abn 85 003 257 556 annual report for the year ended 31 ... · chairman’s letter to shareholders 1...

ABN 85 003 257 556

Annual Report For the Year Ended 31 December 2009

Millennium Minerals Limited Corporate Particulars

DIRECTORS

Peter Rowe Clive Donner Ross Gillon

Simon Durack

COMPANY SECRETARY

Pierre Malherbe

PRINCIPAL PLACE OF BUSINESS AND REGISTERED OFFICE

Ground Floor 17 Ord Street

WEST PERTH WA 6005 Telephone: +61 (0)8 9216 9011 Facsimile: +61 (0)8 9481 0288

SHARE REGISTRY

Advanced Share Registry Services 150 Stirling Highway

NEDLANDS WA 6009 Telephone: +61 (0)8 9389 8033 Facsimile: +61 (0)8 9389 7871

AUDITORS

Rothsay Chartered Accountants 96 Parry Street

PERTH WA 6000 Telephone: +61 (0)8 9227 0552 Facsimile: +61 (0)8 9227 6011

Australian Stock Exchange

Home Branch: Perth

Code: MOY

Australian Business Number (ABN)

85 003 257 556

Millennium Minerals Limited Contents

Chairman’s Letter to Shareholders 1

Review of Operations 2

Directors’ Report 9

Income Statement for the year ended 31 December 2009 27

Balance Sheet as at 31 December 2009 28

Statement of Cash Flows for the year ended 31 December 2009 29

Statement of Changes in Equity for the year ended 31 December 2009 30

Notes to & forming part of, the Financial Statements for the year ended 31 December 2009 31

Directors’ Declaration 56

Independent Audit Report 57

Schedule of interests in Mining Tenements 59

Supplementary Information 62

Millennium Minerals Limited

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Chairman’s Letter to Shareholders Dear Shareholders, The 2009 year was a challenging period for most companies in the resources sector with the Global Financial Crisis resulting in many casualties among the Juniors of the Resources Sector. Millennium Minerals, however, consolidated its operational activities and has reassessed its bankable feasibility study (BFS) for the Nullagine Gold Project over the past twelve months with the objective of achieving long-term success. There have also been some significant changes at Board level. Mr. Michael Grigson (Exploration Director) resigned on 2 February 2009. Mr. Simon Durack was appointed as non executive director on this date. Mr Durack is an experienced Chartered Accountant, Company Secretary and Director, with over 29 years commercial experience gained in Australia, South East Asia and Europe. In July 2009 I was delighted to accept an invitation to join the Board as Non-Executive Chairman. Together with my experience in the development and operation of mining projects, the Board now has appropriate operational and corporate expertise for the move towards establishing a producing gold mine. A strong and competent management team has also been recruited and is now in place. During most of the past twelve months, work continued on the BFS for the Nullagine Gold Project, together with limited pre-development work. The Company has now reached a stage where it is able to actively plan the ramp-up of the Nullagine Gold Project into a producing mine. The BFS shows a robust project with strong financial returns and good long term upside potential. In terms of finance, the remainder of the convertible notes held by LinQ Capital Limited were repaid at the end of March 2009. Furthermore, ongoing exploration activities have been funded through various capital raisings, placements and rights issues. 1. 33,668,167 ordinary shares were issued by private placement on 11 February 2009 at 1.2

cents per share and raised $404,018; 2. 135,061,311 ordinary shares were issued pursuant to a Rights Issue on 13 March 2009 at

1.2 cents per share and raised $1,620,736; 3. 60,777,590 ordinary shares were issued by private placement on 18 November 2009 at 4.5

cents per share and raised $2,734,992; 4. On 23 December 2009, the Company issued a prospectus offering shareholders the

opportunity to participate in a 2 for 8 Rights Issue with one free attached option. The funds raised are to be used to progress the Nullagine Gold Project and for working capital purposes. The total received from rights issue entitlements, commitments and shortfall applications amounted to $3,830,927.

In conclusion, I would like to take this opportunity to thank all of our staff, consultants and my fellow directors for their loyalty and commitment during this period. Last and by no means least, I would like to thank you, our valued shareholders, for supporting the Company through some of the challenges of the past twelve months. I have every confidence that your patience will be well rewarded in the not too distant future.

Peter Rowe Non Executive Chairman


Review of Operations

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SUMMARY The Global Financial Crisis (GFC) had a serious impact on resource companies in late 2008 and Millennium Minerals was no exception. Your Board reacted to these highly uncertain times and instituted an austerity programme to preserve the Company and its assets. As the economy recovered and the gold price improved in 2009, it became evident that the Company’s gold assets had real potential to realise value in the short to medium term. As a result, the Company focussed its efforts on the possible development of the Nullagine Gold Project (Table 1). The primary focus for the Company was to review and update the 2006/2007 Bankable Feasibility Study (BFS). This involved the following activities:- • Development of Mineral Resource estimates for the Golden Gate satellite deposits, namely

Harrier, Crow, Falcon, Condor and G-Reef. • Re-optimisation of Mineral Resource models for Golden Eagle, Shearers, Bartons, All

Nations, Golden Gate and Golden Gate satellites using a USD900/oz gold price. • Review and update of all operating and capital costs. • Review, update and audit of metallurgical test work including heap leach options. • Development of a project financial model. • Completion of a revised BFS. As a result of Mineral Resource modelling the global Mineral Resource for the Nullagine Gold Project is estimated at 28.8Mt at 1.24 g/t Au for 1.15M ounces. Optimisation has generated an Ore Reserve of 7.9Mt at 1.81 g/t Au for 463,000 ounces. The update of the BFS brought into the mining plan a number of additional deposits and extension of the resource envelope not previously fully tested in the earlier studies. As a result, a nine hole diamond drilling programme was conducted in November 2009 to provide sufficient samples to undertake test work to further refine metallurgical recovery and variability on low grade (0.5 g/t Au to 1.0 g/t Au) and high grade (+1 g/t Au) ore types. A total of 203 metres of HQ₃ diamond core was recovered. EXPLORATION UNDERTAKEN Drilling Programs As noted above, diamond drilling was conducted to collect core samples for a range of testing. A nine hole programme was designed and implemented in November 2009 over several of the Company’s tenements. The programme was designed to collect sufficient samples to provide for: • Geotechnical and geological characterisation • Variability testing for process design • To cover the metallurgical response of mineralized zones brought to account since the

previous feasibility study was completed. The program was carried out over 3 weeks, drilling 127.9m of pre-collar and 203.3m of HQ₃ diamond core. Four holes were drilled on the Golden Eagle prospect targeting areas of the pit that had no metallurgical information; two on the Bartons prospect which were planned to test both the fresh and oxide mineralisation within the proposed pit and one each on the Shearers, Golden Gate and All Nations prospects. The results of this test work and analysis of results are expected to be completed in the second quarter of calendar 2010.



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Resource Estimation – Golden Gate Satellite Deposits

CSA Global Pty Ltd (CSA) was commissioned by the Company to undertake Mineral Resource estimates for five satellite deposits located adjacent to Golden Gate at the Nullagine Gold Project. The five deposits, Condor, Crow, Falcon, G-Reef and Harrier are located east of the township of Nullagine in the Pilbara region of Western Australia and are collectively termed “Golden Gate Satellites”. The five deposits have a combined Mineral Resource of 459,000 tonnes at 3.1 g/t Au for 45,500 contained ounces based upon a 0.5g/t gold cut off. The Mineral Resource for the Nullagine Gold Project is now estimated at 28.8Mt at 1.24 g/t Au for 1.15M ounces contained.

Table 1: Nullagine Gold Project Mineral Resource Estimate November 2009

Measured Indicated Inferred Total

Deposit

Mt Grade Mt Grade Mt Grade Mt Grade Ounces

(g/t Au) (g/t Au) (g/t Au)

(g/t Au) (Au)

Golden Eagle² 11.43 1.26 4.60 1.02 4.04 1.00 20.07 1.16 749,000 Shearers² 0.59 1.09 1.04 0.87 0.40 0.90 2.03 0.93 61,000 Bartons² 1.33 1.47 0.85 1.48 0.37 1.70 2.55 1.51 125,000 All Nations² 1.11 1.30 0.19 1.04 0.14 1.10 1.45 1.25 58,000 Golden Gate (ABCD Reef)² 0.58 3.24 0.11 2.60 0.68 3.12 69,000 Golden Gate Satellites³ 0.33 3.00 0.13 3.40 0.46 3.10 45,000 Otways³ 0.61 0.76 0.44 0.91 1.04 0.82 27,000 Little Wonder³ 0.58 1.22 - - 0.58 1.22 22,900 Totals 14.46 1.28 8.78 1.26 5.63 1.12 28.86 1.24 1,156,900

Notes:

1. Figures in Table may not sum due to rounding. 2. The Mineral Resources were estimated using Multiple Indicator Kriging methodology for grade estimation by Hellman and Schofield Pty Ltd. 3. The Otways, Little Wonder and Golden Gate satellite deposits namely Falcon, Harrier, Crow, G-Reef and Condor were estimated using

Ordinary Kriging methodology for grade estimation by CSA Global. 4. The table excludes royalties payable to third parties. 5. The Golden Gate and Bartons deposits are the subject of a mining licence agreement whereby Millennium has the sole and exclusive right to

explore and mine gold and other minerals. Millennium then is required to pay 25% of the net proceeds to the tenement owners (Livestock Marketing Pty Ltd, Duncan Thomas Young, Simba Holdings Pty Ltd and Ronald Lane Swinney) after mining and processing cost deductions.

Compliance Statements

The reported Mineral Resource as it relates to Golden Eagle, Bartons, Shearers, All Nations, Little Wonder and Golden Gate ABCD reefs has been compiled by Mr Nic Johnson. Mr Johnson is a Member of the Australian Institute of Geoscientists and an employee of Hellman & Schofield Pty Ltd. He has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a Competent Person as defined in the ‘Australasian Code for Reporting of Mineral Resources and Ore Reserves’ of December 2004 (“JORC Code”) as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia. The Competent Persons listed consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. The reported Mineral Resource as it relates to the Otways, Little Wonder and Golden Gate satellite deposits was completed under the overall supervision and direction of Steven Hodgson, MAIG, of CSA Global who is a Competent Person as defined by the Australasian Code for the Reporting of Exploration Results, Mineral Resources or Ore Reserves (JORC Code 2004 Edition) and who consents to the inclusion in this report of the matters based on the information in the form and context in which it appears. The information in this report that relates to in-situ Mineral Resources based on information provided by Millennium Minerals Limited. The Mineral Resource estimate was compiled by Steven Hodgson, MAIG, of CSA Global. David Williams, MAusIMM, of CSA Global was responsible for the technical review of the Mineral Resource estimate.



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Figure 1: RC Drilling at Golden Eagle

Figure 2: Nullagine Gold Project Location Plan

Feasibility Study Review

The Nullagine Gold Project is a 1.1 million ounce gold Mineral Resource that was subject to a detailed feasibility study completed in early 2006 and revised in early 2007 contained within 5 deposits on granted mining leases. The largest deposit is Golden Eagle located approximately 10 kilometres south of the township of Nullagine and contains 65% of the total Mineral Resource inventory. Much of the permitting and design work for a 1 million tonne per annum Carbon-In-Leach (CIL) processing facility has been completed providing for an early start to development when a decision to mine is made.



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The Company re-examined the basic economics of the Project in light of improvements in the gold price and the more positive economic conditions generally. The current Mineral Resource estimate for the five project areas now totals 28.86 Mt @ 1.24 g/t Au using a 0.5 g/t Au cut-off grade for approximately 1.156 million ounces contained gold. A total of 23.24 Mt at 1.27 g/t Au is contained within the Measured and Indicated Mineral Resource categories representing approximately 80% of the total Mineral Resource. The feasibility Study review involved the following: • Re-optimisation of resource models using a USD900/oz gold price, an exchange rate of

A$0.85, a lower gold cut-off grade of 0.5g/t Au and updated operating costs. • Review and update of all operating and capital costs. • Review, update and audit of metallurgical test work including heap leach options. • Development of a project financial model. • Completion of a revised Feasibility Study. Results of the re-optimisation and associated pit design work generated a Proven and Probable Ore Reserve estimated at 7.97Mt at 1.8 g/t Au for 463,000 ounces of contained gold. The Ore Reserve is presented in Table 2.

Table 2: Nullagine Project Ore Reserves

Proven Probable Total

Pit Ore (t) Grade (g/t) Ore (t)

Grade (g/t) Ore (t)

Grade (g/t)

Golden Eagle 5,149,400 1.6 579,100 1.5 5,728,500 1.6

Bartons 663,100 1.8 313,200 1.9 976,300 1.9

All Nations 313,400 1.8 20,100 1.6 333,500 1.8

Shearers 172,500 1.7 199,500 1.3 372,000 1.5

Golden Gate 314,400 3.7 66,000 3.9 380,400 3.8

Condor 61,000 3.3 61,000 3.3 Crow 14,000 4.4 14,000 4.4 Falcon 70,000 1.0 70,000 1.0 Greef 7,000 2.1 7,000 2.1 Harrier 34,000 2.2 34,000 2.2

Totals 6,612,800

1.8 1,365,100 2.0 7,975,000 1.8

Notes:

1. Numbers may not sum due to rounding. 2. Golden Gate Area comprises 5 small deposits being Falcon, Harrier, Crow, G Reef and Condor.

The information in this public statement that relates to the Ore Reserves at the Millennium Minerals Nullagine Project is based on information compiled by Mr Steve Lampron and Mr. Daniel Tuffin. The Ore Reserve estimate was completed by Mr. Daniel Tuffin of Auralia Mining Consulting. Mr Daniel Tuffin is a Member of the Australasian Institute of Mining and Metallurgy (#228649) and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that they are undertaking to qualify him as a Competent Person as defined in accordance with the Australasian Joint Ore Reserves Committee (JORC)

Financial Modelling

The base case option selected for the update of the feasibility study is a nominal 7 year operation mining and processing 7.97Mt ore using an average gold extraction of 87% yielding 404,000 ounces. This case is confined to those mineral resources classified under the Measured and Indicated resource categories as defined by the JORC Code. Mine design and scheduling were driven by a desire to maximise gold production in the first four years of the project life. The base case plan shows milling throughput rates of 1.25Mt per annum in the first four years, reverting to



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1Mt per annum for the remaining three years. The higher milling rates in the early years are achievable within the existing process design and exploit excess mill capacity when treating a majority of oxide ore types. Taking this approach gives annual gold production for years 1 to 4 of between 60,000 oz and 72,000 oz, reducing to between 45,000 oz and 50,000 oz for the remaining three years reflecting a mill throughput rate of 1Mt per annum.

The rationale for the two step production plan recognises that upside exists in bringing Inferred Mineral resources into the Measured and Indicated categories, capable then of being assessed for reserve status; and the potential to exploit mineralised waste and other material through lower cost heap leach operation. In addition, depth and strike extension potential exists that will require further exploration to define. These upside factors will have been assessed, and if the potential is realised, brought into the project well before Year 4 with the objective of producing an increase in gold output before then. Figure 3: Old Workings – All Nations



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Table 3: Nullagine Project Metrics Oct-09 Item Unit Metrics Production Ore production Mt 7.97 Ore grade g/t Au 1.80 Processing recovery % 87 Gold production koz 404 Mining strip ratio waste t: ore t 3.45 Life of mine years 7 Operating Costs Mining $/t mined 17.06 Processing $/t milled 18.00 Other $/t milled 2.94 Total $/t milled 38.00 Total $/oz 594 Capital Expenditure Plant $M 40.42 Infrastructure $M 16.60 Working Capital $M 6.30 Sustaining/Rehabilitation $M 8.00 EPCM $M 7.00 Total $M 78.32 Economics Revenue $M 538 Operating cash flow $M 212 NPV (7% discount rate, after tax, ungeared) $M 79 EBIT $M 142 Break Even Grade* g/t Au 1.31 Net Cash Flow (after tax profit) $M 117 IRR % 47% C1 Costs in USD 594 Pay Back Period (1.6 years from start of production) <2 years Assumptions Gold price AUD$/oz 1185 Discount rate % 7%

Tax rate % 30% Royalty rate % 2.5%

*the head grade required to generate an after tax net profit of zero dollars. Input costs, both capital and operating, have been updated to September 2009 levels. Incorporation of the mining schedules, costs and economic factors produces the key project metrics set out above. The base case shows an initial mine life of 7 years producing 404,000 ounces at a robust gross operating margin of 44%. Mining costs reflect an Owner operate “supply and maintain” approach with the Company maintaining direct control of mining operations. Process costs assume single stage SAG milling and on-site diesel power generation. Labour costs have been referenced to industry surveys dated October 2009 and the fly in-fly out manning levels



8

assumes a two week on – one week off schedule. Average C1 cash costs amount to USD594/oz under these assumptions. The capital estimate for the process plant assumes all new equipment though the Company owns core CIL leach plant equipment. The hard number estimate for the plant will recognise this fact and the required refurbishment of existing plant following detailed engineering and ahead of a start to construction. The key outputs are summarised above in Table 3. The gold price assumption reflects current Australian dollar denominated pricing that matches the price used for pit optimisation and mine design. The gross operating margin of 44% is robust under the realistic operating cost assumptions used. Investment payback occurs mid way through the second production year, demonstrating the project’s capacity to fund further investment early in the project life. The break-even grade at 1.31 g/t provides a satisfactory margin to volatility in actual operating performance as this grade is below the average head grade of Golden Eagle, the largest pit and primary ore source for the project. Going Forward 2010 looks to be a promising year with Project construction scheduled to commence at the completion of Project financing. Exploration will be initially targeting the previously defined Inferred Mineral Resources around the current ore bodies with a view to converting those resources to the Measured and Indicated categories and eventual conversion where economic to Ore Reserve. Further drilling will also be conducted at Otways and Gambols Hill where the potential for additional gold resources is considered high. The third area of focus is the potential to recover gold from low grade ore sources and from mineralised material scheduled for removal from the open pit operations. A scoping level study conducted during the second half of the year established the parameters required to mount a successful heap leach operation that would, if proven (from further drilling and testing) allow a stage 2 heap leach operation to be scheduled early in the base project mine life. The potential sources of feedstock consist of some 5 million tonnes of low grade material scheduled for designation as mineralised waste in the mine plan, and the potential for a primary source of low to medium grade material from the Golden Eagle South West Prospect. Further work is scheduled on this project in the coming year.


Directors’ Report

9

The Directors of Millennium Minerals Limited (“Company” or “Millennium”) present their report on the Company for the financial year ended 31 December 2009.

DIRECTORS

The names and details of the Directors of the Company in office during or since the end of the financial year are:

Peter Rowe (Non-Exec Chairman – Appointed 21 July 2009)

Mr Rowe has broad international mining industry experience gained over a 35 year career based mainly in Australia and South Africa. Following 20 years with Anglo American and De Beers, he moved to Australia in the early 1990s. Mr Rowe was project director of the Fimiston Expansion (Kalgoorlie Superpit), general manager of the Boddington Gold Mine and of the Boddington Expansion Project and managing director and CEO of Bulong Nickel. He headed up AngloGold Ashanti Australia and then moved to Johannesburg where he recently retired from his position there as executive vice president - business effectiveness. He is currently a non-executive director with five ASX listed companies.

Mr Rowe holds a chemical engineering degree and is a Fellow of the AusIMM and of the Australian Institute of Company Directors.

Clive Donner BComm (Non-Exec Director)

Mr Donner has substantial skills in the mining sector in fundraising and project financing spanning over 25 years. He was previously the project finance head and Director responsible for Rothschild Australia's project finance mining business in Western Australia before spending almost a decade in venture capital and equities in the resources sector. Mr Donner is the Managing Director of LinQ Capital Limited (as the responsible entity for the LinQ Resources Fund, a mining and resources fund specialising in small cap resources).

Ross Gillon – BJuris, LLB (Non-Executive Director)

Mr Gillon is a solicitor in Perth and has previously been a director of a number of exploration companies.

Mr Gillon was appointed a Non-Executive Director of the Company on 16 June 2003.

Simon Durack–CA, B.Comm, Post GradDip Bus, FCIS (Non-Executive Director, Appointed 2 February 2009)

Mr Durack is an experienced Chartered Accountant, practicing Company Secretary and Director, and brings to the Company over 29 years commercial experience gained working in Australia, South East Asia and Europe. Mr Durack has held many senior Financial, Secretarial and Director positions with both large public and private entities in a diverse range of industries.

Michael Grigson – BSc(Geology) PhD(Geology) (Exploration Director – Resigned 2 Feb 2009 )

Dr Grigson has over 25 years experience in the mining industry and gained his PhD from the University of WA through the study of regional and mine-scale structural controls on gold mineralisation. He has been involved with and supervised a number of successful, large-scale exploration and development projects in WA, and has extensive experience at the generative and grass roots stages of gold and base metal exploration in Archaean and Proterozoic terranes.


Directors’ Report

10

DIRECTORSHIPS OF OTHER LISTED COMPANIES

Directorships of other Australian listed companies held by directors in the three years immediately before the end of the financial year are as follows:

Name Company

Peter Rowe Red 5 Limited (appointed October 2004), Ammtec Limited (appointed February 2009), IronClad Limited (appointed February 2009) and Adamus Resources Limited (appointed July 2009).

Clive Donner Matrix Metals Limited (appointed 1 October 2006, resigned 28 October 2008), Dioro Exploration NL (appointed 1 February 2005, resigned 7 May 2007), and LinQ Capital Limited (as the responsible entity of a unit trust known as the LinQ Resources Fund).

Ross Gillon Red River Resources Limited (appointed 28 November 2005) and Terrain Minerals Limited (appointed 27 May 2008, resigned 4 March 2009).

Simon Durack ROMAC Rotary Medical Aid for Children Limited (resigned 15 February 2009); Zambezi Resources Ltd (appointed 3 August 2009) and Continental Coal Limited (appointed 21 May 2009, resigned 11 December 2009).

Michael Grigson Nil

DIRECTORSHIPS INTERESTS AND BENEFITS

As at the date of this report, the interests of the Directors and their associates in the shares of the Company are:-

Ordinary

Shares Options over Ordinary Shares

Un-Listed Expiry Exercise price ($)

Peter Rowe - - - -Clive Donner - - - -Simon Durack - - - -Ross Gillon 712,502 1,500,000 19/12/11 0.29


Directors’ Report

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Payments:

Mr Ross Gillon is a partner of Lawton Gillon which provides legal services to the Company. During the period that Partnership was paid $7,500 (2008: $38,800).

Mr Clive Donner is a director of LinQ Corporate Pty Ltd, which was paid $104,117.60 during the year for office rental and mandate charges. Mr Simon Durack is a director of Advanced Management Services Australia Pty Ltd, a company owned and controlled by him, which was paid $25,000 for CFO services, between 1 August and 31 December 2009.

These fees and disbursements exclude benefits which have been included in the aggregate amount of emoluments received or due and receivable by Directors as director’s fees and shown in the financial statements, prepared in accordance with the Corporations Regulations, or the fixed salary of a full time employee.

COMPANY SECRETARY

Mark Freeman (Company Secretary – Resigned 11 February 2009)

Mr Freeman is a Chartered Accountant and has more than 11 years' experience in corporate finance and the resources industry. He has experience in strategic planning, business development, acquisitions and mergers, project development and general management. Previous and current corporate experience includes companies such as Liberty Resources NL, Mirabela Nickel Ltd, Albidon Ltd and Sally Malay Mining Ltd. In addition, Mr Freeman is a graduate of the University of Western Australia with a Bachelor of Commerce with a double major in Banking & Finance and Accounting as well as holding a Graduate Diploma in Applied Finance with a major in Investment Analysis from the Securities Institute of Australia. Mr Freeman is a Director of Meccano Pty Ltd, which provided Company Secretarial consultancy services to the Company.

Mark Killmier (Company Secretary – Resigned 16 April 2010)

Mr Killmier is a Fellow of the Australian Society of Certified Practising Accountants and has more than 25 years’ experience in finance and the mining, engineering and manufacturing industries, both in Australia and the United Kingdom. His experience includes strategic planning, and the areas of change, supply chain, project and general management. In addition, Mr Killmier holds a Master of Business Administration (MBA) postgraduate degree from the University of Western Australia, a Bachelor of Economics degree majoring in Accounting from the University of Adelaide, and has completed a Graduate Diploma in the Corporate Governance of ASX Listed Entities.

Pierre Malherbe (Company Secretary – Appointed 16 April 2010)

Mr Malherbe served as Chief Financial Officer of the Company since February 2009 and has a sound knowledge of the Company and its operations. Mr. Malherbe's experience both in South Africa and Australia includes 18 years in the Investment Banking, Finance and Mining industries gained with some of the major banks in South Africa where he held senior financial and managerial positions within these Banks and was responsible for managerial, transactional and financial input across all spectrums, including: mining, construction, aviation and other capital intensive projects as well as senior management positions within mining and financial industries in Australia. In addition, Mr Malherbe holds a Master of Business Management (Master of Commerce) postgraduate degree from the University of Johannesburg, an Honours degree majoring in Accounting - Bachelor of Commerce (Hons)(Acc) and a Bachelor of Commerce Investment Management degree from the University of Johannesburg.


Directors’ Report

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PRINCIPAL ACTIVITY

The principal activity of the Company during the year was the continued exploration for gold and development of the Nullagine Gold Project in Western Australia.

RESULT

The loss after income tax for the financial year was $824,709 (2008: loss of $8,780,511).

DIVIDENDS

No dividend was paid during the financial year and the directors do not recommend payment of a dividend.

REVIEW OF OPERATIONS

The prime activity of the Company during the 2009 financial year was the continued exploration for gold at the Nullagine Gold Project in the Pilbara region northern Western Australia.

A detailed review of the operations for the year is included in the Review of Operations section of the Annual Report.

STATE OF AFFAIRS

In the opinion of the Directors, there were no other significant changes to the state of affairs of the Company that occurred during the financial year under review not otherwise disclosed in this report or the financial statements.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

Rights issue

On 23 December 2009, the Company issued a prospectus offering shareholders the opportunity to participate in a 2 for 8 Rights Issue with one free attached option. The Rights Issue was planned to raise $5,242,067. The funds were to be used to progress the Nullagine gold project and for working capital purposes. On 11 February 2010, 17,609,073 shares were taken up by shareholders raising a total of $792,408. A large proportion of the shortfall shares have already been committed and this together with the shortfall applications received amounted to $3,038,519. The total received from rights issue entitlements, commitments and shortfall applications amounted to $3,830,927.

There was no other matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in financial years subsequent to 31 December 2009.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The Company expects to develop the project to mine construction within the forthcoming year while continuing exploration for gold at its existing tenements at Nullagine.


Directors’ Report

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REMUNERATION REPORT

The Remuneration Report outlines the remuneration arrangements which were in place during the year, and remain in place at the date of this report, for the Directors and executives of the Company.

The information provided within the remuneration report includes remuneration disclosures that are required under Accounting Standard AASB 124 ‘Related Party Disclosures’. These disclosures have been transferred from the financial report and have been audited.

Remuneration Philosophy

The performance of the Company depends on the quality of its Directors and executives. To prosper, the Company must attract, motivate and retain highly skilled Directors and executives.

To this end, the Company embodies the following principles in its remuneration framework:

• Retention and motivation of key executives;

• Attraction of quality management to the Company; and

• Performance incentives which allow executives to share the rewards of the success of the Company.

Remuneration Committee

As part of the Company’s commitment to improved corporate governance, a separate remuneration committee was formed during the year. Messrs Rowe, Donner and Gillon were appointed to the Committee.

The Committee assesses the appropriateness of the nature and amount of remuneration of Directors and senior executives on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a highly qualified Board and executive team.

Remuneration Structure

The structure of non-executive Director and senior executive remuneration is separate and distinct.

Objective

The Board seeks to set remuneration at a level which provides the Company with the ability to attract and retain Directors and executives of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

Structure

Remuneration of non-executive Directors comprises fees determined having regard to industry practice and the need to attract appropriately qualified persons. Fees do not contain any non-monetary elements.

Remuneration of executive Directors and other senior executives is determined after consideration is given to normal commercial rates of remuneration for similar levels of responsibility, industry practices and the need to obtain appropriately qualified persons to fill the executive positions necessary for the Company to operate. Remuneration, at the current exploration stage, is not linked to the performance of the Company, but rather on the ability to attract and retain Directors and senior executives of the highest calibre within the industry.


Directors’ Report

14

The granting of remuneration options is done by the Board. The Board grants the options by giving consideration to the seniority of the employee’s position and the need to retain highly qualified employees and executive team. The granting of options is in substance a performance incentive which allows employees to share the rewards of the success of the Company.

Directors’ and Key Management Remuneration

Details of the remuneration of each Director of Millennium, including their personally-related entities, for the year ended 31 December 2009 are set out as follows:

Year

Short Term Post Employment

Equity Compensatio

n

Directors Fees

$

Consulting Fees

$

Non-monetar

y Benefits

$

Superannuation $

Value of Share Options

$

Total $

Mr P Rowe (Non Executive Chairman - Appointed 21 July 2009)

2009

24,563 (92%) - - 2,211

(8%) - 26,774

2008 - - - - - -

Mr C Donner

2009

36,000 (100%) - - - - 36,000

2008

43,333 (100%) - - - - 43,333

Mr R Gillon

2009

36,000 (100%) - - - - 36,000

2008

43,333 (100%) - - - - 43,333

Mr S Durack (appointed 2 February 2009)

2009

36,000 (100%) - - - - 36,000

2008 - - - - - Nil

Mr M Grigson Resigned 2 Feb 2009

2009

27,704 (95%) - - 1,454

(5%) - 29,158

2008

207,692 (59%) - - 18,692

(5%)124,946

(36%) 351,33

0Mr M Freeman (Company Secretary – resigned 11 Feb 2009)

2009 - 6,600

(100%) - - - 6,600

2008 - 82,000

(100%) - - - 82,000

Mr M Killmier (Company Secretary – appointed 11 Feb 2009; and Chief Financial Officer )

2009 - 54,660

(100%) - - - 54,660

2008 - 111,462

(92%) - 10,032(8%) - 121,49

4

The Company did not have any other executives (“specified executive”) with authority for the strategic direction and management of the Company during the year.


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Key Management Employment Contracts

Michael Grigson, Director (Resigned 2 February 2009):

• Term of agreement – The employment contract commenced on 26 October 2007 for a fixed 1 year term subject to re-election as required by the Company’s constitution.

• A fee of $200,000 (plus superannuation) per annum, reviewed annually by the Board.

Peter Rowe, Director:

• Term of agreement – no fixed term.

• A fee for the period ending 31 December 2009 of $24,563 (inclusive of superannuation), to be reviewed annually by the Board.

Ross Gillon, Director:



Clive Donner, Director:



Simon Durack, Director:



Mark Freeman, Company Secretary (Resigned 11 February 2009):

• Term of agreement – The employment contract commenced on 7 October 2007 for no fixed term and one month’s notice.

• Annual consulting fees of $6,600 were paid for the period ending 31 December 2009.

Mark Killmier, Company Secretary- (Resigned 16 April 2010 and Chief Financial Officer – Resigned 11 February 2009):

• Term of agreement – The current Chief Financial Officer and Company Secretary employment contracts commenced on 3 October 2007 and 11 February 2009 respectively, for no fixed term and may be terminated with one month’s notice.

• Annual consulting fees of $54,660 were paid for the period ending 31 December 2009.


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Pierre Malherbe, Company Secretary – (Appointed 16 April 2010)

• Term of agreement – The Company Secretary employment contract commenced on 16 April 2010 for no fixed term and may be terminated with one month’s notice.

• No fees were paid to Mr Malherbe during the period as his appointment was after the period ending 31 December 2009.

MEETINGS OF DIRECTORS

The number of meetings of Directors held during the year and the number of meetings attended by each Director was as follows:

Directors Meetings

No. of Meetings Held Whilst in Office Meetings Attended

Peter ROWE 6 6

Simon DURACK 11 11

Michael GRIGSON 2 2

Clive DONNER 12 12

Ross GILLON 12 11

INSURANCE OF DIRECTORS AND OFFICERS

The Company agreed to pay a premium in respect of a contract insuring the Directors and Officers of the Company. Full details of the cover and premium are not disclosed as the insurance policy prohibits the disclosure. No liability has arisen under this indemnity as at the date of this report. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify any officer or auditor of the Company or of any related body corporate, against a liability incurred as such by an officer or auditor.


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SHARE OPTIONS

Options on Issue

At the date of this report unissued shares of the Company under option are:

Expiry Date Number of Options Exercise Price 19 December 2011 (unlisted) 6,700,000 29 cents 19 December 2011 (unlisted) 5,000,000 23 cents 31 October 2011 (unlisted) 3,500,000 30 cents 31 October 2011 (unlisted) 8,500,000 20 cents 21 February 2012 (unlisted) 2,500,000 20 cents 28 February 2013 (listed) 8,804,598 7.5 cents 2009 2008 Number Number

Options - listed Balance at beginning of year - - Issued during year - - Exercised during year - - Expired during year - - Balance at end of year - -

Options - unlisted Balance at beginning of year 29,900,000 16,500,000 Issued during year 16,440,000 Share Capital consolidation - - Exercised during year - - Expired or cancelled during year (3,700,000) (3,040,000)

Balance at end of year 26,200,000 29,900,000


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No options were issued to Directors during the year.

A total of 3,700,000 were cancelled during the year ended 31 December 2009 due to employees leaving the Company. The 700,000 options issued to employees during the year expire on 19 December 2011.

The 11,000,000 options on issue at 31 December 2007, together with the 14,500,000 issued to directors on 25 February 2008 are the only options currently issued to directors as at 31 December 2009. None of these options were exercised during the year. Those options issued to directors prior to 31 December 2007 all expire on 19 December 2011. The 12,000,000 options issued prior to 31 December 2008 expire on 31 October 2011 and the remaining 2,500,000 also issued prior to 31 December 2008 expire on 21 February 2012. All directors’ options are fully vested.

CORPORATE GOVERNANCE

Introduction

The Company has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity and pursuing the true spirit of corporate governance commensurate with the Company’s needs. To the extent they are applicable; the Company has adopted the Eight Essential Corporate Governance Principles and Best Practice Recommendations (“Recommendations”) as published by ASX Corporate Governance Council. As the Company’s activities develop in size, nature and scope, including through the Nullagine Gold Project, the size of the Board and the implementation of additional corporate governance structures will be given further consideration. The Company’s Board Charter, Code of Conduct, Trading Policy, and Company Securities policy documents have been posted on the website. Board Composition and Remuneration

The skills, experience and expertise relevant to the position of each Director who is in office at the date of the financial report and their term of office are detailed in the Directors' Report. There is no formal policy or procedure regarding the taking of professional advice by the independent directors; however no restrictions are placed on the independent directors to take advice on matters arising from their roles as independent directors of the company, or the reimbursement of the costs incurred by the company. Mr Rowe is considered by the Board to be an independent director. The determination by the Board as to whether individual directors are independent is a matter of judgement. In making this determination the Board has followed the guidance in Box 2.1 of the Recommendations and the Guide to Reporting on Principle 2. The Board considers the relationships the independent directors have with the company do not materially impact on their independence. In determining the materiality of these relationships, the Board has considered both quantitative and qualitative factors. In determining the quantitative factors the Board considers that a relationship is immaterial where it is equal to or less than 5% of the base amount. In applying this level of materiality to the relationship of the independent directors in the case of shareholders and suppliers, the Board considers that the independent directors’ interest is less than 5% of the base amount. In respect to the qualitative measures the Board has considered the factors affecting the independent directors’ relationship with the company and consider these qualitative factors to be immaterial in the assessment of their independence.


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There is an agreed procedure by the board of directors to take independent professional advice at the expense of the company. Disclosure as to the nature and amount of remuneration paid to the Directors of the Company is included in the Directors report and notes to the financial statements in the company’s annual report each year. The structure and objectives of the remuneration policy and its links to the Company’s performance is disclosed in the annual Directors’ Report. The only form of retirement benefit to which non-executive directors are entitled, is superannuation. The Board has accepted the following definition of an Independent Director:

“An Independent Director is a Director who is not a member of management (a Non-Executive Director) and who:

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

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

• is not a principal of a professional adviser to the Company or another group member;

• is not a significant consultant, supplier or customer of the Company or another group member, or an officer of or otherwise associated, directly or indirectly, with a significant consultant, supplier or customer;

• has no significant contractual relationship with the Company or another group member other than as a Director of the Company;

• 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

• 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 interests of the Company.”

Millennium considers a significant consultant, supplier or customer to be material if the total of their annual invoices amounts to more than 5% of the Company’s total expenditure in that category.

Consistent with the Corporations Act the Company considers that the Board should have at least three Directors and strives to have a majority of Independent Directors. Currently the Board has four directors, with all four being non-executives. Messrs Donner, Durack and Gillon are not considered to be independent as Mr Donner and Mr Durack are officers of a substantial shareholder and Mr Gillon is a principal of a professional advisor to the Company. The number of Directors is maintained at a level which optimises the spread of the workload and efficient decision making.

The composition of the Board is reviewed on an annual basis to ensure the Board has the appropriate mix of expertise and experience. Where a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the services of a new Director with particular skills, the Board determines the selection criteria for the position based on the skills deemed necessary for the Board to best carry out its responsibilities and then appoints the most suitable candidate who must stand for election at the next general meeting of shareholders.


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Performance of Directors

The performance of Directors is assessed through review by the Board as a whole of director’s attendance at and involvement in Board meetings, his performance and other matters identified by the Board or other directors. Due to the Board’s assessment of the effectiveness of these processes, the Board has not otherwise formalised measures of a director’s performance.

The Company has not conducted a performance evaluation of the members of the Board during the reporting period. However, the Board conducts a review of the performance of the Company against budgeted targets on an ongoing basis.

Conflict of Interest

In accordance with the Corporations Act 2001 and the Company’s constitution, Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes a significant conflict exists, the Director concerned does not receive the relevant Board papers and is not present at the Board meeting whilst the item is considered. Details of Directors related entity transactions with the Company are set out in the related parties note in the financial statements.

Corporate Reporting

The Chief Executive Officer and Chief Financial Officer have made the following certifications to the board:

• that the company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the company and are in accordance with relevant accounting standards;

• that the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board and that the company’s risk management and internal compliance and control is operating efficiently and effectively in all material respects.

Code of Conduct The Company has developed a Code of Conduct (the Code) which has been fully endorsed by the Board and applies to all directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behavior and professionalism and the practices necessary to maintain confidence in the Company’s integrity. The Code of Conduct appears on the company’s website. In summary, the Code requires that at all times all company personnel act with the utmost integrity, objectivity, in the best interests of the company and in compliance with the letter and the spirit of the law and company policies. Any breaches of the Code are reported to the Chairman in the first instance for notification to the Board. The directors are satisfied that the Company has complied with its policies on ethical standards, including trading in securities.

Continuous disclosure and shareholder communication The Company has a policy that information concerning the Company that a reasonable person would expect to have a material effect on the price of the company’s securities is continuously disclosed as required under the Australian Stock Exchange (ASX) listing rules. The company encourages communication with shareholders and the attendance and effective participation by shareholders at general meetings. The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure


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requirements of the ASX Listing Rules and overseeing and co-coordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the public. All information disclosed to the ASX is posted on the company’s website as soon as it is disclosed to the ASX. Annual and half yearly reports are made available on the company’s website and mailed to those shareholders who request a hard copy.

Explanations for Departures from Best Practice Recommendations

Principle 1 recommendation 1.1, 1.2,1.3 Notification of Departure: The Company has not: (1) formally disclosed the functions reserved to the Board and those delegated to management; (2) the process for evaluating the performance of senior executives, and; (3) whether a performance evaluation for senior executives has taken place in the reporting period and whether it was in accordance with the process which is to be disclosed. Explanation for Departure: The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management, and evaluating the performance of senior executives. The Board has established a framework for the management of the Company and the roles and responsibilities of the Board and management. Previously, due to the small size of the Board and of the Company, the Board did not think that it was necessary to formally document the roles of the Board and management as these roles were clearly understood by all members of the Board and management. The Board is responsible for the strategic direction of the Company, establishing goals for management and monitoring the achievement of these goals, monitoring the overall corporate governance of the Company and ensuring that shareholder value is increased. Principle 2 Recommendation 2.1 Notification of Departure: The Board does not have a majority of independent Directors. Explanation for Departure: The Board has been structured such that its composition and size will enable it to effectively discharge its responsibilities and duties. Each Director has the relevant industry experience and specific expertise relevant to the Company’s business and level of operations. The Board considers that its structure is, and will continue to be, appropriate in the context of the Company’s recent history. The Company considers that the non-independent Directors possess the skills and experience suitable for building the Company. Furthermore, the Board considers that in the current phase of the Company’s growth, the Company’s shareholders are better served by directors who have a vested interest in the Company. The Board intends to reconsider its composition as the Company’s operations evolve, and may appoint independent directors as it deems appropriate. As of the date of this report the company has 3 non-independent directors and 1 independent director. Principle 2 Recommendation 2.4 Notification of Departure:


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The full Board carries out the role of a nomination committee. The Board has not adopted a charter relevant to the specific functions of a nomination committee. The Board does have a separate remuneration committee to oversee recruitment, performance and remuneration at CEO and senior management levels. Explanation for Departure: The Board considers that no efficiencies or other benefits would be gained by establishing a separate nomination committee. In the future, as the company grows and increases in size and level of activity including through the Nullagine Gold Project, the Board will reconsider the establishment of a separate nomination committee. Principle 2 Recommendation 2.5 Notification of Departure: The Company has not disclosed the process for evaluating the performance of the board and of individual directors. Explanation for Departure: The Board considers that at this time no efficiencies or other benefits would be gained by introducing formal evaluations. In the future, as the company grows and increases in size and activity, the Board will consider the establishment of formal board and individual director evaluation processes. Principle 2 Recommendation 2.6 Notification of Departure: The Company has not disclosed whether a performance evaluation for the board and directors has taken place in the reporting period and whether it was in accordance with a disclosed process. Explanation for Departure: The Board considers that at this time no efficiencies or other benefits would be gained by introducing formal evaluations. In the future, as the company grows and increases in size and activity, the Board will consider the establishment of formal board and individual director evaluation processes. Principle 4 Recommendation 4.1,4.2, 4.3, 4.4 Notification of Departure: There is no separate Audit Committee. Explanation for Departure: The Company’s financial statements are prepared by the Chief Financial Officer and reviewed in detail by the full Board. The Board also relies on the functions and capabilities of its external auditors to ensure proper audit of financial statements. While the Board considers this process sufficient to ensure integrity in financial reporting in the current circumstances, it will continue to monitor whether any further safeguards are required and make changes as appropriate.


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Principle 6 Recommendation 6.1,6.2

Notification of Departure: The Company does not have a formal documented Shareholder communication policy. Explanation for Departure: The Company strongly encourages more communication between the shareholders and the Company and board. All general meetings include briefings by board members to provide a deeper insight into the Company, opportunities for the shareholders to have their questions answered, and following all general meetings, the directors encourage shareholders to chat informally with them. As the Company grows in size, the board is very keen to develop more formal and expansive communications with shareholders. Principle 7 Recommendation 7.1 Notification of Departure: The Company has not disclosed its risk management policies and assessment framework. Explanation for Departure: While the Company has informal risk management policies and frameworks, it is in the process of formalizing these, and they will then be placed on the Company’s website. Principle 8 Recommendation 8.1 Notification of Departure: The Company does not have in place a formal process for evaluation of the Board, its committees, individual directors and key executives. Explanation for Departure: While the company has a Remuneration Committee, due to the small size of the Company and early stages of the Nullagine Gold Project, it is still completing its formal remuneration policies and framework. Principle 9 Recommendation 8.3 Notification for departure: The Company has not provided the information indicated in the guide as it is still in the process of compiling its policies and framework. Explanation for Departure: Due to the company being in the early stages of the Nullagine Gold Project, including building the management team following appointment of the CEO, it is still in the process of compiling its policies and framework. Independent Professional Advice and Access to Company Information

Each Director has the right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairman, may seek independent professional advice at the Company’s expense. A copy of advice received by the Director is made available to all other members of the Board.


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Remuneration

The Board of Directors maintains remuneration policies which are aimed at attracting and retaining a motivated workforce and management team. The intention is to match the outcomes from the remuneration system with the performance of the Company and ultimately the value received by our shareholders on a long-term basis.

The Company embodies the following principles in its remuneration framework:

• retention and motivation of key executives;

• attraction of quality management to the Company; and

• performance incentives which allow executives to share the rewards of the success of the Company.

Full details of Directors’ and specified executives’ remuneration is set out in the Directors’ Report and in the Directors’ and Executives’ Disclosures note in the financial statements. Ethics

It is the policy of Millennium that all Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of Millennium. Risk Management

The Company has in place a framework to safeguard company assets and ensure that business risks are identified and properly managed. The Company has in place a number of risk management controls which include the following:

• Performance and funding of exploration activities;

• Budget controls;

• Guidelines and limits for the approval of capital expenditure and investments;

• A comprehensive insurance programme;

• Status of Mining Tenements; and

• Continuous disclosure obligations.

Management is required to provide to the Board regular reports on all these matters.

The Board receives regular reports about the financial condition and operating results of the Company. A director and the Chief Financial Officer annually provide a formal statement to the Board that in all material respects and to the best of their knowledge and belief:

• The Company’s financial reports present a true and fair view of the Company’s financial condition and operational results and are in accordance with relevant accounting standards; and

• The Company’s risk management and internal control systems are sound, appropriate and operating efficiently and effectively.


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Group Strategic Planning

The Company has adopted a formal and dynamic process of strategic planning. The Board reviews and endorses strategies designed to ensure the long term successful outcome for the Company. Trading in the Company’s Securities by Directors and Employees

The Board has adopted a policy in relation to dealings in the Company’s securities which applies to all directors and employees. Under the policy, directors are prohibited from short term or “active” trading in the Company’s securities and directors and employees are prohibited from dealing in the Company’s securities whilst in possession of price sensitive information. The Chairman or Company Secretary must be notified of any proposed transaction. Role of Shareholders

The shareholders of the Company play an important role in corporate governance by virtue of their responsibilities for voting on the appointment of directors.

The Board ensures that shareholders are kept fully informed on developments affecting the Company through:

• The Annual Report and Millennium newsletters are distributed to shareholders;

• Compliance with Australian Stock Exchange’s continuous disclosure requirements (and subsequent shareholder announcements); and

The annual general meeting and other meetings called to obtain approval for Board action.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company’s operations are subject to environmental regulation under the laws of the Commonwealth and of the State, with specific conditions relating to rehabilitation.

In the case of Approved Notices of Intent to Mine, bonds are held by the Company’s bank which may be released to the Company when Department of Minerals and Energy is satisfied that conditions imposed on those licences have been met.

Notices of Intent to Mine incorporate environmental conditions, including those related to noise, dust, water run-off, rare and endangered flora and fauna, sites of historical and aboriginal significance as well as rehabilitation criteria.

The Directors advise that during the year ended 31 December 2009, no claim has been made by any competent authority that any environmental issues condition of licence or notice of intent have been breached, or any bond forfeited.


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AUDITOR’S INDEPENDENCE DECLARATION

The following is a copy of a letter received from the Company's auditors: "Dear Sirs, In accordance with Section 307C of the Corporations Act 2001 (the "Act") I hereby declare that to the best of my knowledge and belief there have been: i) no contraventions of the auditor independence requirements of the Act in relation to the audit of the 31 December 2009 annual financial statements; and ii) no contraventions of any applicable code of professional conduct in relation to the audit. Graham Swan (Lead Auditor) Rothsay Chartered Accountants Dated 22 April 2010”

Non-Audit Services

The Board of Directors has considered the position and is satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Directors to ensure they do not impact the impartiality and objectivity of the auditor; and

• none of the services undermine the general principles relating to auditor independence as set out in Professional Statement F1, including acting in a management or a decision-making capacity for the Company or acting as advocate for the Company.

The following amounts were paid to the auditors:

2009 2008 Auditors’ Remuneration

Auditing accounts 29,000 36,000

Non-audit Services Independent report - -

Signed at Perth this 22nd day of April 2010 in accordance with a resolution of the Directors.

Simon Durack Director


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Statement of Comprehensive Income For The Year Ended 31 December 2009 NOTE 2009 2008 $ $ Revenue from ordinary activities 3 115,015 812,698 Carrying amount of non-current assets sold - (233,116)Depreciation and amortisation (53,408) (138,805)Employment /consultants (402,298) (1,959,013)Non cash fair value adjustment - (6,243,837)Finance costs (19,465) (62,100)Management and administration expenses (464,553) (956,338) (Loss) from ordinary activities before income tax expense

4 (824,709) (8,780,511)

Income tax expense 5 - - Net profit/(loss) attributable to the members of Millennium Minerals Limited

14

(824,709)

(8,780,511)

Total Changes In Equity Other Than Those Resulting From Transactions With Owners As Owners

(824,709)

(8,780,511) Earnings per share – Basic 21 (0.2232) (0.0371)

The accompanying notes form part of the financial statements.


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Balance Sheet As At 31 December 2009 NOTE 2009

$ 2008

$ Current Assets

Cash and cash equivalents 6 2,652,636 1,273,316 Trade and other receivables 7 301,728 23,509

Total Current Assets 2,954,364 1,296,825 Non-Current Assets

Exploration and evaluation expenditure

8 23,376,567 22,047,029

Property plant and equipment 9 1,351,236 2,487,320 Total Non-Current Assets 24,727,803 23,573,136 Total Assets 27,682,167 24,869,961 Current Liabilities

Trade & other payables 10 106,812 288,433 Provisions 11 - 44,147 Financial Liabilities 12 - 615,250

Total Current Liabilities 106,812 947,830 Total Liabilities 106,812 947,830 Net Assets 27,575,355 23,922,131 Equity

Contributed equity 13 55,055,172 50,577,239 Reserves 14 2,081,048 2,081,048 Accumulated losses 14 (29,560,865) (28,736,156)

Total Equity 27,575,355 23,922,131



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Statement of Cash Flows for the Year Ended 31 December 2009 NOTE 2009 2008 $ $ $ Cash Flows From Operating Activities

Rental and other income 38,083 186,314 Interest and borrowing costs paid (19,464) (60,666) Payments to suppliers and employees (988,282) (1,788,010) Interest and distributions received 62,805 251,695

Net Cash Used In Operating Activities 19 (b) (906,858) (1,410,667) Cash Flows From Investing Activities

Payments for plant and equipment - (311,138) Payment for mineral exploration areas and development

(1,329,538) (3,616,182)

Proceeds from sale of investments 59,690 - Proceeds from sale of plant and equipment - 382,629 Payments of commission on sale of plant - - Payments for mineral exploration security deposits

(306,657) -

Net Cash Used In Investing Activities (1,576,505) (3,544,691) Cash Flows From Financing Activities

Payment for feasibility study due diligence - - Proceeds from shares issued 4,477,933 - Repayments of borrowings (615,250) -

Net Cash Provided By Financing Activities 3,862,683 - Net Increase / (Decrease) In Cash Held 1,379,320 (4,955,358) Cash Held At The Beginning Of Period 1,273,316 6,227,674 Cash Held At The End Of The Financial Year 19 (a) 2,652,636 1,273,316



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Statement of Changes in Equity for the Year Ended 31 December 2009 Issued

capital Accumulated

losses Other

reserves Total Equity

At 1 January 2008 50,577,239 (19,955,645) 1,106,952 31,728,546Total income / (expense) for the period

- (8,780,511) - (8,780,511)

Issue of share capital (net of issue costs)

- - - -

Equity settled payments - - 974,096 974,096Balance at 31 December 2008 50,577,239 (28,736,156) 2,081,048 23,922,131 At 1 January 2009 50,577,239 (28,736,156) 2,081,048 23,922,131Total income / (expense) for the period

(824,709) - (824,709)

Issue of share capital (net of issue costs)

4,477,933 - - 4,477,933

Equity settled payments - - - Balance at 31 December 2009 55,055,172 (29,560,865) 2,081,048 27,575,355


Millennium Minerals Limited Notes To, And Forming Part of, the Financial Statements For The Year Ended 31 December 2009

31

1. CORPORATE INFORMATION

Millennium Minerals Limited (“Millennium” or the “Company”) is a public listed limited Company that is incorporated and domiciled in Australia.

During the year, the principal activity of Millennium was gold exploration and development of the Nullagine gold project in Western Australia.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis Of Presentation

This is a general purpose financial report of the Company that has been prepared in accordance with applicable accounting standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) and the Corporations Act 2001. The accounting policies have been consistently applied. All amounts are presented in Australian dollars.

The financial statements have been prepared on the basis of historical costs, except where stated certain current and non-current assets are held at current valuation.

(b) Statement of Compliance

The full year financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (‘AIFRS’). Compliance with AIFRS ensures that the full year financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (‘IFRS’).

(c) Income Tax

Income tax on the income statement for the periods presented comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

(d) Property, Plant and Equipment

Cost and valuation

Items of property, plant and equipment comprising a class of non-current assets are carried at cost less accumulated depreciation and any impairment in value. Land and buildings are measured at cost less any impairment in value.

The carrying amounts are reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employed and subsequent disposal. The expected net cash flows have been discounted to their net present values in determining recoverable amounts.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation

Depreciation of plant and equipment is calculated on a diminishing value basis to write off the net cost of each item over its expected useful life to the Company. The expected useful lives are as follows: 5 – 10 years.

Land and Buildings will be depreciated over the production life of the mine. The directors review the carrying amounts annually for impairment prior to, and during production.

(e) Mineral Exploration Expenditure

Costs incurred during the exploration and evaluation phases are accumulated in respect of each identifiable area of interest.

Exploration and evaluation costs shown in the Balance Sheet represent an accumulation of net direct exploration and evaluation costs incurred by the Company in relation to the acquisition of areas of interest for which rights of tenure are current and expected to be maintained and in respect of which:

i) such costs are expected to be recouped through successful development and exploitation of the area; or

ii) exploration and/or evaluation activities in the areas have not yet reached a stage which permits an assessment of the existence or otherwise of economically recoverable reserves.

The directors regularly review the capitalised exploration costs and where appropriate areas of interest are written down to their recoverable amount.


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The ultimate recoupment of costs related to the areas of interest in the exploration and evaluation phase is dependent on the successful and commercial exploitation of the relevant areas.

(f) Investments and other financial assets

The Company classifies its investments in the following categories: financial assets at fair value through profit and loss, loan and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date.

(g) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Operating leases

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight line basis.

Contingent rentals are recognised as an expense in the financial year in which they are incurred.

Finance leases

Leases which effectively transfer substantially all of the risks and benefits incidental to ownership of the leased item to the economic entity are capitalised at the present value of the minimum lease payments. A lease liability of equal value is also recognised.

Capitalised lease assets are depreciated over the estimated useful life of the assets. Minimum lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and charged directly to the Income Statement.

The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter.

(h) Segment reporting

A segment is a distinguishable component of the Company that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.


34


(i) Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Balance Sheet.

Cash Flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(j) Trade Payables, Other Creditors and Provisions

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year and which are unpaid, together with assets ordered before the end of the financial year. The amounts are unsecured and are usually paid within 30 days of recognition.

Provisions are recognised when the Company has a present obligation and it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

(k) Trade Receivables and Revenue Recognition

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Other debtors are recognised at the amount receivable and are due for settlement within 30 days from the end of the month in which services were provided.

(l) Cash and cash equivalents

Cash and cash equivalents include cash on hand and in banks and investments in money market instruments, net of any outstanding bank overdraft.

(m) Borrowing Costs

Borrowing costs are recognised as an expense when incurred.

(n) Interest Bearing Loans and Borrowings

All loans and borrowings are initially recognised at cost. Any accrued interest is recorded in payables.


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(o) Revenues

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Dividend and distribution revenue is recognised when the shareholders right to receive payment is established. Interest revenue is recognised as the interest accrues. Rental revenue is recognised in accordance with rental agreements.

(p) Share Based Payment Transactions

Equity based compensation benefits are provided to certain employees and suppliers as consideration for goods and services received.

The fair value of options granted is recognised as an expense. The fair value is measured at grant date and recognised over the period that the holder becomes unconditionally entitled to the options.

(q) Employee Entitlements

(i) Wages and Salaries and Annual Leave

Liabilities for wages and salaries, including annual leave expected to be settled within twelve months of the reporting date are recognised in the provision for employee benefits up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

(ii) Employee Benefit on-costs

Employee benefit on-costs including payroll tax and superannuation guarantee charges are charged as an expense when incurred.

(r) Comparatives

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

(s) Impairment of Assets

Assets are reviewed for impairment at each reporting date or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash flows from other assets or groups of assets (cash generating units).


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(t) Mineral Tenements

The Company’s activities in the mining industry are subject to regulations and approvals including mining heritage, environmental regulation, the implications of the High Court of Australia decision in what is known generally as the “Mabo” case and any State of Federal legislation regarding native and mining titles. Approvals, although granted in most cases, is discretionary. The question of native title has yet to be determined and could affect any mining title area whether granted by the State or not.

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

(u) New accounting standards and UIG interpretations

The Company has adopted the following new and amended Australian Accounting Standards and interpretations as of 1 January 2009:

• AASB 7 Financial Instruments • AASB 8 Operating Segments • AASB 101 Revised Presentation of Financial Statements • AASB 123 Borrowing Costs • AASB 2007-3 Amendments to Australian Accounting Standards arising from

AASB 8. • AASB 2007-8 Amendment to Australian Accounting Standards arising from

AASB 101. • AASB 2008-1 Amendment to Australian Accounting Standards Share-based

Payments: Vesting Conditions and Cancellations. • AASB 2008-5 Amendment to Australian Accounting Standards arising from the

Annual Improvements Project. • AASB 2008-7 Amendment to Australian Accounting Standards – Cost of an

Investment in a Subsidiary, Jointly Controlled Entity or Associate. • AASB 2009-2 Amendments to Australian Accounting Standards arising from

AASB 4, AASB 7, AASB 1023 and AASB 1038.

When the adoption of the Standard or Interpretation is deemed to have an impact on the financial statements or performance of the Company, its impact is described below. AASB 8 Operating Segments

AASB 8 replaced AASB 114 Segment Reporting upon its effective date. The Company concluded that the operating segments determined in accordance with AASB 8 are the same as the business segments previously identified under AASB 114.

AASB 101 Presentation of Financial Statements

The revised standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with non-owner changes in equity presented in a reconciliation of each component of equity and included in the new statement of comprehensive income. The statement of comprehensive income presents all items of recognised income and expense, either in


37


one single statement, or in two linked statements. The Company has elected to present one statement.

The following Applicable Australian Accounting Standards have been issued or amended but are not yet effective and have not been adopted by the Company for the annual reporting period ended 31 December 2009. The Company has not been able to fully assess the impact of these revised standards.

• AASB 3 (revised) Business Combinations • AASB 127 (revised) Consolidated and Separate Financial Statements • AASB 2008-3 Amendment to Australian Accounting Standards arising from

AASB 3 and 127 • AASB 2008-6 Amendment to Australian Accounting Standards arising from the

Annual Improvements Project • AASB 2008-8 Amendment to Australian Accounting Standards - Eligible

Hedged Items • AASB 2009-4 Amendment to Australian Accounting Standards arising from the

Annual Improvements Project. (AASB 2 and AASB 138 and AASB Interpretations 9 & 16)

• AASB 2009-5 Amendment to Australian Accounting Standards arising from the Annual Improvements Project. 9 AASB 5, 8, 101, 107, 117, 118, 136 & 139)

• AASB 2009-8 Amendment to Australian Accounting Standards – Group Cash-settled Share Based Payment Transactions (AASB 2)

• AASB 9 Financial Instruments

(v) Critical accounting estimates and judgements

In preparing this Financial Report the Company has been required to make certain estimates and assumptions concerning future occurrences. There is an inherent risk that the resulting accounting estimates will not equate exactly with actual events and results.

i) Significant accounting judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements: Capitalisation of exploration and evaluation expenditure The Company has capitalised significant exploration and evaluation expenditure on the basis either that this is expected to be recouped through future successful development (or alternatively sale) of the Areas of Interest concerned or on the basis that it is not yet possible to assess whether it will be recouped.

In preparing this Financial Report, the Company has been required to make certain estimates and assumptions concerning future occurrences. There is an inherent risk that the resulting accounting estimates will not equate exactly with actual events and results.


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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued i) Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: Impairment of capitalised exploration and evaluation expenditure

The future recoverability of capitalised exploration and evaluation expenditure is dependent on an number of factors, including whether the Company decides to exploit the related lease itself, or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

As at 31 December 2009, the carrying value of exploration expenditure of the Company was $23,376,567.


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2009 2008 $ $3. REVENUE FROM ORDINARY ACTIVITIES

Interest received 62,805 262,000 Proceeds from disposal of fixed assets 16,720 382,629 Fuel tax credits - 15,203 Rental & others 35,490 152,866

115,015 812,698 4. OPERATING PROFIT / (LOSS)

Loss before income tax expense includes the following specific gains and expenses:

Expenses

Depreciation and amortisation 53,408 138,805 Value of share options- expensed - 974,096 Value of share options – expired - - Non cash fair value adjustment – exploration Non cash fair value adjustment – Land and

Buildings/plant and equipment / motor vehicles/Capital WIP

-

-

5,693,837

550,000 Finance costs

Interest paid or payable – other persons 19,465 1,434 Borrowing costs paid – other persons - 60,666

Net Gains Gain on disposal of fixed assets 16,720 149,513

5. INCOME TAX

Profit / (loss) before income tax expense (824,709) (8,780,511) Prima facie tax on operating profit/(loss) (247,413) (2,634,153) Tax effect of permanent and timing differences

Non-deductible expenses 2,669 35,511 Future income tax benefit not brought to account

244,744 2,598,642

Income Tax Expense Attributable To Operating Profit (Loss)

- -


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5. INCOME TAX continued

The Company has approximately $50,815,966 (2008: $23,142,192) in losses for income tax purposes unrecouped at balance date (subject to confirmation by the Commissioner of Taxation). The aggregate future income tax benefit of $15,244,789 (2008: $8,115,305) has not been carried forward as an asset in the Balance Sheet as realisation of the benefit is not regarded as virtually certain and will only be obtained if:

(a) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the exploration expenditure and tax losses to be realised;

(b) the Company continues to comply with the conditions for deductibility imposed by the law; and

(c) no changes in tax legislation adversely affect the Company in realising the benefit from the tax losses.

6. CURRENT ASSETS - CASH 2009 2008 $ $

Cash at bank and on hand 73,773 68,319Cash on deposit 2,578,863 1,204,997

2,652,636 1,273,3167. CURRENT ASSETS – TRADE & OTHER

RECEIVABLES

Debtors 5,428 8,021GST refundable 20,511 6,092Prepayments 28,822 9,396Secured deposit 246,967 - 301,728 23,509

8. EXPLORATION TENEMENTS Mineral Exploration And Evaluation Expenditure

Carrying amount at beginning of year 22,047,029 24,124,683Current year expenditure 1,329,538 3,616,183Net gain (loss) from fair value adjustment - (5,693,837)

Carrying Amount At End Of Year 23,376,567 22,047,029 Recoverability of the carrying value of interests in mineral projects is subject to the successful development and exploitation of the exploration properties or alternatively, the sale of these tenements at amounts at least equal to the book values. The directors have assessed the Mineral Exploration and Evaluation Expenditure asset for impairment as at balance date as required by AASB6, and concluded that the asset is not impaired, and that the carrying amount does not exceed the recoverable amount.


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2009

$ 2008

$ 9. PLANT AND EQUIPMENT

Plant and Equipment – at cost 786,786 826,786Less Accumulated Depreciation (364,182) (305,027) Written Down Value 422,604 521,759 MOTOR VEHICLES Motor Vehicles – at cost - 179,979Net gain (loss) from fair value adjustment - (50,000)Less Accumulated Depreciation - (54,263) Written Down Value - 75,716 LAND AND BUILDINGS Land and Buildings – at cost Net gain (loss) from fair value adjustment

424,262 524,262(100,000)

Less Accumulated Depreciation - - Written down Value 424,262 424,262 LEASEHOLD IMPROVEMENTS Leasehold Improvements – at cost - -Less Accumulated Depreciation - -

Written down Value - -

CAPITAL WORKS IN PROGRESS Capital Works – Nullagine project Net gain (loss) from fair value adjustment

504,370 904,370(400,000)

Less Accumulated Depreciation - -

Written down Value 504,370 504,370

Total Written Down Value at End of Year 1,351,236 1,526,107


42

2009

$ 2008

$ PLANT AND EQUIPMENT - RECONCILIATION Carrying amount at beginning of year 521,759 730,099Additions - 154,609Net gain from disposal 16,720 -Disposals (62,467) (57,922)Less Depreciation (53,408) (305,027) Carrying Amount At End Of Year 422,604 521,759 MOTOR VEHICLES - RECONCILIATION Carrying amount at beginning of year 75,716 76,722Additions Net gain (loss) from fair value adjustment

- -

103,257(50,000)

Disposals (75;716) Less Depreciation - (54,263) Carrying Amount at End of Year - 75,716 LAND AND BUILDINGS - RECONCILIATION Carrying amount at beginning of year 424,262 524,262Additions at cost - -Net gain (loss) from fair value adjustment Disposals

- -

(100,000)-

Carrying Amount at End of Year 424,262 424,262 LEASEHOLD IMPROVEMENTS - RECONCILIATION

Carrying amount at beginning of year - 76,673Additions Disposals

- -

-(76,673)

Less Depreciation - -

Carrying Amount at End of Year - -

CAPITAL WORKS IN PROGRESS Carrying amount at beginning of year 504,370 1,079,564Additions at cost - -Disposals - (175,194)Net gain (loss) from fair value adjustment - (400,000) Carrying Amount at End of Year 504,370 504,370 Total Amount at End of Year 1,351,236 1,526,107


43

2009

$ 2008

$ 10. CURRENT LIABILITIES – TRADE AND OTHER

PAYABLES

Trade creditors 32,991 240,123Other creditors and accruals 73,821 48,310 106,812 288,433Trade creditors are non interest bearing and are generally on 30 day terms.

11. CURRENT LIABILITIES - PROVISIONS Provision for employee entitlements - 44,147The provision consists of annual leave expected to be settled within twelve months of the reporting date.

12. CURRENT LIABILITIES – FINANCIAL LIABILITIES

Convertible note - 615,250Hire Purchase Liability - -Borrowings - - - 615,250

During the year, on 31 March 2009, the Company repaid a residual amount of $600,000 owing on convertible notes on maturity. The convertible notes were owing to LinQ Capital Limited (as the responsible entity for the LinQ Resources Fund)


44

13. CONTRIBUTED EQUITY

2009 $

2008 $

(a) Issued Capital

465,961,524 (2008: 236,454,456) ordinary shares 55,055,172 50,577,239

(b) Movement In Issued Capital

Balance at the beginning of the financial year 50,577,239 50,577,239 33,668,167 ordinary shares were issued by private placement on 11 February 2009 at 1.2 cents per share for re-evaluation of the Company’s Bankable Feasibility Study. 135,061,311 ordinary shares were issued pursuant to a Rights Issue on 13 March 2009 at 1.2 cents per share for re-evaluation of the Company’s Bankable Feasibility Study, retirement of the convertible note debt and working capital.

404,018

1,620,736

-

-

60,777,590 ordinary shares were issued by private placement on 18 November 2009 at 4.5 cents per share for re-evaluation of the Company’s Bankable Feasibility Study

2,734,992

Additional issue costs brought to account (281,813) - Balance At The End Of Year 55,055,172 50,577,239

(c) Terms and Conditions of Contributed Equity

Ordinary Shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

(d) Options on Issue 2009 2008 Number Number

Options - listed Balance at beginning of year - - Issued during year - - Exercised during year - - Expired during year - - Balance at end of year - -


45

13. CONTRIBUTED EQUITY continued

2009 2008 Number Number

Options - unlisted Balance at beginning of year 29,900,000 16,500,000 Issued during year - 16,440,000 Share Capital consolidation - - Exercised during year - - Expired or cancelled during year (3,700,000) (3,040,000)

Balance at end of year 26,200,000 29,900,000

A total of 3,700,000 options were cancelled during the year ended 31 December 2009 due to employees leaving the Company. The 700,000 options issued to employees during the year expire on 19 December 2011.

The 11,000,000 options on issue at 31 December 2007, together with the 14,500,000 issued to directors on 25 February 2008 are the only options currently issued to directors as at 31 December 2009. None of these options were exercised during the year. Those options issued to directors prior to 31 December 2007 all expire on 19 December 2011. The 12,000,000 options issued prior to 31 December 2008 expire on 31 October 2011 and the remaining 2,500,000 also issued prior to 31 December 2008 expire on 21 February 2012. All directors’ options are fully vested.


46

13. CONTRIBUTED EQUITY continued

(e) Convertible Notes

2009

Movement in notes convertible to ordinary shares in the capital of the Company are as follows: No. of

Convertible Notes

Conversion Price $

No. of Potential Ordinary Shares

Balance $

Opening balance (1) 300,000 0.35 857,142 300,000 Opening balance (2) 300,000 0.55 545,455 300,000 Repayment of convertible notes (600,000) - (600,000) Closing balance - - -

2008

Movement in notes convertible to ordinary shares in the capital of the Company are as follows: No. of

Convertible Notes

Conversion Price $

No. of Potential Ordinary Shares

Balance $

Opening balance (1) 300,000 0.35 857,142 300,000 Opening balance (2) 300,000 0.55 545,455 300,000 Issue of convertible notes - - Closing balance 600,000 1,402,597 600,000

The total number of potential ordinary shares outstanding in the capital of the Company at 31 December 2009, in respect of options and convertible notes, is 35,004,598 (2008: 31,302,598) ordinary shares. A total of 26,200,000 options have been issued to the directors and employees as at 31 December 2009. The convertible notes issued to LinQ Capital Limited (as the responsible entity for the LinQ Resources Fund) was repaid in full on 31 March 2009.

14. ACCUMULATED LOSSES AND RESERVES 2009 $

2008 $

(a) Accumulated Losses

Opening balance at the beginning of year (28,736,156) (19,955,645) Net profit/(loss) attributable to members of Millennium (824,709) (8,780,511) Closing Balance At The End Of Year (29,560,865) (28,736,156)


47

14. ACCUMULATED LOSSES AND RESERVES continued (b) Share-based payments Reserve

Opening balance at the beginning of year 2,081,048 1,106,952 Employee Option expense - 974,096 Employee Option expired - - Closing Balance At The End Of Year 2,081,048 2,081,048

(c) Total Reserves Accumulated Losses (29,560,865) (28,736,156) Share-based payments reserve 2,081,048 2,081,048 Closing Balance At The End Of Year (27,479,817) (26,655,108)

(d) Nature and Purpose of Reserves

The share based payments reserve is used to recognise the fair value of options issued to employees but not exercised, and equity-settled benefits issued in settlement of share costs and part consideration, in lieu of cash payment, for acquisition of mineral interests.

15. SEGMENTAL INFORMATION The Company operated for the financial year within Australia. The principal activity of the Company was mineral exploration.

16. EXPENDITURE COMMITMENTS

(a) Exploration

Due to the nature of the Company's activities, it is difficult to accurately forecast the amount of future expenditure that will be necessary to incur in order to maintain present interests. Expenditure contracts on mineral tenure can be reduced by selective relinquishment of exploration tenements, or by the re-negotiation of expenditure commitments.

2009 2008 $ $

The minimum level of exploration commitments: - Not later than one year is 1,016,000 400,000- later than one year and not later than five years is 3,339,240 750,000- later than five years is 4,554,000 400,000


48

16. EXPENDITURE COMMITMENTS continued

(b) Operating Lease Commitments The minimum level of operating lease commitments:

- Not later than one year is 123,025 39,199- later than one year and not later than five years is - -

(c) Finance Lease Commitments The minimum level of operating lease commitments:

- Not later than one year is - -- later than one year and not later than five years is - -

17. REMUNERATION OF AUDITOR Amounts received, or due and receivable by the auditor for:

Auditing 29,000 36,000 Other services - -

29,000 36,000

The auditor of the Company is Rothsay Chartered Accountants. The Company has received notification from the Company's auditor that he satisfies the independence criterion and that there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct in relation to the audit.


49

18. KEY MANAGEMENT PERSONNEL DISCLOSURE

(a) Names Of Directors and Key Management Personnel

The persons holding positions as Directors and key management of the Company during the financial year were:

P Rowe (Appointed 21 July 2009)

S Durack (Appointed 2 February 2009)

C Donner

R Gillon

B Rear (Chief Executive Officer – Appointed 21 July 2009)

M Killmier (Company Secretary – Appointed 11 February 2009)

M Grigson (Resigned 2 February 2009)

M Freeman (Company Secretary – Resigned 11 February 2009)

(b) Executives’ Remuneration

The Company has taken advantage of the relief provided by Corporations Regulation 2M.6.04 and has transferred the directors’ interests disclosures to the Directors’ Report. The relevant information can be found within the directors’ interests and benefits section of the Directors’ Report.

(c) Key management personnel compensation

The Company has taken advantage of the relief provided by Corporations Regulation 2M.6.04 and has transferred the detailed remuneration disclosures to the Directors’ Report. The relevant information can be found in the remuneration report within the Directors’ Report.

(d) Directors’ Interests as at 31 March 2010

The Company has taken advantage of the relief provided by Corporations Regulation 2M.6.04 and has transferred the directors’ interests disclosures to the Directors’ Report. The relevant information can be found within the directors’ interests and benefits section of the Directors’ Report.


50

18. KEY MANAGEMENT PERSONNEL DISCLOSURE continued

(e) Other Transactions With Specified Directors

Mr Clive Donner is a director of LinQ Corporate Pty Ltd, which was paid $104,117.60 during the year for office rental and mandate charges.

Mr Simon Durack is a director of Advanced Management Services Australia Pty Ltd, a company owned and controlled by him, which was paid $25,000 for CFO services, between 1 August and 31 December 2009.

Mr Ross Gillon is a partner of Lawton Gillon which provides legal services to the Company. During the period that Partnership was paid $7,500 (2008: $38,800).

These fees and disbursements exclude benefits included in the aggregate amount of emoluments received or due and receivable by Directors as director’s fees and shown in the financial statements, prepared in accordance with the Corporations Regulations, or the fixed salary of a full time employee.

(f) Outstanding Balances

The following balances were outstanding at the reporting date in relation to the transactions with related parties:

Current payables – Director’s fees

a) Lawton Gillon (R Gillon) $27,000

(g) Related Party transactions

Other than the transactions disclosed above there are no other transactions between related parties that require disclosure.


51

2009 2008 $ $19. NOTES TO THE STATEMENT OF CASH FLOWS

(a) Reconciliation Of Cash Cash as at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

Cash at bank 73,773 966,659 Cash on deposit 2,578,863 306,657 2,652,636 1,273,316

(b) Reconciliation Of Net Cash Provided/(Used) By Operating Activities To Operating Loss After Income Tax

(Loss) after income tax (824,709) (8,780,511) Profit on sale of property, plant and equipment (16,720) (149,513) Depreciation (53,408) 138,805 Share based payments - 974,096 Provisions (9,591) (108,348) Fair value adjustment - 6,243,837 Movement in assets and liabilities

Receivables 48,163 37,630 Prepayments (19,426) - Trade creditors and accruals (31,167) 233,337

Net Cash Used In Operating Activities (906,858) (1,410,667)

(c) Non-Cash Investing Activities

There were no non-cash investing activities.


52

20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company’s accounting policies, including the terms and conditions of each class of financial liability and equity instrument, both recognised and unrecognised at the balance date, are as follows:

Short Term Deposits

Short term deposits are stated at the lower of cost and net realisable value. Interest is recognised in the Statement of Financial Performance when earned.

Trade Payables and Accruals

Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Company. Trade liabilities are normally settled on 30 day terms.

(a) Interest Rate Risk

The Company monitors interest rates to obtain the best terms and mix of cash flow. Its exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market, interest rates and the effective weighted average interest rates on these financial assets, is as follows:

2009

Weighted Average Effective Interest

%

Floating Interest

$

Fixed Interest Maturing Non-

Interest Bearing

$

Total

$ 1 Year 1 – 5 years

Financial Assets Interest bearing deposits

2.85% 2,578,863 - - - 2,578,863

Cash at bank 2.54% 73,773 - - - 73,773Receivables/tax asset - - - - -Shares in listed companies

-

-

-

-

-

Security deposits 5.5% 246,967 246,967Total Financial Assets 2,899,603 - - - 2,899,603

Financial Liabilities Payables - - - 106,812 106,812Hire Purchase Liability - - - - -Provisions - - - - -Borrowings - - - - -Convertible notes - - - - -Total Financial Liabilities - - - 106,812 106,812

Net Financial Assets 2,899,603 - - (106,812) 2,792,791


53

20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT continued

2008

Weighted Average Effective Interest

%

Floating Interest

$

Fixed Interest Maturing Non-

Interest Bearing

$

Total

$ 1 Year 1 – 5 years

Financial Assets Interest bearing deposits

7.72% 898,340 - - - 898,340

Cash at bank 5.98% 68,319 - - - 68,319Receivables/tax asset - - - - -Shares in listed companies

- - - - -

Security deposits 7.28% 306,657 - - - 306,657Total Financial Assets 1,273,316 - - - 1,273,316

Financial Liabilities Payables - - - 251,121 251,121Hire Purchase Liability - - - -Provisions - - - 44,147 44,147Borrowings - - - -Convertible notes 10.00% - 615,250 - - 615,250Total Financial Liabilities - 615,250 - 295,268 910,518

Net Financial Assets 1,273,316 (615,250) - (295,268) 362,798

(i) At balance date the Company had minimal exposure to interest rate risk, through its cash and cash equivalents held with financial institutions.

Carrying Amount Carrying Amount31 December 2009 31 December 2008

$ $Fixed rate instrumentsFinancial assets - -

Variable rate instrumentsFinancial assets 2,899,603 1,273,316

Fair value sensitivity analysis for fixed rate instruments: There was no exposure to fixed rate instruments at balance date. Fair value sensitivity analysis for variable rate instruments: A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2008.


54

20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT continued

Profit or loss Equity100bp 100bp 100bp 100bp

increase decrease increase decrease31 December 2009Financial assets 28,996 (28,996) 28,996 (28,996)

31 December 2008Financial assets 12,733 (12,733) 12,733 (12,733)

(b) Credit Risk

The 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, net of any provisions for doubtful debts, as disclosed in the Balance Sheet and notes to the financial statements.

The Company does not have any material risk exposure to any single debtor or group of debtors, under financial instruments entered into by it.

(c) Liquidity Risk

Prudent liquidity management involves the maintenance of sufficient cash, marketable securities, committed credit facilities and access to capital markets. It is the policy of the board to ensure that the Company is able to meet its financial obligations through ensuring the Company has sufficient working capital and preserving the 15% share issue limit available to the Company under the ASX Listing Rules.

(d) Net Fair Values

Methods and assumptions used in determining net fair value.

For assets and other liabilities, the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form, other than listed investments. The Company has no financial assets where carrying amount exceeds net fair values at balance date. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the Statement of Financial Position and in the notes to and forming part of the financial statements. The 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, net of any provisions for doubtful debts, as disclosed in the Balance Sheet and notes to the financial statements.


55

21. EARNINGS PER SHARE 2009 2008 $ per share $ per share

Basic earnings per share – (loss) (0.2232) (0.0371) Weighted Average number of ordinary shares outstanding during the year calculation of basic EPS

369,528,494 236,454,456

Diluted earnings per share are not considered to be materially different from basic earnings per share and accordingly are not disclosed.

22. CONTINGENT LIABILITES

Bonds are held with respect to mining licences for which Notices of Intent have been lodged. Bonds are set by the Department of Minerals and Energy however, there is no certainty that such bonds will be adequate to cover any environmental damage in the event of mining. The Company is not able to determine the nature or extent of any further requirement in respect of changing environmental requirements.

23. COMMITMENTS

Royalty payments totalling $400,000 per annum are currently due under the two existing royalty agreements. Under the first agreement, royalty payments of $25,000 per calendar quarter are payable in advance. The other agreement, with royalty payments of $25,000 per month payable in arrears due to mining not having commenced from the tenements within a period of 5 years, includes a cap on aggregate payments. It also contains the condition that should royalty payments not be made within three months of the due date, then the vendor shall have the right to repurchase the tenements for the sum of $10.

24. EVENTS SUBSEQUENT TO BALANCE DATE

On 23 December 2009, the Company issued a prospectus offering shareholders the opportunity to participate in a 2 for 8 Rights Issue with one free attached option. The Rights Issue was planned to raise $5,242,067. The funds were to be used to progress the Nullagine gold project and for working capital purposes. On 11 February 2010, 17,609,073 shares were taken up by shareholders raising a total of $792,408. A large proportion of the shortfall shares have already been committed and this together with the shortfall applications received amounted to $3,038,519. The total received from rights issue entitlements, commitments and shortfall applications amounted to $3,830,927. There was no other matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in financial years subsequent to 31 December 2009.


56

Directors’ Declaration

In the opinion of the Directors of Millennium Minerals Limited:

a) The financial statements and notes set out in pages 27 to 55 are in accordance with the Corporations Act 2001 including:

i) Giving a true and fair view of the Company’s financial position as at 31 December 2009 and of its performance, as represented by the results of its operations and its cash flows, for the financial year ended on that date; and

ii) Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements

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

c) The audited remuneration disclosures set out in the Directors’ Report on pages 9 to 26 comply with Accounting Standard AASB 124 Related Party Disclosures and Corporations Regulations 2001.

The directors have been given the declarations required by Section 295A of the Corporations Act 2001.

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

Simon Durack Director

Perth, 22 April 2010

Millennium Minerals Limited Schedule of Interests in Mining Tenements

59

Tenement Project Registered HolderMillennium Beneficial

Interest ALL NATIONS M46/199 MILLENNIUM MINERALS LIMITED 100% M46/225 MILLENNIUM MINERALS LIMITED 100% M46/98 MILLENNIUM MINERALS LIMITED 100% BARTONS G46/02 LIVESTOCK MARKETING * 75.00% M46/164 LIVESTOCK MARKETING * 75.00% M46/3 LIVESTOCK MARKETING * 75.00% M46/441 TUPPERGLENDA PTY LTD * 75.00% BEATONS CREEK M46/10 MILLENNIUM MINERALS LIMITED 100% M46/11 MILLENNIUM MINERALS LIMITED 100% M46/9 MILLENNIUM MINERALS LIMITED 100% BEATONS CREEK EAST M46/263 MILLENNIUM MINERALS LIMITED 100% CADJEBUT M46/432 MILLENNIUM MINERALS LIMITED 100% DAVIS RIVER L46/41 MILLENNIUM MINERALS LIMITED 100% EASTERN CREEK M46/245 TAYLOR, DAVID JOHN 100% M46/56 TAYLOR, DAVID JOHN 100% FEDERATION M46/64 MILLENNIUM MINERALS LIMITED 100% FIVE MILE E46/308 **TYSON RESOURCES PTY 100% L46/33 MILLENNIUM MINERALS LIMITED 100% M46/192 MILLENNIUM MINERALS LIMITED 100% M46/212 TYSON RESOURCES PTY 100% M46/213 TYSON RESOURCES PTY 100% M46/234 TYSON RESOURCES PTY 100% M46/235 TYSON RESOURCES PTY 100%

M46/261 **MILLENNIUM MINERALS LIMITED 100%


M46/264 TYSON RESOURCES PTY 100% M46/265 TYSON RESOURCES PTY 100% M46/266 TYSON RESOURCES PTY 100% M46/445 MILLENNIUM MINERALS LIMITED 100% M46/446 MILLENNIUM MINERALS LIMITED 100% M46/50 SIMBA HOLDINGS PTY LTD * 75% P46/1123 MILLENNIUM MINERALS LIMITED 100% P46/1368 RUANE, MICHAEL 100% P46/1436 MILLENNIUM MINERALS LIMITED 100% P46/1437 MILLENNIUM MINERALS LIMITED 100% P46/1451 MILLENNIUM MINERALS LIMITED 100% P46/1452 MILLENNIUM MINERALS LIMITED 100% P46/1461 MILLENNIUM MINERALS LIMITED 100% P46/1604 MILLENNIUM MINERALS LIMITED 100% P46/1605 MILLENNIUM MINERALS LIMITED 100% P46/1606 MILLENNIUM MINERALS LIMITED 100%


60


Interest

GOLDEN EAGLE E46/394 **MILLENNIUM MINERALS LIMITED 100%

L46/45 MILLENNIUM MINERALS LIMITED 100%


M46/267 MILLENNIUM MINERALS LIMITED 100% M46/300 MILLENNIUM MINERALS LIMITED 100% M46/436 MILLENNIUM MINERALS LIMITED 100% M46/443 MILLENNIUM MINERALS LIMITED 100% M46/444 MILLENNIUM MINERALS LIMITED 100% P46/1444 MILLENNIUM MINERALS LIMITED 100% GOLDEN GATE E46/279 SIMBA HOLDINGS PTY LTD * 75% M46/129 SIMBA HOLDINGS PTY LTD * 75% M46/163 MILLENNIUM MINERALS LIMITED 100% M46/187 SIMBA HOLDINGS PTY LTD 75% M46/189 SIMBA HOLDINGS PTY LTD 75% M46/200 SIMBA HOLDINGS PTY LTD 100% M46/448 LIVESTOCK MARKETING 100% M46/457 BIGHEAD ENTERPRISES 100% M46/47 SIMBA HOLDINGS PTY LTD * 75% P46/1422 BIGHEAD ENTERPRISES 100% LITTLE WONDER M46/146 MILLENNIUM MINERALS LIMITED 100% M46/198 MILLENNIUM MINERALS LIMITED 100% MIDDLE CREEK E46/391 MILLENNIUM MINERALS LIMITED 100% E46/449 MILLENNIUM MINERALS LIMITED 100% M46/272 MILLENNIUM MINERALS LIMITED 100% M46/273 MILLENNIUM MINERALS LIMITED 100% M46/274 MILLENNIUM MINERALS LIMITED 100% M46/275 MILLENNIUM MINERALS LIMITED 100% M46/276 MILLENNIUM MINERALS LIMITED 100% M46/277 MILLENNIUM MINERALS LIMITED 100% M46/282 MILLENNIUM MINERALS LIMITED 100% M46/302 MILLENNIUM MINERALS LIMITED 100% M46/430 MILLENNIUM MINERALS LIMITED 100% M46/431 MILLENNIUM MINERALS LIMITED 100% M46/447 MILLENNIUM MINERALS LIMITED 100% P46/1270 MILLENNIUM MINERALS LIMITED 100% MOSQUITO CREEK E46/452 MILLENNIUM MINERALS LIMITED 100% M46/278 MILLENNIUM MINERALS LIMITED 100% M46/279 MILLENNIUM MINERALS LIMITED 100% M46/283 MILLENNIUM MINERALS LIMITED 100% M46/303 MILLENNIUM MINERALS LIMITED 100% M46/426 MILLENNIUM MINERALS LIMITED 100% M46/427 MILLENNIUM MINERALS LIMITED 100% M46/428 MILLENNIUM MINERALS LIMITED 100% M46/429 MILLENNIUM MINERALS LIMITED 100% P46/1384 TYSON RESOURCES PTY 100% NULAGINE P46/1382 WALSH, JOHN FRANCIS 100%


61


InterestNULLAGINE SOUTH P46/1557 MILLENNIUM MINERALS LIMITED 100% P46/1558 MILLENNIUM MINERALS LIMITED 100% P46/1559 MILLENNIUM MINERALS LIMITED 100% P46/1560 MILLENNIUM MINERALS LIMITED 100% P46/1561 MILLENNIUM MINERALS LIMITED 100% P46/1562 MILLENNIUM MINERALS LIMITED 100% P46/1563 MILLENNIUM MINERALS LIMITED 100% P46/1564 MILLENNIUM MINERALS LIMITED 100% P46/1565 MILLENNIUM MINERALS LIMITED 100% P46/1566 MILLENNIUM MINERALS LIMITED 100% P46/1567 MILLENNIUM MINERALS LIMITED 100% P46/1568 MILLENNIUM MINERALS LIMITED 100% P46/1569 MILLENNIUM MINERALS LIMITED 100% P46/1570 MILLENNIUM MINERALS LIMITED 100% P46/1571 MILLENNIUM MINERALS LIMITED 100% P46/1572 MILLENNIUM MINERALS LIMITED 100% P46/1573 MILLENNIUM MINERALS LIMITED 100% P46/1574 MILLENNIUM MINERALS LIMITED 100% P46/1575 MILLENNIUM MINERALS LIMITED 100% P46/1576 MILLENNIUM MINERALS LIMITED 100% TWENTY MILE SANDY M46/433 MILLENNIUM MINERALS LIMITED 100% M46/434 MILLENNIUM MINERALS LIMITED 100% * The percentage noted is not a beneficial ownership interest in the tenements or the ore contained within the tenements, but the percentage of the net proceeds from the sale of product Millennium Minerals is entitled to retain on sale of product derived from the tenements. Millennium Minerals Limited has an interest under a Mining Licence Agreement with Livestock Marketing Pty Ltd, Duncan Thomas Young, Simba Holdings Pty Ltd and Ronald Lane Swinney (the Tenement Owners") whereby Millennium has the sole and exclusive right to enter upon the tenements, conduct exploration and extract gold and other minerals. Millennium is then required to pay 25% of the net proceeds to the Tenement Owners after deductions relating to mining and processing costs. ** Royalties apply.


Supplementary Information

62

Stock Exchange Listing Millennium Minerals Limited shares are listed on the Australian Securities Exchange. The Company’s ASX code is MOY.

Substantial Shareholders (Holding not less than 5%) As at 6th April 2010

Name of Shareholder

Total Number of Voting Share in the Company in which the Substantial Shareholders and its Associates

Hold Relevant Interests

Percentage of Total Number of Voting Shares

(%)

Linq Group – (RBC Dexia Investor Services) 102,477,069 19.14 ANZ Nominees Limited 96,330,128 17.79 HSBC Custody Nominees (Australia) Limited 36,306,353 6.78

Class of Shares and Voting Rights As at 6th April 2010 there were 3,401 holders of 535,330,781 ordinary fully paid shares of the Company. The voting rights attaching to the ordinary shares are in accordance with the Company’s Constitution being that:

a) each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative;

b) on a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of a shareholder has one vote; and

c) on a poll, every person present who is a shareholder or a proxy, attorney or Representative of a shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or Representative, have one vote for the Share, but in respect of partly paid Shares, shall, have such number of votes as bears the proportion which the paid amount (not credited) is of the total amounts paid and payable (excluding amounts credited).

There are no voting rights attached to the options in the Company. Voting rights will be attached to the unissued ordinary shares when options have been exercised.

Distribution of Security Holders

Number of Shares Held Number of Shareholders 1 – 1,000 114 1,001 – 5,000 614 5,001 – 10,000 715 10,001 – 100,000 1,588 100,001 and over 370 Total 3,401

The number of shareholders holding less than a marketable parcel is 1,830.

Cash Usage Since the time of listing on ASX, the entity has used its cash and assets in a form readily converted to cash that it had at the time of admission to the official list of ASX in a manner which is consistent with its business objectives.


Supplementary Information

63

Listing of 20 Largest Shareholders

Name of Ordinary Shareholder Number of Shares Held

Percentage of Shares Held

(%)1. Linq Group – (RBC Dexia Investor Services) 102,477,069 19.143 2. ANZ Nominees Limited 96,330,128 17.995 3. HSBC Custody Nominees (Australia) Limited 36,306,353 6.782 4. Grand Spectrum Asset Ltd 24,444,444 4.566 5. Mr Wong Liang Feng 22,222,222 4.151 6. Citicorp Nominees Pty Ltd 10,319,157 1.928 7. Nefco Nominees Pty Ltd 9,650,000 1.803 8. Yandal Investments Pty Ltd 7,500,000 1.401 9. IE Properties Pty Ltd 5,500,000 1.027 10. Westpac Direct Equity Investments Pty Ltd 4,883,549 0.912 11. Twynam Agricultural Group Pty Ltd 4,500,000 0.841 12. Queensland Marketing Management Pty Ltd 4,000,000 0.747 13. Karari Australia Pty Ltd 4,000,000 0.747 14. Baystreet Pty Ltd 4,000,000 0.747 15. Mr Ianaki Semerdziev 3,321,200 0.620 16. Mr Tan Ching Khoon 2,566,667 0.479 17. Sanger Investments Pty Ltd 2,540,727 0.475 18. Melbourne Capital Limited 2,400,000 0.448 19. Mr Alan Brien & Mrs Melinda Brien 2,226,069 0.416 20. Emerald River Pty Ltd 2,222,222 0.415 Total 229,703,424 65.643

Unquoted Securities on Issue

Securities issued by the Company which are not listed on the ASX are as follows: Securities Number Holders Name of

Holders >80% Number

HeldOptions exercisable at 29 cents on or before 19 Dec 2011

6,700,000 8 - -

Options exercisable at 23 cents on or before 19 Dec 2011

5,000,000 1 T. Stark 5,000,000

Options exercisable at 30 cents on or before 31 Oct 2011

3,500,000 1 A. Law 3,500,000

Options exercisable at 20 cents on or before 31 Oct 2011

8,500,000 2 A. Law B. Eldridge

3,500,000 5,000,000

Options exercisable at 20 cents on or before 21 Feb 2012

2,500,000 1 M. Grigson 2,500,000

abn 85 003 257 556 annual report for the year ended 31 ... · chairman’s letter to shareholders 1...

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