for personal use only - asx · 2011. 10. 19. · grc4 7,240,757 460,775 e09/1368 60 030 80 grc5...

Aurora Minerals Limited PO Box 707, Belmont, WA 6984, Australia, Tel +61 8 6143 1840

19 October 2011

The Manager

Announcements

Company Announcements Office

Australian Securities Exchange Limited

PO Box H224 Australia Square

SYDNEY NSW 2000

Dear Sir/Madam

Please find attached the Aurora Minerals Limited Annual Report for the year ended 30

June 2011.

Yours faithfully

Peter Ruttledge

Company Secretary

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2011AnnuAl RepoRt

2011AnnuAl RepoRt

AURORA MINERALS LIMITEDACN 106 304 787

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Corporate DireCtory

DireCtorS

Phillip Jackson

Chairman

Martin Pyle

Managing Director

Robert Taylor

Executive Director

CoMpaNy SeCretary

Peter Ruttledge

StoCK eXCHaNGe LiStiNG

Australian Securities Exchange

2 The Esplanade

Perth WA 6000

Aurora Minerals Limited is a public listed company incorporated in Australia

SHare reGiStry

Computershare Investor Services Pty Limited

Level 2, 45 St Georges Tce

Perth Western Australia 6000

Telephone +61 8 9323 2000

Facsimile +61 8 9323 2033

aUDitorS

RSM Bird Cameron Partners

8 St Georges Tce


reGiStereD oFFiCe

271 Great Eastern Hwy

Belmont Western Australia 6104

Telephone +61 8 6143 1840

Facsimile +61 8 6162 9079

Email [email protected]

Websites www.auroraminerals.com For

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report 2011chairmans

SHare reGiStry

Computershare Investor Services Pty Limited

Level 2, 45 St Georges Tce


Telephone +61 8 9323 2000

Facsimile +61 8 9323 2033

aUDitorS


8 St Georges Tce


reGiStereD oFFiCe

271 Great Eastern Hwy

Belmont Western Australia 6104

Telephone +61 8 6143 1840

Facsimile +61 8 6162 9079

Email [email protected]

Websites www.auroraminerals.com

Dear Fellow Shareholder

I am pleased to report on the progress made this year by Aurora Minerals Limited (“Aurora”) on two of our key projects located in the Gascoyne and Bangemall Provinces of the mid-north of Western Australia. Some 17,000m of exploration drilling was completed during the year highlighting a sustained tempo of aggressive activity justified by the prospectivity of our tenements and sound cash position.

The Glenburgh Project is rapidly emerging as our key exploration project due to the early success we have recorded from drilling campaigns. After several years of reconnaissance work the first of several copper and gold prospects (GBO) was drilled in May 2011. Significant zones of copper mineralisation (>1% copper) were delineated from the drilling results within a broad halo of anomalous copper values (>0.1% copper). From a single albeit extensive prospect at GBO covering some 6km of strike, the scope of the project has now grown to include more than a dozen promising targets expressed by surficial copper and gold mineralisation and/or geophysical, structural and geochemical targets, covering a strike extent of several tens of kilometres and a width of in excess of 10km. Consistent with our exploration philosophy we have secured a very strong tenement position at Glenburgh with 2,500km2 of mostly granted exploration tenure to increase the chances of commercial discoveries.

Work programs for the balance of 2011 and into 2012 will include additional phases of prospecting, soil sampling and drilling of various targets including follow up drilling at the GBO, M&B and Pink Elephant Prospects which have generated significant copper intersections. The occurrence of variable gold grades within the copper intervals is intriguing particularly considering there are discrete gold shows such as Nigel’s Find in close proximity from which small gold nuggets have been recovered by prospectors and our field teams.

At our flagship Capricorn Southeast (“Mango”) Project two additional large drilling programs were completed during the year with the aim of systematically testing the 90km of prospective stratigraphy. Results have been enigmatic, with more moderate grade but generally narrow intervals of manganese mineralisation (typically 10-25%) recorded from a range of targets. However continuity of most prospects drilled to date has been highly variable.

Aurora’s geotechnical team, including a range of expert consultants, are continuing to evaluate and test various geophysical and geochemical exploration techniques in order to help prioritise targets for follow up drilling, as with some 90km of prospective stratigraphy to thoroughly test, the costs of pattern drilling extensive manganese outcrops is prohibitive.

Our subsidiary and joint venture partner Desert Energy Limited (“Desert”) has recorded notable success from exploration on the Camel Hill Joint Venture on two fronts:

• reconnaissance drilling of magnetic targets demonstrated that the targeting model is effective and capable of delineating substantial magnetite iron resources; and

• prospecting and sampling has lead to the identification of a prospective copper gold target named Dalgety Copper.

A plan for commencing reverse circulation drilling on the Dalgety copper and gold targets is well advanced and subject to necessary consents will be drilled during the 2011 December quarter.

I would like to thank my fellows Directors, and the whole Aurora team, for their contributions during the year. I would also like to thank shareholders for their ongoing support.

Phillip JacksonChairman

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OPERATIONS REPORT............................................................................................................1

DIRECTORS’ REPORT..............................................................................................................7

STATEMENT OF COMPREHENSIVE INCOME ..................................................................16

STATEMENT OF FINANCIAL POSITION ............................................................................17

STATEMENT OF CHANGES IN EQUITY .............................................................................18

STATEMENT OF CASH FLOWS ...........................................................................................19

NOTES TO THE FINANCIAL STATEMENTS ......................................................................20

DIRECTORS’ DECLARATION...............................................................................................41

INDEPENDENT AUDITOR’S REPORT ................................................................................ .42

INDEPENDENT AUDITOR’S DECLARATION ....................................................................44

CORPORATE GOVERNANCE STATEMENT .......................................................................45

SHAREHOLDER INFORMATION .........................................................................................49

MINERAL TENEMENT INFORMATION ..............................................................................51

2011contents

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1AuRoRA MIneRAlS lIMIteD ANNUAL REPORT 2011

report 2011operations

OPERATIONS REPORTAurora conducted extensive regional exploration campaigns primarily on its Glenburgh Copper/Gold and Capricorn South East Manganese Projects which are located in the central province of Western Australia (Figure 1). Aurora’s partly owned subsidiary, Desert Energy also undertook extensive exploration activities on the Camel Hills Joint Venture Project.

Figure 1: Project Location Plan

Glenburgh Project

The Glenburgh Project consists of granted exploration licences applications covering an area of approximately 2,500km2 and is located in the Gascoyne Metamorphic Complex of central Western Australia. During the year Aurora Minerals Limited undertook a series of campaigns of reconnaissance mapping, sampling, soil surveys and general exploration over its Glenburgh Copper/Gold Project (Figure 2). In May 2011 the company undertook a maiden Reverse Circulation (RC) drilling program for approximately 3,100m at the GBO Prospect. Broad zones of anomalous copper mineralisation were encountered in the drilling with peak single metre copper grades up to 2% copper. The maiden RC drilling program was designed to test copper-in-soils anomalies as shown in Figure 3. These zones form semi-continuous anomalies over a strike length of some 6km situated immediately south of a prominent East-West fault zone (Knotmi Fault) that appears to cut basement and the overlying sediments. At the western end of the soil anomaly rock chip samples have also been recorded displaying high-grade secondary copper minerals.

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2 AuRoRA MIneRAlS lIMIteD ANNUAL REPORT 2011

report 2011 Cont…operations

A series of broadly North-South oriented drill-lines with variably 1-4 drill-holes per section, were drilled into the anomaly for a total of 3,098m. At a 0.2% Cu lower cut-off eighteen of 31 holes drilled reported significant copper mineralisation. At a 400ppm lower cut-off, 27 of the 31 holes were anomalous in copper; results are summarised in Figure 3 and in Tables 1&2. Copper mineralisation was encountered from near surface (e.g. in hole GRC0005) to a maximum depth of 145m down-hole (in hole GRC0013) representing the approximate depth limit of the Stage One RC drilling. Copper minerals reported from chip logging included malachite and chrysocolla from within the weathered zone transitioning to sulphide mineralisation typically associated with silicification +/- quartz veining within fresh rock. Variable gold grades up to 260ppb (0.26g/t) were recorded within the copper rich intersections. Thirty of the 31 drill-holes were drilled to the north at a declination of 600. Hole GRC0016 was drilled to the south (600 dip) as a scissor hole (Figure 4). Holes GRC0014, 15 & 16 were drilled on the one section and indicate that the mineralisation dips steeply to the south on this section.In parallel with the highly successful maiden drill program at the GBO prospect, Aurora field crews have been systematically prospecting the Glenburgh Project following up anomalies identified from remote sensing and regional structural interpretation.

Figure 2: Glenburgh Targets overlain on Geological Sketch Map

Figure 3: GBO Prospect Drill Collar Location Plan

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Several new zones of surficial copper and gold mineralisation were also discovered from surface prospecting including; the Pink Elephant, M&B and Green Dragon Prospects.

A large VTEM airborne survey was completed in the second half of the year and results are still being evaluated. This survey covered the central section of the main East-West fault including the GBO and Green Dragon Prospects and the ENE trending Deadman Fault Zone including the M&B and Pink Elephant Prospects.

In 2011/2012 follow up will include RC drilling programs on multiple targets including those discussed above.

Aurora has received a co-funding grant of $150,000 to assist with the drilling of the GBO prospect area. Funding was granted from a successful application to the 2011/12 GSWA, Department of Mines and Petroleum EIS Co-funded Drilling Project.

Figure 4: GBO Cross Sections

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Hole MGA_North MGA_East Tenement Dip Azimuth Depth (m)GRC1 7,241,030 460,599 E09/1368 60 030 101GRC2 7,241,007 460,587 E09/1368 60 030 86GRC3 7,240,777 460,787 E09/1368 60 030 80GRC4 7,240,757 460,775 E09/1368 60 030 80GRC5 7,240,865 460,381 E09/1368 60 030 86GRC6 7,240,837 460,368 E09/1368 60 030 113GRC7 7,241,135 460,461 E09/1368 60 030 74GRC8 7,241,520 463,910 E52/1988 60 355 95GRC9 7,241,115 465,090 E52/1988 60 032 71

GRC10 7,241,030 465,190 E52/1988 60 036 74GRC11 7,241,325 464,785 E52/1988 60 024 62GRC12 7,241,500 464,345 E52/1988 60 015 113GRC13 7,241,476 464,339 E52/1988 60 015 152GRC14 7,241,487 463,706 E52/1988 60 355 89GRC15 7,241,461 463,708 E52/1988 60 355 131GRC16 7,241,531 463,706 E52/1988 60 175 74GRC17 7,241,552 463,705 E52/1988 60 355 106GRC18 7,241,499 463,303 E52/1988 60 340 123GRC19 7,241,255 462,710 E52/1988 60 337 176GRC20 7,240,966 462,149 E52/1988 60 040 53GRC21 7,240,949 462,135 E52/1988 60 040 107GRC22 7,240,991 462,118 E52/1988 60 040 56GRC23 7,240,973 462,103 E52/1988 60 040 101GRC24 7,241,310 461,000 E09/1368 60 000 83GRC25 7,241,270 461,000 E09/1368 60 000 83GRC26 7,240,985 460,573 E09/1368 60 030 110GRC27 7,241,115 460,439 E09/1368 60 030 107GRC28 7,241,060 460,200 E09/1368 55 030 116GRC29 7,241,020 460,200 E09/1368 56 045 125GRC30 7,240,974 460,202 E09/1368 55 045 125GRC31 7,240,940 460,200 E09/1368 55 045 146

GLENBURGH DRILLHOLE SUMMARY JULY 2011

NOTE: Datum used GDA94 zone 50

Table 1: GBO Prospect Reverse Circulation Drill Information

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CommentHole From (m) To (m) Interval (m) Cu %GRC1 24 26 1 0.20 GRC2 53 54 1 0.69

61 62 1 0.34 GRC3 NSIGRC4 NSIGRC5 22 23 1 1.50

24 26 2 0.25 32 35 3 1.06 incl. 1m @ 1.5% Cu from 22m55 62 7 0.32 incl. 2m @ 1.5% Cu from 33m

GRC6 57 58 1 0.32 62 63 1 0.50 68 74 6 0.65 incl. 2m @ 1.4% Cu from 68m87 98 11 0.37

GRC7 41 44 3 0.62 GRC8 NSIGRC9 NSIGRC10 NSIGRC11 NSIGRC12 82 90 8 0.66 incl. 2m @ 1.4% Cu from 84mGCR13 112 114 2 0.33

144 145 1 0.47 GRC14 34 40 6 0.56

43 65 22 0.57 incl. 1m @ 2.0% Cu from 53m and,incl. 1m @ 1.5% Cu from 64m

GRC15 72 80 8 0.56 incl. 1m @ 1.4% Cu from 73m83 84 1 0.55 95 96 1 0.23

103 104 1 0.23 106 108 2 0.24 111 118 7 0.20 120 121 1 0.22

GRC16 22 34 12 0.45 incl. 2m @ 1.2% Cu from 26m

44 67 23 0.51 incl. 2m @ 1.7% Cu from 51m and, 2m @ 1.4% Cu from 65m

72 74 2 0.34 GRC17 82 86 4 0.32 GRC18 44 51 7 0.72 incl. 2m @ 1.2% Cu from 44m

59 60 1 0.22 92 94 2 0.45

GRC19 NSIGRC20 NSIGRC21 100 102 2 0.21 GRC22 NSIGRC23 NSIGRC24 NSIGRC25 NSIGRC26 83 84 1 0.42

88 93 5 0.54 GRC27 96 98 2 0.49 GRC28 NSIGRC29 100 107 7 0.28 GRC30 68 70 2 0.33

109 114 5 0.25 GRC31 44 50 6 0.27

121 122 1 0.24 129 140 11 0.29

Table 2: Glenburgh GRC1 to 31, Mineralised IntervalsMineralisation >0.2% Cu

Table 2: GBO Prospect Significant Copper Assays – Phase One RC Drilling Program (0.2% Cu lower cut)

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Capricorn Southeast (Manganese) Project

The project consists of granted exploration licences covering approximately 2,540km2 and is located over the north-western arm of the mid-Proterozoic Bangemall Basin, approximately 950kms north of Perth, Western Australia.

During the year Aurora undertook several RC drilling campaigns for a total of approximately 11,250m testing a range of targets including outcropping “Ridge” manganese formations, laterite targets on the northern flanks of the outcropping Ridge horizon and buried paleochannel targets. A number of significant manganese intersections were reported from the drilling campaigns in all three prospect types.

A large Electromagnetic (XTEM) airborne survey was completed over part of the project area, with the results generating a range of additional targets. A ground based gravity survey was conducted over the Isles Bore Prospect and indicated gravity techniques may assist in the identification of further manganese/iron mineralisation.

Samples were submitted to a metallurgical testing laboratory for beneficiation testwork including Dense Media Separation (DMS). Although an RC drill sample is not run-of-mine size ore, this work does indicate that the material can potentially be upgraded to a ~35% Mn product with recoveries of approximately 50%.

A short RC drilling program was also completed on the Dooley Downs copper/gold target located within the broader project area. Despite elevated rock chip and copper-in-soil anomalism being previously reported, the RC drilling program did not encounter significant copper or gold mineralisation.

Desert Energy Limited (Aurora 40%)

Camel Hills Joint Venture (Desert earning an initial 51%)

Camel Hills is a large project covering some 4,800km2 in the southern Gascoyne Region of Western Australia. Desert’s geologists consider it has exploration potential for magnetite iron ore, copper, gold, nickel-PGE and rare earths-uranium mineralisation.

During the year Desert completed $1.94m of expenditure on the project satisfying the minimum first-year earn-in requirement of the joint venture.

Two reverse circulation drilling campaigns for approximately 4,350m were successfully completed targeting predominantly magnetite iron. The targets were generated from detailed aero-magnetic survey, prospect scale mapping and sampling, and ground based magnetic and gravity surveys. Several broad zones of magnetite iron were intersected in the drilling and numerous additional mineralised intervals were encountered. Iron ore sample from the drilling have been submitted for metallurgical test work.

The drilling to date has been reconnaissance in nature and many targets displaying surface magnetite iron mineralisation and/or strong magnetic signatures interpreted from regional airborne magnetic survey data have yet to be drill tested. Ongoing testing of these targets will continue in 2011/2012.

Copper and gold mineralisation was identified at a prospect named Dalgety Copper late in the year from surface prospecting, mapping and sampling. Several high grade copper and gold rock chip samples from this area have been reported and form the basis of follow-up sampling and drill testing in 2011/2012.

Field mapping and prospecting and sampling was also conducted along the Errabiddy Shear zone which trends approximately NE-SW over some 80km through the northern half of the Camel Hills Project area. The Main Grid gold-in-soil anomaly was extended and work is ongoing to define drill targets.

The information in this Report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Robert S Taylor, a Member of The Institute of Materials, Minerals and Mining and Mr John Jordan, a corporate member of the Australasian Institute of Mining and Metallurgy. Executive Director of Aurora Minerals Limited, Robert Taylor, and John Jordan, consultant, consult to the Companies through their respective consulting companies Able Kids Pty Ltd and Churchlands Consulting Pty Ltd.

Robert Taylor and John Jordan have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Robert Taylor and John Jordan consent to the inclusion in the Report of the matters based on this information in the form and context in which it appears.

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report 2011

DIRECTORS’ REPORTAurora Minerals Limited (“the Company”) is a public company incorporated and domiciled in Australia and listed on the Australian Securities Exchange. The registered office of the Company is located at 271 Great Eastern Highway, Belmont, Western Australia.

The Directors of the Company present their report on the group, which comprises Aurora Minerals Limited and its controlled entities, for the financial year ended 30 June 2011 (“financial period”).

DIRECTORSThe names of the Directors of Aurora Minerals Limited during the whole of the financial period and up to the date of this report are:

Phillip Sidney Raymond Jackson (BJuris, LLB, MBA, FAICD), Chairman Phillip Jackson, the Chairman and a Director of the Company, is a barrister and solicitor with significant legal and international corporate experience, especially in the areas of commercial and contract law, resources law and corporate governance. He was formerly a managing legal counsel for Western Mining Corporation, and in private practice specialised in small to medium resource companies. Phillip was for many years a director and senior executive of the Australian and Asian subsidiaries of a large multinational oil services company. He is now the Legal Manager of the regional operations of a large oil and gas company. He has been a director of a number of Australian public companies and has management experience in administration, finance, accounting and human resources. Phillip has been Chairman of Aurora Minerals Limited since it listed in June 2004 and is responsible for monitoring the Company’s corporate governance. Phillip is also Chairman of Desert Energy Limited and is a non-executive director of listed company Scotgold Resources Limited.

Robert Spencer Taylor (BSc Mining Geology, PhD Geology, ARSM, Member IMM), Executive DirectorDr Taylor, Executive Director of the company, is a geologist with 30 years world-wide experience in mineral exploration for a range of commodities including gold, and has discoveries in gold, diamond and base metals. He was General Manager Exploration for Goldfields Limited (1997–2001), through its merger with Delta Gold NL in 2001 to form AurionGold Limited, and then General Manager of Exploration for AurionGold in 2002 up to its takeover by Placer Dome Asia Pacific Limited. He was closely involved in consolidating the Kalgoorlie gold district. Prior to this, Dr Taylor held senior positions with Rio Tinto in Africa, Kennecott, BP Minerals and the Selection Trust Group in North and Central America and parts of Europe. Dr Taylor is currently an Executive Director of the listed public company Desert Energy

Limited. Dr Taylor held the position of Managing Director of the Company from the date of its incorporation until relinquishing that position on 14 July 2010, and since then has served as an Executive Director. Dr Taylor is responsible for managing the exploration activities of the company including new projects.

Garry Patrick O’Hara (BSc Geology, MAusIMM), Director (Resigned 7 July 2010)Mr O’Hara, an Executive Director, is a geologist with extensive experience in the Australian junior company sector. He has been exploration manager of a number of Australian resource companies where his primary role was identification and acquisition of project opportunities and the application of modern exploration techniques. He specialises in project negotiations and acquisitions, and has considerable experience in negotiation and management of joint ventures with major mining companies. In recent years he has gained intensive corporate experience in ASX listed companies including in financing and administration. Mr O’Hara was a Director of Golden State Resources Limited from February 1994 to February 2003 and Ezyimage Limited (now MGM Wireless Limited) from January 2000 to February 2003, and was an Executive Director of the listed public company Desert Energy Limited until resigning that position in July 2010. Mr O’Hara was responsible for corporate and business development including new projects.

Martin James Pyle (BSc Geology, MBA), Managing Director (Appointed 6 May 2010)Mr Pyle, Managing Director, has a broad range of experience gained over more than 20 years in the resources industry in Australia. His roles have included positions as Corporate Finance Executive with prominent east and west coast broking firms. During this time he was responsible for the generation and execution of resources related equity raisings, mergers & acquisitions, corporate advisory and research. Most recently he has provided corporate advisory services to a number of junior resource companies and is Executive Director of Desert Energy Limited, Chairman of Syndicated Metals Limited and Midwinter Resources No Liability and non-executive director of Gold Road Resources Limited. Mr Pyle was appointed as Managing Director of the Company on 14 July 2010, and in that role is responsible for corporate affairs and the day to day oversight of the Company’s activities.

Mr Pyle has a Bachelor of Science degree (First Class Honours – Geology) and a Masters of Business Administration.

In the three years immediately prior to the end of the financial year, Mr Pyle also served as a director of the following listed company:

Nickelore Limited 24/08/2009 to 15/10/2009

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report 2011 Cont…directors’

COMPANY SECRETARYPeter Campbell Ruttledge (BSc, CA, FFin)Peter Ruttledge is a chartered accountant and has a broad background in corporate finance, administration and accounting. He has been a director and company secretary of several mining and exploration companies and is currently company secretary of a number of ASX listed exploration companies including Desert Energy Limited.

PRINCIPAL ACTIVITIESThe principal activities of the group are mineral exploration within Australia and assessing further opportunities.

OPERATING RESULTSThe operating loss after tax for the financial period was $6,426,760 (2010: $7,016,647) of which $6,381,448 (2010: $4,824,801) related to exploration expenditure written off.

DIVIDENDSNo dividends were paid during the year and the directors do not recommend the payment of a dividend.

SIGNIFICANT CHANGES IN STATE OF AFFAIRSOther than the operating results there were no other significant changes in the state of affairs of the Company.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD AND LIKELY DEVELOPMENTThere has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the group, the results of those operations, or the state of affairs of the group in future financial periods.

FINANCIAL POSITIONThe operating loss after tax for the year was $6,426,760 (2010: $7,016,647). At year end the group had $18.4 million net cash.

REVIEW OF OPERATIONSGlenburghThe Glenburgh Project consists of granted exploration licences applications covering an area of approximately 850 km2 and is located in the Gascoyne Metamorphic Complex of central Western Australia. During the year Aurora Minerals Limited undertook a series of campaigns of reconnaissance mapping, sampling, soil surveys and general exploration over its Glenburgh Copper/Gold Project. In May 2011 the company undertook a

maiden RC drilling program for approximately 3,000m at the GBO Prospect. Broad zones of anomalous copper mineralisation were encountered in the drilling with peak single meter copper grades up to 2% copper. The mineralisation is open at depth and along strike.

Several new zones of surficial copper and gold mineralisation were also discovered from surface prospecting including the Pink Elephant, M&B and Green Dragon Prospects.

A large VTEM airborne survey was completed in the second half of the year and results are still being evaluated. This survey covered the central section of the main East-West fault including the GBO and Green Dragon Prospects and the east-north east trending Deadman Fault Zone including the M&B and Pink Elephant Prospects.

In 2011/2012 follow up will include RC drilling programs on multiple targets including those discussed above. Aurora has received a co-funding grant of $150,000 to assist with the drilling of the GBO prospect area. Funding was granted from a successful application to the 2011/12 GSWA, Department of Mines and Petroleum EIS Co-funded Drilling Project.

Capricorn Southeast (Manganese) Project The project consists of granted exploration licences covering 2,540km2 and is located over the north-western arm of the mid-Proterozoic Bangemall Basin, approximately 950kms north of Perth, Western Australia.

During the year Aurora undertook several RC drilling campaigns for a total of approximately 11,250m testing a range of targets including outcropping “Ridge” manganese formations, laterite targets on the northern flanks of the outcropping Ridge horizon and buried paleochannel targets. A number of significant manganese intersections were reported from the drilling campaigns in all three prospect types.

A large electromagnetic (XTEM) airborne survey was completed over part of the project area, with the results generating a range of additional targets. A ground based gravity survey was conducted over the Isles Bore Prospect and indicated gravity techniques may assist in the identification of further manganese/iron mineralisation.

Samples were submitted to a metallurgical testing laboratory for beneficiation testwork including Dense Media Separation (DMS). Although an RC drill sample is not run-of-mine size ore, this work does indicate that the material can potentially be upgraded to a ~35% Mn product with recoveries of approximately 50%.

A short RC drilling program was also completed on the Dooley Downs copper/gold target located within the broader project area. Despite elevated rock chip and copper-in-soil anomalism being previously reported, the RC drilling program did not encounter significant copper or gold mineralisation.

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REVIEW OF OPERATIONS Cont…Desert Energy Limited (Aurora 40%) Camel Hills Joint Venture (Desert earning an initial 51%)Camel Hills is a large project covering some 5,000km2 in the southern Gascoyne Region of Western Australia. Desert’s geologists consider it has exploration potential for magnetite iron ore, copper, gold, nickel-PGE and rare earths-uranium mineralisation.During the year Desert completed $1.94m of expenditure on the project satisfying the minimum first-year earn-in requirement of the joint venture.

Two reverse circulation drilling campaigns for approximately 4,350m were successfully completed,

targeting predominantly magnetite iron. The targets were generated from detailed aero-magnetic survey, prospect scale mapping and sampling, and ground based magnetic and gravity surveys. Several broad zones of magnetite iron were intersected in the drilling and numerous additional mineralised intervals were encountered. Iron ore sample from the drilling have been submitted for metallurgical test work.

The drilling to date has been reconnaissance in nature and many targets displaying surface magnetite iron mineralisation and/or strong magnetic signatures interpreted from regional airborne magnetic survey data have yet to be drill tested. Ongoing testing of these targets will continue in 2011/2012.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of Directors held during the financial year ended 30 June 2011 and the number of meetings attended by each Director:

Full Board Meetings Meetings by Circular Resolutions

Director Number Attended

Number eligible to attend Number Held Number eligible to

attendPhillip Jackson 3 3 8 8

Robert Taylor 3 3 8 8

Martin Pyle 3 3 8 8

Garry O’Hara (i) - - - -

Governance Committee Meetings Remuneration Committee Meetings

Director Number Attended

Number eligible to attend Number Held Number eligible to

attendPhillip Jackson 1 1 1 1

Robert Taylor - - 1 1

Martin Pyle - - 1 1

Garry O’Hara (i) - - - -

(i) Garry O’Hara resigned 7 July 2010

REMUNERATION REPORT (Audited) Board policyThe objective of the Company’s remuneration policy for directors and executives is to ensure reward for performance is appropriate for the results delivered. The policy is designed to ensure that the following key criteria for good governance practices are followed:

Acceptability to shareholdersTransparencyCapital management

Company performance, shareholder wealth and director and executive remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives by the issue of options to the directors and executives to encourage the alignment of personal and

shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth.

The constitution of the Company provides that the non-executive Directors may collectively be paid as remuneration for their services a fixed sum not exceeding the aggregate maximum sum per annum from time to time determined by the Company in general meeting. The Company has entered into separate Consulting Agreements with each of the Directors and accordingly the Company has resolved not to pay any remuneration to the non-executive Directors.

A Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

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$99,

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anks

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of th

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nd S

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ents

with

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pany

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e co

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sted

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w:

Annu

al F

eeNo

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erio

d -

Com

pany

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$22,

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yle

$125

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$62,

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ths

$12,

250

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ins

$73

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onth

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$12,

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Peter

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mon

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onth

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3,16

8

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directors’report 2011 Cont…

REMUNERATION REPORT (Audited) Cont…(a) Details of RemunerationThe remuneration of the key management personnel, being the Directors, and other specified executives is summarised below.

No salaries, fees, commissions, bonuses, superannuation or other form of remuneration were paid or payable to key management personnel or specified executives during the year other than fees and options paid to companies associated with those persons, in terms of consulting agreements, as follows:2011 Short-term

BenefitsLong Term

BenefitsOther

BenefitsTotal Represented

by EquityFees Paid to

Associated EntityEquity

$ $ $ $ %DirectorsRobert Taylor 225,000 - - 225,000 -Phillip Jackson 135,000 - - 135,000 -Martin Pyle 250,008 380,908 - 630,916 60Garry O’Hara (i) 187,500 - - 187,500 -Specified ExecutivesPeter Ruttledge 41,508 8,896 - 50,404 18John Jordan 162,583 184,227 - 346,810 53Kenneth Banks 174,042 59,307 - 233,349 25Guy Watkins 164,625 29,654 - 194,279 15Eric Moore 164,625 29,654 - 194,279 15

1,504,891 692,646 - 2,197,537

(i) Resigned 7 July 2010

2010 Short-term Benefits

Long Term Benefits

Other Benefits

Total Represented by Equity

Fees Paid to Associated Entity

Equity

$ $ $ $ %DirectorsRobert Taylor 181,729 203,968 - 385,697 53Phillip Jackson 110,705 624,202 - 734,907 85Martin Pyle (i) 20,834 - - 20,834 -Garry O’Hara 181,729 203,968 - 385,697 53Specified ExecutivesPeter Ruttledge 44,001 10,569 - 54,570 19John Jordan (ii) 126,667 339,313 - 465,980 73Kenneth Banks 149,790 175,565 - 325,355 54Guy Watkins 139,787 53,383 - 193,170 28Eric Moore 139,790 7,825 - 147,615 5

1,095,032 1,618,793 - 2,713,825

(i) Commenced 1 June 2010(ii) Commenced 1 Sept 2009

The Remuneration detailed above includes fees paid by the Company’s subsidiary, Desert Energy Limited.

The Company has not entered into any agreements to remunerate consultants on the basis of performance.

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REMUNERATION REPORT (Audited) Cont…(b) Shares issued as remuneration

No shares were issued to the Key Management Personnel.

(c) Compensation Options(i) Options granted as Compensation – the Company

2011 NumberGranted

Grant Date

Value of Option at

Grant Date

Exercise Price

Expiry Date

Vesting Date

Value yet to Vest

Directors Mr M Pyle 1,000,000 02 Sept 10 $0.183 $0.4495 02 Sept 14 02 Sept 11 $32,107 Mr M Pyle 1,000,000 02 Sept 10 $0.183 $0.4495 02 Sept 14 02 Sept 12 $107,713 Mr M Pyle 1,000,000 02 Sept 10 $0.183 $0.4495 02 Sept 14 02 Sept 13 $132,824

3,000,000

2010 NumberGranted

Grant Date

Value of Option at

Grant Date

Exercise Price

Expiry Date

Vesting Date

Value yet to Vest

Directors Mr P Jackson 1,500,000 30 Nov 09 $0.325 $1.005 15 Nov 15 16 Dec 09 -

SpecifiedExecutives Mr K Banks 500,000 30 Nov 09 $0.235 $0.825 16 Dec 12 17 Dec 09 - Mr K Banks 300,000 30 Nov 09 $0.164 $1.62 26 Feb 13 11 Mar 10 - Mr J Jordan 1,000,000 02 Oct 09 $0.264 $0.50 30 Sept 13 02 Oct 09 - Mr J Jordan 500,000 15 June 10 $0.191 $1.20 17 June 14 17 June 11 $91,986 Mr J Jordan 500,000 15 June 10 $0.191 $1.20 17 June 14 17 June 12 $93,820

4,300,000

All options were granted for nil consideration.The fair value of the options was estimated at the date of grant using the Black-Scholes valuation model and is allocated to each reporting period evenly over the period from grant date to vesting date. The values disclosed above are the portions of the fair value that will be allocated in future periods.The assumptions made in determining the fair value of the options granted during the year ended 30 June 2011 are set out in a table in Note 15 of the financial statements.

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REMUNERATION REPORT (Audited) Cont…(ii) Options granted as Compensation – Desert Energy Limited

2011 NumberGranted

Grant Date

Value of Option at

Grant Date

Exercise Price

Expiry Date

Vesting Date

Value yet to Vest

Directors Mr M Pyle 1,000,000 02 Sept 10 $0.069

$0.145 02 Sept 14 02 Sept 11 $12,093

Mr M Pyle 1,000,000 02 Sept 10 $0.069

$0.145 02 Sept 14 02 Sept 12 $40,569

Mr M Pyle 1,000,000 02 Sept 10 $0.069

$0.145 02 Sept 14 02 Sept 13 $50,027

3,000,000

2010 NumberGranted

Grant Date

Value of Option at

Grant Date

Exercise Price

Expiry Date

Vesting Date

Value yet to Vest

Directors Mr P Jackson 2,000,000 15 June 10 $0.068 $0.40 16 May 17 17 June 10 - Mr R Taylor 3,000,000 15 June 10 $0.068 $0.40 16 May 17 17 June 10 - Mr G O’Hara 3,000,000 15 June 10 $0.068 $0.40 16 May 17 17 June 10 -

Executives Mr J Jordan 1,000,000 10 Nov 09 $0.068 $0.34 31 Oct 13 10 Nov 10 - Mr J Jordan 2,250,000 15 June 10 $0.048 $0.40 17 Sept 14 22 Dec 11 $106,226 Mr E Moore 100,000 01 July 09 $0.069 $0.30 30 June 13 01 July 09 - Mr E Moore 1,500,000 15 June 10 $0.048 $0.40 17 Sept 14 22 Dec 11 $70,817 Mr K Banks 100,000 01 July 09 $0.069 $0.30 30 June 13 01 July 09 - Mr K Banks 3,000,000 15 June 10 $0.048 $0.40 17 Sept 14 22 Dec 11 $141,634 Mr G Watkins 500,000 01 July 09 $0.069 $0.30 30 June 13 01 July 09 - Mr G Watkins 1,500,000 15 June 10 $0.048 $0.40 17 Sept 14 22 Dec 11 $70,817 Mr P Ruttledge 150,000 01 July 09 $0.069 $0.30 30 June 13 01 July 09 - Mr P Ruttledge 450,000 15 June 10 $0.048 $0.40 17 Sept 14 22 Dec 11 $21,245

18,550,000

All options were granted for nil consideration.

PARTICULARS OF DIRECTORS’ INTERESTS IN SHARES IN THE CONSOLIDATED ENTITYThe relevant interest of each Director in the share capital of the Company at the date of this report is as follows:

Ordinary Shares Fully Paid Unlisted OptionsDirect Indirect Direct Indirect

DirectorsPhillip Jackson 2,050,000 - - 7,250,000Robert Taylor 3,350,000 100,000 - 6,625,000Martin Pyle 450,000 - - 3,000,000

The relevant interest of each Director in the share capital of the Company’s subsidiary, Desert Energy Limited at the date of this report is as follows:

Ordinary Shares Fully Paid Unlisted OptionsDirect Indirect Direct Indirect

DirectorsPhillip Jackson 1,160,250 - - 5,000,000Robert Taylor - 100,000 - 9,000,000Martin Pyle 500,000 - - 3,000,000

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SHARE OPTIONSOptions to take up ordinary fully paid shares in the Company at the date of this report are as follows:

Number of Options Listed/Unlisted Grant Date Exercise Price Expiry Date

6,000,000 Unlisted 24 Jan 07 $0.388 19 Dec 117,500,000 Unlisted 30 Nov 07 $0.5763 31 Oct 14

532,500 Unlisted 18 Dec 07 $0.47 30 Nov 12250,000 Unlisted 30 Jun 08 $0.34 31 May 1320,000 Unlisted 23 Jul 08 $0.34 31 May 13

605,000 Unlisted 23 Jul 08 $0.47 30 Nov 121,450,000 Unlisted 28 Nov 08 $0.50 22 Dec 117,500,000 Unlisted 28 Nov 08 $0.50 22 Nov 152,420,000 Unlisted 30 June 09 $0.30 30 Jun 13

800,000 Unlisted 02 Oct 09 $0.50 30 Sept 13300,000 Unlisted 30 Nov 09 $1.62 26 Feb 13

1,500,000 Unlisted 30 Nov 09 $1.005 15 Nov 15500,000 Unlisted 30 Nov 09 $0.825 16 Dec 12

1,000,000 Unlisted 15 June 10 $1.20 17 June 14200,000 Unlisted 31 July 10 $1.00 31 July 14

3,000,000 Unlisted 02 Sept 10 $0.4495 02 Sept 14300,000 Unlisted 07 Dec 10 $0.5742 07 Dec 14

A total of 3,000,000 unlisted options expiring 2 September 2014 were issued to one director during the financial year. A further 200,000 options expiring on 31 July 2014 were issued to one consultant under the Company’s Employee Option Plan during the financial year. In addition, a total of 300,000 options were issued to one consultant, with an expiry date of 7 December 2014.

A total of 2,605,000 options issued to consultants in November 2007 expired on 30 November 2010. A total of 500,000 options issued to a consultants 7 May 2008 expired on 30 April 11. A total of 350,000 options issued under the Employee Option Plan on 2 October 2009 and expiring on 30 September 2013 were cancelled on 23 December 2010.

The names of all persons who currently hold options are entered in the register kept by the Company pursuant to section 170 of the Corporations Act (2001). Inspection of the register and of the documents kept pursuant to subsection 170 (3) may be made free of charge.

Options do not entitle their holders to participate in entitlement offers of new shares in the Company unless the holders first exercise their options. No person entitled to exercise any option above has or had, by virtue of the option, a right to participate in any share issue of any other body corporate.

Options to take up ordinary fully paid shares in the Company’s subsidiary, Desert Energy Limited, at the date of this report are as follows:

Number of Options Listed/Unlisted Grant Date Exercise Price Expiry Date

7,500,000 Unlisted 30 Nov 07 $0.34017 31 Oct 147,500,000 Unlisted 15 Dec 08 $0.50 22 Nov 158,000,000 Unlisted 18 June 10 $0.40 17 May 171,700,000 Unlisted 28 Nov 08 $0.50 22 Dec 111,700,000 Unlisted 01 Jul 09 $0.30 30 June 13

12,850,000 Unlisted 18 June 10 $0.40 17 Sept 141,000,000 Unlisted 10 Nov 09 $0.34 31 Oct 13

10,000,000 Unlisted 23 June 10 $0.40 22 June 17562,500 Unlisted 18 Dec 07 $0.31 30 Nov 12330,000 Unlisted 30 June 08 $0.35 31 May 13630,000 Unlisted 16 Jul 08 $0.35 30 Nov 12200,000 Unlisted 31 Jul 10 $0.40 31 July 14


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AUDIT COMMITTEEThe Company is not of a size nor are its financial affairs of such a complexity to justify a separate audit committee of the board of Directors. Matters that might properly be dealt with by such a committee are the subject of scrutiny at full board meetings.

ENVIRONMENTAL REGULATIONSThe mining leases, exploration licences and prospecting licences granted to the Company pursuant to the Mining Act (1978) (WA) and prospecting permits and exploration permits granted pursuant to the Crown Minerals Act (NZ) are granted subject to various conditions which include standard environmental requirements. The Company’s policy is to adhere to these conditions and the Directors are not aware of any contraventions of these requirements.

PROCEEDINGS ON BEHALF OF THE COMPANYNo person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.The Company was not a party to any such proceedings during the year.

INSURANCE OF OFFICERSThe Company paid a premium in respect of a contract insuring directors and officers of the Company. The contract prohibits disclosure of the nature of the liabilities insured and the amount of the premium.

AUDITOR’S INDEPENDENCE DECLARATION A copy of the lead auditor’s independence declaration as required by Section 307c of the Corporations Act 2001 is included within the Financial Report.

Signed in accordance with a resolution of Directors:

DIRECTOR

Perth, 15 September 2011

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for year ended 30 june 2011statement of comprehensive income

Note

Consolidated2011

$

2010

$

Revenue 4 1,157,553 449,737

Administration Expenses 5 (2,738,323) (4,254,428)

Write-off of exploration and evaluation expenditure 12 (6,381,448) (4,824,801)

Loss before tax (7,962,218) (8,629,492)

Income tax expense 6 - -

Loss for the year from continuing operations (7,962,218) (8,629,492)

Other comprehensive income/ (expenses)Exchange differences on translating foreign controlled entities 15,633 (444)

Income tax relating to components of other comprehensive income - -

Total comprehensive loss for the year (7,946,585) (8,629,936)

Loss attributable to:

Non-controlling interest (1,535,458) (1,612,845)

Owners of the parent entity (6,426,760) (7,016,647)

(7,962,218) (8,629,492)

Total comprehensive loss for the year is attributable to:

Non-controlling interest (1,535,458) (1,612,845)

Owners of the parent entity (6,411,127) (7,017,091)

(7,946,585) (8,629,936)

Basic loss per share (cents per share) 27 (6.17) (8.33)

Diluted loss per share (cents per share) 27 (6.17) (8.33)

The accompanying notes form part of these financial statements.For

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statement of financial positionas at 30 june 2011

Note

Consolidated2011

$

2010

$

Current Assets

Cash and cash equivalents 7 18,412,387 22,905,868

Trade and other receivables 8 729,711 689,263

Other current assets 9 70,330 110,254

Total current assets 19,212,428 23,705,385

Non-Current Assets

Plant and equipment 10 520,753 625,317

Deferred exploration and evaluation expenditure 12 - -

Total non-current assets 520,753 625,317

Total assets 19,733,181 24,330,702

Current Liabilities

Trade and other payables 13 728,289 326,215

Total current liabilities 728,289 326,215

Total liabilities 728,289 326,215

Net Assets 19,004,892 24,004,487

Equity

Issued Capital 14 36,577,518 36,577,518

Reserves 16 11,572,136 10,260,509

Accumulated losses (31,104,912) (24,678,152)

Parent entity interest 17,044,742 22,159,875

Non-controlling interest 1,960,150 1,844,612

Total Equity 19,004,892 24,004,487

The accompanying notes form part of these financial statements.

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for the year ended 30 june 2011statement of changes in equity

Issu

ed

Capi

tal

Chan

ge in

ow

ners

hip

inte

rest

Accu

mul

ated

Lo

sses

Fore

ign

Curr

ency

Tr

ansla

tion

Rese

rve

Shar

e-ba

sed

paym

ents

Non-

cont

rolli

ng

Inte

rests

Tota

l

CONS

OLI

DATE

D$

$$

$$

$$

At 1

Jul

y 20

0915

,501

,112

4,15

4,08

8(1

7,66

1,50

5)(1

5,18

9)4,

308,

062

1,85

1,88

68,

138,

454

Loss

for t

he p

erio

d-

-(7

,016

,647

)-

-(1

,612

,845

)(8

,629

,492

)Ot

her c

ompr

ehen

sive i

ncom

e-

--

(444

)-

-(4

44)

Total

com

preh

ensiv

e inc

ome f

or th

e per

iod

--

(7,0

16,6

47)

(444

)-

(1,6

12,8

45)

(8,6

29,9

36)

Tran

sacti

ons w

ith o

wner

s in

their

capa

city

as o

wner

s:Sh

are b

ased

pay

men

ts-

--

-1,

057,

336

768,

019

1,

825,

355

Expe

nse o

f sha

re b

ased

pay

men

ts-

--

-(2

,966

)(1

,054

)(4

,020

)Iss

ue o

f sha

re ca

pital

22,0

69,5

7794

5,07

6-

--

894,

445

23,9

09,0

98Ex

pens

e of s

hare

issu

e(9

93,1

71)

(52,

238)

--

-(5

5,83

9)(1

,101

,248

)Ch

ange

due

to is

sue o

f sha

res b

y su

bsid

iary

-(1

33,2

16)

--

--

(133

,216

)

At 3

0 Ju

ne 2

010

36,5

77,5

184,

913,

710

(24,

678,

152)

(15,

633)

5,36

2,43

21,

844,

612

24,0

04,4

87

At 1

Jul

y 20

1036

,577

,518

4,91

3,71

0(2

4,67

8,15

2)(1

5,63

3)5,

362,

432

1,84

4,61

224

,004

,487

Loss

for t

he p

erio

d-

-(6

,426

,760

)-

-(1

,535

,458

)(7

,962

,218

)Ot

her c

ompr

ehen

sive i

ncom

e-

--

15,6

33-

-15

,633

Total

com

preh

ensiv

e inc

ome f

or th

e per

iod

--

(6,4

26,7

60)

15,6

33-

(1,5

35,4

58)

(7,9

46,5

85)

Tran

sacti

ons w

ith o

wner

s in

their

capa

city

as o

wner

s:Sh

are b

ased

pay

men

ts-

--

-65

2,38

121

4,08

486

6,46

5Iss

ue o

f sha

re ca

pital

-86

8,37

0-

--

1,50

2,34

02,

188,

985

Expe

nse o

f sha

re is

sue

-(4

3,02

2)-

--

(65,

428)

(108

,450

)Ch

ange

due

to is

sue o

f sha

res b

y su

bsid

iary

-(1

81,7

35)

--

--

(181

,735

)

At 3

0 Ju

ne 2

011

36,5

77,5

185,

557,

323

(31,

104,

912)

-6,

014,

813

1,96

0,15

019

,004

,892

The

acco

mpa

nyin

g no

tes f

orm

par

t of t

hese

fina

ncia

l sta

tem

ents.

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for year ended 30 june 2011statement of cash flows

Note

Consolidated2011

$

2010

$

Cash flows from operating activities

Other payments to suppliers and employees (1,748,446) (2,378,125)

Payments for exploration expenditure (5,735,242) (4,685,035)

Receipts from customers - 3,591

Payments for security deposits and bonds (14,305) (121,604)

Interest received 1,053,514 441,859

Net cash (outflow) from operating activities 26 (6,444,479) (6,739,314)

Cash flows from investing activities

Payments for purchases of plant and equipment (146,113) (219,783)

Receipt on sale of options to purchase tenements 20,630 -

Net cash (outflow) from investing activities (125,483) (219,783)

Cash flows from financing activities

Proceeds from issue of shares 2,188,985 23,775,882

Share issue transaction costs (108,450) (1,101,248)

Option issue transaction costs - (2,010)

Net cash inflow/(outflow) from financing activities 2,080,535 22,672,624

Net increase/(decrease) in cash held (4,489,427) 15,713,527

Cash at the beginning of the financial year 22,905,868 7,192,785

Effects of exchange rate changes on balances held in foreign currency (4,054) (444)

Cash at the end of the financial year 7 18,412,387 22,905,868

The accompanying notes form part of these financial statements.

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for the year ended 30 june 2011

notes to the financial statements

NOTE 1: BASIS OF PREPARATIONThe financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The consolidated financial statements of Aurora Minerals Limited comprises the company and its subsidiaries (together referred to as the ‘group’ or ‘consolidated entity’). The separate financial statements of the parent entity, Aurora Minerals Limited, have not been presented within this financial report as permitted by the Corporations Act 2001.

Aurora Minerals Limited is a listed public company, incorporated and domiciled in Australia.

The financial statements were authorised for issue on 15 September 2011 by the directors of the company.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated.

The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES(a) Principles of consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Aurora Minerals Limited at the end of the reporting period. A controlled entity is any entity over which Aurora Minerals Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left the group during the year, the financial performance of those entities are included only for the period of the year that they were controlled.

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

(b) TaxationThe charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Tax consolidation

The company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 27 January 2006 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is Aurora Minerals Limited.

Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised

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notes to the financial statementsfor the year ended 30 june 2011 Cont…

NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont…in the separate financial statements of the members of the tax-consolidated group using the “separate taxpayer within group” approach by reference to the carrying amounts of assets and liabilities in the separate financial statements of each entity and the tax values applying under tax consolidation. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries is assumed by the head entity in the tax-consolidated group and are recognised by the Company as amounts payable (receivable) to (from) other entities in the tax-consolidated group in conjunction with any tax funding arrangement amounts. Any difference between these amounts is recognised by the group as an equity contribution or distribution.

The group recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which the asset can be utilised.

Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only.

(c) Segment ReportingA business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographic segment is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

(d) Exploration, evaluation and development expenditure

Exploration and evaluation are written off as incurred. The Company’s policy is that such costs will only be carried forward when development of the area indicates that recoupment will occur or where activities in the area have reached an advanced stage which permits reasonable assessment of the existence of economically recoverable reserves.

(Exploration, evaluation and development costs comprise acquisition costs, direct exploration and evaluation costs and an appropriate portion of related overhead expenditure but do not include general overhead expenditure which has no direct connection with a particular area of interest.

Revenue received from the sale or disposal of product, materials or services during the exploration and evaluation phase of operation is offset against expenditure in respect of the area of interest concerned.

When an area of interest is abandoned or the Directors decide that it is not commercially viable, any accumulated costs in respect of that area are written off in the financial

period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. Restoration costs arising from exploration activities are provided for at the time of the activities which give rise to the need for restoration.

Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. When production commences, carried forward exploration, evaluation and development costs are amortised on a units of production basis over the life of the economically recoverable reserves.

(e) Trade and other payablesLiabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Company.

(f) Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the relevant taxation authority. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expenses.

Receivables and payables in the statement of financial position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating activities.

(g) Business combinationsBusiness combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identified as the acquirer (ie parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated financial statements, and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured.

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for the year ended 30 june 2011 Cont…


NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont…(g) Business combinations cont…The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree. The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.

Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.

Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value through the statement of comprehensive income unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

(h) Revenue RecognitionInterest incomeInterest income is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

All revenue is stated net amount of goods and services tax (GST).

(i) ComparativesWhere required by accounting standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

(j) Earnings per shareBasic earnings per shareBasic earnings per share is determined by dividing the operating profit after income tax by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(k) Interest in Joint VentureThe group’s share of the assets, liabilities, revenue and expense of joint venture operations are included in the appropriate items of the statements of financial performance and financial position.

(l) Cash and cash equivalentsFor the purpose of the statement cash flows, cash includes:

Cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; Investments in money market instruments with less than one month to maturity; and bills of exchange with short term to maturity which are readily convertible to cash.

(m) Issued capitalIssued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(n) Equity based paymentsThe company provides benefits to its directors, consultants and contractors in the form of share-based payments, whereby directors, consultants and contractors render services in exchange for options to acquire shares or rights over shares (equity-settled transactions).

The cost of these equity-settled transactions is measured by reference to the fair value to the Company of the equity instruments at the date at which they were granted. The fair value is determined using the Black-Scholes valuation model, taking into account the terms and conditions upon which the options were granted.

The cost of equity-settled transactions is recognised as an expense, together with a corresponding increase in equity, on a straight-line basis, over the period in which the vesting and/or service conditions are fulfilled (the vesting period), ending on the date on which the relevant directors and employees become fully entitled to the options (the vesting date).

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NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont…(n) Equity based payments cont…At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income reflects:

- the grant date fair value of the options;

- the current best estimate of the number of options that will ultimately vest, taking into account such factors as the likelihood of personnel turnover during the vesting period and the likelihood of vesting conditions being met, based on best available information at balance date; and the extent to which the vesting period has expired.

The charge to the statement of comprehensive income for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a corresponding entry to equity.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. An additional expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of the modification.

If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

(o) Plant and EquipmentEach class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation.

Plant and equipment is measured on the cost basis.

The carrying amount of plant and equipment is 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 which will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Depreciation is calculated on a straight line basis so as to write off the net cost of each fixed asset over its effective life.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income.

The depreciation rates used for each class of depreciable assets are:Class of Fixed Asset Depreciation RatePlant and Equipment 5.0% - 33.33%

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

(q) LeasesLease payments for operating leases, where substantially all the risk and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

(r) Financial Instruments Recognition and initial measurementFinancial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurementFinance instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost.

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied

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for the year ended 30 june 2011 Cont…notes to the financial statements

NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont…(r) Financial Instruments cont…to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss.

The Company does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments.

(i) Loans and receivables Loans and receivables are non-derivative financial

assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period.

(ii) Financial assets at fair value through profit or loss Financial assets are classified at “fair value through

profit or loss” when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(iii) Financial liabilities Non-derivative financial liabilities (excluding

financial guarantees) are subsequently measured at amortised cost

ImpairmentAt the end of each reporting period, the directors assesses whether there is objective evidence that a financial instrument has been impaired.

DerecognitionFinancial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is

transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

(s) Foreign Currency TransactionsThe functional currency of each of the Company’s controlled entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the group’s functional and presentation currency.

Transactions in foreign currencies have been converted at rates of exchange ruling on the date of those transactions. At reporting date, amounts receivable and payable in foreign currencies are translated to Australian currency at rates of exchange at that date. Realised and unrealised gains and losses are brought to account in determining the profit or loss for the financial year.

The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:

- assets and liabilities are translated at year-end exchange rates prevailing at that reporting period;

- income and expenses are translated at average exchange rates for the period; and

- retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the statement of financial position. These differences are recognised in the statement of comprehensive income in the period in which the operation is disposed.

(t) Critical accounting estimates and judgmentsEstimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Share-based payment transactionsThe group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instrument at the date at which they are granted. The fair value is determined using the Black-Scholes valuation model. The accounting estimates and assumptions relating to the equity-settled share-based payments would have no impact on the carrying amount of assets and liabilities within the next annual reporting period but may impact expense and equity.

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NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont…(u) Adoption of new and revised standardsIn the current year, the group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period. The adoption of these new and

revised Standards and Interpretations has not resulted in a significant or material change to the group’s accounting policies.

New accounting standards issued but not yet effective At the date of this financial report the following accounting standards, which may impact the group in the period of initial application, have been issued but are not yet effective:

Reference Title Summary Application date (financial

years beginning)

AASB 9 Financial Instruments

Replaces the requirements of AASB 139 for the classification and measurement of financial assets. This is the result of the first part of Phase 1 of the IASB’s project to replace IAS 39.

1 January 2013

AASB 124 Related Party Disclosures

Revised standard. The definition of a related party is simplified to clarify its intended meaning and eliminate inconsistencies from the application of the definition

1 January 2011

The group has decided not to early adopt any of the above accounting standards.

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NOTE 3 – FINANCIAL RISK MANAGEMENTThe Group, in its normal course of business, is exposed to financial risks comprising market risk (essentially interest rate risk), credit risk and liquidity risk.

The directors have overall responsibility for the Group’s management of these risks and seek to minimise these risks through on-going monitoring and review of the adequacy of the risk management framework in relation to the risks encountered by the Group.

Liquidity riskThe Group has no significant exposure to liquidity risk as the Group’s only debt is that associated with trade creditors in respect of which the Group’s policy is to ensure payment within 30 days. The Group manages its liquidity by monitoring forecast cash flows.

Credit riskThe Group’s only exposure to credit risk arises from its cash deposits at the bank. The Group manages this minimal exposure by ensuring its funds are deposited only with major banks with high security ratings.

Consolidated2011

$

2010

$Exposure to liquidity and credit risk

Trade and other receivables 729,711 689,263

Cash and cash equivalents 18,412,387 22,905,868

Market riskThe Group’s market risk exposure is predominantly to the Australian money market interest rates in respect of its cash assets. The risk is managed by monitoring the interest rate yield curve out to 90 days to ensure a balance is maintained between the liquidity of its cash assets and interest rate return

The weighted average rate of interest earned by the Group on its cash assets as at the year was 5.49% (2010: 4.04%).

The table below summarises the sensitivity of the Group’s cash assets to interest rate risk. The Group has no interest rate risk associated with any of its other financial assets or liabilities. Whilst this analysis reflects the effect of a 1% decline in interest rates recent Australian Treasury announcements and general press reports would indicate mixed opinions on the direction and magnitude of movements in interest rates over the next twelve months.

Financial AssetsEffect of decrease or increase of interest rate on profit and equity

-1% +1%Profit Equity Profit Equity

$ $ $ $30 June 2011Total increase /(decrease) (207,073) (207,073) 207,073 207,073

30 June 2010Total increase/(decrease) (110,432) (110,432) 110,432 110,432F

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NOTE 3 – FINANCIAL RISK MANAGEMENT Cont…Fair value estimatesThe carrying amount of the Group’s financial assets and liabilities approximates fair value due to their short term maturity.

Capital management riskThe Group’s objective in managing capital is to safeguard its ability to continue as a going concern, so that it can continue to explore for minerals with the ultimate objective of providing returns for shareholders whilst maintaining an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may issue new shares, sell assets, or farm out joint venture interests in its projects.

Consolidated2011

$

2010

$NOTE 4 – REVENUE

Revenue from operating activities

Interest revenue from other persons 1,136,923 446,146

Gain on sale of consumables - 3,591

Other 20,630 -

1,157,553 449,737

NOTE 5 – LOSS FOR THE YEARLoss from ordinary activities before income tax expense includes the following specific expenses:

Depreciation 234,841 208,056

Less: capitalised to exploration (210,380) (179,391)

24,461 28,665

Consulting fees 1,049,298 734,088

Salaries and wages (administration) 61,316 -

Stock exchange fees 114,646 178,078

Equity based compensation 866,465 1,825,355

Rent and outgoings 106,429 108,710

Insurance and legal 117,712 128,153

Expense arising from alleged misappropriation of funds - 713,656

Loss on sale of assets 15,836 -

Foreign exchange loss transferred from reserve 19,675 -

Other expenses 362,485 537,723

2,738,323 4,254,428

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Consolidated2011

$

2010

$NOTE 6 – INCOME TAX

(a) Reconciliation of income tax to operating loss

The income tax expense for the year differs from the prima facie tax as follows:

Operating loss before income tax (7,962,218) (8,629,492)Income tax calculated at 30% (2010 – 30%) (2,388,665) (2,588,848)

Tax effect of amounts which are not tax deductible (taxable)in calculating taxable income

Entertainment 6,024 2,889Option based remuneration 259,940 547,606NZ branch losses (542) 23Capital raising costs in equity (140,985) (136,893)Over-provision /(Under-provision) in prior years (101,769) -Tax loss and temporary differences not brought to account 2,365,997 2,175,223Income tax expense - -

(b) Deferred tax assets not brought to account

The directors estimate that the potential future income tax benefits carried forward but not brought to account at year end at a tax rate of 30% are made up as follows:

Deferred tax assets and liabilities at 30% (2010 – 30%)Tax Losses 9,093,832 6,704,945Temporary differences (52,127) (29,237)Net Deferred differences 9,041,705 6,675,708Parent entity interest 7,052,144 5,358,648Non-controlling interest 1,989,561 1,317,060Total Net deferred tax assets 9,041,705 6,675,708

These benefits will only be obtained if:

(i) the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits from the deductions for losses to be realised;

(ii) the Group continues to comply with conditions for deductibility imposed by tax legislation; and(iii) no changes in tax legislation adversely affect the Group in realising the benefit from the deduction of losses.

Consolidated2011

$

2010

$NOTE 7 – CASH AND CASH EQUIVALENTS

Cash at bank 18,412,387 22,905,868

18,412,387 22,905,868

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Consolidated2011

$

2010

$NOTE 8 – TRADE AND OTHER RECEIVABLES

CURRENTSecurity deposits and bonds (1) 284,176 269,871Interest receivable 215,106 131,697Hazelbrook joint venture - 24,328Travel expense advance to related parties 494 3,878Other 229,935 259,489

729,711 689,263(1) Security deposits are held with the bank for Department of Mines and Petroleum for bonds issued on behalf of the Group

NOTE 9 – OTHER CURRENT ASSETSConsumables inventory 27,876 -Prepayments 42,454 110,254

70,330 110,254

NOTE 10 – PLANT AND EQUIPMENT

Furniture and fittings – at cost 28,696 27,941Accumulated depreciation (10,047) (7,829)

18,649 20,112

Field and office equipment – at cost 443,725 322,636Accumulated depreciation (257,957) (201,460)

185,768 121,176

Motor vehicles and mobile equipment – at cost 826,081 837,362Accumulated depreciation (509,745) (353,333)

316,336 484,029

Total plant and equipment 520,753 625,317

A reconciliation of the carrying amounts of plant and equipment at the beginning and end of the current financial period is set out below.

Furniture & fittings

$

Field & office

$

Vehicles & mobile

equipment

$

Total

$

Balance as at 30 June 2010 20,112 121,176 484,029 625,317Additions during the period 755 121,089 24,269 146,113Disposals during the period - - (15,836) (15,836)Depreciation expense (2,218) (56,497) (176,126) (234,841)Balance as at 30 June 2011 18,649 185,768 316,336 520,753

Balance as at 30 June 2009 20,924 130,699 456,412 608,035Additions during the period 1,270 42,919 181,149 225,338Disposals during the period - - - -Depreciation expense (2,082) (52,442) (153,532) (208,056)Balance as at 30 June 2010 20,112 121,176 484,029 625,317

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NOTE 11 – CONTROLLED ENTITIESCountry of

IncorporationPercentage Owned

2011 2010Parent Entity:Aurora Minerals Limited Australia - -

Subsidiaries of Aurora Minerals Limited:Hazelbrook Limited (1) New Zealand - 100%Aurora Resources Pty Ltd Australia 100% 100%Desert Energy Limited(2) Australia 39.67% 47.58%Mainland Minerals Limited Australia 100% 100%

(1) The entity has been deregistered during the year.

(2) The directors have considered the requirement of the applicable accounting standard and are satisfied that Desert Energy Limited is deemed to be controlled by Aurora Minerals Limited, despite owning less than 50% of the voting rights pertaining to the entity. This is due to the fact that two entities sharing the same board of directors and the company has potential voting rights to increase its ownership in the future.

The consolidated entity’s registered office is located at 271 Great Eastern Highway, Belmont, Western Australia.

Consolidated2011

$

2010

$NOTE 12 – DEFERRED EXPLORATION AND EVALUATION EXPENDITURE

Exploration ExpenditureCosts carried forward in relation to areas of interest in:- exploration and evaluation phases 21,656,606 15,275,158Accumulated exploration and evaluation costs written off (21,656,606) (15,275,158)

Total exploration expenditure - -

Exploration and evaluation costs incurred and written off during the year to the statement of comprehensive income 6,381,448 4,824,801

NOTE 13 – TRADE AND OTHER PAYABLES

Trade and other payables 728,289 326,215728,289 326,215

NOTE 14 – ISSUED CAPITAL104,167,499 (2010: 104,167,499)fully paid ordinary shares 36,577,518 36,577,518

Ordinary shares have no par value. There is no limit to the authorised share capital of the Company.

Rights attaching to ordinary sharesOrdinary shares entitle the holder to participate in dividends and in the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote and upon a poll each share is entitled to one vote.

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NOTE 14 – ISSUED CAPITAL Cont…(a) Movements in ordinary share capitalFully Paid Shares

Date Details Number of Shares $

30/06/2009 Balance 70,195,722 15,501,112

Placement 29,506,777 19,712,250

Exercised options 3,665,000 1,573,327

Issue to Joint Venture Partners(1) 800,000 784,000

Cost of share issued - (993,171)

30/06/2010 Balance 104,167,499 36,577,518

No Movement - -

30/06/2011 Balance 104,167,499 36,577,518

(1) 400,000 shares issued to Coventry Enterprises Pty Ltd and 400,000 shares issued to Lindsay Chappel as consideration for entering into the Syndicate Joint Venture, details of which are in Note 19.

(b) Options

Options to take up ordinary fully paid shares in the Company at 30 June 2011 are as follows:Number of

OptionsListed/Unlisted Grant Date Exercise Price Expiry Date

6,000,000 Unlisted 24 Jan 07 $0.388 19 Dec 117,500,000 Unlisted 30 Nov 07 $0.5763 31 Oct 14

532,500 Unlisted 18 Dec 07 $0.47 30 Nov 12250,000 Unlisted 30 Jun 08 $0.34 31 May 1320,000 Unlisted 23 Jul 08 $0.34 31 May 13

605,000 Unlisted 23 Jul 08 $0.47 30 Nov 121,450,000 Unlisted 28 Nov 08 $0.50 22 Dec 117,500,000 Unlisted 28 Nov 08 $0.50 22 Nov 152,420,000 Unlisted 30 June 09 $0.30 30 June 13

800,000 Unlisted 2 Oct 09 $0.50 30 Sept 13300,000 Unlisted 30 Nov 09 $1.62 26 Feb 13

1,500,000 Unlisted 30 Nov 09 $1.005 15 Nov 15500,000 Unlisted 30 Nov 09 $0.825 16 Dec 12

1,000,000 Unlisted 15 June 10 $1.20 17 June 14200,000 Unlisted 31 July 10 $1.00 31 July 14


33,877,500

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NOTE 15 – SHARE BASED PAYMENTSEach option entitles the holder to take up one fully paid ordinary share in the Company at anytime up to and including the expiry date. Upon exercise of an option, the resulting ordinary share has the same rights as other ordinary shares. Options do not entitle their holders to receive dividends, participate in entitlement issues or vote at general meetings of shareholders.

(a) Movements in Options

Weighted average exercise

price2011

Number of options

2011

Weighted average exercise price

2010

Number of options

2010Outstanding at 1 July $0.5428 33,832,500 $0.4779 33,272,500

Forfeited/cancelled during the period $0.5677 (3,455,000) $0.5763 (425,000)

Exercised during the period (1) - - $0.4293 (3,665,000)

Granted during the period $0.4916 3,500,000 $0.9206 4,650,000

Outstanding at 30 June (2) $0.53496 33,877,500 $0.5428 33,832,500

Exercisable at 30 June $0.53205 30,052,500 $0.5267 32,152,500(1) The weighted average share price of options exercised during the year is $nil (2010:$0.99).

(2) The weighted average life of the outstanding options is 995 days or 2.72 years (2010: 1,232 days or 3.37 years).

(b) Fair ValueThe following table sets out the assumptions made in determining the fair value of the options granted during the year:

2011

Options Granted July 2010 (1)

Options Granted Sept 2010 (2)

Options Granted Dec 2010 (3)

Expected volatility (%) 89.03 89.03 89.03

Risk free interest rate (%) 4.80 4.52 5.14

Weighted average expected life of options (years) 4.00 4.00 4.00

Expected dividends Nil Nil Nil

Option exercise price (cents) 100.00 44.95 57.42

Share price at grant date (cents) 40.00 31.00 38.5

Fair value of option (cents) 19.40 18.31 22.72

Number of options 200,000 3,000,000 300,000

Expiry date 31 July 14 02 Sept 14 07 Dec 14

Vesting date (50%) 31 July 11 - -

Vesting date (50%) 31 July 12 - -

Vesting date (33.3%) - 02 Sept 11 07 Dec 10

Vesting date (33.3%) - 02 Sept 12 07 Sept 11

Vesting date (33.3%) - 02 Sept 13 07 June 12(1) Options issued to Employees(2) Options issued to Directors(3) Options issued to Consultants

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NOTE 15 – SHARE BASED PAYMENTS Cont…

2010

Options Granted Oct 2009 (1)

Options Granted Nov 2009 (2)



Options Granted June 2010 (5)

Expected volatility (%) 82.00 82.00 82.0 82.79 87.29Risk free interest rate (%) 4.71 5.21 5.08 4.74 5.02Weighted average expected life of options (years) 4.00 5.96 3.04 3.24 4.00

Expected dividends Nil Nil Nil Nil NilOption exercise price (cents) 50.00 100.50 82.50 1.62 120.00Share price at grant date (cents) 44.00 52.00 52.00 52.00 42.50Fair value of option (cents) 26.40 32.50 23.50 16.40 19.10Number of options 1,350,000 1,500,000 500,000 300,000 1,000,000Expiry date 30 Sep 13 15 Nov 15 16 Dec 12 26 Feb 13 17 June 14Vesting date (100%) - 30 Nov 09 17 Dec 09 11 Mar 10 -Vesting Date (74%) 02 Oct 09 - - - -Vesting Date (50%) - - - - 17 June 11Vesting Date (50%) - - - - 17 June 12Vesting Date (13%) 30 Sept 10 - - - -Vesting Date (13%) 30 Sept 11 - - - -(1) Options issued to Employees(2) Options issued to Directors(3) Options issued to Consultants(4) Options issued to Consultants(5) Options issued to Consultants

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.The expected volatility is based on the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.

(c) Terms and Conditions for Each Grant of OptionsThe options issued to Directors, Consultants and Employees have varying exercise prices and expiry dates as follows:

NumberGranted

Grant Date Value of Option at

Grant Date

Exercise Price

Expiry Date

2011DirectorMr M Pyle 3,000,000 02 Sept 2010 $0.1831 $0.4495 02 Sept 2014Non Specified Contractors & EmployeesOther (1) 200,000 31 July 2010 $0.1940 $1.00 31 July 2014Other 300,000 07 Dec 2010 $0.2272 $0.5742 07 Dec 2014

3,500,0002010DirectorMr P Jackson 1,500,000 30 Nov 2009 $0.325 $1.005 15 Nov 2015Specified ExecutivesMr K Banks 500,000 30 Nov 2009 $0.235 $0.825 16 Dec 2012Mr K Banks 300,000 30 Nov 2009 $0.164 $1.62 26 Feb 2013Mr J Jordan (1) 1,000,000 02 Oct 2009 $0.264 $0.50 30 Sept 2013Mr J Jordan 1,000,000 15 June 2010 $0.191 $1.20 17 June 2014Non Specified Contractors & EmployeesOther (1) 350,000 02 Oct 2009 $0.264 $0.50 30 Sept 2013

4,650,000(1) Options issued under “EOP”

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NOTE 15 – SHARE BASED PAYMENTS Cont…The Aurora Minerals Limited Employee Option Plan (“EOP”) was approved at the Company’s Annual General Meeting in November 2007. A summary of the rules of the EOP is set out below:The allocation of options to employees, directors and consultants of the Company is at the discretion of the Board. Each option is to subscribe for one fully paid share in the Company. Options are issued free and the exercise price of options is determined by the Board. An option is exercisable at a time determined by the Board.

Consolidated2011

$

2010

$NOTE 16 – RESERVES

Foreign currency translation reserve (a) - (15,633)Option reserve (b) 6,014,803 5,362,432Change in ownership interest(c) 5,557,323 4,913,710

11,572,126 10,260,509(a) The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled entity.(b) The option reserve records items recognised as expenses on valuation of share options.(c) The change in ownership interest records change in company’s ownership interest of a subsidiary after new shares are issued by the

subsidiary.

NOTE 17 – KEY MANAGEMENT PERSONNEL COMPENSATION(a) Names and positions of Key Management PersonnelThe names and positions of persons who were Key Management Personnel of Aurora Minerals Limited and its controlled entities at any time during the financial year are as follows:

Key Management Personnel P S R Jackson Chairman – non-executive

M J Pyle Managing Director – executive R S Taylor Director – executive G P O’Hara Director – executive (resigned 7 July 2010)

(b) Key Management Personnel and Specific Executives RemunerationConsolidated

2011

$

2010

$

Short-term personnel benefits 1,504,891 1,095,032

Share based payments 692,646 1,618,7932,197,537 2,713,825

Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each member of the Group’s Key Management Personnel for the year ended 30 June 2011.

(c) Principles used to determine the nature and amount of remunerationThe nature and amount of remuneration paid to directors and executives has been determined by reference to the services provided, prevailing market rates and with the objective of retaining their services.

Directors and Specified Executives are not directly remunerated by way of salary. The Company and its subsidiary Desert Energy Limited have entered into agreements with director and specified executive related entities for the provision of their services to the Group. Details of these agreements are set out within the remuneration report which is contained in the director’s report.

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NOTE 17 – KEY MANAGEMENT PERSONNEL COMPENSATION Cont…(d) (i) Details of transactions of Key Management Personnel concerning shares – the Company

Opening Balance

Purchased during Period

Sold during Period

Other(a)

Options Exercised

Closing Balance

2011Martin Pyle - - - - - -Garry O’Hara 3,540,000 - - (3,540,000) - -Robert Taylor 3,450,000 - - - - 3,450,000Phillip Jackson 2,050,000 - - - - 2,050,000

2010Garry O’Hara 3,540,000 - - - - 3,540,000Robert Taylor 3,450,000 - - - - 3,450,000Phillip Jackson 2,550,000 - (1,000,000) - 500,000 2,050,000

(a) Garry O’Hara resigned from the Company effective 07 July 2010.

The Company has not entered into any agreements to remunerate consultants on the basis of performance.

(d) (ii) Details of transactions of Key Management Personnel concerning shares – Desert Energy LimitedOpening Balance

Purchased during Period

Sold during Period

Other Options Exercised

Closing Balance

2011Martin Pyle - - - - - -Garry O’Hara - - - - - -Robert Taylor 100,000 - - - - 100,000Phillip Jackson 1,160,250 - - - - 1,160,250

2010Garry O’Hara - - - - - -Robert Taylor 100,000 - - - - 100,000Phillip Jackson 1,160,250 - - - - 1,160,250

(e) (i) Details of transactions of Key Management Personnel concerning share options – the CompanyDetails of options provided as remuneration, together with terms and conditions of the options, can be found in the remuneration report of the Directors’ Report.

Opening Balance

Received as Remuneration

Net Change Other (a)

Options Exercised

Closing Balance

2011Martin Pyle - 3,000,000 - - 3,000,000Garry O’Hara (b) 6,625,000 - (6,625,000) - -Robert Taylor(b) 6,625,000 - - - 6,625,000Phillip Jackson(b) 7,250,000 - - - 7,250,000

2010Garry O’Hara(b) 9,000,000 - (2,375,000) - 6,625,000Robert Taylor(b) 9,000,000 - (2,375,000) - 6,625,000Phillip Jackson(b) 3,500,000 1,500,000 2,750,000 (500,000) 7,250,000

(a) In 2011, net change other pertains to the resignation of Garry O’Hara. In 2010, movements relate to the sale, purchase and expiry of options.

(b) All options have vested and are exercisable.

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NOTE 17 – KEY MANAGEMENT PERSONNEL COMPENSATION Cont…(e) (ii) Details of transactions of Key Management Personnel concerning share options – Desert Energy

LimitedOpening Balance

Received as Remuneration

Net Change Other (a)

Options Exercised

Closing Balance

2011Martin Pyle - 3,000,000 - - 3,000,000Garry O’Hara 9,000,000 - (9,000,000) - -Robert Taylor 9,000,000 - - - 9,000,000Phillip Jackson 5,000,000 - - - 5,000,000

2010Garry O’Hara 6,000,000 3,000,000 - - 9,000,000Robert Taylor 6,025,000 3,000,000 (25,000) - 9,000,000Phillip Jackson 3,290,062 2,000,000 (290,062) - 5,000,000

(a) In 2011, net change other pertains to the resignation of Garry O’Hara. In 2010, movements relate to the expiry of loyalty options.

Consolidated2011

$

2010

$NOTE 18 – REMUNERATION OF AUDITORS

Audit and review of financial reports- RSM Bird Cameron Partners 50,000 24,000- Crowe Horwath Perth 20,600 37,750

Other services(1) - 12,000

70,600 73,750

(1) RSM Bird Cameron Corporate Pty Ltd was engaged by the Company to prepare an Independent Expert’s Report on the Camel Hills Joint Venture (refer Note 19).

NOTE 19 – INTEREST IN JOINT VENTURESThe Group has the following interest in mineral exploration joint ventures as at 30 June 2011:

The joint ventures detailed below do not constitute separate legal entities. They are a contractual agreement between the participants for the sharing of costs and output and does not in itself generate revenue and profit. The joint ventures are of the type where initially one party contributes tenements with the other party earning a specified percentage by funding exploration activities; thereafter the parties may choose to share exploration and development costs in proportion to their ownership of joint venture assets. The joint ventures do not hold any assets and accordingly the Group’s share of exploration expenditure is accounted for in accordance with the policy set out in Note 1.F

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NOTE 19 – INTEREST IN JOINT VENTURES Cont…Name of Project % Interest by

the CompanyActivities Other Parties

Macraes West Gold Project 70% Mineral Exploration Glass Earth Limited (earning 70%)Glass Earth New Zealand Limited (GENZL) has earned a 70% equity in the project by spending NZ $750,000 and is the manager of the joint venture. Aurora may elect to fund its 30% interest share of the joint venture or dilute to 20% carried until commencement of a bankable feasibility study.

Syndicate Joint Venture Nil Mineral Exploration Coventry Enterprises Pty Ltd & Lindsay Chappel (“Syndicate”)Aurora may earn an 80% interest in an exploration licence owned by syndicate members, Coventry Enterprises Pty Ltd & Lindsay Chappel, by spending a minimum of $1,000,000 over three years. In the event that Aurora earns its 80% interest, it has the right to purchase each of the syndicate members’ 10% interest, if following a decision to mine, either party wishes to sell.

Camel Hills Joint Venture 100% Mineral Exploration Desert Energy Limited (earning 51%, 70% or 75%)Aurora’s subsidiary, Desert Energy Limited, may earn a 51% interest in Aurora’s Camel Hills Project by spending a minimum of $3,800,000, with $1,500,000 to be spent in the first year of the joint venture. Desert’s interest may be increased to 70% by sole funding a bankable feasibility study. That interest may increase to 75% if Aurora elects not to contribute towards the cost of the feasibility study.

NOTE 20 - COMMITMENTS FOR EXPENDITUREMineral TenementsIn order to maintain the mineral tenements in which the Group and other parties are involved, the Group is committed to fulfil the minimum annual expenditure conditions under which the tenements are granted. The minimum estimated expenditure requirements in accordance with the requirements of the Western Australian Department of Mines for the next financial year are:

Consolidated2011

$

2010

$

Minimum estimated expenditure requirements 4,374,500 5,553,000

4,374,500 5,553,000These requirements are expected to be fulfilled in the normal course of operations and may be varied from time to time subject to approval by the grantor of titles. The estimated expenditure represents potential expenditure which may be avoided by relinquishment of tenure. Exploration expenditure commitments beyond twelve months cannot be reliably determined.

Operating Lease Commitments

Payable minimum lease payments

- not later than twelve months 18,659 87,300- between twelve months and five years - 18,187

18,659 105,487

The Company has a lease over property that expires on 15 September 2011, after which the lease is on a monthly option.

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NOTE 20 - COMMITMENTS FOR EXPENDITURE Cont…Consultancy AgreementsIn the event that the Company terminates all of the Directors’ and Executives’ consultancy agreements, there is a requirement to continue payment of the fees for a period of six months or two months in the case of Executives. Should the services of the Directors and Executives not be required during the respective periods the cost to the Company would be $368,812 (2010: $520,416).

NOTE 21 - RELATED PARTIES(a) Remuneration and retirement benefits Information on remuneration of Directors during the financial period is disclosed in Note 17.

(b) Other transactions with Directors and Director-related entities There are no other transactions with Directors and Director-related entities.

(c) Transactions of Directors and Director-related entities concerning shares and share options Details of transactions of Directors and Director-related entities concerning shares and share options are set out

in Note 17.

NOTE 22: PARENT ENTITY DISCLOSURESFinancial Position

2011$

2010$

Assets

Current assets 15,829,651 20,390,634

Non-current assets 3,609,665 5,861,875

Total assets 19,439,316 26,252,509

Liabilities

Current liabilities 482,491 335,867

Total liabilities 482,491 335,867

Equity

Issued capital 36,577,518 36,577,518

Reserves – fair value adjustment to financial asset 1,792,845 3,691,432

Reserves – option reserves 4,964,519 4,476,468

Reserves – foreign currency translation - (15,633)

Retained earnings (24,378,057) (18,813,143)

Total equity 18,956,825 25,916,642

Financial Performance

Loss for the year (5,564,914) (5,490,624)Other comprehensive income - -Total comprehensive loss for the year (5,564,914) (5,490,624)

Guarantees entered into by the parent entity in relation to the debts of its subsidiaryAurora Minerals Limited has not entered into any guarantees in relation to the debts of its subsidiary.

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NOTE 22: PARENT ENTITY DISCLOSURES Cont…Contingent liabilities of the parent The parent entity did not have any contingent liabilities as at 30 June 2011 (30 June 2010: nil).

Contractual commitments for the acquisition of property, plant or equipmentAs at 30 June 2011 (30 June 2010: nil), the parent entity did not have any contractual commitments for the acquisition of property, plant or equipment.

NOTE 23 - EVENTS OCCURRING AFTER BALANCE DATEThere has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the group, the results of those operations, or the state of affairs of the group in future financial periods.

NOTE 24 - NUMBER OF EMPLOYEESThe Group has nine employees at balance date.

NOTE 25 - SEGMENT INFORMATIONThe Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The group operates as a single segment which is mineral exploration within Australia.

The group is domiciled in Australia. All revenue from external customers is generated from Australia only. Segment revenues are allocated based on the country in which the customer is located.

No operating revenue was derived during the year (2010: nil)

All assets are located within Australia. Segment assets are allocated to countries based on where the assets are located.

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NOTE 26 – RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH FLOW FROM OPERATING ACTIVIITIES

Consolidated2011

$

2010

$

Loss after income tax (6,426,760) (7,016,647)

Cash flow excluded from loss attributable to operating activities:Revenue recognised on sale of option to purchase tenements (20,630) -

Non cash flow in loss:Non-controlling interest (1,535,458) (1,612,845)Foreign currency translation 19,675 -Share-based payment expense 866,465 1,825,355Loss on disposal of plant and equipment 15,836 -Depreciation expense 234,841 208,056

Change in operating assets and liabilities:Receivables (40,447) (294,019)Prepayments 67,801 (66,467)Inventory (27,876) -Creditors 402,074 217,253

Net cash outflow from operating activities (6,4444,479) (6,739,314)

Non-cash financing and investing activities

There were no significant non-cash financing and investing activities.

NOTE 27 - EARNINGS PER SHAREConsolidated

2011Cents

2010Cents

Basic loss per share (cents per share) (6.17) (8.33)

Diluted loss per share (cents per share) (6.17) (8.33)

Reconciliation of loss

Loss used in calculating earnings per share – basic and diluted (6,426,760) (7,016,647)

Net loss for the reporting period (6,426,760) (7,016,647)

2011 2010No of Shares No of Shares

Weighted average number of ordinary shares outstanding during the year used in the calculation of basic and diluted earnings per share 104,167,499 84,234,582

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for the year ended 30 june 2011

directors’declaration

The directors of the company declare that the financial statements and notes are in accordance with the Corporations Act 2001 and:

a. comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and

b. give a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date;

the directors have declared that: a. the financial records of the company for the financial year have been properly maintained in accordance

with s286 of the Corporations Act 2001;b. the financial statements and notes for the financial year comply with Australian Accounting Standards;

andc. the financial statements and notes for the financial year give a true and fair view; and in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors.

DIRECTORPerth, 15 September 2011

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8 St George’s Terrace Perth WA 6000

GPO Box R1253 Perth WA 6844

T +61 8 9261 9100 F +61 8 9261 9101

www.rsmi.com.au

Liability limited by a scheme approved under Professional Standards Legislation

Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036

RSM Bird Cameron Partners is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms. RSM International is the name given to a network of independent accounting and consulting firms each of which practices in its own right. RSM International does not exist in any jurisdiction as a separate legal entity.

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF AURORA MINERALS LIMITED

Report on the Financial Report We have audited the accompanying financial report of Aurora Minerals Limited, which comprises the consolidated statement of financial position as at 30 June 2011, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

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Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Aurora Minerals Limited, would be in the same terms if given to the directors as at the time of this auditor's report. Opinion In our opinion: (a) the financial report of Aurora Minerals Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and

(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1. Report on the Remuneration Report We have audited the Remuneration Report contained within the directors’ report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion the Remuneration Report of Aurora Minerals Limited for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001.

RSM BIRD CAMERON PARTNERS

Chartered Accountants

Perth, WA TUTU PHONG

Dated: 15 September 2011 Partner

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8 St Georges Terrace Perth WA 6000

GPO Box R1253 Perth WA 6844

T +61 8 9261 9100 F +61 8 9261 9111

www.rsmi.com.au

Liability limited by a scheme approved under Professional Standards Legislation

Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036

RSM Bird Cameron Partners is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms. RSM International is the name given to a network of independent accounting and consulting firms each of which practices in its own right. RSM International does not exist in any jurisdiction as a separate legal entity.

AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Aurora Minerals Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

RSM BIRD CAMERON PARTNERS

Chartered Accountants

Perth, WA TUTU PHONG

Dated: 15 September 2011 Partner

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2011corporate governance statement

The Board of Directors of Aurora Minerals Limited (the “Company”) is responsible for monitoring the business undertakings of the Company and protecting the rights and interests of shareholders. High standards of corporate governance are considered essential to give effect to these responsibilities. The Board has appointed a Corporate Governance Committee currently comprising the Chairman, the General Manager and the Company Secretary. The Company’s corporate governance policies are set and reviewed from time to time by the Board having regard to any changing circumstances of the Company and the best interests of shareholders. They comply with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (the ‘Principles’) as revised and reissued in August 2007.

This statement outlines the Company’s corporate governance policy for the financial year ended 30 June 2011. Any documents referenced in this statement as being available on the Company’s website can be found on www.auroraminerals.com.

1 LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT1.1 Functions reserved for the Board and those delegated to senior executives The Board’s key objective is to increase of shareholder value by the successful exploration for and/or production of minerals. The Board focuses the Company’s activities on pursuing exploration opportunities in the mineral resource sector which are judged to have the potential for success, without exposing the Company to undue risk. Aurora Minerals’ principal current focus is on its manganese prospects in the Capricorn Project. The Company also has projects prospective for gold, base metal and platinum group metals and has a 40% controlling interest in Desert Energy Limited, a listed diversified minerals explorer. The Company’s main approach is to add shareholder value by the discovery of economic mineral deposits.

The Board is accountable to shareholders for the performance of the Company, and its responsibilities include:

(a) approval of corporate strategy including approval of budgets and monitoring performance against such budgets;

(b) determining the capital structure of the Company;

(c) appointing and determining the duration, remuneration and other terms of appointment of the chief executive officer(s) and other senior management;

(d) evaluating the performance of the Managing Director and Executive Director (“the Executive Directors”) and other senior management;

(e) approval of financial and other periodic reporting requirements;

(f) approval of a risk management strategy and framework and monitoring their effectiveness;

(g) corporate governance systems and practices within the company;

(h) approval of investments, corporate acquisitions, new joint ventures; and

(i) appointment of the external auditors and principal advisors.

Remuneration and other terms of engagement for the directors are formalised in consulting agreements with their respective companies and the terms of these agreements are summarised in the annual Remuneration Report forming part of the Directors’ Report which accompanies the annual financial report.

Any new directors, who may be appointed to the Board, will be provided with a letter of appointment including their remuneration details together with copies of Company and Board policies, the Constitution and access to prior Board minutes and papers. New directors will also be advised of their confidentiality and disclosure obligations, share trading policy guidelines, indemnity and insurance arrangements.

Senior executives

The role of the Executive Directors during the year under review has been to manage the Company’s exploration activities and business development on a day to day basis pursuant to authority delegated by the Board and implementation of Board and corporate policy and planning in accordance with approved exploration programmes and budgets. The Executive Directors report to the Board regularly and are under an obligation to make sure that all reports which they present give a true and fair view of the Company’s exploration and corporate activities.

1.2 The process for evaluating the performance of senior executivesThe Board is responsible for setting the Executive Directors’ performance objectives and for evaluating their performance against them. The full Board carries out an annual review of the adequacy of his remuneration and participation in share incentive arrangements.

The Board is responsible for the appointment of the Company Secretary, evaluating his performance on an annual basis and determining his remuneration.

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2011 Cont…corporate governance statement

2 STRUCTURE THE BOARD TO ADD VALUE2.1 Board members’ independenceNone of the Company’s three Directors are independent in terms of the Relationships affecting Independent Status (the “Categories”) in Recommendation 2.1 of the Principles. Notwithstanding this apparent non-compliance the Board is of the opinion that the objectives and current strategy of the Company are well served by retaining the current composition of the Board, irrespective of the Directors’ degree of independence. A determination with respect to independence is made by the Board on an annual basis. In addition the Directors are required on an ongoing basis to disclose relevant personal interests and conflicts of interest which may in turn trigger a review of a director’s independent status.

2.2 Chairman’s independence As detailed above the chairman is considered not to be independent.

2.3 Roles of chairman and chief executive officerThe Company has complied with this Principle - the chief executive officer role is filled by the Managing Director.

Role of the Chairman

The Chairman is responsible for the effective conduct of meetings of directors and general meetings of shareholders. The Chairman is also responsible for settling the agenda for Board meetings with the Company Secretary and the Executive Directors. Any director of the Board may request an item of business to be included on the agenda.

While the Executive Directors are responsible to the Board as a whole, they also liaise with the Chairman regularly.

2.4 The Board should establish a nomination committeeA Nomination Committee has been established. The Board considers that it is in the best interests of the Company to determine the criteria for the selection of new directors based on any perceived “gaps” in the skill set of the Board as and when a casual vacancy arises.

Retirement and rotation of directors is governed by the Corporations Act and the constitution of the Company. Each year, one-third of the directors must retire and offer themselves for re-election. Any casual vacancy filled between general meetings will be subject to a shareholder vote at the next Annual General Meeting of the Company.

Re-appointment of directors is not automatic. Shareholders are provided with relevant information on each of the candidates for election or, where applicable, re-election.

2.5 Board performanceDue to the size and composition of the Board, the Company does not have a formal process for the performance evaluation of the Board, its committees or individual directors.

Accordingly, no formal performance evaluation for the Board or its members took place in the reporting period.

New directors will have access to all employees to gain full background on the Company’s operations.

All directors have access to company records and information and receive regular detailed financial and operational reports from management. The Chairman regularly consults with the Executive Directors and the Company Secretary and may consult with and request additional information from any employee.

The Board collectively, and each director individually, has the right to seek independent professional advice at the expense of the Company to assist with the discharge of their duties. While the Chairman’s prior approval is required, it may not be unreasonably withheld.

Company Secretary

The Board is responsible for the appointment of the Company Secretary. The Company Secretary is responsible for providing directors with ongoing guidance and advice on commercial and corporate governance matters. The Company Secretary also provides guidance for the preparation of the semi annual and annual accounts.

3. PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING3.1 Code of conductThe Company has a code of conduct and is committed to achieving the following objectives:

(a) ensuring that all of its business affairs are conducted legally, ethically and with integrity;

(b) ensuring that the Company itself and its joint venturers who act as operators of projects in which the Company has an interest adopt high standards of occupational health and safety, environmental management and ethics;

(c) managing its legal obligations and the reasonable expectations of stakeholders effectively through the development and implementation of a risk management framework which incorporates these key areas; and

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3. PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING Cont:(d) fostering and maintaining a culture of ownership, care, professional excellence, confidentiality, integrity and

freedom from any conflict or perceived conflict of interest in each of the Company’s employees and consultants.

Director Conflict of Interest

All directors are required to disclose any actual or potential conflict of interest upon appointment and are required to keep these disclosures to the Board up-to-date.

3.2 DiversityIn accordance with the new diversity requirements set out in the ASX Principles and Recommendations, the Company during the year considered its approach to diversity, required to be reported on with respect to the 2011 financial year onwards.

While the Company believes in creating fair and equal access for employees to all employment opportunities, all appointments are made on the basis of merit. The Company, due to its size, does not currently have a formalised diversity policy in place, but does not believe that non-compliance by the Company with this Principle will have a detrimental effect on the Company.

3.3 Trading in company securitiesThe Company lodged its policy on the trading of the Company’s securities with the ASX on 23 December 2010. The policy is contained on the Company’s web site.

4. SAFEGUARD INTEGRITY IN FINANCIAL REPORTING4.1 Audit committeeAurora Minerals does not have an audit committee, as its size and its financial affairs are not of such complexity to justify a separate audit committee.

The Board monitors the form and content of the Company's financial statements; it also maintains an overview of the Company’s internal financial control and audit system and risk management systems.

Additionally, on an annual basis, the Board, in line with its overall responsibility to shareholders, reviews the performance and independence of the external auditor and the continuation of that appointment. The Board also approves the remuneration and terms of engagement of the external auditor. Any appointment of a new external auditor will be submitted for ratification by shareholders at the next annual general meeting of the Company.

Corporate governance recommendations 4.2 and 4.3 do not apply as there is no audit committee.

5. MAKE TIMELY AND BALANCED DISCLOSURE5.1 Compliance with ASX disclosure requirementsCompliance procedures, to ensure timely and balanced disclosure of information in line with the Principles have been noted and adopted by the Company. The Company Secretary is charged with ensuring that any necessary steps which need to be taken by the Company are brought before the Board for discussion and, subject to amendment, approval.

The Company Secretary, assisted by the General Manager, is responsible for non-material and standard form disclosures to the market. In addition he is responsible for communications with the ASX.

Commentary on Financial Results

The Company provides commentary in the Directors’ Report accompanying its half yearly and yearly results in a clear and objective manner to ensure that shareholders and potential shareholders have access to the information needed to make an informed assessment of the Company’s activities and results.F

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6. RESPECT THE RIGHTS OF SHAREHOLDERS6.1 Communication with and participation of Shareholders The Board aims to ensure that shareholders are fully informed by communicating to shareholders through:

(a) continuous disclosure reporting to the ASX;

(b) the quarterly, half yearly and annual reports; and

(c) media releases copies of which are lodged with ASX and placed on the Company’s website, www.auroraminerals.com.

Shareholders are given the option to receive information such as the Annual Report and Notices of Meeting /Explanatory Memoranda in print or electronic form.

Aurora Minerals Limited maintains a website at www.auroraminerals.com and complies with the continuous disclosure requirements of the ASX Listing Rules. Shareholders may find all recent information on the Company under various headings on the Company’s website, including latest ASX releases, details of its projects and its Corporate Profile. Shareholders may also request a copy of the Company’s ASX recent releases.

7. RECOGNISE AND MANAGE RISK7.1 Oversight and management of material business risksThe Company has a management policy in place for the identification and effective management of risk. The policy caters for the management of risk by the Board and management being principally the risks involved in exploration for gold, base metal and platinum group metals.

7.2 Design and implementation of systems to manage material business risksManagement has established a register of business risks and identified the material business risks affecting the Company. To the extent possible in a Company with a very small number of staff, internal controls are in place to mitigate against any material business risks. Risks of a strategic, financial and operational nature (such as ability to raise capital to fund exploration, commodity price and currency fluctuations, adequate levels of insurance, contract documentation, resourcing, and meeting financial reporting and compliance obligations) are reviewed on a regular basis by the Board as and when applicable.

Potential operational risks involved in running the Company are managed by the Board. Due to the size of the Company, the Board does not consider it practicable to establish a separate committee to focus on these issues but has designated that the Corporate Governance Committee be charged with the overall responsibility for the implementation of the policy and report to the Board on whether those risks are being managed effectively.

7.3 Compliance with Corporations Act Section 295AThe Board receives a declaration from the Managing Director in his role as Chief Executive Officer and the Group Accountant in his role as Chief Finance Officer covering the matters set out in section 295A of the Corporations Act 2001 and in accordance with the terms stipulated in Recommendation 7.3.

8. REMUNERATE FAIRLY AND RESPONSIBLY8.1 Remuneration committeeThe Company has constituted a remuneration committee to review Director remuneration.

The Remuneration Committee and the Board reviews, on an annual basis, executive remuneration and incentive policies. In addition, the Board reviews and approves the audited remuneration report set out in the Directors’ Report. The Board where needed consults external consultants and specialists.

8.2 Distinguishing remuneration structure Remuneration for non-executive directors is fixed. Non-executive directors do not receive any retirement benefits, except that, as part of their fixed remuneration. For information about non-executive director remuneration practice, please refer to the audited remuneration report set out in the Directors’ Report.

Executive Directors

For information about the remuneration of the Executive Directors, reference can be made to the audited remuneration report set out in the Directors’ Report.

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shareholder information

The shareholder information set out below was applicable at 27 September 2011

1. Number and Distribution of Equity Securities

The number and class of all securities on issue:

ASX Code Number DescriptionARM 104,167,499 Ordinary fully paid shares

ARMAA 7,500,000 Consultants options (not listed, expiring 31 Oct 2014)

ARMAB 532,500 Employee options (not listed, expiring 30 Nov 2012)

ARMAI 270,000 Employee options (not listed, expiring 31 May 2013)

ARMAE 300,000 Consultants options (not listed, expiring 26 February 2013)

ARMAM 2,420,000 Employee options (not listed, expiring 3 June 2013)

ARMAK 605,000 Employee options (not listed, expiring 30 Nov 2012)

ARMAD 7,500,000 Consultants options (not listed, expiring 22 Nov 2015)

ARMAD 1,450,000 Consultants options (not listed, expiring 22 Dec 2011)

ARMAO 1,500,000 Consultants options (not listed, expiring 15 November 2015)

ARMAQ 800,000 Employee options (not listed, expiring 30 September 2013)

ARMAW 6,000,000 Consultants options (not listed, expiring 19 Dec 2011)

ARMAS 500,000 Consultants options (not listed, expiring 16 December 2012)

ARMAU 200,000 Employee options (not listed, expiring 31 July 2014)

ARMAF 3,000,000 Consultants options (not listed, expiring 2 September 2014)

ARMAY 1,000,000 Consultants options (not listed, expiring 17 June 2014)

No Code 300,000 Consultants options (not listed, expiring 7 December 2014)

The number of holders

Ordinary Shares fully paid (ASX Code ARM): 1,859

Distribution of equity securities Ordinary Shares (ARM)

Size of Holding No of Holders Shares Held 1-1,000 137 79,730 1,001-5,000 462 1,509,456 5,001-10,000 386 3,270,559 10,001-100,000 755 26,462,550 100,001 and over 119 72,845,204 Total 1,859 104,167,499

Marketable parcel

There are 381 shareholders who hold less than a marketable parcel of 3,226 shares.

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Cont…shareholder information

2. Substantial Shareholders

Name No of Shares %

HSBC Custody Nominees (Australia) Limited 7,882,786 7.57

3. Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of shares, at a general meeting every shareholder or class of shareholder present in person or by proxy, attorney or representative has one vote on a show of hands and, on a poll, one vote for each fully paid share which that member holds or represents.

4. Twenty Largest Shareholders as at 27 September 2011

The twenty largest fully paid shareholders hold 46.71% of the issued capital and are tabled below:

Shareholder No. of Shares %

1. HSBC Custody Nominees (Australia) Limited 7,882,786 7.57

2. J P Morgan Nominees Australia Limited 4,810,000 4.62

3. Forsyth Barr Custodians Ltd (Forsyth Barr Ltd Nominee Account) 4,662,116 4.48

4. William Douglas Goodfellow 3,400,000 3.26

5. Robert Spencer Taylor (Pelican Account) 3,050,000 2.93

6. Archem Trading (NZ) Ltd 2,700,000 2.59

7. National Nominees Limited 2,644,977 2.54

8. Custodial Services Limited (Beneficiaries Holding A/C) 2,162,036 2.08

9. Phillip Sidney Redmond Jackson 2,050,000 1.97

10. Amalgamated Dairies Limited 2,000,000 1.92

11. Citicorp Nominees Pty Limited 1,720,774 1.65

12. Forty Traders Limited 1,685,714 1.62

13. S C Corporation Pty Ltd (Graham Family A/C) 1,671,545 1.60

14. Garry Patrick O’Hara 1,622,228 1.56

15. Forty Traders Limited 1,300,000 1.25

16. Ronay Investments Pty Ltd 1,250,231 1.20

17. DBS Vickers Securities (Singapore) Pte Ltd (Client Account) 1,094,688 1.05

18. Schenk Investments Pty Ltd (schenk Superfund Account) 1,051,816 1.01

19. Austock Nominees Pty Ltd (Custodian Account) 1,000,000 0.96

20 Robert Gordon Bruce Roberts (Rosbruce Account) 900,000 0.86

48,658,911 46.71

Total Issued Shares 104,167,499 100.00

KEY RISK FACTORS

Exploration and mining companies throughout the world are subject to the inherent risks of the minerals industry. Aurora Minerals has a comprehensive summary of its key risk factors on its web-site under the Sustainable Development link.

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mineral tenement informationas at 4 oCtober 2011

PROJECT TENEMENT PERCENT HOLDING

NOTES TITLE HOLDER/APPLICANT

JOINT VENTURE OR SUB LICENCE

NEW ZEALANDMacraes West PP 39 267 100% Aurora Minerals Limited Glass Earth earning interest

WESTERN AUSTRALIACapricorn E08/1717 100% Granted Aurora Resources Pty LtdCapricorn E08/1718 100% Granted Aurora Resources Pty LtdCapricorn E08/1725 100% Granted Aurora resources Pty LtdCapricorn E09/1427 100% Granted Aurora Resources Pty LtdCapricorn E09/1428 100% Granted Aurora Resources Pty LtdCapricorn E09/1600 100% Granted Aurora Resources Pty LtdCapricorn E09/1433 100% Granted Aurora Resources Pty LtdCapricorn E09/1602 100% Granted Aurora Resources Pty LtdCapricorn E09/1605 100% Granted Aurora Resources Pty LtdCapricorn E09/1652 100% Granted Aurora Resources Pty LtdCapricorn E52/2036 100% Granted Aurora Resources Pty LtdCapricorn E52/2037 100% Granted Aurora Resources Pty LtdCapricorn E52/2137 100% Granted Aurora Resources Pty LtdCapricorn E52/2139 100% Granted Aurora Resources Pty LtdCapricorn E09/1836 100% Granted Aurora Resources Pty LtdGlenburgh E09/1353 100% Granted Aurora Resources Pty Ltd Sub-Licence to Desert EnergyGlenburgh E52/1969 100% Granted Aurora Resources Pty Ltd Sub-Licence to Desert EnergyGlenburgh E52/1983 100% Granted Aurora Resources Pty Ltd Sub-Licence to Desert EnergyGlenburgh E09/1368 100% Granted Aurora Resources Pty Ltd Sub-Licence to Desert EnergyGlenburgh E52/1988 100% Granted Aurora Resources Pty Ltd Sub-Licence to Desert EnergyGlenburgh E52/1989 100% Granted Aurora Resources Pty Ltd Sub-Licence to Desert EnergyGlenburgh E52/1990 100% Granted Aurora Resources Pty Ltd Sub-Licence to Desert EnergyGlenburgh E09/1719 100% Granted Aurora Resources Pty LtdGlenburgh E09/1758 100% Granted Aurora Resources Pty LtdGlenburgh E09/1759 100% Granted Aurora Resources Pty LtdGlenburgh E09/1822 100% Granted Aurora Resources Pty LtdGlenburgh E52/2587 100% Granted Aurora Resources Pty LtdGlenburgh E52/2617 100% Granted Aurora Resources Pty LtdGlenburgh E52/2703 100% Granted Aurora Resources Pty LtdGlenburgh E52/2704 100% Application Aurora Resources Pty LtdGlenburgh E52/2705 100% Granted Aurora Resources Pty LtdGlenburgh E52/2706 100% Granted Aurora Resources Pty LtdCamel Hills E09/1634 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1635 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1313 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1314 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1320 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1323 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1398 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1399 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1400 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1546 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1549 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1550 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1587 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1595 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1596 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1712 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1713 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1718 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1735 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E09/1810 100% Granted Aurora Resources Pty Ltd JV with Desert EnergyCamel Hills E52/1961 100% Granted Aurora Resources Pty Ltd JV with Desert Energy

E: Exploration Licence PP: Prospecting Permit Where Applications exist, the Company or the Applicant is not entitled to ownership until title is granted by the appropriate authority. Tenements Sub Licenced to Desert Energy are subject of a Deed of Sub Licence between Aurora and Desert Energy.

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271 Great Eastern HwyBelmont Western Australia 6104

Telephone +61 8 6143 1840 • Facsimile +61 8 6162 9079Email [email protected] • Website www.auroraminerals.com

AURORA MINERALS LIMITED

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for personal use only - asx · 2011. 10. 19. · grc4 7,240,757 460,775 e09/1368 60 030 80 grc5...

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