 Frank Lawson 1,000,000

iv) 58,265,714 unlisted $0.05 options exercisable on or before 23 July 2013.

There are 79 holders of this security, all holding less than 20%.


Page 23

(d) Substantial Shareholder The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporation Act 2001 are: Gregory Bennet Barnes, Lerat Pty Ltd, Profit Billion Group Ltd, Stand Power Investments Ltd and Mark William Ling Lee Meng. (e) Voting Rights All ordinary shares carry one vote per share without restriction. (f) Restricted Securities The Company has no restricted securities (held in escrow) on issue. (g) Business Objective The Company has used its cash and assets that are readily convertible to cash in a way consistent with its business objectives. (h) On-Market Buy-Back There is no current on-market-buy-back in place.

MUTINY GOLD LTD A.B.N. 72 101 224 999 INTEREST IN MINING AND EXPLORATION TENEMENTS

Page 24

Mutiny Gold Ltd held the following interest in mining and exploration tenements as at 24 September 2010. Tenements located in Western Australia

Tenement Registered Holder Mutiny’s

Interest Note

White Well: M20/54

George Francis Lee 70% 1

Donnellys: E08/1655

Fletcher Nominees Pty Ltd

100% 2

E08/1265 Fletcher Nominees Pty Ltd 100% 2

Widgie South E15/1025

George Francis Lee

0%

3

Gullewa: E59/1134

ATW Gold Corp Australia Pty Ltd

0%

4

E59/1240 ATW Gold Corp Australia Pty Ltd 0% 4




L59/35 ATW Gold Corp Australia Pty Ltd 0% 4



L59/64 Batavia Mining Limited 0% 4



M59/132 ATW Gold Corp Australia Pty Ltd 0% 4

















P59/1736 ATW Gold Corp Australia Pty Ltd 0% 4

P59/1737 ATW Gold Corp Australia Pty Ltd 0% 4

1. The registered interest of Mutiny is 70%. However the earned interest under the Joint Venture is 82%. The title will

be amended accordingly. 2. Mutiny Gold Ltd purchased the tenements outright from Fletcher Nominees Pty Ltd in August 2008 pursuant to a

contract entered 23 June 2008 and is in the process of transferring the title. 3. In accordance with the Farm-in Agreement Mutiny has to spend $300,000 by 20 January 2012 to earn 51% of the

project. To date the Company has spent $80,585. Mutiny plans for a drill program to take place during 2011 and expect to have earned its first 51% once the drilling has been carried out.

4. Mutiny will make staged payments of a total of $9 million to earn a 70% interest in the Gullewa Project. To date Mutiny has paid $1.5 million. Please refer to the Review of Operations, and to the Subsequent Events in the Directors’ Report for further details.

MUTINY GOLD LTD A.B.N. 72 101 224 999 CORPORATE GOVERNANCE STATEMENT

Page 25

The Directors are responsible for protecting the rights and interest of the shareholders through the implementation of sound strategies and action plans and development of an integrated framework of controls over the Company’s resources, functions and assets. Good corporate governance structures encourage companies to create value (through entrepreneurism, innovation, development and exploration) and provide accountability and control systems commensurate with the risks involved. Good corporate governance will evolve with the changing circumstances of a Company and must be tailored to meet these circumstances. The Company is in a phase of exploration and early development of its gold assets. The Company currently operates with only two permanent staff and relies on additional specialist consultants and casual field staff to assist in the formulation and implementation of exploration and evaluation programs. On the corporate side, the executive team consists of the Managing Director, the Company Accountant and the Company Secretary. The Company’s Board and management are committed to a high standard of corporate governance, ensuring that the Company complies with the Corporations Act 2001, Listing Rules of the ASX, Company Constitution and other applicable laws and regulations. However, at this stage of the Company’s corporate development, implementation of the ASX Corporate Governance and Recommendations, whilst fully supported, is not practical in every instance. The core principles contemplate establishment of the role of the Board and senior executives, with a balance of skills, experience and independence appropriate to the nature and extent of operations, and the need for integrity among those who influence strategy and financial performance, together with responsible and ethical decision-making. Presenting the Company’s financial and non-financial position requires processes that safe guard, both internally and externally, the integrity of Company reporting and its provision in a timely and balanced manner. The rights of Company shareholders must be recognised and upheld. Risk must be managed through effective oversight and internal control. Board and management effectiveness must be encouraged. Remuneration must attract and maintain talented and motivated directors and employees with a clear relationship to corporate and individual performance. Please refer to the Company’s website for further details on the Corporate Governance documents. The details of the Company’s current and evolving corporate governance practices are identified below. Board of Directors Board Responsibilities As the Board acts on behalf of and is accountable to the shareholders, the Board seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks. Responsibility for the operation and administration of the consolidated entity is delegated by the Board to the Managing Director and the executive team. The Board ensures that this team is appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the Managing Director and the executive team. The Company Secretary, Mrs Cecilia Tyndall forms part of the executive team and is the only female in an executive role in the Company. The Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by the Board. The Board has a number of mechanisms in place to ensure that this is achieved. In addition to the establishment of the committees referred to in the table below, these mechanisms include the following:

• Board approval of a strategic plan designed to meet stakeholders’ needs and manage business risk; • The Board being actively involved in developing and approving initiatives and strategies designed to

ensure the continued growth and success of the Company; • Implementation of operating plans and budgets by management and Board monitoring of progress

against budgets; and


Page 26

• The ability for Directors to seek independent professional advice at the Company’s expense, in the furtherance of their duties.

Board Membership and Composition The Board comprises of five directors. The names, qualifications and relevant experience of each director are set out in the Directors’ Report. The Managing Director is charged with the overall management of the Company however the rest of the Board is consulted on the activities of the Company on a regular (daily or weekly) basis and consider this an appropriate way to ensure good governance. Name of Director Year

Appointed Executive Independent Member of

Remuneration Committee

Member of Audit

Committee

Member of Technical & Environment Committee

Member of Occupational

Health & Safety

Committee Frank Lawson, Chairman

2003 No Yes Yes Yes Yes Yes

John Greeve, Managing Director

2005 Yes No Yes Yes Yes No

Allan Brown Non-Executive Director

2003 No No Yes No Yes Yes

Kevin Hardman Non-Executive Director

2005 No Yes Yes Yes No Yes

Benedict Kusni Non-Executive Director

2006 No Yes Yes No No No

Assessing the Independence of Directors An independent director is a non-executive director and:

1. is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;

2. within the last three years has not been employed in an executive capacity by the Company or another Group member, or been a director after ceasing to hold any such employment;

3. within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another Group member, or an employee materially associated with the service provided;

4. is not a material supplier or customer of the Company or another Group member, or an officer or otherwise associated directly or indirectly with a material supplier or customer;

5. has no material contractual relationship with the Company or another Group member other than as a Director of the Company;

6. has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and

7. is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interest of the Company.

Materiality Thresholds The Board considers that: § a supplier is material if the Company or the Group accounts for more than 2% of the supplier’s

consolidated gross revenue; § a material customer is a customer of the Company or Group member which accounts for more than 2%

of the Company’s gross revenue; and § service on the Board for a period exceeding 10 years is a period which could, or could reasonably be

perceived to, materially interfere with a Director’s ability to act in the best interests of the Company.


Page 27

Compensation Arrangements The maximum aggregate amount payable to non-executive Directors as Directors’ fees has been set at $250,000. The Constitution provides that non-executive Directors’ fees can only change pursuant to a resolution at a general meeting. Further details regarding the remuneration of the Board are included in the Directors’ Report on page 18. Safeguard Integrity in Financial Reporting The Managing Director, Chairman of the Audit Committee, and the Company Accountant formally state to the Board that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results, and are in accordance with the relevant Australian Accounting Standards. The Company has appointed an audit committee who’s role it is to:

• Assess the appropriateness of the accounting policies, practices and disclosure and whether the quality of the financial reporting is adequate;

• Review the scope and results of internal, external and compliance audits; • Maintain open lines of communication between the Board and external auditors and the Company’s

compliance officers; • Review and report to the Board on the annual report and financial statements; • Assess the adequacy of the Company’s internal controls and make informed decisions regarding

compliance policies, practices and disclosures; and • Nominate the external auditors.

A copy of Mutiny’s Audit Committee Charter can be accessed via the Company’s website. Respect the Rights of Shareholders and Stakeholders Effective Communication The Company’s communications strategy includes the communication with shareholders through:

• Announcements to the market via the Australian Securities Exchange; • The Company’s website; • The annual report, which is distributed to shareholders; and • The annual general meeting and other meetings so called to obtain approval for the Boards action as

appropriate. Participation in General Meetings The external auditor attends the Annual General meeting to respond to specific questions from shareholders. A copy of Mutiny’s Shareholder Communication Policy and Code of Conduct can be accessed via the Company’s website. Timely and Balanced Disclosures In accordance with the Company’s obligations under the Listing Rules of the ASX material information is lodged immediately with the ASX and on acknowledgment by the ASX is disseminated by posting to the Company website. The Board endorses a culture in favour of continuous disclosure and recognises the benefits of consistency achieved through a dedicated spokesperson. A copy of Mutiny’s Continuous Disclosure Policy can be accessed via the Company’s website.


Page 28

Directors, Officers and Employees Dealing in Company Shares Current practice requires Directors to advise the Company of any transactions conducted by them in the shares of the Company in accordance with the Corporations Act 2001 and the Listing Rules of the ASX. Officers and employees are also required to advise the Company of any transactions conducted by them in the shares of the Company in accordance with the Corporations Act 2001. A copy of Mutiny’s Policy on Dealing with Mutiny Securities can be accessed via the Company’s website. Remunerate Fairly and Responsibly Directors and key executives are remunerated in accordance with market conditions and performance as judged by the Board. The Managing Director’s remuneration and directors’ fees are detailed in the Remuneration Report contained in the Directors’ Report on page 15. There are no termination entitlements. During the financial year ended 30 June 2010 the Company complied with the ASX Principles and Recommendations other than as indicated below: Principle Recommendation Reference 1. Lay solid foundations for management and oversight 2. Structure the board to add value

1.2 2.4 & 2.5

3. Promote ethical and responsible decision-making 3.2, 3.3 4. Safeguard integrity in financial reporting 4.2 7. Recognise and manage risk 7.1& 7.2 8. Remunerate fairly and responsibly 8.1 & 8.2


Page 29

Notification of Departure Explanation for Departure 1.2 & 2.5 The process for evaluation of the Board, individual directors and key executives has not been disclosed. 2.4 No Nomination Committee has been established.

During the reporting period, the Board of five members was compact enough to maintain internal evaluation. This approach is the subject of ongoing evaluation and evolution as the Company grows in terms of capitalisation and diverse management structure. Members of the Board have been brought together to provide a blend of qualification, skills and national and international experience required for managing a company operating within the mining industry. At this stage the establishment of a Nomination Committee is not relevant. This is however a matter for regular review and consideration by the Board.

3.2 & 3.3 No diversity policy has been established and therefore there is no measurable objectives or progress measured.

As the Company matures and increases its number of executives, the establishment of a diversity policy becomes relevant.

4 The Managing Director is the chairperson of the Audit Committee.

The makeup of the Board makes strict compliance impractical. The Board appointed Directors who were the best suited for committee membership. The Company Secretary is also a member of the committee.

7.1 & 7.2 Formal policies on risk management have not been adopted.

The management of risk is part of the everyday responsibility of the Managing Director, and of the full Board on a regular basis. The Company’s currently small operations make this practical at the moment. Internal financial controls are assessed regularly through the audit process.

8.1 & 8.2 Substantive compliance in relation to remuneration disclosures has been achieved with a detailed remuneration report.

The Board determined all matters of remuneration in accordance with the Corporations Act requirements, especially in respect of related party transactions and personal interest in matters before the Board. As the Company progresses and employs additional staff it is recognised that a more detailed policy and process will be required.

MUTINY GOLD LTD A.B.N. 72 101 224 999 DIRECTORS’ DECLARATION

Page 30

The Directors of the Company declare that: 1. the financial statements and notes as set out on pages 31 to 68, are in accordance with the Corporations

Act 2001:

(a) comply with Accounting Standards (including the Australian Accounting Interpretations) and the Corporate Regulations 2001;

(b) give a true and fair view of the financial position as at 30 June, 2010 and of the performance for the

year ended on that date of the Company and Group; and (c) comply with International Financial Reporting Standards as disclosed in Note 1.

2. the Chief Executive Officer and the Chief Finance Officer have each declared that:

(a) the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

(b) the financial statements and notes for the financial year comply with the Accounting Standards; and (c) the financial statements and notes for the financial year give a true and fair view.

3. in the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its

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

John Greeve Managing Director Dated: 24 September 2010

MUTINY GOLD LTD A.B.N. 72 101 224 999 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2010

Page 31

Note Consolidated Group

2010 $

Consolidated Group 2009

$

Revenues 2 18,649 45,341 Loss on disposal of asset held for sale 3b (500,000) - Loss on disposal of property 3b - (28,516) Loss on disposal of plant & equipment 3b - (38,830) Employee benefits expense (500,764) (495,885) Depreciation & amortisation expenses ( 6,834) (25,524) Marketing expenses (22,486) (32,570) Consulting expenses (54,241) (51,931) Occupancy expenses 3a (75,217) (65,537) Administrative expenses (70,813) (133,383) Other expenses (61,541) (20,859) Finance costs 3a (54) - Write off of exploration & evaluation expenditure

(100,976)

(1,034,692)

Impairment property, plant & equipment - (104,730) Impairment of exploration & evaluation - (3,468,025) Loss before income tax 3 (1,374,277) (5,455,141) Income tax (expense) / benefit 4 - - Loss for the year (1,374,277) (5,455,141) Other comprehensive income for the year

- (40,924)

Other comprehensive income for the year, net of tax

-

-

Total comprehensive loss for the year (1,374,277) (5,496,065) Loss per share - Basic (cents per share) 7 (0.01) (5.83) - Diluted (cents per share) 7 (0.01) (5.83)

The accompanying notes form part of these financial statements

MUTINY GOLD LTD A.B.N. 72 101 224 999 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010

Page 32

Note Consolidated Group 2010

$


$

Current Assets Cash & cash equivalents 8 779,551 188,948 Trade & other receivables 9 40,661 163,117 Assets held for sale 10 - 800,000 Total Current Assets 820,212 1,152,065 Non-Current Assets Property, plant & equipment 12 24,756 29,128 Exploration & evaluation expenditure 13

1,729,025

1,125,252

Total Non-Current Assets 1,753,781 1,154,380 Total Assets 2,573,993 2,306,445 Current Liabilities Trade & other payables 14 308,572 321,124 Annual leave entitlements 15 37,914 37,322 Total Current Liabilities 346,486 358,446 Total Liabilities 346,486 358,446 Net Assets 2,227,507 1,947,999 Equity Issued capital 16 12,211,874 10,644,408 Reserves 95,134 8,815 Accumulated losses (10,079,501) (8,705,224) Total Equity 2,227,507 1,947,999


MUTINY GOLD LTD A.B.N. 72 101 224 999 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2010

Page 33

Consolidated Group Share Accumulated Asset Option Total Capital Losses Revaluation Reserve Reserve $ $ $ $ $

Balance at 1 July 2008

10,466,881

(3,311,630)

102,471

3,517

7,261,239

Loss for the period - (5,455,141)

-

-

(5,455,141) Other comprehensive income/(loss) for the period - -

(40,924)

- (40,924) Transfer of revaluation reserve to accumulated losses on sale of land - 61,547

(61,547)

- -

Options issued to employees - -

-

5,298

5,298

Issue of share capital

177,527 -

-

-

177,527

Subtotal

177,527

(5,393,594) (102,471)

5,298

(5,313,240)

Balance at 30 June 2009

10,644,408

(8,705,224) -

8,815

1,947,999

Balance at 1 July 2009

10,644,408

(8,705,224) -

8,815

1,947,999

Loss for the period -

(1,374,277)

- -

(1,374,277) Other comprehensive income/(loss) for the period - -

-

- -

Options issued to employees - - -

86,319

86,319

Issue of share capital

1,667,305 - - -

1,667,305

Transaction costs

(99,839) - - -

(99,839)

Subtotal

1,567,466

(1,374,277) -

86,319

279,508

Balance at 30 June 2010

12,211,874

(10,079,501) -

95,134

2,227,507


MUTINY GOLD LTD A.B.N. 72 101 224 999 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2010

Page 34

Note Consolidated

Group 2010

$


$

Cash Flow from Operating Activities

Payments to suppliers & employees

(451,349) (514,815)

Interests received 18,338 45,341 Interest & other costs of finance (54) - Net cash used in operating activities

21 (433,065) (469,474)

Cash Flow from Investing Activities

Proceeds from the sale of property, plant & equipment

300,000

103,636

Payment for property, plant & equipment

(2,462)

-

Payments for exploration & evaluation expenditure

(561,031)

(912,781)

Net cash used in investing activities (263,493) (809,145) Cash Flow from Financing Activities Proceeds of issue of shares 1,387,000 - Costs of share issue (99,839) - Net cash provided by financing activities 1,287,161 - Net (decrease)/increase in cash held

590,603

(1,278,619)

Cash at the beginning of the year 188,948 1,467,567 Cash at the end of the year 8 779,551 188,948


MUTINY GOLD LTD A.B.N. 72 101 224 999 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010

Page 35

This financial report includes the consolidated financial statements and notes of Mutiny Gold Ltd and its controlled entities (‘Consolidated Group’ or ‘Group’). Note 1: Statement of Significant Accounting Policies Basis of Preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. The financial report has been prepared on an accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

a Principles of Consolidation A controlled entity is any entity over which Mutiny Gold Ltd has the power to govern the financial and operating policies so as to obtain benefit from its activities. In assessing the power to govern, the existence and effect of holding of actual and potential voting rights are considered. A list of controlled entities is contained in Note 11 to the financial statements. The controlled entities have a 30 June financial year-end. As at reporting date, the assets and liabilities of the controlled entities have been incorporated into the consolidated financial statements as well as its results for the year ended. Where a controlled entity has entered or left the Group during the year, its operating results have been included from the date control was obtained or until the date control ceased. In the Company’s financial statements, investments in subsidiaries are carried at cost, less any impairment losses. All inter-group balances and transactions between entities in the Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

b Business combination Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured. The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree.


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The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer. Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss. Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value through the statement of comprehensive income unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

c Income Tax

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on the taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movement in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profits will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and


Page 37

settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

d Property, Plant and Equipment

Each class of property, plant and equipment is carried at the cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land is shown at its fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external independent sources. Increases in the carrying amount arising on revaluation of land is credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against revaluation reserves directly in equity; all other decreases are charged to the statement of comprehensive income. Plant and Equipment Plant and equipment are measured on the cost basis. Subsequent costs are included in the asset’s carrying amount recognised as a separate asset, as appropriate, only when it is probable that future economic benefits are associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate

Plant and Equipment 18.75 – 30.0%

Office Equipment 15.00 – 40.0% Motor Vehicles 18.75 – 30.0%

The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income.

e Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandon area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.


Page 38

A regular review is undertaken of each of the area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Any changes in the estimate for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.

f Assets held for sale Assets classified as held for sale are measured at the lower of carrying value and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and expected to be completed within one year from classification and the asset is available for immediate sale in its present condition.

g Financial Instruments Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For the financial asset, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted). Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. Derecognition Financial assets are derecognised where the contractual rights to receipts of the cash flows expires or the asset is transferred to another party whereby the entity is no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of the consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. Impairment At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are regonised in the statement of comprehensive income. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Financial Liabilities Non-derivative financial liabilities are subsequently measured at amortised cost.


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h Event subsequent to year end and financial position impact

On 20 July 2010 Mutiny entered into an agreement with ATW Gold Corp. to acquire up to 100% of the Gullewa Gold Project, refer to Note 23 Events After the Balance Date.

To acquire an initial 70% interest, Mutiny must:

(i) make cash payments totalling $9 million as follows:

a) $250,000 by way of a non-refundable deposit (notwithstanding non-fulfillment of the conditions precedent referred to below), on execution of the agreement; (paid 20/07/10)

b) $1.25 million on or before 24 September 2010 (paid 24/09/10);

c) $1.5 million on or before 24 January 2011;

d) $4 million on or before 24 July 2011;

e) $2 million on or before 31 October 2011; and

(ii) sole fund all exploration and development expenditure on the Gullewa Project until 31 October 2011.

Mutiny intends to satisfy the consideration by raising capital through a combination of institutional investors and rights issues to members. Capital raising is well advanced and Mutiny will be raising up to $2.45 million during September 2010 for the first stage payment of $1.25 million with the balance of funds used for drilling, development and working capital.

i Impairment of non-financial Asset

At each reporting date, the Group reviews the carrying values of its non-financial tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

j Employee Benefits

Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Equity-settled compensation The Group operates equity-settled share based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Black-Scholes pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.


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The entity provided benefits to employees (including Directors) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). These benefits are currently provided under the Executive Services Agreement.

k Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is possible that an outflow of economic benefits will result and that outflow can be reliably measured.

l Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

m Revenue and Other Income

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of the amount of goods and services tax (GST).

n Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except when the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of 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 gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

o Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Critical Accounting Estimates and Judgments The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key Estimates – Impairment The Group assesses impairment at each reporting date by evaluating conditions and events specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value in use calculations which incorporate various key assumptions. Key Judgments – Provision for Impairment Assets Held for Sale

A provision for impairment is recognised when there is objective evidence that an individual asset or group of assets is impaired. An impairment loss is recognised where the carrying amount of an asset, exceeds the recoverable amount, being the higher of the asset’s fair value less costs to sell and value in use.

On 7 May 2009 the Directors resolved to place the Company’s Victorian exploration and mining tenements for sale. As a result the Company’s assets in Victoria were impaired to their net carrying value of $800,000 and then reclassified to Assets Held for Sale at 30 June 2009.


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The amount recognised on the balance sheet was based on the directors’ estimate of the assets’ fair value less cost of sale. The directors’ estimates are based on known inferred mineral resources present, the existence of an extensive mineral data library on the specific areas and fair value of in situ plant, equipment and infrastructure.

An estimate of the recoverable amount was been determined by the directors who have extensive knowledge and experienced gained over many years of working within the gold exploration industry and from assessing gold projects for valuation and acquisition.

Key Judgment – Impairment of Plant and Equipment

A provision for impairment is recognised when there is objective evidence that an individual asset or group of assets is impaired. An impairment loss is recognised where the carrying amount of an asset, exceeds the recoverable amount, being the higher of the asset’s fair value less costs to sell and value in use.

There has been no impairment of plant and equipment in 2010. During the 2009 financial year, management recognised that with the focus of the Group’s activities on the Western Australian tenements, the value in use of the plant and equipment based in Victoria was $nil. A provision for impairment was recognised in December 2008 and the written down value of the plant and equipment was fully impaired. Key Judgment – Exploration and Evaluation Expenditure The Group’s policy for exploration and evaluation is discussed in Note 1(e). The application of this policy requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploitation, then the relevant capitalised amount will be written off through the consolidated statement of comprehensive income. At the date of this report the Group has sufficient reason to believe:

• rights to explore in specific areas, once expired, will be renewed; • substantive expenditure on further exploration for the evaluation of mineral resources in specific area has

been budgeted; • exploration in specific areas is on going and has lead to the discovery of viable quantities of mineral

resources and the Company has not decided to discontinue such activity; and • sufficient data exists to indicate that, although a development in a specific area is likely to proceed, the

carrying amount of the exploration and evaluation assets are likely to be recovered in full from successful development or sale.

Capitalised exploration expenditure at the end of the year is $1,729,025.

p. New Accounting Standards

During the current year the Group has adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these standards has impacted the recognition, measurement and disclosure of certain transactions. The following is an explanation of the impact the adoption of these standards and interpretations has had on the financial statements of Mutiny Gold Ltd.

AASB 3 Business Combinations In March 2008 the Australian Accounting Standards Board revised AASB 3, and as a result some aspects of business combination accounting have changed. The changes apply only to business combinations which occur from 1 July 2009. Recognition and measurement impact Recognition of Acquisition Costs – The revised version of AASB 3 requires that all costs associated with a business combination be expensed in the period in which they were incurred. Previously such costs were


Page 42

capitalised as part of the cost of the business combination.

Measurement of Contingent Considerations – The revised AASB 3 requires that contingent considerations associated with a business combination be included as part of the cost of the business combination. They are recognised at the fair value of the payment calculated having regard to probability of settlement. Any subsequent changes in the fair value or probability of payment are recognised in the statement of comprehensive income except to the extent that they relate to conditions or events existing at acquisition date in which case the consideration paid is adjusted. The previous version of AASB 3 allowed such changes to be recognised as a cost of the combination impacting goodwill. Recognition of contingencies – The revised AASB 3 prohibits entities from recognising contingencies associated with a business combination, unless they meet the definition of a liability. Disclosure impact The revised AASB 3 contains a number of additional disclosure requirements, not required by the previous version of AASB 3. The revised disclosures are designed to ensure that users of the Group’s financial statements are able to understand the nature and financial impact of any business combinations on the financial statements. AASB 8 Operating Segments In February 2007 the Australian Accounting Standards Board issued AASB 8 which replaced AASB 114: Segment Reporting. As a result, some of the required operating segment disclosures have changed with the addition of a possible impact on the impairment testing of goodwill allocated to the cash generating units (CGUs) of the entity. Below is an overview of the key changes and the impact on the Group’s financial statements. Measurement impact Identification and measurement of segments – AASB 8 requires the ‘management approach’ to the identification measurement and disclosure of operating segments. The ‘management approach’ requires that operating segments be identified on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker, for the purpose of allocating resources and assessing performance. This could also include the identification of operating segments which sell primarily or exclusively to other internal operating segments. Under AASB 114 segments were identified by business and geographical areas, and only segments deriving revenue from external sources were considered. The adoption of the ‘management approach’ to segment reporting has resulted in the identification of reportable segments largely consistent with the prior year. Under AASB 8, operating segments are determined based on management reports, using the ‘management approach’, whereas under AASB 114 financial results of such segments were recognised and measured in accordance with Australian Accounting Standards. This has resulted in changes to the presentation of segment results, with inter-segment sales and expenses such as depreciation and impairment now being reported for each segment rather than in aggregate for total group operations, as this is how they are reviewed by the chief operating decision maker. Impairment Testing of the Segments Goodwill AASB 136: Impairment of Assets, para 80 requires that goodwill acquired in a business combination shall be allocated to each of the acquirer’s CGUs, or group of CGUs that are expected to benefit from the synergies of the combination. Each cash generating unit (CGU) which the goodwill is allocated to must represent the lowest level within the entity at which goodwill is monitored, however it cannot be larger than an operating segment. Therefore, due to the changes in the identification of segments, there is a risk that goodwill previously allocated to a CGU which was part of a larger segment could now be allocated across multiple segments if a segment had to be split as a result of changes to AASB 8.


Page 43

Management have considered the requirements of AASB 136 and determined implementation of AASB 8 has not impacted the CGU’s of each operating segment. Disclosure impact AASB 8 requires a number of additional quantitative and qualitative disclosures, not previously required under AASB 114, where such information is utilised by the chief operating decision maker. This information is now disclosed as part of the financial statements. AASB 101 Presentation of Financial Statements In September 2007 the Australian Accounting Standards Board revised AASB 101, and as a result there have been changes to the presentation and disclosure of certain information within the financial statements. Below is an overview of the key changes and the impact on the Group’s financial statements. Disclosure impact Terminology changes – The revised version of AASB 101 contains a number of terminology changes, including the amendment of the names of the primary financial statements. Reporting changes in equity – The revised AASB 101 requires all changes in equity arising from transactions with owners in their capacity as owners to be presented separately from non-owner changes in equity. Owner changes in equity are to be presented in the statement of changes in equity, with non-owner changes in equity presented in the statement of comprehensive income. The previous version of AASB 101 required that owner changes in equity and other comprehensive income be presented in the statement of changes in equity. Statement of comprehensive income – The revised AASB 101 requires all income and expenses to be presented in either one statement, the statement of comprehensive income, or two statements, a separate income statement and a statement of comprehensive income. The previous version of AASB 101 required only the presentation of a single income statement. The group’s financial statements now contain a statement of comprehensive income. Other comprehensive income – The revised version of AASB 101 introduces the concept of “other comprehensive income” which comprises of income and expense that are not recognised in profit or loss as required by other Australian Accounting Standards. Items of other comprehensive income are to be disclosed in the statement of comprehensive income. Entities are required to disclose the income tax relating to each component of other comprehensive income. The previous version of AASB 101 did not contain an equivalent concept.

q. New Accounting Standards for application in future periods The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows: ● AASB 9: Financial Instruments and AASB 2009-11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] (applicable for annual reporting periods commencing on or after 1 January 2013) These standards are applicable retrospectively and amend the classification and measurement of financial assets. The Group has not yet determined any potential impact on the financial statements. The changes made to accounting requirements include:

─ simplifying the classifications of financial assets into those carried at amortised cost and

those carried at fair value ─ simplifying the requirements for embedded derivatives


Page 44

─ removing the tainting rules associated with held-to-maturity assets

─ removing the requirements to separate and fair value embedded derivatives for financial

assets carried at amortised cost

─ allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument

─ financial assets will need to be reclassified where there is a change in an entity’s business model as they are initially classified based on (a) the objective of the entity’s business model for managing the financial assets; and (b) the characteristics of the contractual cash flows

● AASB 2009-5 “Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139] (applicable for annual reporting periods commencing from 1 January 2010)

These standard details numerous non-urgent but necessary changes to accounting standards arising from the IASB’s annual improvements project. No changes are expected to materially affect the Group. ● AASB 2009-13: Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB 1] (applicable for annual reporting periods commencing on or after 1 July 2010) This standard makes amendments to AASB 1 arising from the issue of Interpretation 19. The amendments allow a first-time adopter to apply the transitional provisions in Interpretation 19. This Interpretation is not expected to impact the Group. • AASB 2009-8: Amendments to Australian Accounting Standards – Group Cash – settled Share-based

Payment Transactions [AASB 2].

Supersedes pronouncement: Interpretation 8 Scope of AASB 2 and Interpretation 11 AASB 2 – Group and Treasury Share Transactions.

The amendments clarify the accounting for group cash-settled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the share-based payment transaction.

The amendments clarify 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 group settles the transaction, and no matter whether the transaction is settled in shares or cash. The effective date for this amendment is 31 December 2010.

These amendments are not expected to impact the Group and it is unlikely to have significant impact in Australia.

• AASB 2009-10: Amendments to Australian Accounting Standards – Classification of Rights Issues.

Supersedes pronouncement: AASB 132: Financial Instruments Presentation

AASB 2009-10 makes amendments which clarify that rights, options or warrants to acquire a fixed number of an entity’s own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all existing owners of the same class of its non-derivative equity instruments. The effective date for this amendment is 31 January 2011.

As the entity does not have any rights, options or warrants to acquire their own equity instruments, these amendments will not have any impact on the entity’s financial report.


Page 45

• AASB 2010-3: Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 3, AASB 7, AASB, 121, AASB 128, AASB 131, AASB 132 & AASB 139]

Limits the scope of the measurement choices of non-controlling interest at proportionate share of net assets in the event of liquidation. Other components of NCI are measured at fair value.

Requires an entity (in a business combination) to account for the replacement of the acquiree’s share-based payment transactions (whether obliged or voluntarily), i.e split between consideration and post combination expenses.

Clarifies that contingent consideration from a business combination that occurred before the effective date of AASB 3 Revised is not restated.

Eliminates the requirement to restate financial statements for a reporting period when significant influence or joint control is lost and the reporting entity accounts for the remaining investment under AASB 139. This includes the effect on accumulated foreign exchange differences on such investments. The effective date of this Standard will be 30 June 2011.

The Group considers it unlikely that the impact will be significant.

• AASB 2010-4: Further Amendments to Australian Accounting Standards arising from the Annual

Improvements Project [AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13]

Emphasises the interaction between quantitative and qualitative AASB 7 disclosures and the nature and extent of risks associated with financial instruments.

Clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity of in the notes to the financial statements.

Provides guidance to illustrate how to apply disclosures principals in AASB 134 for significant events and transactions.

Clarify that when the fair value of award credits is measured based on the value of the awards for which they could be redeemed, the amount of discounts or incentives, otherwise granted to customers not participating in the award credit scheme, is to be taken in account. The effective date for this Standard will be 30 June 20111.

The Group considers it unlikely that the impact will be significant.


Page 46

Note Consolidated

Group 2010

$


$

Note 2: Revenue Interest received 2a 18,338 45,341 Other 311 - Total Revenue 18,649 45,341 a. Interest received from - other persons 18,338 45,341 18,338 45,341 Note 3: Loss for the Year a. Expenses Finance costs - external 54 - Total Finance Costs 54 - Rental expense on operating leases - rental expense for sublease 75,217 65,537 b. Significant revenue & expenses The following significant revenue and expense items are relevant in explaining the financial performance:

Consideration on disposal of assets held for sale

300,000 -

Carrying amount of assets held for sale (800,000) - Net loss on disposal of assets held for sale

(500,000) -

Carrying amount of net assets sold - (28,353) Disposal costs - (163) Net loss on disposal of property improvements

-

(28,516)

Consideration on disposal of plant & equipment

-

103,636

Carrying amount of net assets sold - (142,466) Net loss on disposal of plant & equipment

-

(38,830)


Page 47

Consolidated

Group 2010

$


$

Note 4: Income Tax Prima facie tax on loss before income tax @ 30%.

(412,283)

(1,636,542)

Add tax effect: Non allowable items 233 1,364,519 Exploration & evaluation expenses (183,891) (281,634) Sale of available for sale asset 240,000 - Write off of exploration expenses 2,759 - Provisions 178 - Impairment of assets held for sale - 1,040,408 Impairment plant & equipment - 31,419 Loss on disposal of plant & equipment (31,419) - Prepayments 369 (1,938) Share issue costs (54,455) (50,262) Tax losses not brought to account 438,509 (796,509) Income tax attributable to entity - - Unrecognised deferred tax balances: Unrecognised deferred tax asset losses 3,703,902 1,918,800 Unrecognised deferred tax assets other 147,102 1,028,434 Unrecognised deferred equity adjustment

(67,864) (56,620)

Unrecognised deferred tax liabilities (518,338) (577,006) Deferred tax asset not brought to account

3,264,802 2,313,608

The unrecognised deferred tax assets will only be available if:

a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; b) the conditions for deductibility imposed by the tax legislation continue to be complied with; and c) no changes in tax legislation adversely affect the Company in realising the benefit.


Page 48

Note 5: Interests of Key Management Personnel (KMP)

Refer to the remuneration report contained in the Report of the Directors for details of the remuneration paid or payable to each member of the Group’s key management personnel for the year ended 30 June 2010. KMP Options Holdings The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows: 30 June 2010

Balance at beginning of

year

Granted as remuneration

during the year

Exercised during the year

Other changes during the year

Balance at end of year

Mr F Lawson - 1,000,000 - 100,000 1,100,000 Mr J Greeve 200,000 2,000,000 - 2,128,500 4,328,500 Mr A Brown - 500,000 - - 500,000 Mr K Hardman 250,000 500,000 - - 750,000 Mr B Kusni 250,000 500,000 - - 750,000 Mrs C Tyndall - - - - - Mr P O’Neill - - - - - Mr A Dellar 100,000 - - - 100,000 800,000 4,500,000 - 2,228,500 7,528,500 30 June 2009


year


during the year

Exercised during the year



Mr F Lawson 1,573,601 - - (1,573,601) - Mr J Greeve 1,600,000 100,000 - (1,500,000) 200,000 Mr A Brown 375,000 - - (375,000) - Mr K Hardman 3,615,000 - - (3,365,000) 250,000 Mr B Kusni 1,500,000 - - (1,250,000) 250,000 Mrs C Tyndall 500,000 - - (500,000) - Mr P O’Neill 250,000 - - (250,000) - Mr A Dellar 100,000 - - - 100,000 9,513,601 100,000 - (8,813,601) 800,000


Page 49

Note 5: Interests of Key Management Personnel (KMP) (Cont) KMP Shareholdings The number of ordinary shares in Mutiny Gold Ltd held by each KMP of the Group during the financial year is as follows: 30 June 2010


year


during the year

Issued on exercise of

options during the

year



Mr F Lawson 2,154,152 1,676,033 - 200,000 4,030,185 Mr J Greeve 3,427,230 2,006,019 - 5,020,810 10,454,059 Mr A Brown 903,823 1,244,250 - - 2,148,074 Mr K Hardman 3,893,823 1,244,250 - - 5,138,074 Mr B Kusni 1,278,823 1,244,250 - - 2,523,074 Mrs C Tyndall 500,000 - - - 500,000 Mr P O’Neill 300,000 - - 241,190 541,190 12,457,851 7,414,802 - 5,462,000 25,334,656 30 June 2009


year


during the year

Issued on exercise of

options during the

year



Mr F Lawson 1,573,601 580,551 - - 2,154,152 Mr J Greeve 1,959,989 1,122,241 - 345,000 3,427,230 Mr A Brown 375,000 528,823 - - 903,823 Mr K Hardman 3,365,000 528,823 - - 3,893,823 Mr B Kusni 750,000 528,823 - - 1,278,823 Mrs C Tyndall 500,000 - - - 500,000 Mr P O’Neill 250,000 - - 50,000 300,000 8,773,590 3,289,261 - 395,000 12,457,851


Page 50

Note 5: Interests of Key Management Personnel (KMP) (Cont) KMP Remuneration The totals of remuneration paid to KMP of Group during the year are as follows: 2010 2009

$ $

Short-term employment benefits 857,353 483,407

Post-employment benefits 53,184 55,767

Other long-term benefits - -

Termination benefits - -

910,537 539,174

Other KMP Transactions On 13 July 2009 shareholders in a general meeting approved the issue of 5,367,499 shares at a total value of $182,435 in lieu of remuneration for the period 1 November 2008 – 30 June 2009. For details of other transactions with KMP refer to Note 24: Related Party Transactions.

Consolidated

Group 2010

$


$ Note 6: Auditor’s Remuneration Amounts received or due and receivable by: Grant Thornton (WA) Partnership for:

- audit or review of the financial report of the Company and other entities in the Group

26,875 25,100 Note 7: Loss Per Share Consolidated Group 2010 Consolidated Group 2009

Loss for the year (1,374,277) (5,455,141) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS

124,234,271 93,489,210 Weighted average number of options outstanding

11,504,697 24,600,055 Weighted average number of ordinary securities outstanding during the year used in calculating diluted EPS 135,738,968 118,089,265 The options were out of the money, thus no dilutive impact.


Page 51

Consolidated

Group 2010

$

Consolidated

Group 2009

$

Note 8: Cash and Cash Equivalents Cash at bank & in hand 1,308 11,036 Interest bearing deposit 445,882 79,202 Term deposits 332,361 98,710 779,551 188,948 The effective interest rate on Interest bearing deposit for 2010 was 2.43% (2009: 5.62%) with average maturity of 30 days. The effective interest rate on Term deposits for 2010 was 5.55% (2008: 4.01%) with average maturity of 90 days. At balance date the Company has a credit card facility with a limit of $10,000 and unused amount of $7,913 (2009:$9,761). The credit card facility is secured against a term deposit with a balance at 30 June 2010 of $11,292 (2009:$11,073). Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows:

Cash & cash equivalents 779,551 188,948 779,551 188,948 Note 9: Trade and Other Receivables

Current Bonds 9a - 1,140 Other receivables 9a 15,886 129,076 Prepayments 5,228 6,459 Input tax credits 17,929 25,133 Income tax withholding credit 1,618 1,309 40,661 163,117 There are no balances in Other receivables that contain assets that are impaired and are past due. It is expected these balances will be received when due. Credit Risk – Trade and Other Receivables The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties. The class of assets described as Other receivables is considered to be the main source of credit risk related to the Group. On a geographical basis, all the Group credit risk exposure is in Australia.


Page 52

Consolidated Group Note 2010

$ 2009

$

9a Financial assets classified as loans and receivables

Trade and other receivable - Total current 15,886 130,216 - Total non-current - - Financial assets 25 15,886 130,216 Note 10: Asset Held for Sale Current Transfer from exploration & evaluation expenditure

-

800,000

- 800,000 With the Group reaching significant milestones in the exploration and evaluation of the White Well Project in Western Australia, management formed a view to concentrate the Groups’ resources into that specific area of interest. On 7 May 2009 the Directors resolved to place the Group’s Victorian exploration and mining tenements for sale. The tenements were available for immediate sale and were advertised at minesonline.com.

Country of Corporation

Percentage Owned

Percentage Owned

Note 11: Controlled Entities 2010 2009 Parent Entity: Mutiny Gold Ltd Australia Subsidiaries of Mutiny Gold Ltd: Mt Gingee Munjie Resources Pty Ltd Australia 100% 100% Duval Dene Pty Ltd Australia 100% 100%


Page 53

Consolidated

Group 2010

$


$

Note 12: Property, Plant and Equipment

Plant & equipment - At cost - 128,922 - Less: accumulated depreciation - (40,855) - Less: accumulated impairment loss - (88,067) - - Office equipment - At cost 62,088 59,626 - Less: accumulated depreciation (37,332) (30,498) 24,756 29,128 Motor vehicles - At cost - 21,829 - Less: accumulated depreciation - (5,166) - Less: accumulated impairment loss - (16,663) - - Total Property, Plant and Equipment

24,756

29,128

Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current year. 2010 Office

Equip. Total

Consolidated Group Balance at the beginning of year 29,128 29,128 Additions 2,462 2,462 Depreciation expense (6,834) (6,834) Carrying amount at the end of the year 24,756 24,756


Page 54

2009 Freehold

Land Plant & Equip.

Leasehold Improvements

Motor Vehicles

Total

Consolidated Group Balance at the beginning of year 170,000 249,516 29,395 51,290 500,201 Revaluation increment(decrements) (40,924) - - - (40,924) Disposals (129,076) (111,545) (28,353) (30,921) (299,895) Additions - - - - - Depreciation expense - (20,776) (1,042) (3,706) (25,524) Impairment - (88,067) - (16,663) (104,730) Carrying amount at the end of the year - 29,128 - - 29,128 Refer to note 1 Critical Accounting Estimates and Judgments for impairment of plant and equipment. Consolidated

Group 2010

$


$

Note 13: Exploration and Evaluation Expenditure

Exploration & evaluation expenditures carried forward in respect of mining areas of interest.

Exploration & evaluation phase - At cost

1,729,025 1,125,252 1,729,025 1,125,252 Reconciliation Balance at beginning of year 1,125,252 5,489,188 Exploration expenditure incurred 567,419 938,781 Impairment of exploration expenditure

- (3,468,025)

Exploration expenditure written off

(9,197) (1,034,692)

Acquisition at fair value of tenements.

45,551 -

Transfer to assets held for sale (refer Note 10)

- (800,000)

1,729,025 1,125,252 The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of respective mining areas of interest. Refer to note 1 Critical Accounting Estimates and Judgments for impairment of exploration and evaluation expenditure.


Page 55


$


$ Note 14: Trade and Other Payables

Current Unsecured liabilities - Trade creditors 64,774 138,689 - Other creditors & accruals 243,798 182,435 308,572 321,124 Note 15: Annual Leave Entitlements Current Accrual for employee benefits 37,914 37,322 37,914 37,322 Opening balance at 1 July 2009 37,322 Additional accrual 38,907 Amount used (38,315) Unused amount reserved - Balance at 30 June 2010 37,914


Page 56

Consolidated

Group 2010

$


$

Note 16: Issued Capital (a) Issued and paid up capital 147,513,277 (2009: 98,847,047) Ordinary Shares Fully Paid

12,211,874 10,644,408 12,211,874 10,644,408 (b) Movements in shares on issue

2010

Number of Shares

$

Beginning of financial year 94,847,047 10,644,408 Issued during the year: 13 July 2009 5,367,499 182,435 21 August 2009 17,500,000 612,500 less transaction costs - (68,277) 28 August 2009 8,571,427 300,000 11 December 2009 2,047,304 90,870 18 February 2010 200,000 7,000 3 June 2010 18,980,000 474,500 less transaction costs - (31,562) End of Financial Year 147,513,277 12,211,874 The value of shares issued in settlement of services is based on the fair value of services provided as determined by the Directors. Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. (c) Options During this reporting period the Company has issued a further:

(i) 13,035,715 (listed, ex $0.10 on or before 30/06/2011) (ii) 4,500,000 Director options (unlisted, ex $0.10 on or before 30/11/12)


Page 57

Note 16: Issued Capital (cont.) Consolidated

Group 2010 No

Consolidated Group 2009 No

Opening number of options issued

1,800,000

69,395,247

Number of options issued during the year

17,535,715

1,100,000

Number of options lapsed during the year

-

(68,695,247)

Closing Number of Options Issued

19,335,715

1,800,000

Capital Management Management controls the capital of the Group in order to safeguard their ability to continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders. Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary source of funding being equity raising. Therefore, the focus of the Group’s capital management is the current working capital position against the requirement of the Group to meet exploration projects and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raising as required. Consolidated

Group 2010

$


$

Cash and cash equivalents 779,551 188,948 Trade and other receivables 40,661 163,117 Trade and other payables (346,486) (358,446) Working capital position 473,726 (6,381) There have been no significant changes in the strategy adopted by management to control the capital of the Group since the prior year. Note 17: Leasing and Capital Commitments

Operating lease commitments. The operating lease commitment pertains to the sub-lease arrangement of office premises

Non-cancellable operating leases contracted for but not capitalised in the financial statements

Payable: - not later than 1 year; 75,217 65,537 - later than 1 year but not later than 5 years; and - - - later than 5 years. - - 75,217 65,537


Page 58

Note 17: Leasing and Capital Commitments (cont.) An amount of $75,217 was charged as an expense in the Statement of Comprehensive Income for the year ended 30 June 2010 (2009: $65,537). Note 18: Contingent Liabilities There are no contingent liabilities as at balance date or as at the date of the report. Note 19: Expenditure Commitments In January the Company announced that it had entered into an agreement to Farm-In to the Widgie South project, located in the Widgiemoltha district of WA. Under the terms of the agreement, the Company will earn a 51% right after completing exploration expenditure of $300,000 within 24 months of the purchase. Under the requirements of the Western Australian Department of Mining and Petroleum, the Company has an annual minimum expenditure commitment of $110,000 on granted tenements. As at 30 June 2010 the Company had met the minimum expenditure requirement on its granted tenements. Tenement Date Aquired Annual Expenditure Commitment $ E08/1655 14/08/2008 20,000 E08/1265 14/08/2008 15,000 M20/54 27/03/2009 60,000 E15/1025 20/01/2010 15,000

TOTAL 110,000 In order to retain the rights of tenure to its granted tenements, the Company is required to meet the minimum statutory expenditure requirement but may reduce these at any time by reducing the size of the tenements. The figure quoted below assumes that no new tenements are granted and that only compulsory statutory area reductions are made. $

Not later than 1 year 110,000 Later than 1 year but not later than 2 years 110,000 Later than 2 years but not later than 5 years 330,000 TOTAL 550,000

Note 20: Operating Segments Identification of reportable segments The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group is managed primarily on the basis of product category since the diversifications of the Group’s operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on this basis. Reportable segment disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and also similar with respect to the geographical location of the mineral exploration and evaluation projects.


Page 59

Types of products and services by segment Mineral exploration and evaluation: White Well Project in the Tuckabianna region of WA Donnellys Project in the Ashburton region of WA Secret Creek Project in the Ashburton region of WA, Mutiny withdrew from the Joint Venture in June 2009 Cassilis Project in the Swifts Creek region of Victoria, Mutiny sold the Cassilis project in December 2009 Basis of accounting for the purposes of reporting by operating segment Accounting policies adopted Unless stated otherwise, all amounts reported to the Board of Directors as the chief operating decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group. Inter-segment transactions Some corporate charges may be allocated to reporting segments based on the segments overall proportion of tenement expenditure within the Group. The Board of Directors believes this is representative of likely consumptions of head office expenditure that should be used in assessing segment performance and cost recoveries. Segment assets Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location. Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets have not been allocated to operating segments. Unallocated items The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• Cash and debtors;

• Fixed assets;

• Fund raising costs;

• Corporate charges not related to mineral exploration and evaluation; and

• Retirement benefits obligations.

Comparative information This is the first reporting period in which AASB 8: Operating Segments has been adopted. Comparative information has been stated to conform to the requirements of the Standard.


Page 60

Year ended 30.06.2010 WW Donnellys Widgie Secret VIC Corporate Total Creek Head Office

Revenue

Interest revenue - - - - - 18,649 18,649

Total segment revenue - - - - - 18,649 18,649 Reconciliation of segment revenue to group revenue

Unallocated items:

Inter segment elimination -

Total group revenue 18,649

Segment net profit (loss) before tax - (9,233) - -

(36,154) (1,340,704) (1,367,443)

Reconciliation of segment results to group net profit/(loss) before tax

i. Amounts not included in segment result but

reviewed by the Board

- Depreciation and amortisation - - - - - 6,834 6,834

ii. Unallocated items - - - - - - - Net profit (loss)before tax from continuing operations (1,374,277)

Year ended 30.06.2009 WW Donnellys Widgie Secret VIC Corporate Total Creek Head Office

Revenue

Interest revenue - - - - - 45,341 45,341

Total segment revenue - - - - - 45,341 45,341 Reconciliation of segment revenue to group revenue

Unallocated items:

Inter segment elimination -

Total group revenue 45,341

Segment net profit (loss) before tax - - - (565,743)

(3,899,591) (904,895) (5,324,887) Reconciliation of segment results to group net profit/(loss) before tax

i. Amounts not included in segment result but

reviewed by the Board

- Depreciation and amortisation - - - -

(16,061) (9,463) (25,524)

- Impairment of property plant and equipment - - - -

(104,730) - (104,730)

ii. Unallocated items - - - - - - - Net profit (loss)before tax from continuing operations (5,455,141)


Page 61

As at 30.06.2010 WW Donnellys Widgie Secret VIC Corporate Total Creek Head Office

Segment assets 1,508,726 96,181 124,119 - - 844,968 2,573,993

Segment assets increases/(decreases) for the period

Capital expenditure 458,663 30,188 78,568 - - - 567,419

Acquisitions 45,551 - - 45,551

458,663 30,188 124,119 - - 612,970

Reconciliation of segment assets to group assets

Unallocated assets -

Total group assets 2,573,993


Segment assets 1,050,102 75,148 - - - 1,181,194 2,306,445

Segment assets increases/(decreases) for the period

Capital expenditure 778,114 12,784 - 5,516

159,730 - 956,145

Acquisitions - 62,364 - - - - 62,364

778,114 75,148 - 5,516

159,730 - 1,018,508

Reconciliation of segment assets to group assets

Unallocated assets -

Total group assets 2,306,445


Segment liabilities - - - - - 346,486 346,486

Reconciliation of segment liabilities

to group liabilities

Intersegment eliminations -

Unallocated liabilities -

Total group liabilities 346,486

As at 30.06.2009 WW Donnellys Widgie Secret Creek VIC Corporate Total Head Office

Segment liabilities 4,238 - - -

5,500 348,708 358,446

Reconciliation of segment liabilities

to group liabilities

Intersegment eliminations -

Unallocated liabilities -

Total group liabilities 358,446


Page 62

Consolidated

Group 2010

$


$

Note 21: Cash Flow Information Reconciliation of Cash Flow from Operations with Loss after Income Tax

Loss after income tax (1,374,277) (5,455,141) Non-cash flows in loss after income tax Depreciation & amortisation expenses 6,834 25,524

Write-off of exploration & evaluation expenditure

74,701

1,034,692

Loss on sale of property - 28,516 Impairment of property, plant &

equipment

500,000

104,730 Impairment of exploration & evaluation expenditure

-

3,468,025

Accrued expenses 15,954 - Loss on sale of plant & equipment - 38,830 Share based payments 335,657 285,739 Employee benefits expenses 592 37,322 Changes in Assets and Liabilities (Increase)/decrease in trade & other receivables Increase/(decrease) in trade & other payables

(8,410)

15,883

(69,654)

31,943

Cash flow used in operating activites (433,066) (469,474)


Page 63

Note 22: Share-Based Payments The following share-based payment arrangements existed at 30 June 2010: On 30 November 2009, 4,500,000 share options were granted to Directors to accept ordinary shares at an exercise price of 10 cents. The options are exercisable on or before 30 November 2012. The options hold no voting or dividend rights. At balance date, no share options have been exercised. All options granted to key management personnel are for ordinary shares in Mutiny Gold Ltd, which confer a right of one ordinary share for each option. Consolidated Group 2010 2009

Number of

Options

Weighted Average

Fair Value $

Weighted Average Ex Price

$

Weighted Average

Remaining Life

Number of Options

Weighted Average

Fair Value $

Weighted Average Ex

Price $

Weighted Average

Remaining Life

Outstanding at beginning of the year

800,000

0.2

18 months

700,000

0.2 30 months Granted 4,500,000 0.018 100,000 0.011 Forfeited - - Exercised - - Expired - - - Outstanding at year end

5,300,000

0.12

15 months 800,000

0.2

18 months

Exercisable at year-end

5,300,000

800,000

The range of exercise prices at 30 June 2010 was $0.10 - $0.20 (2009: $0.20). The weighted average fair value of the options granted during the year was 1.8 cents (2009: 0.11 cents). This price was calculated using a Black-Scholes option pricing model applying the following inputs: Weighted average exercise price 10 cents Weighted average life of the option 3 years Underlying share price 4.4 cents Expected share price volatility 89% Risk free interest rate 4.99% Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future tender, which may not eventuate. The life of the option is based on the historical exercise patterns, which may not eventuate in the future. Included under employee benefits expenses in the statement of comprehensive income is $86,319 (2009: $109), and relates, in part, to equity-settled share-based payment transactions.


Page 64

Note 23: Events After the Balance Date Purchase of Gullewa Gold Project from ATW Gold Corp. On 22 July 2010 Mutiny Gold Ltd announced that it had executed an agreement to purchase the Gullewa Gold Project from Canadian Miner ATW Gold Corp (ATW), (TSX V: ATW). The acquisition is in line with Mutiny’s previously stated objective of becoming a gold producer in the Murchison region of WA. The acquisition is also complementary to the Company’s White Well project, where the scoping study called for the gold ore to be concentrated on site and then transported for processing. The Gullewa project has infrastructure in place that with some upgrades will be able to process ore from the White Well project. Project Highlights

• Mutiny to farm into ATW Gold Corp’s Gullewa Gold Project by paying $9m to earn 70% in a company transforming transaction

• The project contains substantial existing resources totaling 650,000oz gold (Au) and 25,000 tonnes of copper (Cu) including Measured and Indicated Resources of 230,000oz Au and 17,000 tonnes Cu

• There is significant potential through near mine exploration to increase these resources • Infrastructure includes 300kt pa mill, camp, offices and other facilities • One of the most prospective tenement holdings in the WA goldfields • Significant pre-approvals, agreements and permits in place to commence mining • Focus on bankable feasibility and mining ramp up planned for 2010/11 • Preliminary Mine Studies indicate operation would be profitable

For further details of the Project, refer to Review of Operations and Note 1(h) Event subsequent to balance date and impact on financial position. Issue of Placement Options and Mandate Options On 23 July 2010 shareholders in a general meeting approved the issue of 18,980,000 free Options (ex price $0.05, ex date 23/07/2013) to participants in the placement that took place in June 2010. Approval was also given to issue 5,000,000 free Options (ex price $0.05, ex date 23/07/2013) to the lead broker in the June 2010 placement. Approval by Shareholders to purchase the Gullewa Gold Project At a general meeting of shareholders held on 8 September 2010, shareholders passed a resolution to approve Mutiny’s purchase of the Gullewa Gold Project. The meeting also passed a resolution allowing the Company to issue up to 70,000,000 shares together with one free option for every share subscribed to (ex price $0.05, ex date 23/07/2013) to fund the first payment due to the vendor ATW Gold Corp. and further development and exploration of the company’s tenements. The financial effects of the above have not been brought to account in the accounts at 30 June 2010.


Page 65

Note 24: Related Party Transactions


$


$

Transactions with related parties: i) Director or related entities Consulting fees paid to Allan Brown & Associates Pty Ltd, a related entity to Mr Brown.

38,000 36,025 Professional consulting & corporate service fees paid and accrued to Jackson Greeve, an accounting practice where Mr Greeve & Mr O’Neill are partners.

30,770 37.508 Rent & outgoings paid and accrued to Jackson Greeve, an accounting practice where Mr Greeve & Mr O’Neill are partners.

75,217 65,537 Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. As at 30 June 2010 trade creditors include an amount of $9,600 owing to Mr Allan Brown. Note 25: Financial Risk Management Objectives and Policies and Processes The Group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable. The totals for each category of financial instrument, measured in accordance with AASB: 139 as detailed in the accounting policies to these financial statements, are as follows: Consolidated Group Note 2010 2009 $ $ Financial Assets Cash and cash equivalents 8 779,551 188,948 Loans and receivables 9a 15,886 130,216 795,437 319,164 Financial Liabilities - Trade and other payables at amortised cost

14 308,572 321,124

308,572 321,124


Page 66

Financial Risk Management Policies The Group’s financial risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Board of Directors, in its function as Audit Committee, oversees how management monitors compliance with the risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risk. Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial report. The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board of Directors is responsible for the developing and monitoring the Group’s risk management policies. Interest rate risk The Company has cash subject to interest and therefore the interest rate risk impact is minimal. Management continually monitors the exposure to interest rate risk. The following table sets out the carrying amount, by maturity, of the financial instruments exposed to interest rate risk.

< 1 Year

$ Weighted Average

Effective Interest Rate Year ended 30 June 2010 Floating rate Cash assets 779,551 779,551 3.79% Year ended 30 June 2009 Floating rate Cash assets 188,948 188,948 5.47% Credit Risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. In most cases, the Company requires full and final payment either prior to, or upon delivery of the goods to the customer. In limited cases where credit is provided, the Company trades on credit terms with recognised, creditworthy third parties. Customers who wish to trade on credit terms are subject to a credit verification procedures. In addition, receivables balances are monitored on an ongoing basis with the results that the Company’s exposure to bad debts is not significant. There are no significant concentrations of credit risk within the Company. All amounts past due in excess of 30 days are individually assessed and provided for as doubtful if reasonable doubt as to collectability exists. With respect to credit risk arising from financial assets of the Company, which comprise of cash and cash equivalents and receivables, the Company’s maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, as disclosed in the statement of financial position and notes to the financial statements. Included in receivables is the amount for GST refundable, this amount is not past due nor impaired.


Page 67

Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s policy for managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. The Company’s overall objective is to maintain a balance between continuity of funding and flexibility through the use of bank facilities. The Company also manages liquidity risk by maintaining adequate reserves and banking facilities and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and financial liabilities. The table below summarises the maturity profiles of the Company’s financial liabilities based on contractual undiscounted payments. Less than 3

months $

3 to 12 Months

$

More than 12 months

$ Total

$ Year ended 30 June 2010 Trade & other creditors 308,572 - - 308,572 308,572 - - 308,572 Year ended 30 June 2009 Trade & other creditors 321,124 - - 321,124 321,124 - - 321,124 The Company also has an office sub lease agreement. The future contracted commitments at year end is disclosed in Note 17. Sensitivity Analysis The following table illustrates sensitivity to the Group’s exposures to changes in the interest rate. The table indicates the impact on how profit and equity values reported at balance date would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. Consolidated

Group

Profit Equity $ $ 2010 +/- 2% in interest rate +/- 9,685 +/- 9,685 2009 +/- 2% in interest rate +/- 16,600 +/- 16,600


Page 68

Note 26: Reserves a) Asset Revaluation Reserve

The asset revaluation reserve records revaluation of non-current assets. Under certain circumstances dividends can be declared from this reserve.

b) Option Reserve

The option reserve records items recognised as expenses on valuation of directors and employee share options. Note 27: Parent Entity Information 2010 2009 Information relating to Mutiny Gold Ltd:

$ $

Current assets 820,212 1,152,065 Total assets 2,573,993 2,306,445 Current liabilities 346,486 358,446 Total liabilities 346,486 358,446 Issued capital Retained earnings Option Reserve Total shareholders’ equity

12,211,874 (10,079,501)

95,134

2,227,507

10,644,408 (8,705,224)

8,815

1,947,999 Profit or loss of the parent entity Total comprehensive income of the parent entity

(1,374,277) (1,374,277)

(5,455,141) (5,455,141)

Note 28: Company Details The registered office and principal place of business of the Company is: 29 Charles Street South Perth WA 6151

Grant Thornton Audit Pty Ltd ABN 94 269 609 023 10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000

F +61 8 9322 7787

E [email protected]

W www.grantthornton.com.au

69

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together

with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

Auditor’s Independence Declaration

To the Directors of Mutiny Gold Ltd

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead

auditor for the audit of Mutiny Gold Ltd for the year ended 30 June 2010, I declare that, to

the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act

2001 in relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the

audit.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

M J Hillgrove

Director - Audit & Assurance

Perth, 24 September 2010

Grant Thornton Audit Pty Ltd ABN 94 269 609 023 10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000

F +61 8 9322 7787

E [email protected]

W www.grantthornton.com.au

70

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together

with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

Independent Auditor’s Report

To the Members of Mutiny Gold Ltd

Report on the financial report

We have audited the accompanying financial report of Mutiny Gold Ltd (the ‘Company’),

which comprises the statement of financial position as at 30 June 2010, 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 report and the directors’ declaration of the consolidated entity

comprising the Company and the entities it controlled at the year’s end or from time to time

during the financial year.

Directors’ responsibility for the financial report

The directors of the Company are responsible for the preparation and fair presentation of

the financial report in accordance with Australian Accounting Standards (including the

Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility

includes establishing and maintaining internal controls relevant to the preparation and fair

presentation of the financial report that are free from material misstatement, whether due to

fraud or error; selecting and applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances. The directors also state, in the

notes to the financial report, in accordance with Accounting Standard AASB 101

Presentation of Financial Statements, that compliance with the Australian equivalents to

International Financial Reporting Standards ensures that the financial report, comprising the

financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We

conducted our audit in accordance with Australian Auditing Standards which require us to

comply with relevant ethical requirements relating to audit engagements and plan and

perform the audit to obtain reasonable assurance whether the financial report is free from

material misstatement.

71

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial report. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the

entity’s preparation and fair presentation of the financial report in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of

accounting estimates made by the directors, as well as evaluating the overall presentation of

the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the

Corporations Act 2001.

Auditor’s opinion

In our opinion:

a the financial report of Mutiny Gold Ltd is in accordance with the Corporations Act

2001, including:

i giving a true and fair view of the consolidated entity’s financial position as at 30

June 2010 and of it’s 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; and

b the financial report also complies with International Financial Reporting Standards as

disclosed in the notes to the financial statements.

Significant uncertainty regarding continuation as a going concern

Without qualifying our opinion, we draw attention to the financial report which indicates

that the consolidated entity incurred a net loss of $1,374,277 during the year ended 30 June

2010 and, as of that date, the consolidated entity had a cash outflow from operations of

$433,065. These conditions, along with the matters as set forth in Note 1(h), indicate the

existence of a significant uncertainty which may cast significant doubt about the

consolidated entity’s ability to continue as a going concern.

72

Report on the remuneration report

We have audited the Remuneration Report included in pages 15 to 20 of the directors’

report for the year ended 30 June 2010. 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 Mutiny Gold Ltd for the year ended 30 June

2010, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

M J Hillgrove

Director - Audit & Assurance

Perth, 24 September 2010

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