Corporate Governance Policies

1. Board Charter

1.1 Board Committees

1.1.1 Audit Committee Charter

1.1.2 Technical Committee Charter

2. Selection and appointment of Directors

3. Code of Conduct

4. Securities Trading Policy

5. Continuous Disclosure Policy

6. Shareholders Communication Policy

7. Risk Management and Internal Compliance and Control

8. Performance Evaluation and Remuneration Policy

1. Board Charter

In accordance with Principle 1 of the ASX Corporate Governance Principles, the Board of Directors is responsible for guiding and monitoring the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Board is responsible for, and has the authority to determine all matters relating to the strategic direction, policies, practices and goals for management and the operation of the Company.

The monitoring and ultimate control of the business of the Company is vested in the Board. The Board’s primary responsibility is to oversee the Company’s business activities and management for the benefit of the Company’s shareholders.

The specific responsibilities of the Board include:

appointment, evaluation, rewarding and if necessary the removal of the Site Manager of the Guanaco Project in Chile
appointment, evaluation, rewarding and if necessary the removal of the Chief Financial Officer and the Company Secretary who at present is one in the same person.
in conjunction with management, development of corporate objectives, strategy and operations plans and approving and appropriately monitoring plans, new investments, major capital and operating expenditures, capital management, acquisition, divestitures and major funding activities;
establishing appropriate levels of delegation to the Chief Financial Officer/Company Secretary to allow her to manage the business efficiently;
monitoring actual performance against planned performance expectations and reviewing operating information at a requisite level, to understand at all times the financial and operating conditions of the Company;
monitoring the performance of senior management including the implementation of strategy, and ensuring appropriate resources are available;
via management, an appreciation of areas of significant business risk and ensuring that the Company is appropriately positioned to manage those risks;
overseeing the management of safety, occupational health and environmental matters;
satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and finance performance of the Company for the period under review;
satisfying itself that these are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, and internal control processes are in place and functioning appropriately;
to ensure that appropriate internal and external audit arrangements are in place and operating effectively;
having a framework in place to help ensure that the Company acts legally and responsibly on all matters consistent with the code of conduct; and
reporting to shareholders.

Whilst at all times the Board retains full responsibility for guiding and monitoring the Company, in discharging its stewardship, the Board has established an Audit committee and will in the future seek to establish a Remuneration Committee.

Each director has the right to seek independent professional advice on matters relating to his/her position as a director of the Company at the Company’s expense, subject to the prior approval of the Chairman, which shall not be unreasonably withheld.

In the event of a conflict of interest or where a potential conflict of interest may arise, involved directors will, unless the remaining directors resolve otherwise, withdraw from deliberations concerning the matter.

In accordance with the constitution of the Company clause 13.2, directors must offer themselves for re-election by shareholders at least every 3 years. The Board does not specify a maximum term for which a director may hold office.

The responsibility for the day-to-day operation and administration of the Company is delegated by the Board to the Chief Financial Officer/Company Secretary. The Board ensures that the Chief Financial Officer/Company Secretary and the management team is appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the Chief Financial Officer/Company Secretary and management.

The Chairman’s role is a non-executive position. The Chief Financial Officer/Company Secretary is accountable to the Board for all authority delegated to the position.

Whilst there is a clear division between the responsibilities of the Board and management, the Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved including:

Board approval and monitoring of annual budgets and monitoring actual performance against budget;
putting in place procedures to incorporate presentations to each Board meeting by financial, operations, exploration and marketing management.

Expenses incurred by directors in fulfilling their duties be authorized prior to being reimbursed by the company.

The authorization limits are set out below:

General business related expenses	<A$2,000	Any one Director
General business related expenses	>A$2,000	Board

This policy is reviewed annually.

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1.1 Board Committees

The Board utilises the support from the following committees in matters which require more intensive review. Each committee has a written charter, approved by the Board, defining its duties, reporting procedures and authority.

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1.1.1 Audit Committee Charter

Scope

In accordance to Principle 4 of the ASX Corporate Governance Principles, the Audit Committee is a committee of the Board of the Company with the specific powers delegated under this charter. The charter sets out the Audit Committee’s function, composition, mode of operation, authority and responsibilities.

Function

The primary function of the Committee is to assist the Board in fulfilling its responsibilities relating to accounting and reporting practices of the Company. In addition, the Committee will:

oversee, co-ordinate and appraise the quality of the audits conducted by both the Company’s external and internal auditors;
determine the independence and effectiveness of the external and internal auditors;
maintain open lines of communications among the Board and auditors to exchange views and information, as well as confirm their respective authority and responsibilities;
serve as an independent and objective party to review the financial information submitted by management to the Board for issue to shareholders, regulatory authorities and the general public; and
review the adequacy of the reporting and accounting controls of the Company.

Meetings

The Committee shall:

meet as frequently as required to undertake its role effectively
have the minimum quorum for a committee meeting (two members).
keep minutes of its meetings

Authority

In performing its functions in accordance with any applicable law, the Committee:

has unrestricted access to the external auditors, senior management and employees of the Company;
has unrestricted access to information and reports relevant to fulfilling its responsibilities;
may seek independent external advice on matters brought before the Committee or in relation to the functions and responsibilities of the Committee; and
shall have the power to conduct or authorise investigations into any matters within the committee’s scope of responsibilities or when requested by the Board.

Responsibilities

The Committee must promote an environment within the Company which is consistent with best practice financial reporting. In particular, the Committee must:

perform an independent review of financial information prepared by management for external reporting. This will include conducting reviews of the annual report, directors’ report, annual financial statements, half yearly financial statements and any other externally reported financial information required by law;
monitor the integrity and effectiveness of financial reporting processes;
review and assess the external audit arrangements;
review and ensure implementation of legislated major accounting changes;
ensure that appropriate policies are established and adequate systems are in place to identify and disclose related-party transactions and assess the propriety of any related part transactions; and
ensure that the Board is kept regularly informed on general progress and activities, and is promptly briefed on all significant matters.

External audit arrangements

The Committee shall report to the Board on external audit arrangements including:

making recommendations to the Board on the appointment, re-appointment, replacement and remuneration of the external audit firm;
review the terms of engagement for the external auditor
review the scope of the external audit with the external auditor including identified risk areas;
monitor the performance of the external audit including assessment of the quality and rigour of the audit, quality of the service provided and the audit firm’s internal quality control procedures;
review and monitor management’s responsiveness to the external audit findings; and
review and monitor management’s responsiveness to the external audit findings; and
on a periodic basis, meet with the external auditor without the presence of management

Appointment of external auditor

Should a change in auditor be considered necessary, a formal tendering process will be undertaken. The Committee will identify the attributes required of an auditor and will ensure the selection process is sufficiently robust so as to ensure selection of an appropriate auditor.

The Committee will ensure that prospective auditors have been provided with a sufficiently detailed understanding of the Company, its operations, its key personnel and any other information, including group structures and financial statements that will have a direct bearing on each firm’s ability to develop an appropriate proposal and fee estimate.

The Committee and the Board will consider the appointment in conjunction with senior management.

In selecting an external auditor, particular consideration will be given to determining whether the fee quoted is sufficient for the work required, that the work is to be undertaken by people with an appropriate level of seniority, skill and knowledge and whether the work proposed is sufficient to meet the Company’s needs and expectations.

The appointment of a new external audit firm will be placed before shareholders for ratification at the following general meeting is made.

Rotation and succession planning

The Committee will discuss with the auditor the provisions the audit firm has in place for rotation of the lead engagement partner and the independent review partner. The Company shall require that the lead engagement partner and review partner be rotated at least every 5 years.

Management sign-off procedure

The Audit committee will ensure that the Chief Financial Officer prepare a written statement to the Board certifying that the Company’s annual financial report and half yearly financial report present a true and fair view, in all material respects, of the financial condition of the Company and its operational performance and are in accordance with relevant accounting standards.

The statement is to be presented to the Board prior to the approval and sign-off of the respective annual and half year financial reports.

This policy is reviewed annually.

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1.1.3 Technical Committee Charter

Function

The technical committee is a committee of the Board with its principle functions being to:

provide guidance to site management in Guanaco in making operational decisions
ensure that the projects operates within the budget allocated

It is not a committee that makes decisions regarding the operations of the project(s)

Composition

The committee shall comprise at least three directors. The Board may appoint additional members to the Committee or remove and replace members of the committee by resolution.

Meetings

The committee shall meet as frequently as required, but at not less than two times per year.

The committee shall have access to professional advice.

Three or more members of the Committee including at least two directors shall comprise a quorum. Where only three members are present, the unanimous vote of the three members will constitute an act of the Committee. Where the committee comprises more than three committee members, the vote of a majority of the members present will constitute an act of the committee. (Note: as thee are currently 6 members, at least 50% of the members should constitute a quorum.

The committee may invite senior management team members or other individuals, including external third parties to attend meetings of the committee, as they consider appropriate.

Access

Members of the committee have rights of access to reports and other material associated to the project to enable them to discharge their duties as committee members.

The Committee may consult independent experts where the committee considers this necessary to carry out its duties and responsibilities. Any costs incurred as a result of the committee consulting an independent expert will be borne by the company.

This policy is reviewed annually.

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2. Selection and Appointment of Directors

In accordance with Principle 2 of the ASX Corporate Governance Principles, the Board shall ensure that, collectively, it has the appropriate range and expertise to properly fulfill its responsibilities, including:

accounting and finance;
business development and risk management;
industry and public company experience; and
an appropriate ratio and skills matrix for all directors.

In the circumstances where the Board believes there is a need to appoint another director, whether due to retirement of a director or growth or complexity of the Company, certain procedures will be followed, including the following:

determine the skills and experience appropriate for the appointee having regard to those of the existing directors and any other likely changes to the Board.
agree the process and timetable for seeking such a person, which may involve an external search firm;
a short list of candidates will be prepared for the Board’s consideration and interview. The selection process will encourage visitation to the Company’s operating sites and an understanding of the management information systems. Candidates will be assessed on the following basis:
1. competencies and qualifications
2. independence;
3. other directorship;
4. time availability;
5. contribution to the overall balance of the composition of the Board and
6. depth of understanding of the role of and legal obligations, of a director.

The Board currently comprises 6 persons and is considered to have an appropriate balance of skills and experience.

The Chairman as and when needed will review the composition of the Board to ensure that the board continues to have the mix of skills and experience necessary for the conduct of the Company’s activities.

If an invitation to become a director is accepted, the Board will appoint the new director during the year and that person will then stand for re-election by shareholders at the next General Meeting. Shareholders are provided with relevant information on the candidates for re-election. When appointed to the Board, a new director will receive an induction appropriate to their experience.

This policy is reviewed annually.

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3. Code of Conduct

In accordance to Principle 3 of the ASX Corporate Governance Principles, this code of conduct aims to encourage the appropriate standards of the conduct and behavior of the directors, officers, employees and contractors (collectively called the employees) of the Company.

Employees are expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

General Principles

Employees of the Company must act honestly, in good faith and in the best interests of the Company as a whole.
Employees have a duty to use due care and diligence in fulfilling the functions of their position and exercising the powers attached to their employment.
Employees must recognise that their primary responsibility is to the Company’s shareholders as a whole.
Employees must not take advantage of their position for their personal gain, or the gain of their associates.
Directors have an obligation to be independent in their judgments.
Confidential information received by employees in the course of the exercise of their duties remains the property of the Company. Confidential information can only be released or used with specific permission from the Company.
Employees have an obligation, to comply with the spirit as well as the letter, of the law and with the principles of this code.

The Company views breaches of this code as a serious misconduct. Employees who have become aware of any breaches of this code must report the matter immediately to the Chief Financial Officer/Company Secretary. The Chief Financial Officer/Company Secretary has the responsibility to report the breach to the Board and to advise the relevant employee of the outcome and actions implemented.

Any employee who in good faith, reports a breach or a suspected breach will not be subject to any retaliation or recrimination for making that report.

Employees who breach the policies outlined in the Code may be subject to disciplinary action, including in the case of serious breaches, dismissal.

Directors

The following additional comments apply to directors of the Company and aim to ensure the directors have a clear understanding of the Company’s expectations of their conduct.

Fiduciary duties

All directors have a fiduciary relationship with the shareholders of the Company. A director occupies a unique position of trust with shareholders, which makes it unlawful for directors to improperly use their position to gain advantage for themselves.

Duties of directors

Each director must endeavour to ensure that the Company is properly managed so as to protect and enhance the interests of all shareholders. To this end, directors need to devote sufficient time and effort to understand the Company’s operations.

Directors should ensure that shareholders and the ASX are informed of all material matters which require disclosure and avoid or fully disclose conflicts of interest.

Conflict of Interest

At all times a director must be able to act in the interests of the Company. Where the interests of associates, the personal interest of a director or a director’s family may conflict with those of the Company, then the director must immediately disclose such conflict and either;

eliminate the conflict, or
abstain from participation in any discussion or decision-making process in relation to the subject matter of the conflict.

Insider trading

Information concerning the activities or proposed activities of the Company, which is not public and which could materially affect the Company’s share price must not be used for any purpose other than valid Company requirements.

Chief Financial Officer/Company Secretary

It is the responsibility of the Chief Financial Officer/Company Secretary to provide assurances to the Board that in all material respects:

the financial reports submitted to the Board represent a true and fair view of the Company’s financial condition and operational results; and
the Company’s risk management and internal compliance and control system is operating efficiently and effectively.

Stakeholders

The Board recognises that the primary stakeholders in the Company are its shareholders. Other legitimate stakeholders in the Company include employees, customers and the general community.

The Company’s primary objective is to create shareholder wealth through capital growth and dividends by the continued development of its business.

The Company is committed to conducting all its operations in a manner which:

protects the health and safety of all employees, contractors and community members;
recognises, values and rewards the individual contribution of each employee;
achieves a balance between economic development, maintenance of the environment and social responsibility
maintains good relationships with suppliers and the local community and
is honest, lawful and moral.

All employees (including directors) are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

Strict compliance to this policy is imperative. Any breach to this policy may result in termination of employment.

This policy is reviewed annually.

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4. Securities Trading Policy

In accordance with Principle 5 of the ASX Corporate Governance Principles, the Company’s share trading policy regulates dealings by directors, officers and employees in securities issued by the Company. In certain circumstances this policy also applies to contractors and consultants.

This policy imposes basic trading restrictions on all employees of the Company and its related companies who possess inside information and additional trading restrictions on:

directors;
Chief Financial Officer/Company Secretary; and
any other employees of the Company considered appropriate by the Chief Financial Officer/Company Secretary from time to time.

General restrictions when in possession of inside information

Insider Trading Laws

Insider trading laws cover all directors and employees of the Company. If a person is in possession of any unpublished price-sensitive information, it is a criminal offence to take advantage for personal gain or that of an associate(s).

Price-sensitive information is any information which if it were generally available, a reasonable person would expect it to have a material effect on the price or value of the Company’s securities, or would be likely to influence a person in deciding whether to buy or sell the Company’s securities.

Confidential Information

Employees and directors also have a duty of confidentiality to the Company.

A person must not reveal any confidential information concerning the Company, use that information in any way which may cause loss to the Company, or use that information to gain an advantage for themselves or anyone else.

Additional trading restrictions for directors and some employees

Additional restrictions on trading in the Company’s securities apply to directors of the Company, all executives reporting directly to the Board and any other employees of the Company considered appropriate by the Chief Financial Officer/Company Secretary from time to time (Restricted Persons).

Restricted Persons generally hold positions where it can be assumed that they will have inside information regarding the Company. Accordingly, additional restrictions may apply for any proposed trading in shares by Restricted Persons during nominated “closed periods.” These periods will be determined from time to time.

In exceptional circumstances clearance may be given for a Restricted Person to sell (but not to purchase) securities when they would otherwise be prohibited from doing so but not while there exists any matter which constitutes unpublished price-sensitive information in relation to the Company’s securities.

Requirements before trading

The requirements imposed by this policy are separate from and additional to the legal prohibitions in the Corporations Act on insider trading.

Before trading, or giving instructions for trading in the Company’s securities, a director must;

notify the Chairman of his intention to trade;
confirm that he/she does not hold any inside information;
have been advised by the Chairman that there is no reason to preclude him/her from trading in the Company’s securities as notified; and
complied with any conditions on trading imposed by the Chairman (including, for example, any time limits applicable to the clearance).

In the case of the Chairman intending to trade in the Company’s securities, he must notify and obtain clearance from the Board before trading, or giving instructions for trading.

In the case of any other Restricted Person, he/she must notify and obtain clearance from the Company Secretary before trading, or giving instructions for trading.

Notification of trading

Directors must notify the Company Secretary of any dealings in the Company’s securities immediately any such dealings occur.

Breaches of policy

Strict compliance with this policy is a condition of employment.

This policy is reviewed annually.

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5. Continuous Disclosure Policy

In accordance with Principle 5 of the ASX Corporate Governance Principles, the Company has put in place mechanisms designed to ensure compliance with the Corporations Act and the ASX Listing Rules such that

the Company complies with the general and continuous disclosure principles contained in the Corporations Act and the ASX Listing rules;
all investors have equal and timely access to material information concerning the Company – including its financial position, performance, ownership and governance;
Company reports information to the market on a timely basis
Company announcements are factual and presented in a clear and balanced way. “Balance” requires disclosure of both positive and negative information.

Disclosure Officer

The Company Secretary is the primary disclosure officer and is responsible for implementing and administering this policy. Whilst the disclosure officer is responsible for all communication with ASX it is executed on instruction from the Directors to decide on what should be disclosed publicly under this policy.

Material Information

In accordance with the ASX Listing Rules, the Company must immediately notify the market (via an announcement to the ASX)of any information concerning the Company which a reasonable person with experience in the industry in which the Company operates would expect to have a material effect on the price or value of the Company’s securities.

Information need not be disclosed if:

a reasonable person would not expect the information to be disclosed; and
the information is confidential and the ASX has not formed the view that the information has ceased to be confidential; and
one or more of the following applies:
1. it would breach the law to disclose the information;
2. the information concerns an incomplete proposal or negotiation;
3. the information comprises matters of supposition or is insufficiently definite to
  Warrant disclosure;
4. the information is generated for internal management purposes; or
5. the information is a trade secret.

The Company is also required to disclose information if asked to do so by the ASX, to correct or prevent a false market.
Note that the Company is deemed to have become aware of information where a director or officer of the Company has, or ought to have, come into possession of the information in the course of the performance of his duties as a director or executive officer.

The Corporations Act defines a material effect on price or value as being where a reasonable person would be taken to expect information to have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the securities.

Review of communications for disclosure

The disclosure officer will review all communications to the market to ensure that they are full and accurate and comply with the Company’s obligations. Such communications may include:

media releases;
analyst, investor or other presentations;
prospectuses; and
other corporate publications.

Examples of information or events that are likely to require disclosure include:

financial performance and material changes in financial performance or projected financial performance;
changes in relation to directors and the terms of employment of the Company Secretary / Chief Financial Officer
mergers, acquisitions, divestments, joint ventures or material changes in assets;
significant developments in new projects or ventures;
material changes to the Company’s security position;
material information affecting joint venture partners, customers or non-wholly owned subsidiary companies;
media or market speculation;
analyst or media reports based on inaccurate or out of date information;
industry issues which have, or which may have, a material impact on the Company; and
decisions on significant issues affecting the Company by regulatory authorities.

Where there is any doubt as to whether an issue might materially affect the price or value of the Company’s securities, the disclosure officer will assess the circumstances with a director/(s) and if necessary, seek external professional advice.

All presentations to analysts and investors will be released to the ASX and then included on the Company’s web-site.

Authorised spokespersons

The Company’s authorized spokespersons are the Chairman and the Company Secretary/Chief Financial Officer. In appropriate circumstances, the Chairman may from time to time authorise other spokespersons on particular issues and those within their area of expertise.

No employees or consultants are permitted to comment publicly on matters confidential to the Company. Any information which is not public must be treated by employees and consultants as confidential until publicly released.

Reporting of disclosable information

Once the requirement to disclose information has been determined, the disclosure officer in this case the Chief Financial Officer/Company Secretary and the Office Manager are the only persons authorized to release that information to the ASX.

Information to be disclosed must be lodged immediately with the ASX. Any such information must not be released to the general public until the Company has received formation confirmation of lodgement by the ASX.

All information disclosed to the ASX in compliance with this policy must be promptly placed on the Company’s web-site.

Market speculation and rumours

As a guiding principle, the Company has a “no comment” policy on market speculation and rumours, which must be observed by all employees. The Company however, will comply with any request by the ASX to comment upon a market report on rumour.

Trading halts

The Company may, in exceptional circumstances, request a trading halt to maintain orderly trading in the Company’s securities and to manage any disclosure issues.

No employee of the Company is authorized to seek a trading halt except for the disclosure officer.

Meetings and group briefings with investors and analysts

The Board of Directors is primarily responsible for the Company’s relationship with major shareholders, institutional investors and analysts. The Company Secretary is however, the primary contact for those parties.

Any written materials containing new price-sensitive information to be used in briefing media, institutional investors and analysts are lodged with ASX prior to the briefing commencing. Upon confirmation of receipt by ASX, the briefing material is posted to the Company’s web-site. Briefing materials may also include information that may not strictly be required under continuous disclosure requirements.

The Company will not disclose price sensitive information in any meeting with an investor or stockbroking analyst before formally disclosing it to the market. The Company considers that one-on-one discussions and meetings with investors and stockbroking analysts are an important part of pro-active investor relations. The Company however, will only discuss previously disclosed information in such meetings.

Periods prior to release of financial results

During the time between the end of the financial year or half year and the actual results release, the Company will not discuss financial performance, broker estimates and forecasts and, particularly, any pre-result analysis with stockbroking analysts, investors or the media, unless the information to be discussed has already been disclosed to the ASX.

Web-based communication

The Company’s web-site features discrete sections for shareholders and investors to ensure that such information can be accessed by interested parties. Such information will include:

annual reports and results announcements;
all other company announcements made to the ASX;
speeches and support material given at investor conferences or presentations;
company profile and company contact details; and
all written information provided to investors or stockbroking analysts.

Announcements lodged with the ASX will be placed on the Company’s web-site as soon as practicable after ASX confirms receipt of that information.

Shareholders may be offered the option of receiving information via email instead of post.

Analysts reports and forecasts

Stockbroking analysts frequently prepare reports on listed companies that typically detail their opinion on strategies, performance and financial forecasts. To avoid inadvertent disclosure of information that may affect the Company’s value or share price. The Company’s comments on analyst reports will be restricted to:

information the Company has issued publicly; and
other information that is in the public domain.

Given the level of price sensitivity to earnings projections, the Company will only make comment to correct factual errors in relation to information publicly issued by other parties and Company statements.

This policy is reviewed annually

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6. Shareholders Communication Policy

In accordance with Principle 6 of the ASX Corporate Governance Principles, the Company recognises the value of providing current and relevant information to its shareholders.

The point of contact between the Company and its shareholders is the Office Manager although primary responsibility for communication with shareholders is that of the Company Secretary.

Information is communicated to shareholders through:

continuous disclosure to ASX of all material information;
periodic disclosure through the annual report, half year financial report and quarterly reporting of exploration, production and corporate activities;
notices of meetings and explanatory material;
the annual general meeting;
the Company’s web-site.

The Company is committed to the promotion of investor confidence by ensuring that trading in the Company’s securities takes place in an efficient, competitive and informed market.

Electronic communication and web-site

The Company believes that communicating with shareholders by electronic means, particularly through the web-site, is an efficient way of distributing information in a timely and convenient manner.

The Company’s web-site includes the following pages, which contain relevant information for its shareholders:

section on the Company’s corporate governance policies and practices;
reports section, which contains copies of annual, half yearly and quarterly reports;
ASX Announcements which contain Press Releases and
Media Releases which contains articles from newspaper and media clippings

The Company’s web-site will be updated with material released to the ASX as soon as practicable after confirmation of release by the ASX.

All web-site information will be continuously reviewed and updated to ensure that information is current, or appropriately dated and archived.

The Company places the full text of notices of meeting and explanatory material on the web-site.

Written communication and annual report

The annual report of the Company is the major written communication by the Company to shareholders each year. Shareholders are provided with a hard copy of the annual report unless they elect to download it off the Company web-site.

Annual General Meeting

The Company recognises the rights of shareholders and encourages the effective exercise of those rights through the following means:

notices of meetings are distributed to shareholders in accordance with the provisions of the Corporations Act;
notices of meetings and other meeting material are drafted in concise and clear language
shareholders are encouraged to use their attendance at meetings to ask questions on any relevant matter, with time being specifically set aside for shareholder questions;
notices of meetings encourage participation in voting on proposed resolutions by lodgement of proxies, if shareholders are unable to attend the meeting;
it is general practice for a presentation on the Company’s activities to be made to shareholders at each annual general meeting; and
it is both the Company’s policy and the policy of PKF Chartered Accountants and Business Advisers (the Company’s auditor) to have a representative present at the annual general meeting and to answer any questions regarding the conduct of the audit and the preparation and content of the auditor’s report.

This policy is reviewed annually.

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7. Risk Management and Internal Compliance and Control

In accordance with Principle 7 of the ASX Corporate Governance Principles, Management determines the Company’s risk profile and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control. The Company’s process of risk management and internal compliance and control includes:

establishing the Company’s goals and objectives, and implementing and monitoring strategies and policies to achieve these goals and objectives;
continuously identifying and reacting to risks that might impact upon the achievement of the Company’s goals and objectives, and monitoring the environment for emerging factors and trends that affect these risks;
(c) formulating risk management strategies to manage identified risks and designing and implementing appropriate risk management policies and internal controls; and
monitoring the performance of, and continuously improving the effectiveness of, risk management systems and internal compliance and controls, including an ongoing assessment of the effectiveness of risk management and internal compliance and control.

Within the identified risk profile of the Company, comprehensive practices are in place that are directed towards achieving the following objectives:

effectiveness and efficiency in the use of the Company’s resources;
compliance with applicable laws and regulations; and
(c) preparation of reliable published financial information.

The Board oversees an ongoing assessment of the effectiveness of risk management and internal compliance and control.

The responsibility for undertaking and assessing risk management and internal control effectiveness is delegated to management. Management is required by the Board to report back on the efficiency and effectiveness of risk management, inter alia, by benchmarking the Company’s performance against industry standards.

The risk profile of the Company contains both financial and non-financial factors including material risks arising from pricing, competitive position, currency movements, operational efficiency, ore reserve replacement, fuel prices, ground water flows, product quality, investments in new projects.

To mitigate these risks, the Company has in place a broad range of risk management policies and procedures.

Management is responsible for the ongoing management of risk with standing instructions to appraise the Board of changing circumstances within the Company and within the international business environment.

This policy is reviewed annually.

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8. Performance Evaluation Practices and Remuneration

In accordance with Principle 8 of the ASX Corporate Governance Principles, part of the annual review of the performance of the Board, the appropriate size, composition and terms and conditions of appointment to and retirement from the Board are considered. The level of remuneration for non-executive directors is considered with regard to practices of other public companies and the aggregate amount of fees approved by shareholders. The Board also reviews the appropriate criteria for Board membership collectively.

The Board has established formal processes to review its own performance and the performance of individual directors and the committees of the Board, annually.

Board

A process has been established to review and evaluate the performance of the Board. The Board is required to meet annually with the specific purpose of reviewing the role of the Board, assessing its performance over the previous 12 months, including comparison with others, and examining ways in which the Board can better perform its duties. The review will incorporate the performance of the Board.

The annual review includes consideration of the following measures:

comparison of the performance of the Board against the requirements of the Board charter;
assessment of the performance of the Board over the previous twelve months having regard to the corporate strategies, operating plans and the annual budget;
review the Board’s interaction with management;
identification of any particular goals and objectives of the Board for the next year;
review the type and timing of information provided to the directors; and
identification of any necessary or desirable improvements to Board or committee charters.

The method and scope of the performance evaluation will be set by the Board and which may include a Board self-assessment checklist to be completed by each director. The Board may also use an independent adviser to assist in the review.

Non-executive Directors

The Chairman will have primary responsibility for conducting performance appraisals of non-executive directors in conjunction with them, having particular regard to:

contribution to Board discussion and function;
degree of independence including relevance of any conflicts of interest;
availability for and attendance at Board meetings and other relevant events;
contribution to Company strategy;
membership of and contribution to any Board committees; and
suitability to Board structure and composition.

Where the Chairman, following a performance appraisal, considers that action must be taken in relation to a director’s performance, the Chairman must consult with the remainder of the Board regarding whether a director should be counseled to resign, not seek re-election, or in exceptional circumstances, whether a resolution for the removal of a director be put to shareholders.

Chief Financial Officer/Company Secretary

The Board will annually review the performance of the Chief Financial Officer and Company Secretary who is one in the same person. At the commencement of each financial year, the Board and the Chief Financial Officer/Company Secretary will agree a set of generally Company specific performance measures to be used in the review of the forthcoming year.

These will include:

financial measures of the Company’s performance;
the extent to which key operational goals and strategic objectives are achieved;
development of management and staff;
compliance with legal and Company policy requirements; and
achievement of key performance indicators.

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