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

Introduction

This policy imposes constraints on directors, employees and consultants dealing in securities of the Company. It also imposes disclosure requirements on directors.
This policy has been adopted by the Board of the Company.

Objectives

The objectives of this policy are to:

minimise the risk of directors, employees and consultants of the Company contravening the laws against insider trading;
assist the Company in meeting its reporting obligations under the ASX Listing Rules; and
increase transparency with respect to dealing in securities of the Company by Key Management Personnel.

To achieve these objectives, directors, employees and consultants should treat this policy as binding on them in the absence of any specific exemption by the Board.

What is insider trading?

The Corporations Act 2001 (Cth) (Corporations Act) prohibits persons who are in possession of information that is not generally available to the public and which a reasonable person would expect to have a material effect on the price of securities in the Company (price sensitive information) from:

dealing in the securities; or
communicating the price sensitive information to others who might deal in the securities.

Information is ‘generally available’ if, amongst other things, it consists of readily observable matters or it has been brought to the attention of investors by an ASX announcement and a reasonable period for its dissemination has elapsed since the announcement.

Directors, employees and consultants of the Company will from time to time be in a situation where they are in possession of price sensitive information. Examples are the period prior to release of annual or half-yearly results to the Australian Securities Exchange (ASX) and the period during which a major transaction is being negotiated.

No dealing in securities of the Company when in possession of Price Sensitive Information

Directors, employees and consultants in possession of price sensitive information must not at any time:

deal in securities of the Company;
advise, procure, encourage or suggest another person deal in securities of the Company; or
communicate the price sensitive information, or cause the price sensitive information to be communicated, to a person who may deal in securities of the Company or may procure another person to deal in securities of the Company.

A contravention of the insider trading prohibitions is an offence and exposes a person to criminal and civil liability, including liability under civil damages actions and compensation orders. The penalty for a breach of the insider trading prohibition is a fine up to $220,000 for a natural person (and up to five times the maximum for a body corporate) or 5 years imprisonment, or both.

Key Management Personnel must ensure that external advisers who may receive price sensitive information are bound by confidentiality agreements or other enforceable confidentiality obligations.

The Company may also publish from time to time a list of securities in other companies which directors, employees and consultants are prohibited from dealing in due to the Company being in possession of price sensitive information in respect of those companies (Restricted Securities List). Directors, employees and consultants must not at any time deal in securities on the Restricted Securities List.

Key Management Personnel not to deal in securities of the Company during Restricted Periods

In addition to the restrictions outlined in this policy but subject to the section "Trading in exceptional circumstances during Restricted Periods", Key Management Personnel must not deal in securities of the Company during the following periods:

from the balance date until the second trading day after the Company’s annual or half-yearly results have been released to ASX; and
any other period designated by the Board.

(Restricted Periods).

Key Management Personnel Securities Trading Policy

At all other times outside the Restricted Periods, Key Management Personnel should not deal in securities of the Company unless:

they have satisfied themselves that they are not in possession of any inside information that is not generally available to the public;
they have contacted the Chairman or Company Secretary, and notified them of their intention to do so; and
where the Chairman wishes to deal in securities, he or she has contacted the Company Secretary or, in his or her absence, a Non-Executive Director, and notified them of his or her intention to do so.

Notification to the Chairman or Company Secretary is intended as a compliance monitoring function only and is not an endorsement of the proposed dealing.

Key Management Personnel remain responsible for their own investment decisions and compliance with the law.

Key Management Personnel should wait a full trading day after disclosure of inside information by the Company before dealing in securities so that the market has had time to absorb the information.

No short-term dealing in securities of the Company

Key Management Personnel must not at any time engage in short term dealing in securities of the Company.

Short-term dealing is considered to be dealing where the acquisition and disposal of securities occurs within 6 months of each other.

The Chairman may, at their discretion, permit Key Management Personnel to trade in securities in circumstances that would contravene this paragraph if that Key Management Personnel establishes hardship and that they do not have inside information.

No hedging

Despite any other part of this policy, Key Management Personnel must not at any time enter into transactions in associated products which operate to limit the economic risk of security holdings in the Company.

Trading in exceptional circumstances during Restricted Periods

Key Management Personnel may be granted prior written clearance by the Chairman or Company Secretary to deal in securities of the Company during the Restricted Periods if there are exceptional circumstances (provided that he or she is not in possession of unpublished, price sensitive information as outlined above in "No dealing in securities of the Company when in possession of Price Sensitive Information".

Exceptional circumstances are:

financial hardship whereby the relevant Key Management Personnel has a pressing financial commitment that cannot be satisfied other than by dealing in securities of the Company; or
a court order or court enforceable undertakings directing the dealing in securities of the Company.

Key Management Personnel wishing to deal in securities of the Company during a Restricted Period based on exceptional circumstances must apply in writing (email is acceptable) to the Chairman or Company Secretary for prior written clearance to deal in those securities. The application must include the following information:

details of the exceptional circumstances;
the number of securities of the Company that he or she wishes to deal in;
the way in which he or she wishes to deal in those securities;
a request for clearance to deal in those securities; and
confirmation that he or she is not in possession of any price sensitive information.

The Chairman or Company Secretary must consider the objectives of this policy and the purpose of the ASX Listing Rules in making a determination as to whether to provide consent to deal in securities of the Company during a Restricted Period.

Any consent provided by the Chairman or Company Secretary under this policy must:

be in writing (email is acceptable); and
outline the duration of the clearance (no more than 5 trading days).

Clearance by the Chairman or Company Secretary is intended as a compliance monitoring function only and is not an endorsement of the proposed dealing. Key Management Personnel remain responsible for their own investment decisions and compliance with the law.

Notification of dealing in securities

Key Management Personnel must notify the Company Secretary immediately after acquiring or disposing of a relevant interest in any securities of the Company.

Directors have entered into an agreement with the Company under which they are obliged to notify changes in interests in shares and other relevant matters in sufficient detail to allow the Company to comply with the ASX Listing Rules.

Margin Lending

ASX, in its Companies Update of 29 February 2008, has also highlighted that in certain circumstances, the Company may be required to disclose details of the margin lending arrangements of Key Management Personnel in respect of their securities of the Company (if any) if that information would be price sensitive under ASX Listing Rule 3.1.

To enable the Company to comply with ASX Listing Rule 3.1, any Key Management Personnel who enter into margin lending arrangement or otherwise encumber their securities of the Company (Security Arrangements) is required to provide details of those Security Arrangements to the Chairman (who will notify the Company Secretary) upon entering into, and on any change occurring to, the Security Arrangements. Security Arrangements may be subject to prohibitions on dealing in securities in the Company contained in this policy.

The details of the Security Arrangements that must be provided pursuant to the first paragraph in section "Margin Lending" must include the number of securities of the Company involved, any trigger points, the right of the lender or securityholder to sell the securities unilaterally and any other material details.

Directors Notification of dealings in Securities

ASX Listing Rules 3.19A and 3.19B require the Company to notify dealing in securities by Directors within 5 business days.

Section 205G of the Corporations Act 2001 requires a Director of a listed company to notify ASX within 14 days of acquiring or disposing of a relevant interest in any Securities of the Company. This is an obligation of the Director, not the Company. There is no prescribed form for such notifications.

ASIC has granted class order relief from the requirements of section 205G where notifications are made by the Company under Listing Rules 3.19A and 3.19B.

Penalties

Strict compliance with this policy is a condition of employment.

A contravention of this policy by any Key Management Personnel may result in the summary dismissal of that person.

Application

This policy applies to all directors, employees and consultants and its subsidiaries.

For the purposes of this policy, directors, employees and consultants “dealing” in securities of the Company includes associates of directors, employees and consultants dealing in securities of the Company. It is incumbent on each director and employee to take all reasonable steps to ensure that an associate does not deal in circumstances where the dealing could be attributed to the director or employee concerned and would involve a contravention of this policy if the dealing had been undertaken by the director or employee concerned. Associates include your relatives, entities which you control and entities you are acting in concert with.

Despite anything in this policy, the following types of dealing are excluded from the operation of this trading policy:

transfers of securities of the Company already held in a superannuation fund or other saving scheme in which the restricted person is a beneficiary and where the investments are made at the discretion of a third party;
an investment in, or dealing in units of, a fund or other scheme (other than a scheme only investing in securities of the Company) where the assets of the fund or other scheme are invested at the discretion of a third party;
where a restricted person is a trustee, trading in securities of the Company by that trust provided the restricted person is not a beneficiary of the trust and any decision to trade during a prohibited period is taken by the other trustees or by the investment managers independently of the restricted person;
undertakings to accept, or the acceptance of, a takeover offer;
dealing under an offer or invitation made to all or most of the security holders, such as, a rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an equal access buy-back, where the plan that determines the timing and structure of the offer has been approved by the Board of the Company. This includes decisions relating to whether or not to take up the entitlements and the sale of entitlements required to provide for the take up of the balance of entitlements under a renounceable pro rata issue;
a disposal of securities of the Company that is the result of a secured lender exercising their rights, for example, under a margin lending arrangement; and
the exercise (but not the sale of securities of the Company following exercise) of an option or a right under an employee incentive scheme, or the conversion of a convertible security.

The Board of the Company has absolute discretion to prohibit directors, employees and consultants from dealing in securities of the Company at any time.

Definitions

For the purposes of this policy:

dealing in securities includes:
1. applying for, acquiring or disposing of, securities;
2. entering into an agreement to apply for, acquire or dispose of, securities;
3. granting, accepting, exercising or discharging an option or other right or obligation to acquire or dispose of securities;
4. trading in financial products issued or created over securities; and
5. entering into transactions in financial products which operate to limit the economic risk of security holdings;
Key Management Personnel has the meaning given to it in the ASX Listing Rules and includes the people listed in Schedule 1;
price sensitive information has the meaning given in section "What is insider trading" above;
securities includes shares, options over those shares and any other financial products of the Company traded on ASX.

Schedule 1

Each Director of the Company
All members of the board of subsidiaries of the Company
The Chief Operating Officer or General Manager of any division of the Company or a subsidiary of the company
The General Manager of any division of the Company or a subsidiary of the Company
The Chief Financial Officer of the Company
The Company Secretary of the Company
All other executives who directly report to the Chief Operating Officer
Other executives as determined by the board from time to time
Other than any of the persons listed above, an Officer of the Company as defined by section 9 of the Corporations Act
Other than any of the persons listed above, an employee having authority and responsibility for planning, directing and controlling the activities of the Company or any subsidiary of the Company

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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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