Departure from ASX Corporate

Governance Principles

The company has identified the following as departures from the best practice recommendations established under the Corporate Governance Principles:

The company with only four directors, two of who are executives does not have a majority of non executive independent directors. Mr Gaskell is identified as the only independent director as defined under the Corporate Governance Principles. Mr Joseph is identified as not being independent by virtue of his shareholding in the company.

By open and transparent discussion at board meetings, with directors encouraged to have independent views and judgement and with a mixture of skills and experience the board believes it is of an effective composition, size and commitment to adequately discharge its responsibilities and duties.

The board considers it is appropriate for Mr Joseph to hold the position of Chairman having regard to his overall commercial experience, his knowledge of the mining and resources industry and other than his shareholding and status of non executive director he has no other relationship or business dealings with the company.

The audit committee due to the size of the board does not have a majority of independent directors.

By virtue of their qualifications and commercial experience the board consider that both members of the audit committee are appropriately qualified to hold these positions. In addition the board is of the view given the current size of the company and scope of its operations a balance is needed in meeting the recommendations under the Corporate Governance Principles in particular the composition of the board against the administration and costs involved.

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