allied annual 2000 - 2644

A C N 0 0 2 5 9 4 8 7 2

MMPEU Dismantling & Loadout from Perth

MMPEU TRANSPORTATION

Contents / Highlights

Allied Mining & Processing Ltd Annual Report 2000 Page 1

Chairman’s Report 2

Company Particulars 3

Directors’ Report 4 – 15

Profit and Loss Account 16

Balance Sheet 17

Statement of Cash Flows 18

Notes to the Financial

Statements 19 – 32

Directors’ Declaration 33

Independent Audit Report 34

Additional ASX Information 35 – 37

Corporate Governance 38 – 39

R&D:

• During the 1999/2000 financial year a total of $214,000, which is the balance

of the R&D Contract Sum held by Macquarie Bank, was released to the

Company together with all interest accrued.

• The crushing, grinding and classification modules of the mobile plant were

moved to RAV8 Nickel Project near Ravensthorpe in Western Australia. The

plant commissioning commenced in the first half of June and a Final

Completion Certificate was issued in August 2000.

• The hiring of the MMPEU is expected to generate an income of

approximately $2 million over the initial 2-year term of the Hiring Agreement.

• Negotiations are continuing for the utilisation of the balance of the MMPEU

for processing a high-grade gold deposit overseas. Also, studies are being

made into the utilisation of some of the modules in environmental projects.

EXPLORATION:

• The evaluation of 11 anomalies with potential for Kidston style mineralisation

was undertaken at Beverley in North Queensland.

• Evaluation of projects with established resources is continuing with a view

of entering into a joint venture or outright acquisition of resources suitable for

the application of the MMPEU.

ALLIED MEDICAL:

• Significant increase in sales of Go Medical products was achieved in the

June 2000 quarter.

• Allied Medical and Go Medical are participating in the development of a new

range of products for antibiotic infusion.

• Allied Medical achieved a cash positive result for its first year of operation.

ALLIED INTERNET TECNOLOGY:

• AIT acquired 30% equity in Fastpath Pty Ltd, which has devised an Internet

security system of electronic payment for goods and services.

• AIT also acquired 52.8% interest in Worldwidefm.net Pty Ltd, a specialised

Internet Audio Design company.

Contents Highlights

Chairman’s Report


Dear Shareholder

The 1999/2000 year has been a year ofsignificant change and substantialadvancement in the development of yourCompany. The Company took advantageof a number of new initiatives as acounter to the downturn in miningactivities. Initiatives undertaken were:

• The appointment of new members tothe Board of Directors who brought tothe Company a wealth of knowledgeand experience in corporate, financeand business management.

• The directors’ decision to capitalise onthe expertise of Mr Michael Dillon toinvolve the Company in the lucrativemedical products market.

• The directors’ desire to capitalise onmarket opportunities to improve thevalue of the Company shares byparticipating in Internet Technologyprojects.

As a result, the following developmenttook place during the past year:

1. Research and Development:The Company completed thedevelopment of the prototype mobileplant "MMPEU" and entered into thecommercialization stage. The crushingand grinding section of the plant washired to Tectonic Resources NL for thetreatment of their RAV8 nickel ore.The hiring agreement is for 2 years with aprovision for another 12 monthsextension. During the initial 2 years, theCompany expects to receive $2 to $2.5million in rent, which is equal to 4.5 to 5.5cents per share.In addition, the remaining MMPEUmodules are expected to generateadditional revenue of up to $1 million perannum when leased.

2. Exploration:The Company’s efforts were focused onthe identification of resource projectssuitable for the mobile plant.Exploration activities were restricted topromising gold and base metal anomaliesat the Company’s Beverley prospect inNorth Queensland.

3. Medical Projects:As a result of the efforts of Mr MichaelDillon, the Company, through its whollyowned subsidiary, Allied Medical Ltd, hasentered into an Exclusive DistributionAgreement with Go Medical IndustriesPty Ltd.Go Medical is a Western Australiancompany which produces a range ofunique medical products developed byPerth’s well-known inventor Dr GeorgeO’Neil.The products enjoy a worldwideacceptance and are sold in 22 countriesincluding the USA, UK, Germany andSweden.Allied aims to achieve a target sales figureof $10 million in Australia.

4. Internet Projects:As a result of the efforts of Mr AlistairMacKinlay, the Company through itswholly owned subsidiary, Allied InternetTechnology Ltd, acquired interests in twopromising Internet technology projects.Allied acquired a 30% equity in FastpathPty Ltd, which has developed an Internetsecurity system for use on worldwide e-commerce transactions. The serviceprovided is designed to assist bothcustomers and merchants to confidentlymake transactions on the Internet.Allied has also acquired 52.8% ofWorldwidefm.net Pty Ltd ("wwfm"), whichis an Internet Audio Design Companyspecialized in providing audio content forclients’ web sites as an aural aid tonavigating a web site.

The developments over the past yearhave contributed to the Companyachieving a marked improvement in themarket perception of the Company’sfuture and facilitated the listing of theCompany’s shares on the Frankfurt StockExchange "FSE".

The Company has used its personnelwisely and kept expenses to a minimumwhilst at the same time examining anynew proposals, which in the Board’s viewhave the potential to advance theCompany. In addition, the expected cashflow from the hiring of the mobile plantand the sale of the medical products putsthe Company in a good position to pursuenew opportunities.

Finally, on behalf of the members of theBoard, I wish to pay tribute to theCompany’s past chairman, Sir WilliamKeys, who died last May. He was a greatAustralian who guided the Company’sdevelopment over the past 6 years.

I also wish to thank Mr Alistair MacKinlay,who resigned last April after serving onthe Board of Allied and making a valuablecontribution to the development of theCompany over the past 5 years.

Michael PerrottChairman

Company Particulars


Directors

Mr Michael Perrott B.Comm, FAIM -

Chairman

Mr Mohamed El-Ansary BSc, FAusIMM,

CPMan - Managing Director and DeputyChairman

Mr Michael Dillon Ph.Ch, MPS, JP –

Non Executive Director, Medical andPharmaceutical Products

Dr Peter Hans Wallner BSc ,MSc, PhD,

FAusIMM, MAIME -

Non Executive Director

COMPANY SECRETARYMs Kristine May B.Bus

EXPLORATIONMr Mohamed El-Ansary BSc, FAusIMM, CPMan

RESEARCH & DEVELOPMENTDr Andrew Whitton BSc (Hons), PhD, MBA

Mrs Ros MacKinlay B.E.

MEDICAL AND PHARMACEUTICALMr Michael Dillon Ph.Ch, MPS, JP

Mr Tarek El-Ansary BA

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESSAXA CentreLevel 9, 111 St Georges TerracePerth WA 6000Telephone: (08) 9322 2100Facsimile: (08) 9322 2890

AUDITORSDeloitte Touche TohmatsuCentral Park, Level 16152-158 St Georges TerracePerth WA 6000

LOCATION OF REGISTERS OF SECURITIESComputershare Registry Services Pty LtdReserve Bank Building, Level 245 St Georges TerracePerth WA 6000Telephone: (08) 9323 2000Facsimile: (08) 9323 2033

BANKERSNational Australia Bank Limited50 St Georges TerracePerth WA 6000

STOCK EXCHANGEThe Company is listed on the Australian Stock Exchange and the FrankfurtExchange. The Home Exchange is Perth.

Directors Report


The Directors present their reporttogether with the financial report of AlliedMining & Processing Ltd ("the Company")and its controlled entities for the yearended 30 June 2000.

DIRECTORSThe Directors of the Company in officeduring or since the end of the financialyear are:

Mr Michael Perrott B.Comm, FAIM

Non Executive ChairmanMr Perrott is highly experienced incorporate management and investmentand is a director of a number of privateand public companies. He has beeninvolved in the construction andcontracting industry since 1969. MrPerrott is also on the board ofmanagement of Notre Dame Universityand West Coast Eagles.Director since July 1999

Mr Mohamed El-Ansary BSc,

FAusIMM, CPMan

Deputy Chairman & Managing Director Mr El-Ansary is a geologist with 35 yearsexperience in mineral exploration, miningand corporate management. He iscredited with the discovery of theBoddington and Mt Gibson Gold Mines.Formerly Chief Executive Officer ofForsayth NL and former Manager ofReynolds Australia.Director since November 1994.

Dr Peter Hans Wallner Bsc, MSc, PhD,

FAusIMM, MAIME

Non Executive DirectorDr Wallner obtained his PhD in Geology in1976 from Aachen University in WestGermany following a BSc and MSc inGeology from Berlin University. DrWallner spent five years in the Philippineswhere he became Vice President,Operations with La Playa MiningCorporation, a company successful in thediscovery and production of a number ofmetallurgical and chemical chromitedeposits. From 1981 to 1985 he was

Chief Geologist of Little River GoldfieldsNL in Australia. From 1986 to 1987 DrWallner has been Managing Director ofAustralian Overseas Resources Limited.Since 1989 he has been Chairman andChief Executive Officer of Boulder SteelNL.Director since June 1987

Mr Michael Dillon Ph.Ch, MPS, JP

Non Executive Director, Medical &Pharmaceutical ProductsMr Dillon is a qualified Pharmacist and hasbeen involved in the industry since 1964.Over the last 36 years he has establishedPharmacy 777 chain as a household namein Western Australia. He is highlyregarded in the industry, both at a locallevel and nationally. Over the last decade,Mr Dillon has broadened his businessprofile by becoming a director ofCognicare (Aust) Pty Ltd, a pharmacy careorientated software provider. Mr Dillon’scurrent directorships and membershipsare Indoor Holding, Brandts (Aust),Pharmacy 777 Australia Pty Ltd, Memberof Pharmaceutical Society of WA andRegistered Member of PharmaceuticalSociety of Great Britain.Director since July 1999

Sir William Keys AC, OBE, MC

Non-Executive ChairmanSir William was a prominent Australianwar veteran and businessman. He was aNuffield Scholar (1956) and a ChurchillFellow (1969) and was the NationalPresident of the Returned ServicesLeague of Australia (1978-1988). Director since November 1994.Died on 3 May 2000

Mr Alistair MacKinlay LL.B

Non Executive DirectorMr MacKinlay has been a legalpractitioner since 1973 and is the principalof MacKinlay & Co., Barristers andSolicitors. His legal experience includesadvising on corporate takeovers,prospectuses and joint ventures as wellas a wide range of general

commercial work in real estate,securities, intellectual property andfranchises. He has considerableexperience representing Australiancompanies overseas and has travelledextensively to negotiate and concludefinancial arrangements on behalf ofclients. Mr MacKinlay is a past memberof the Council of the Law Society ofWestern Australia. Director since January 1996.Resigned in April 2000

Directors Report


REVIEW OF OPERATIONS

I. RESEARCH AND DEVELOPMENT:

I.1 R&D Syndicate:

In November 1995, the FederalGovernment’s Industry Research andDevelopment Board approved theCompany’s submission for a $7.18 millionResearch and Development programmeto develop an innovative relocatablemineral processing plant known as theMobile Mineral Process Evaluation Unit"MMPEU".

On 22 February 1996, a Research andDevelopment Syndicate known as the"MMPEU Syndicate" was formedbetween Aretrend Pty Ltd with 95%equity, and the Company’s wholly ownedsubsidiary, Advance R&D Pty Ltd, with5% equity. The Syndicate is anunincorporated joint venture, whichinvested a total of $9,334,000 in the R&Dprogramme and to commercialise anyresearch results arising from the R&Dprogramme. In addition, the Syndicatedeposited with Macquarie Bank the coretechnology purchase price amounting to$23.7 million, which is subject to a putoption.

At the end of the Research andDevelopment period, Allied Mining &Processing Ltd has the right to negotiateto market the technology of the Syndicateas Marketer. The receipt of commercialrevenue will give rise to an obligation onAllied Mining & Processing Ltd to pay theSyndicate a 12.5% royalty on all incomereceived from the commercialization ofthe MMPEU.

As at the 30th June 2003, the Investorshave the option to continue in theSyndicate or exercise the put option. Ifthe Investors choose to continue theSyndicate beyond June 2003, theescrowed core technology funds ondeposit with Macquarie Bank will bereleased to Allied Mining & ProcessingLtd. Alternatively, if the investors choose

DIRESTOR’S MEETINGSThe number of directors’ meetings and number of meetings attended by each ofthe directors of the Company during the year under review are:

Director No of Meetings No of Meetings

Held Attended

Sir W. Keys* 5 2Mr M. El-Ansary 6 6Dr P H Wallner 6 4Mr A. MacKinlay ** 4 4Mr M. Perrott 6 6Mr M. Dillon 6 6* Died on 3 May 2000

**Resigned in April 2000

PRINCIPAL ACTIVITIESThe principal activities of the consolidated entity in the course of the financial yearwere research and development of a Mobile Mineral Process Evaluation Unit andexploration, evaluation and development of mineral resources. During the yearthe consolidated entity became involved in the marketing and distribution ofmedical products through its wholly owned subsidiary Allied Medical Ltd andprovided seed capital for Internet projects through its wholly owned subsidiaryAllied Internet Technology Ltd.

RESULTSThe net amount of the consolidated loss of the consolidated entity for the financialyear after abnormal items andincome tax expense was:

2000 1999$ $

Operating (loss) – after income tax (765,762) (470,432)

DIVIDENDSNo dividends have been paid or declared since the end of the previous financialyear and the directors do not recommend the payment of a dividend in respect ofthe current financial year.

Directors Report


to exercise the put option, that will resultin the Syndicate receiving the coretechnology funds on deposit withMacquarie Bank and in Allied Mining &Processing Ltd acquiring all of the sharesin Aretrend Pty Ltd (and thus the MMPEUtechnology) for a nominal amount.

I.2. The Prototype MMPEU:

The MMPEU has been designed as arelocatable plant for on site treatment of arange of gold and other metalliferous oresat a nominal continuous rate of 25 tonnesper hour. New and innovative equipmentand processing methods are incorporatedin the MMPEU resulting in the size ofmany sections of the plant beingsignificantly smaller than conventional orcurrent gold process plants installedthroughout the world. All sections of theplant have been built in a modular formatto allow the components to be easilyassembled on a site and subsequentlydisassembled for relocation to anothersite on completion of an assignment. Theconstruction of the prototype MMPEUwas completed in 1998 and the trial of anumber of the plant circuits wasconducted at a Perth workshop.

There are six ‘independent’ plantsections as described in this report andindicated on the accompanying simplifiedflow sheet. Each section is able tooperate independently of the other ifrequired to test a unit process or problemarea at an existing mine, while the totalsix units make up a complete processingplant.

The plant sections are:-

Section A - Primary Crushing

This section includes a ‘run of mine’ feedbin and vibrating feeder discharging into a750 by 1000mm Nordberg C100B jawcrusher (1). The crusher discharge isconveyed to a Malco double deck 1.2m x3.6m screen (2) for separation into threesize fractions: -• Plus 60 mm oversize to stockpile for

recirculation through the jaw crusher• Minus 60 plus 6mm material to plant

feed bin & plant feed stockpile• Minus 6 mm material to stockpile (for

direct mill feed, bypassing secondarycrushing).This crushing circuit is required to

operate on a day shift basis only, withfeed for the continuous milling operationscoming from the plant feed stockpile. Thejaw crusher is sized to accept run of minelumps and will handle up to 150 tph witha closed side setting of 60 to 70 mm.

Section B - Secondary Crushing

This section incorporates the wet plantfeed bin (3) which discharges onto aconveyor feeding the secondary crushingtower. The tower includes a NordbergWF200 WaterFlush crusher (cone crusher980mm)(4) which discharges slurry onto ahorizontal Malco wet screen 1.2m x 2.4m(5). The oversize from this screen isrecirculated back to the WaterFlushcrusher and the minus 6mm ore andwater is pumped to the milling section.This module produces nominally 25 tph ofcrushed ore continuously as feed for therest of the plant sections.

Section C - Milling, Classification,

Gravity & Thickening

This plant section is actually severalmodular sections which work together asfollows:-The slurry from the secondary crushing

section is fed to the mill discharge hopperand is pumped to the classificationcyclones (Warman 10CE units) (6), thecyclone overflow at nominally 80% minus80 micron material, gravitates to theWrencat thickener as feed for theleaching section. The cyclone underflowpasses over a sieve bend whereby theplus 3mm solids are passed through aFalcon SB21 gravity concentrator (7) forremoval of the free gold, and the sievebend underflow discharges into the ballmill. The gravity concentrator tails are alsodirected to the ball mill feed.

The ball mill is a 520kw inline drive unit(8), which can be transported as acomplete fully assembled unit.

The Thickener (9) which densifies theslurry ahead of the leach and CIP circuits,and recovers process water for re use is apatented "Wren Technologies" unit, 3.4mdiameter by 9m high, with no movingparts and is transported as one maincomponent.

Section D - Leaching

There are three draft tube leach tanks

(10) fitted with Lightnin 15Q4 agitatormechanisms. Two of the tanks are alsofitted with pumps and Atomaer inline‘Filblast’ 11A-20/230 reactors (11) foroxygen injection into the slurry topromote reduced leaching times.

Section E - Carbon Adsorption

The Adsorption section is fed by gravityfrom the leach section and includes AngloAmerican patented ‘pump cells’ (12), insix tanks which operate in a carouselmode. The total volumetric capacity ofthis section is 75 cubic metres. Themechanisms operate as agitators, pumps(for transferring slurry from tank to tank)and screens to keep the carbon in theindividual tanks allowing the slurry to passthrough. Slurry is pumped to tails afterpassing through the pump cells.

Section F - Elution & Carbon

Reactivation

The Elution system for removing the goldfrom the carbon is based on the AARLsystem (13) and is a continuous operationto handle nominally 1 tonne of carbon aday. The continuous design minimisesequipment sizes and heat loadrequirements. The elution system andelectrowinning cell (14) are incorporatedinto one tower module. Theelectrowinning product is smelted usingan Ansac Model A200 furnace (15).A separate tower houses an Ansac carbonreactivation kiln model HC2835 (16)

Applications: -

The commercial applications of theMMPEU worldwide include: -

1. A relocatable production plant forsmall deposits that would otherwisenot support a full-scale permanentproduction facility.

2. A relocatable plant for difficult toaccess deposits, such as in Indonesia& South America.

3. Evaluation of ore deposits withcomplex metallurgy for investigatingprocess options.

4. Process evaluation of economically

Directors Report


marginal deposits.5. Establishment of process steps and

operating costs as a prelude to finalplant design and or as part of adetailed feasibility study on a majororebody.

6. Use of the MMPEU (or specificmodules) on existing minesites,where processing difficulties arebeing encountered, for testingprocess options without disrupting theday-to-day operations of the mine.

I.3. Intellectual Property:

Patent applications have been lodged forthe MMPEU in the names of theinventors, Keith Dodd, Brian Coupe,Bruno Sceresini and Mohamed El-Ansary.The applications have been assigned tothe R&D Syndicate Investors namelyAretrend Pty Ltd and Advance R&D PtyLtd.

An international patent application underthe Patent Corporation Treaty (PCT) wasfiled on 25 September 1998. Theapplication, PCT/AU 98/00820, wasexamined by the Australian Patent Officeand received a favourable InternationalPreliminary Examination Report on 25January 2000.

The PCT application lapsed on 25 March2000, at which time the applicationproceeded into the national phase inAustralia. A South African patentapplication for the MMPEU, 98/8778,which was lodged at the same time as thePCT application is also being prosecuted.

A request for Examination was lodgedwith the Australian Patent Office on 23May 2000, but no response has beenreceived at the date of writing this report.It is anticipated that patents will begranted in Australia and South Africawithin the next few months.

I.4. Commercialisation:

Considerable interest has been expressedby a number of local and overseascompanies for the utilisation of theMMPEU. However, due to the downturnin the mining industry in general and in thegold mining industry in particular, thesubstantial benefits arising from rentingthe MMPEU, as against the large capital

cost required for the development of astand alone plant, proved insufficient tomake most of these projectseconomically viable due to the depressedmetal prices. As such, the completion ofthe field trials and the commercialisationof the MMPEU were delayed.

In January 2000, the Company signed aDry Hire Agreement with TectonicResources NL, for the utilisation of theMMPEU comminution circuit in theprocessing of nickel ore at RAV8 Projectnear Ravensthorpe in Western Australia.

The broad terms of the agreement are:

• Tectonic is to pay an option fee of$225,000 for an option period expiring25 August 2000. Tectonic may offset apro-rata part of the option fee againstthe rent payable, if it were tocommence operation prior to 25 August2000.

• The Syndicate is to contribute $300,000to the cost of field-trialling the plantincluding transportation, setting-upand/or commissioning.

• Following the Final Completion of theplant commissioning, Allied receives amonthly rental for the plant being thegreater of:

1. A minimum rent of $75,000 permonth; and

2. An amount calculated on the tonnes ofore processed by the plant during themonth at the following incrementalrates:

• The rental period is 2 years, which maybe extended.

• At the end of the rental period, Tectonicis responsible for all the costs ofdismantling the plant and returning it toAllied.

The ball mill and the primary andsecondary crushers were pre-commissioned in Perth in April 2000 andtransported together with the cyclonesand the thickener to the RAV8 mine site inMay 2000.

The majority of the installation and pre-commissioning work took place at RAV8between 20 May and 25 June 2000.

Dry and wet commissioning and fineadjustments were undertaken during July2000 followed by the successfulcompletion test in August 2000.

A Completion Certificate was issued byTectonic on 24 August 2000.

Allied has also recently been engaged innegotiations with another miningcompany over the hiring of the balance ofthe plant for the processing of a highgrade gold deposit overseas. In addition,some of the components are currentlybeing re-assessed with a view ofexpanding their applications to theenvironmental field.

Tonnage per month Rate per tonne

0 to 8,000 tonnes $9.00 for each tonne processed

8,001t to 8,800t $72,000 plus $8.55 for each tonne processed over 8,000t.



Thereafter, for each additional increase of 800 tonnes in throughput, the rate for that800 tonne increment shall decrease by $0.45 per tonne

Directors Report


1. Jaw CrusherNordberg C100B

2. Double DeckScreen 1.2 x 3.6m

3. Wet Plant FeedBin

4. WaterFlush ConeCrusher WF200

5. Single DeckScreen 1.2 x 2.4m

6. ClassificationCyclones 10CE

7. GravityConcentrator

8. Ball Mill 520kWInline drive

9. Thickener - Static“WrenCat”

10. Leach Tankswith 15Q4 Agitators

11. Oxygen InjectionReactors - Filblast

12. CIP Pump Cells

13. ContinuousElution System

14. ElectrowinningCell

15. Gold Furnace

16. Reactivation Kiln

MMPEU PrototypeSimplified Flow Sheet

Directors Report


II. EXPLORATION:

Exploration activities during 1999/2000remained subdued with most of theexploration activities directed to theevaluation of known gold and base metalanomalies at Comet Vale in WesternAustralia and Beverley in NorthQueensland. The Company was alsoactively evaluating various opportunitiesand advanced mining projects.

Comet Vale (E29/322) - 100%

Exploration licence E29/322 was grantedin December 1996 over 32 graticularblocks or an area of approximately 95 sq.km encompassing the western margin ofthe Comet Vale Monzogranite, north westof the Comet Vale mining centre.Following a 50% partial surrender inDecember 1999, the tenement currentlycovers 16 graticular blocks.

Although the area is largely soil covered,with only minor outcrops of granitoidrocks present in the southern part of thelicence area, low level aeromagneticsindicate that the sequence of greenstonerocks which host the gold mineralisationat Comet vale is likely to continue alongthe western rim of the monzogranite.Also, other poorly exposed andunexplored greenstone slivers andpromising structures may exist undercover in the northern part of the area,adjacent to the main outcroppinggreenstone sequence.

Exploration work undertaken by Allied

consisted of:

1. Soil sampling over a 3 km wide zonealong the western margin of theComet Vale Monzonite to test forpotential mineralised greenstonebeneath the soil cover between theMenzies and Comet Vale gold miningcentres. The results showed a numberof narrow zones of low order goldanomalies in different parts of thearea. In addition, anomalous nickelvalues in the northern part of the areaindicate that ultramafic rocks,prospective for nickel mineralisationmay also be present.

2. Shallow RAB drilling of soilgeochemical anomalies. A total of978m were drilled in 75 holes to testthe soil geochem anomalies along theprojected western margin of theComet Vale monzogranite with nosignificant results.

3. Soil sampling of the northern part ofthe area adjacent to exposedgreenstones. The soil samplesreturned some interesting results witha distinct soil anomaly of +10 ppb Ausupported by anomalous Ni, Cu andAs (up to 10 x background), extendingover a 4 km long, 400-900m wide, soilcovered area.

Follow up aeromagnetic data acquisitionand interpretation followed by drilling ofcombined geochemical and aeromagneticanomalies is planned for the area.

BEVERLEY (EPM11129) - 90%

Exploration Permit for MineralsEPM11129 is located 35km northwest ofthe Kidston Gold Mine in NorthQueensland.

Gold mineralisation occurs in two

distinct styles:

1. Epithermal gold mineralisationassociated with high level intrusivesand hydrothermally altered volcanicbreccia occurring along the fault zonemarking the contact between theEinasleigh Metamorphics and theNew Castle Volcanics;

2. Gold mineralisation associated withbreccia zones within the EinasleighMetamorphics.

Work conducted by Allied included:

1. Soil sampling over an area 12.5 kmlong and 1-2 km wide area coveringthe prospective volcanic breccia andall known gold mineralisation. Thesampling returned intermittentanomalous gold values along a 7.5 kmlong structure where historicexploration drilling had failed to fullytest the main anomalous zone.

2. RAB and RC drilling of part of thegeochemically anomalous zone to adepth of 3-20m. The programme waspartially completed due to excessivewet conditions.

3. Aerial photograph interpretation study,which identified a number ofstructures closely related to felsicintrusives and known goldmineralisation. This work alsoidentified a series of photo anomalies,some associated with geochemicalanomalies.

4. Soil and rock sampling of coincidentairphoto anomalies, anomalousstream geochemistry and geophysicalanomalies.

Efforts to attract a joint venture partner toundertake follow up sampling and drillingprogrammes are continuing.

ENVIRONMENTAL REGULATIONS

In the course of its normal mining andexploration activities the Companyadheres to environmental regulationsimposed upon it by the Department ofMinerals and Energy of Western Australiaand the Department of Mines and Energyof Queensland, particularly thoseregulations relating to ground disturbanceand the protection of rare and endangeredflora and fauna. The Company hascomplied with all material environmentalrequirements up to the date of this report.

Directors Report


I. GO MEDICAL AGREEMENT:

Allied Medical Ltd, a wholly ownedsubsidiary of Allied Mining & ProcessingLtd, entered into an Exclusive DistributionAgreement with Go Medical Industries PtyLtd in November 1999.Under the terms of the agreementbetween Allied and Go Medical, Allied isinitially appointed as the sole marketing anddistributing agent for Go Medical’sproducts in Australia and New Zealand foran initial period of 4 years, renewable for afurther 4 years at Allied’s option. This strategic alliance will assist GoMedical with future product research andenhance development of manufacturingexpertise within its factories. It is intendedthat Allied Medical & Go Medical willdevelop complementary systems andstructures, with the expectation that thisco-operative alliance will assist with themarketing and distribution of these uniqueand innovative products overseas. So far, Allied has commenced supplyingsome products to the Vietnamese marketand is negotiating sub-distributorshiparrangements for the Middle East.

This Agreement has now been extended tocover the production and marketing of anew range of antibiotic infusion devicesdeveloped by Dr George O’Neil as a resultof a recent R&D programme.

The products provide an increased patientmobility and a considerable time saving formedical staff at hospital or at home. Thepotential market in Australia alone is for upto 2.5 million sets per annum, with a totalvalue in excess of $25 million.

The new arrangement provides Allied witha substantially higher profit margin thanthat achievable under the ExclusiveDistribution Agreement with Go MedicalIndustries Pty Ltd. It will accelerate AlliedMedical’s already rapid growth path.

It is also the first step in the developmentof a comprehensive Home Care Service forearly discharge patients, long term patientsat home and patients receiving same-daytreatment in hospitals. The Home CareService is a joint development by Allied andGo Medical.

I.1 Go Medical Products:

Go Medical Industries Pty Ltd is a privatelyowned Australian company, whichproduces a large range of unique productswith applications in the fields of obstetrics& gynecology, anaesthesia, urology andgeriatrics.

Go Medical has production facilities inAustralia, Indonesia and Romania andexports 95% of its products to 22 countriesincluding the USA, UK, Germany andSweden. However, the market for GoMedical products remains largelyundeveloped, a situation that is rapidlyimproving with Allied’s marketing efforts.

The following is one of the Go Medicalproducts with substantial sales:

ALLIED MEDICAL LIMITED

Patient Controlled Pain Management ProductsPain management is now recognised medicaldisciplines, with direct applications in thespecialties of Paediatrics, Palliative care,Oncology, as well as, acute and chronic painmanagement associated with general medical /surgical procedures.

Traditionally, patients have had to rely on nursingstaff to administer pain relief, injections &tablets, as requested. With focus towardsstaffing and budgetary considerations, GoMedical has designed a range of low cost patientcontrolled analgesia pumps that are fullydisposable, very lightweight and simple to use.Complementary models have been developed forintravenous, epidural and sub-cutaneous usage.Patient mobility is enhanced as the pumps can besimply hung around the neck, facilitating earlierpatient discharge from expensive hospital beds.

Springfusor PumpsSpringfusors are simple, low cost pumps andtubing that deliver a continuous infusion ofantibiotics, over a user selected period, throughthe development of Flow Controlled Tubing.This technology prevents “Downloading” of drug,requires no electricity, and frees up stretchednursing staff. Reliable reusable spring-drivensyringe-pumps utilizing disposable Flow ControlTubing connected to a disposable Go MedicalV-Set.

Directors Report


Time Controlled Nasal Spray:

This is a new product with wideapplications, which features Go Medical’stubing technology within a portable, "TimeControlled Nasal Spray". The nasalmucosa is rich in blood supply and idealfor a number of drugs as they are simplyabsorbed into the blood stream. Thisdevice delivers a measured dose and willnot give another spray for a specified timeperiod. As such, it is ideal for many of thepain relieving drugs on the market, whichare often given by injection. Trials of thedevice have occurred in Perth,Queensland, Victoria and the UnitedKingdom with extremely encouragingresults.

I.2 Marketing and Distribution:

Allied Medical has forged an alliance withSigma Company Limited for thewarehousing and distribution of the GoMedical products.

The alliance with Sigma has providedAllied with immediate access to a highlyefficient distribution network and accessto an extensive number of medicalinstitutions.

Allied has also appointed Beta Healthcaresub-distributor in Queensland and NewSouth Wales and engaged arepresentative in New South Wales.

As a result, sales have shown a markedimprovement in the June 2000 quarteralthough the extent of this improvementis yet to be quantified as salesoutstripped the supplies of a number ofproducts during that period.

II. MEDHEALTH USD SYSTEM:

Allied Medical has acquired the businessand assets of Medhealth Supplies Pty Ltd("MHS"), a successful Australianmanufacturer and distributor of medicalproducts.

The main business of MHS is theUnderwater Seal Drainage "USD" which isused in post-operative cardio-thoracicsurgery and is one of the lowest costimplements of this kind in Australia.

The System includes a single catheter kit,which connects between the patientdrain catheter and an underwater sealbottle and a double catheter kit, whichconnects between two patient draincatheter and the underwater seal bottle.

Due to various additional compliancerequirements by the Therapeutic GoodsAuthority, which were not in place at thetime of the acquisition, the cost ofproduction increased substantially. Thisnecessitated significant increases in theprices for the MHS, which reduced itscost advantage and in turn reduced thepotential of market expansion.

As a result, Allied is reviewing theeconomics of this acquisition and isconsidering a buy back offer from thevendors.

ALLIED MEDICAL LIMITED

Go Medical V-SetThis intravenous connector has no common-spacebetween each line. “Back Flushing” ofconcentrated drugs through erroneous mixing incommon-space is eliminated and less swappingof syringes results in reduced infection. A rangeof 2 & 3 line sets customized for specific andgeneral usage with No Kink Fast Flow line andAnti-Reflux valves simplifies procedures,reducing costs.

Specialised Obstetric and Gynaecological Range:These diverse products were developed as aresult of years of practical experience in theobsteric and gynaecological field. They include adisposable, user-friendly, Amnicot for openingdelicate membranes prior to childbirth, theAspirating & Irrigating Needle for the collectionof Oocytes by the I.V.F. teams and the ImprovedVacuum Extraction Cup for safer baby delivery.

This strategic alliance will assist Go Medical with future product research and enhancedevelopment of manufacturing expertise within its factories, located in Perth, Romania andBatam (Indonesia). It is intended that Allied Medical & Go Medical will developcomplementary systems and structures, with the expectation that this cooperative alliance willassist with the marketing and distribution of these unique and innovative products overseas.

O’Neil Sterile Field Urinary Catheters:Unique, self contained and sterile range of urinarycatheters which incorporate a lubricated andsterilised “Introducer Sheath”. This IntroducerSheath extends the sterile field of the catheterthrough the higher risk of infection area near theaperture, allowing the sterilised catheter to beextended into the bladder, avoiding costly anduncomfortable urinary tract infection.

Directors Report


Allied Internet Technology Ltd "AIT" is awholly owned subsidiary of Allied Mining& Processing Ltd.The Company was incorporated for thepurpose of acquiring substantial equitiesin two, highly promising Internet relatedprojects, namely:

1. Fastpath Pty Ltd, which has devisedan Internet security system ofelectronic payment for goods andservices. AIT acquired a 30% interestby providing the working capitalrequired for the development of thefirst stage of the system and the website.

2. Worldwidefm.net Pty Ltd ("wwfm") isan Internet Audio Design Companyspecialized in providing audio contentfor clients’ web sites as an aural aid tonavigating a web site. AIT acquired52.8% interest by providing thefinance required for the developmentof the first stage and through therationalisation of the ownership ofwwfm.

I. FASTPATH PTY LTD:

Fastpath Pty Ltd is a company operatedby the Principals of Internet BusinessCorporation (IBC) a company thatemploys a highly skilled team ofdesigners, programmers and developers,and uses automated and secureelectronic commerce systems with a highlevel of data integration. They are acertified re-seller of the Camtech SecurePayment gateway which allows websitetransactions to integrate directly into theAustralian EFTPOS banking network.

Fastpath has developed an Internetsecurity system for use on worldwide e-commerce transactions, which isprotected by Australian provisional PatentApplication No. PQ5432, presentlyregistered in the name of Fastpath.

The system developed by IBC meets thefollowing criteria:

1. The system operates in a nichemarket with mass global appeal;

2. The system focuses on abundanceand is capable of significant naturalgrowth with the growth of theInternet;

3. The system website requiresrelatively low site maintenance andhas the bulk of its content updated bysite users;

4. The system is able to create andmaintain positive cash flow early afterits establishment;

5. The system has relatively lowadministration overheads;

6. Ongoing sales revenue is based onrecurring income from repeatcustomers; and

7. The system can be easily run undermanagement.

II. WORLDWIDEFM.NET PTY LTD

Worldwidefm.net Pty Ltd Pty Ltd("wwfm") is a company operated by Perthentertainer Dennis Bryant, otherwiseknown as Kevin ("Bloody") Wilson. wwfmis a specialised Internet Audio Designcompany. It designs, programs, producesand supplies tailored audio specifically forthe Internet. This is designed to capitaliseon the massive growth in the use of theInternet in terms of information provision,entertainment and e-commerceapplications. wwfm is presently the onlyprovider of corporate and special interestaudio sites on the Internet.

Allied Internet Technology Pty Ltdacquired 4.54 million shares representing52.8% interest in wwfm by financing thefirst stage of the Business Plan, andthrough the rationalisation of theownership of the Company.

Following Allied’s involvement, wwfm

developed two new web-based radiostations which are practically the same asconventional radio stations, completewith the latest music and entertainment,combined with extensive information onthe sponsors available 24 hours each day.The two stations developed are:i. West Coast Eagles on Air: a radio

station dedicated to the West CoastEagles Football Club. The stationprovides interviews with key players,weekly comments from the coach,regular updated profiles on all theWest Coast Eagles players and thelatest Club news. The websiteaddress iswww.westcoasteagles.com.au.

ii. A golf radio station providingextensive information on all aspects ofgolf including equipment, tips andinterviews with golf professionals. The website address iswww.golffm.com.au.

LLIED NTERNET ECHNOLOGY LTD

Directors Report


Share Placements

On 20 July 1999, Allied Mining &Processing Ltd made a placement of5,230,799 ordinary fully paid sharesrepresenting 15% of the Company’sissued capital, at 7 cents per share toTroika Securities Ltd which is a holder ofan unrestricted Dealer’s Licence fromASIC.

On 20 January 2000, Allied Mining &Processing Ltd made a placement of4,000,000 ordinary fully paid shares in theCompany, representing 11.5% of theCompany’s issued capital, at 20 cents pershare to clients of D.J. Carmichael PtyLtd, which is a member corporation of theAustralian Stock Exchange Ltd and alicensed security dealer.

On 31 January 2000, Allied Mining &Processing Ltd issued 300,000 shares atan issue price of 25 cents per share to theshareholders Medhealth Supplies Pty Ltdfor the purchase of the Underwater SealSystem.

Agreements

On 19 November 1999, the Company’swholly owned subsidiary, Allied MedicalLtd, signed an Exclusive DistributionAgreement with Go Medical IndustriesPty Ltd. The Agreement is for a period of4 years, with an option to renew for afurther 4 years. Allied Medical also entered into anagreement with Sigma Company Ltd forthe warehousing and distribution of GoMedical products.

On 21 January 2000, the Company’swholly owned subsidiary, Allied MedicalLtd entered into an agreement topurchase the Underwater Seal Systemfrom Medhealth Supplies Pty Ltd.

On 21 January 2000, Allied Mining &Processing Ltd signed an Option to HirePlant Agreement. Pursuant to this

Agreement, the Company granted anexclusive option expiring 25 August 2000to Tectonic Resources NL to hire thecrushing, milling, cyclone and thickermodules of the MMPEU. Allied receivedan option fee of $225,000.The two companies also signed a Dry HireAgreement for the same modules for aperiod of two years with 12 monthsextension. Pursuant to the Dry HireAgreement the Company receives amonthly rental of $75,000 plus anadditional payment for each tonneprocessed in excess 8,333 tonnes permonth.

On 21 January 2000, the Company,Tectonic Resources NL, Tectonic SystemsPty Ltd and the Bank of Western AustraliaLtd signed a Plant Hire Contract – SideDeed.

On 24 February, the Company’s whollyowned subsidiary Allied InternetTechnology Ltd, Worldwidefm.net Pty LtdPty Ltd, Thomas Frederick Tapping,Dennis Vincent Bryant, Count DownPromotions Pty Ltd and Both Barrels PtyLtd entered into a Share Acquisition andOption Deed. Pursuant to this Deed,Allied purchased 2,500,000 Worldwidefmshares for $200,000.

On 12 April 2000, the Company’s whollyowned subsidiary Allied InternetTechnology Ltd, Fastpath Nominees PtyLtd, Richard Andrew Keeves, DavidAnthony Dell, Alistair Robert MacKinlay,Kit Investments Pty Ltd and RedsilkEnterprises Pty Ltd signed a Heads ofAgreement. Pursuant to the Heads ofAgreement, Allied purchased 2,000,000Fastpath ordinary shares for $200,000.

On 1 May 2000, the Company’s whollyowned subsidiary Allied InternetTechnology Ltd, accepted an IrrevocableOffer by Both Barrels Pty Ltd for thepurchase of its shares in Worldwidefm for$106,000 in cash and a 10% royalty ongross sales by Worldwidefm. The royalty

is subject to a 3 years call and put optionsexercisable at $150,000.

On 4 May 2000, the Company’s whollyowned subsidiary Allied InternetTechnology Ltd, entered into a Deed ofRelease and Transfer with ThomasFrederick Tapping and CountdownPromotions Pty Ltd. Pursuant to theDeed, Allied acquired 2,004,000Worldwidefm shares held by Countdownfor $20,000 and agreed to release Tappingand Countdown from various obligationsunder the February 2000 ShareAcquisition and Option Deed.

The Company’s shares commencedtrading on the Frankfurt Stock Exchange"FSE" as well as electronic trading "ETR" inJune 2000.

In the opinion of the Directors there wereno other significant changes in the stateof affairs of the Company that occurredduring the year not otherwise disclosed inthis report or the financial report.

CHANGES IN STATE OF AFFAIRS

Directors Report


SHARE OPTIONS

Options to take up ordinary shares were granted as follows:

The number of options issued at the date of this report:

No. of Options Exercise Price ($ Expiry Date

22,428,491 20 cents 1st March 2001

2,000,000 20 cents 30th June 2002

2,000,000 30 cents 30th June 2003

The numbers of options issued during the financial year were:

On 15th December 1999, a total of 2,000,000 options exercisable at 20 cents expiring30th June 2002 were issued to Company directors pursuant to a shareholdersresolution on 19 November 1999. The options are unquoted and have a value per theBlack – Scholes option valuation formula of $137,304.

On 15th December 1999, a total of 2,000,000 options exercisable at 30 cents expiring30th June 2003 were issued to Company directors pursuant to a shareholdersresolution on 19 November 1999. The options are unquoted and have a value per theBlack – Scholes option valuation formula of $158,896.

No options were exercised during the financial year.

DIRECTORS’ AND AUDITORS’ INDEMNITIES

The Company has not, during or since the financial year, in respect of any person whois or has been an officer or auditor of the Company or of any related body corporate:- indemnified or made any relevant agreement for indemnifying against a liability,

including costs and expenses insuccessfully defending legal proceedings: or

- paid or agreed to pay a premium in respect of a contract insuring against a liability forthe costs or expenses to defend legal proceedings.

SUBSEQUENT EVENTS

On 24 August 2000, the Final Completiontest of the MMPEU comminution circuitwas satisfactorily completed at RAV8Nickel Project and Tectonic Resources NLissued a Completion Certificate.

LIKELY DEVELOPMENTS

In the opinion of the directors it wouldprejudice the interests of theconsolidated entity to provide additionalinformation, except as reported in thisDirectors’ Report, in relation to likelydevelopments in the operation of theconsolidated entity and the expectedresults of those operations in subsequentfinancial years.

Directors Report


DIRECTORS’ INTERESTS The relevant interest of each Director in the share capital of the Company shown in the Register of Directors’ Shareholdings as at thedate of this report is:

20c Ordinary Shares 20c Options 20c Options 30c Options

- fully paid - expire 1 March 2001 - expire 30 June 2002 - expire 30 June 2003

Direct Indirect Direct Indirect Direct Indirect Direct Indirect

Mr M El-Ansary 9,000 3,830,529 4,500 2,768,836 - - - -

Dr P Wallner - 421,391 200,000 174,718 - - - -

Mr M Perrott - - - - 1,000,000 - 1,000,000 -

Mr M Dillon - 664,286 4,500 55,000 1,000,000 - 1,000,000 -

DIRECTORS’ AND EXECUTIVES’ REMUNERATION

In order to retain and attract executives of sufficient calibre to facilitate the efficient and effective management ofthe company’s operations, the board reviews the remuneration packages of all directors and executive officers on anannual basis and makes recommendations. Remuneration packages are reviewed with due regard to performanceand other relevant factors.Remuneration packages contain the following key elements:a) Salary/fees;b) Benefits – including provision of motor vehicle, superannuation and health benefits; andc) Incentive schemes – including performance related bonuses and share options under the executive and employee

share option plan.The following table discloses the remuneration of the directors of the company and the consolidated entity:

Salary/Fees Benefits Incentive Schemes Total

(Options)

Mr M El-Ansary 142,860 17,251 - 160,111Dr P Wallner 10,000 700 - 10,700Mr M Perrott 20,000 700 148,100 168,800Mr M Dillon 14,800 700 148,100 163,600Sir W Keys * 27,500 - - 27,500Mr A MacKinlay ** 11,524 525 - 12,049

* Died on 3 May 2000**Resigned in April 2000

There were no executives other than included in the table above.

Dated at Perth this 29th day of September 2000.

Signed in accordance with a resolution of the Directors:

.....................................................M. PerrottDirector

......................................................M. El-AnsaryDirector

Profit and Loss Statementfor the year ended 30 June 2000


Consolidated Company

Note 2000 1999 2000 1999

$ $ $ $

Operating loss before income tax 2 (765,762) (470,432) (505,054) (432,930)Income tax attributable to operating loss 3 - - - -

Operating loss after income tax (765,762) (470,432) (505,054) (432,930)Outside equity interests in operating losses after income tax 84,688 - - -

Operating loss after income tax attributable

to members of the parent entity (681,074) (470,432) (505,054) (432,930)Accumulated losses at the beginning ofthe financial year (5,802,031) (5,331,599) (4,187,553) (3,754,623)

Accumulated losses at the end of the

financial year (6,483,105) (5,802,031) (4,692,607) (4,187,553)

Earnings per share

Basic (cents per share) 14 (1.84) (1.35)

Balance Sheetas at 30 June 2000



Note 2000 1999 2000 1999

$ $ $ $

CURRENT ASSETS

Cash 718,784 711,755 672,840 711,755Receivables 4 322,759 - 16,538 -Inventories 5 169,865 - - -Total current assets 1,211,408 711,755 689,378 711,755

NON-CURRENT ASSETS

Receivables 6 8,000 8,000 2,320,425 1,650,308Property, Plant and Equipment 7 1,057,877 1,031,195 1,048,843 1,031,195Investments 8 12,890 - 26 24Intangibles 9 186,304 - - -Total non-current assets 1,265,071 1,039,195 3,369,294 2,681,527

Total assets 2,476,479 1,750,950 4,058,672 3,393,282

CURRENT LIABILITIES

Accounts Payable 10 602,976 114,778 416,840 110,678Other 11 181,053 463,804 158,884 495,758Total current liabilities 784,029 578,582 575,724 606,436

Total liabilities 784,029 578,582 575,724 606,436

Net assets 1,692,450 1,172,368 3,482,948 2,786,846

EQUITY

Issued Capital 12 8,175,555 6,974,399 8,175,555 6,974,399Accumulated losses (6,483,105) (5,802,031) (4,692,607) (4,187,553)Equity attributable to members of the parent entity 1,692,450 1,172,368 3,482,948 2,786,846

Outside equity interests in controlled entity 13 - - - -

Total equity 1,692,450 1,172,368 3,482,948 2,786,846



Note 2000 1999 2000 1999

$ $ $ $

CASH FLOWS FROM OPERATING ACTIVITIES

Cash payments in the course of operations (1,224,137) (252,645) (483,161) (247,445)

Interest received 85,270 48,046 84,723 48,046

Receipts from customers 495,128 - 225,000 -

Net cash used in operating activities 20(b) (643,739) (204,599) (173,438) (199,399)

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for plant and equipment (29,434) (3,954) (23,933) (3,954)

Exploration expenditure (118,334) (181,527) (118,334) (181,527)

Receipts from R&D Syndicate 482,842 - 482,842 -

Research and development expenditure (558,806) (482,754) (558,806) (487,954)

Payment for investments (214,863) - (2) -

Payment for intangibles (1,105) - - -

Acquisition of business 20(c) (114,090) - - -

Loans advanced to controlled entities - - (1,086,699) -

Loans repaid by controlled entities - - 270,128 -

Net cash used in investing activities (553,790) (668,235) (1,034,804) (673,435)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the issue of shares 1,173,661 - 1,166,156 -

Proceeds from borrowings 27,726 -

Net cash provided by financing activities 1,201,387 - 1,166,156 -

Net increase/(decrease) in cash held 3,858 (872,834) (42,086) (872,834)

Cash at the beginning of the financial year 711,755 1,588,113 711,755 1,588,113

Effects of exchange rate changes on cash 3,171 (3,524) 3,171 (3,524)

Cash at the end of the financial year 20(a) 718,784 711,755 672,840 711,755

Statement of Cash Flowsfor the year ended 30 June 2000


Notes to the Financial Statementfor the year ending 30 June 2000

1. SUMMARY OF ACCOUNTING POLICIES

The significant policies which have been adopted in the preparation of these financial statements are:

FINANCIAL REPORTING FRAMEWORKThe financial report is a general purpose financial report which has been prepared in accordance with applicable AccountingStandards, Urgent Issues Group Consensus Views and the Corporations Law. The accounting policies adopted are consistent withthose of previous years except as otherwise stated. The financial report has been prepared on the basis of historical cost and except where stated, does not take into account changingmoney values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchangefor assets.

SIGNIFICANT ACCOUNTING POLICIESAccounting policies are selected and applied in a manner which ensures that the resultant financial information satisfies the conceptsof relevance and reliability, thereby, ensuring that the substance of the underlying transactions and other events is reported.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) PRINCIPLES OF CONSOLIDATIONThe consolidated financial statements of the economic entity include the financial statements of the Company, being the parententity, and its controlled entities. Where an entity either began or ceased to be controlled during the year, the results are includedonly from the date control commenced or up to the date control ceased. The balances, and effects of transactions, betweencontrolled entities included in the consolidated financial statements have been eliminated. A list of controlled entities appears inNote 24 to the financial statements.

(b) MINERAL EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITUREMineral exploration expenditures and acquisition costs in relation to these areas of interest have been written off in the year in whichthey are incurred on projects where exploration and evaluation activities in the area have not yet reached a stage that permitsreasonable assessment of the existence or otherwise of economically recoverable reserves.When rights to tenure are held and expenditures have been expected to be recouped through development and economicexploitation of the area of interest, the exploration costs are capitalised and amortised against the estimated economical mine lifeonce mining commences.

(c) FOREIGN CURRENCY TRANSACTIONSTransactions in foreign currencies have been converted at rates of exchange ruling on the date of those transactions. At balancedate, amounts receivable and payable in foreign currencies are translated to Australian currency at rates of exchange current at thatdate. Realised and unrealised gains and losses are brought to account in determining the profit or loss for the financial year.

(d) DEPRECIATION OF NON-CURRENT ASSETSDepreciation is calculated on a reducing balance method so as to write off the net cost of each non-current asset over its estimateduseful life. The following estimated useful lives are used in the calculation of depreciation:• Furniture and Fittings 5 - 10 years• Office Equipment 3 - 5 years

(e) GOODWILLGoodwill, representing the excess of the cost of acquisition over the fair value of the identifiable net assets acquired, is amortisedon a straight line basis as follows:• Goodwill associated with Worldwidefm.net Pty Ltd is amortised over a period of 5 years.• Goodwill associated with MedHealth is amortised over a period of 20 years.



(f) RECEIVABLESTrade receivables and other receivables are recorded at amounts due less any provision for doubtful debts.

(g) ACCOUNTS PAYABLETrade payables and other accounts payable are recognised when the economic entity becomes obliged to make future paymentsresulting from the purchase of goods and services.

(h) INCOME TAXTax effect accounting principles have been adopted whereby income tax expense has been calculated on pre-tax accounting profitsafter adjustment for permanent differences. The tax effect of timing differences, which occur when items are included or allowed forincome tax purposes in a period different to that for accounting, is shown at current taxation rates in provision for deferred income taxand future income tax benefit, as applicable.

(i) RECOVERABLE AMOUNT OF NON-CURRENT ASSETSNon-current assets are written down to recoverable amount where the carrying value of any non-current asset exceeds recoverableamount. In determining the recoverable amount of non-current assets the expected net cash flows have not been discounted to theirpresent value.

(j) COMPARATIVE FIGURESComparative figures are, where appropriate, reclassified so as to be compatible with the figures presented in the current financial year.

(k) RESEARCH & DEVELOPMENT COSTSResearch and development costs are charged against income as incurred, except to the extent that such costs, together withunamortised deferred costs in relation to that project, are expected, beyond any reasonable doubt, to be recoverable.

The deferred costs are amortised over the period in which the corresponding benefits are expected to arise, commencing with thecommercial use of the product.

The unamortised balance of research and development costs deferred in previous periods are reviewed regularly and at each reportingdate, to ensure the criterion for deferring continues to be met. Where such costs are no longer considered recoverable, they arecharged to the profit and loss statement for the financial year.

(l) RESEARCH AND DEVELOPMENT SYNDICATEContract revenue received from the research and development syndicate is recognised as revenue when the corresponding researchand development expenditure is committed.

(m) FINANCIAL INSTRUMENTS ISSUED BY THE COMPANY DEBT AND EQUITY INSTRUMENTSDebt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractualarrangement.

INTEREST AND DIVIDENDSInterest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of therelated debt or equity instruments or component parts of compound instruments.

(n) REVENUE RECOGNITION SALE OF GOODS AND DISPOSAL OF ASSETSRevenue from the sale of goods and disposal of other assets is recognised when the economic entity has passed control of the goodsor other assets to the buyer.

RENDERING OF SERVICESRevenue from a contract to provide services is recognised by reference to the stage of completion of the contract.

(o) INVENTORIESInventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variableoverhead expenses, are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with themajority being valued on a first in first out basis.



(p) JOINT VENTURE OPERATIONThe company’s interest in an unincorporated joint venture operation is brought to account by including its interest in the followingamounts in the appropriate categories in the balance sheet and profit and loss statement:• each of the individual assets employed in the joint venture;• liabilities incurred by the consolidated entity in relation to the joint venture and the liabilities for which it is jointly and/or severally

liable; and• expenses incurred in relation to the joint venture.


2000 1999 2000 1999$ $ $ $

2. OPERATING LOSS

Operating loss before income tax has been arrived at after including:

OPERATING REVENUEInterest received or due and receivable from:Other persons 85,858 48,046 84,723 48,046Sales Revenue 550,769 - - -Proceeds from Rental of Plant 150,000 - 150,000 -

Foreign exchange gain 3,171 2,192 3,171 2,192R&D income 852,899 472,536 911,254 504,838Other income 5,089 - - -

1,647,786 522,774 1,149,148 555,076OPERATING EXPENSESDepreciation - Plant and Equipment 8,857 7,635 6,285 7,635Foreign exchange loss 24 5,714 24 5,714Exploration expenditure written off 118,334 181,527 118,334 181,527R&D expenditure written off 874,535 493,932 874,535 493,932Amortisation of Goodwill 1,971 - - -Provision for Non Recovery - Loan - - 258,943 -

3. INCOME TAX

The prima facie income tax benefit on operating loss is reconciled to the income tax provided in the financial statements as follows:

Operating loss (765,762) (470,432) (505,054) (432,930)

Income tax benefit calculated at 36% of operating loss (275,674) (169,356) (181,819) (155,855)Permanent differences:R&D transactions (4,198) 6,698 (4,198) 6,698Other (29,658) 66,455 (52,131) 66,455Timing differences and tax losses not brought to account as future income tax benefits 309,530 96,203 238,148 82,702

- - - -Future income tax benefits not brought to account as assets at 30% (1999-36%):

Tax losses - Revenue 524,833 242,344 505,260 228,843

Tax losses - Capital 6,845,831 8,270,000 6,845,831 8,270,000

Tax losses - Exploration 222,710 499,068 222,710 499,068

7,593,374 9,011,412 7,573,801 8,997,911

The taxation benefits will only be obtained if:(a) The economic entity derives assessable income of a nature and of an amount sufficient to enable the benefit

from the deductions to be realised;(b) The economic entity continues to comply with the conditions for deductibility imposed by law; and(c) There are no changes in tax legislation adversely affecting the economic entity in realising the benefit from the deductions.



2000 1999 2000 1999$ $ $ $

4. RECEIVABLES-CURRENT

Trade Debtors 322,759 - 16,538 -322,759 - 16,538 -

Other Debtors 89,808 89,808 89,808 89,808Less Provision for doubtful debts (89,808) (89,808) (89,808) (89,808)

- - - -

322,759 - 16,538 -

Due to the uncertainty about the future of the Egyptian Concession Agreement and the funds and assets in the possession of Pharaoh Gold Mines NL, a company which has been conducting exploration in Egypt on behalf of Allied Mining & Processing NL and is controlled by Messrs Sami El-Raghy, Youssef El-Raghy and Michael Kriewaldt, it was decided to fully provide for these assets.

5. INVENTORIES-CURRENT

Finished GoodsAt cost 169,865 - - -

169,865 - - -

6. RECEIVABLES-NON CURRENT

Security Deposits - Mining Tenements 8,000 8,000 8,000 8,000Loans & Advances – Controlled Entities - - 2,571,368 1,642,308Less Provision for Non Recovery - Loan - - (258,943) -

8,000 8,000 2,320,425 1,650,308

Included in Loans and Advances – Controlled Entities is an amount receivable from Advance R&D Pty Ltd of $1,674,866 (1999 - $1,638,247). The recoverability of this amount is contingent on the successful commercialisation of the MMPEU technology.

7. NON-CURRENT ASSETS- PROPERTY, PLANT AND EQUIPMENT

Plant and office equipment - at cost 173,452 162,240 163,243 162,240Accumulated depreciation (142,428) (134,968) (141,253) (134,968)

31,024 27,272 21,990 27,272

R&D Prototype Plant & Equipment 1,026,853 1,003,923 1,026,853 1,003,923

Motor vehicles - at cost 127,492 127,492 127,492 127,492Accumulated depreciation (127,492) (127,492) (127,492) (127,492)

- - - -Total Property, Plant and Equipment 1,057,877 1,031,195 1,048,843 1,031,195




2000 1999 2000 1999$ $ $ $

8. INVESTMENTS

UNQUOTED INVESTMENTS - AT COSTShares in controlled entities (note 24) - - 26 24Other investments 12,890 - - -

12,890 - 26 24

9. NON-CURRENT ASSETS- INTANGIBLES

Goodwill – MedHealth 70,000 - - -Goodwill – WWFM 118,275 - - -

188,275 - - -Accumulated amortisation (1,971) - - -

186,304 - - -MINERAL EXPLORATION AND DEVELOPMENT EXPENDITURE -Balance at beginning of year - - - -Exploration expenditure during the period 118,334 181,527 118,334 181,527Expenditure written off during the year (118,334) (181,527) (118,334) (181,527)Balance at end of year - - - -

10. CURRENT LIABILITIES- ACCOUNTS PAYABLE

Trade payables 579,976 91,778 397,940 91,778Other payables and accruals 23,000 23,000 18,900 18,900

602,976 114,778 416,840 110,678

11. CURRENT LIABILITIES- OTHER

Unspent R&D Funds 77,042 463,804 82,599 488,387Unearned Income 1,285 - 1,285 7,371Tectonic Unearned Income 75,000 - 75,000 -Loans – Unsecured 27,726 - - -

181,053 463,804 158,884 495,758

12. SHARE CAPITAL 2000 1999Number of Shares Number of Shares 2000 1999

$ $ISSUED AND PAID UP CAPITALa) Ordinary shares fully paid

Balance at the beginning of the financial year 34,871,996 34,871,996 6,974,399 6,974,399Share issues 9,530,799 - 1,201,156 -Balance at the end of the financial year 44,402,795 34,871,996 8,175,555 6,974,399

Fully paid ordinary shares 44,402,795 34,871,996 8,175,555 6,974,399

On 20 July 1999, Allied Mining & Processing Ltd made a placement of 5,230,799 ordinary fully paid shares in the Company,representing 15% of the Company’s issued capital, at 7 cents per share to Troika Securities Ltd which is a holder of an unrestrictedDealer’s Licence from the ASIC.

On 20 January 2000, Allied Mining & Processing Ltd made a placement of 4,000,000 ordinary fully paid shares in the Company,representing 11.5% of the Company’s issued capital, at 20 cents per share to clients of D.J. Carmichael Pty Ltd, which is a membercorporation of the Australian Stock Exchange Ltd and a licensed security dealer. Costs associated with this issue are $40,000.



On 31 January 2000, Allied Mining & Processing Ltd issued 300,000 shares at an issue price of 25 cents per share to the shareholdersMedhealth Supplies Pty Ltd for the purchase of the Underwater Seal System.

During the financial year, the Company changed its status from a no liability (NL) company to a company limited (Ltd) by shares.

b) Options over fully paid ordinary shares:

The number of options on issue at balance date:

No. of Options Exercise Price ($) Expiry Date

22,428,491 20 cents 1st March 2001

2,000,000 20 cents 30th June 2002

2,000,000 30 cents 30th June 2003

The numbers of options issued during the financial year were:

On 15th December 1999, a total of 2,000,000 options exercisable at 20 cents expiring 30th June 2002 were issued to Companydirectors pursuant to a shareholders’ resolution on 19 November 1999. The options are unquoted and have a value per the Black –Scholes option valuation formula of $137,304.

On 15th December 1999, a total of 2,000,000 options exercisable at 30 cents expiring 30th June 2003 were issued to Companydirectors pursuant to a shareholders’ resolution on 19 November 1999. The options are unquoted and have a value per the Black –Scholes option valuation formula of $158,896.

No options were exercised during the financial year.

13. OUTSIDE EQUITY INTERESTS 2000 1999$ $

Outside equity interests in controlled entities comprises:Issued capital 97,962 -Accumulated losses (97,762) -

- -

14. EARNINGS/(LOSS) PER SHARE 2000 1999cents cents

Basic earnings / (loss) per share (1.84) (1.35)

Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share 41,582,533 34,871,996

Diluted earnings/(loss) per share is not disclosed as it is not materially different from basic earnings per share.




15. SEGMENTAL INFORMATION

The principal activities of the economic entity are research and development of a Mobile Mineral Process Evaluation Unit andexploration, evaluation and development of mineral resources. During the year the economic entity became involved in the marketingand distribution of medical products through its wholly owned controlled entity Allied Medical Ltd and provided seed capital forInternet projects through its wholly owned controlled entity Allied Internet Technology Ltd. Research and development commenced in1997. The economic entity operates in two geographic areas, being Australia and Egypt.

GEOGRAPHIC SEGMENTS 2000 Australia Egypt Consolidated$ $ $

Revenue 1,647,786 - 1,647,786Operating Loss (714,701) (51,061) (765,762)Segment Assets 2,476,479 - 2,476,479

GEOGRAPHIC SEGMENTS 1999 Australia Egypt Consolidated$ $ $

Revenue 522,774 - 522,774Operating Loss (448,025) (22,407) (470,432)Segment Assets 1,750,950 - 1,750,950

INDUSTRY SEGMENTS 2000 Exploration Research & Medical Internet ConsolidatedDevelopment Technology

$ $ $ $ $Revenue 29,252 1,061,541 552,143 4,850 1,647,786Operating Loss (438,339) 128,364 1,061 (456,848) (765,762)Segment Assets 270,765 1,475,456 545,610 184,648 2,476,479

INDUSTRY SEGMENTS 1999 Exploration Research & Medical Internet ConsolidatedDevelopment Technology

$ $ $ $ $

Revenue 50,238 472,536 - - 522,774Operating Loss (449,036) (21,396) - - (470,432)Segment Assets 242,669 1,508,281 - - 1,750,950


16. AUDITORS` REMUNERATION 2000 1999 2000 1999$ $ $ $

Amounts received, or due and receivable, by the auditors for:Auditing – the Financial Report 17,945 17,285 16,445 17,285Other Services 8,900 21,950 8,900 21,950

26,845 39,235 25,345 39,235


2000 1999 2000 1999$ $ $ $

17. DIRECTORS` REMUNERATION

The directors of Allied Mining & Processing Ltd during the year were:• Mr M El-Ansary• Dr P Wallner• Mr M Perrott• Mr M Dillon• Sir W Keys *• Mr A MacKinlay **The aggregate of income paid or payable, or otherwise made available, in respect of the financial year, to all directors of the Company, directly or indirectly, by the Company or by any related party.

542,760 185,512

The aggregate of income paid or payable, or otherwise made available, in respect of the financial year, to all directors of each entity in the economic entity, directly or indirectly, by the entities in which they are directors or by any related party.

581,510 185,512The number of directors whose income from the Company was within the specified band are as follows:$ 10,000 - $ 19,999 2 3$ 20,000 - $ 29,999 1 -$150,000 - $159,999 - 1$160,000 - $169,999 3 -

* Died on 3 May 2000** Resigned in April 2000

18. EXECUTIVES` REMUNERATIONThe aggregate remuneration of the executive officers of the Company and each entity in the economic entity working mainly in Australia and receiving $100,000 or more from the entity for which they are executive officers or from any related party.

160,111 154,112 160,111 154,112

The number of executives whose income from the Company was within the specified band are as follows:$150,000 - $159,999 - 1$160,000 - $169,999 1 -

19. SUPERANNUATION

The economic entity contributes, but does not participate in, superannuation equal to 12% of the executive directors’ salary pursuantto an Executive Service Agreement dated 6 September 1994 between the Company and El Aura Pty Ltd (a company controlled bydirector, Mr M El-Ansary).

Directors of Entities in the Economic Entity

Directors ofThe Company



20. NOTES TO THE STATEMENT OF CASH FLOWS

(a) RECONCILIATION OF CASHFor the purpose of the Statement of Cash Flows, cash includes cash on hand and at bank and deposits. Cash as at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related item in the balance sheets as follows:


2000 1999 2000 1999$ $ $ $

Cash at bank 274,209 212,676 228,265 212,676Deposits at call 444,575 499,079 444,575 499,079

718,784 711,755 672,840 711,755

(b) RECONCILIATION OF OPERATING PROFIT/(LOSS)TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

Operating loss after income tax (765,762) (470,432) (505,054) (432,930)Add/(less) non-cash items:Depreciation 8,857 7,635 6,285 7,635Foreign exchange (gain)/loss (3,171) 3,523 (3,171) 3,523Exploration expenditure 118,334 181,527 118,334 181,527R&D Syndicate Income (852,899) (472,536) (911,254) (504,838)R&D Expenditure 874,535 493,932 874,535 493,932Provision for Non Recovery - Loan - - 258,943 -Amortisation on Goodwill 1,971 - - -

Changes in assets and liabilities during the year: Increase/(decrease) in trade payables 375,482 51,752 (87,056) 51,752(Increase)/decrease in trade receivables (306,221) - - -Movement in unearned income 75,000 - 75,000 -(Increase)/decrease in inventory (169,865) - - -Net cash outflow from operating activities (643,739) (204,599) (173,438) (199,399)

(c) BUSINESS ACQUIRED

During the financial year, one controlled entity and one business was acquired. Details of the acquisition are as follows:ConsiderationCash 213,000 - - -Shares 75,000 - - -

288,000 - - -Fair Value of Net Assets AcquiredCurrent AssetsCash 187,362 - - -Receivables 7,750 - - -Non Current AssetsProperty, plant and equipment 6,133 - - -Intangibles 5,000 - - -Current LiabilitiesTrade Creditors (21,560) - - -Net Assets Acquired 184,435 - - -Outside Equity Interest (84,710) - - -Goodwill on acquisition 188,275 - - -

288,000 - - -Net Cash OutflowCash Consideration 213,000 - - -Less Cash Acquired (98,910) - - -

114,090 - - -



(d) NON-CASH TRANSACTIONSDuring the financial year, the economic entity acquired a business, MedHealth through the issue of 300,000 fully paid ordinary sharesissued at 25 cents per share.

21. FINANCIAL INSTRUMENTS

(a) SIGNIFICANT ACCOUNTING POLICIESDetails of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurementand the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equityinstrument are disclosed in note 1 to the financial statements.

(b) INTEREST RATE RISKCash balances are subject to very little interest rate risk as the Company only has at call bank accounts and term deposits which havevariable interest rates. The interest rates earned/paid during the year are as follows:

2000 1999Cash at bank 0% - 5% 0% - 5%Term deposits 3% - 5% 3% - 5%

No other financial assets or liabilities are subject to interest rate risk.

(c) CREDIT RISKCredit risk refers to the risk that a counterparty will default on its contractual obligations result in financial loss to the economic entity.The economic entity has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral orother security where appropriate, as a means of mitigating the risk of financial loss from defaults. The economic entity measurescredit risk on a fair value basis.

The economic entity does not have any significant credit risk exposure to any single counterparty or any group of counterpartieshaving similar characteristics.

The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the economicentity’s maximum exposure to credit risk without taking account of the value of any collateral or other security obtained.

(d) NET FAIR VALUEThe carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fairvalues, determined in accordance with the accounting policies disclosed in note 1 to the financial statements.

22. COMMITMENTS

The economic entity’s expenditure requirement for its Australian Mining tenements amounts to approximately $100,000. The commitments are expected to fall within one year.



23. RELATED PARTIES

DIRECTORSThe names of each person holding the position of director of Allied Mining & Processing Ltd during the financial year were:

Sir W Keys, Mr M El-Ansary, Dr P Wallner, Mr Michael Perrott, Mr Michael Dillon and Mr A MacKinlay.

Sir William Keys died on 3 May 2000.

Mr A MacKinlay resigned as a Director in April 2000.

Details of directors’ remuneration are set out in Note 17.

The relevant interest of each Director in the share capital of the Company shown in the Register of Directors’ Shareholdings as at thedate of this report is:

20c Ordinary Shares 20c Options 20c Options 30c Options- fully paid - expire 1 March 2001 - expire 30 June 2002 - expire 30 June 2003

Direct Indirect Direct Indirect Direct Indirect Direct IndirectMr M El-Ansary 9,000 3,830,529 4,500 2,768,836 - - - -Dr P Wallner - 421,391 200,000 174,718 - - - -Mr M Perrott - - - - 1,000,000 - 1,000,000 -Mr M Dillon - 664,286 4,500 55,000 1,000,000 - 1,000,000 -

The Company entered into an Executive Service Agreement dated 6 September 1994 with El Aura Pty Ltd, a company controlled by adirector, Mr M El-Ansary whereby El Aura Pty Ltd provides management and consulting services to the Company.

On 15th December 1999, a total of 2,000,000 options exercisable at 20 cents expiring 30th June 2002 were issued to Company directorspursuant to a shareholders resolution on 19 November 1999. The options are unquoted and have a value per the Black – Scholes optionvaluation formula of $137,304.

On 15th December 1999, a total of 2,000,000 options exercisable at 30 cents expiring 30th June 2003 were issued to Company directorspursuant to a shareholders resolution on 19 November 1999. The options are unquoted and have a value per the Black – Scholes optionvaluation formula of $158,896.

Apart from the details disclosed in this note, no director has entered into a material contract with the Company since the end of theprevious financial year and there were no material contracts involving directors’ interests at year end.

OTHER TRANSACTIONS WITH THE COMPANYA director of the Company, Mr M El-Ansary has an interest as a director and controlling shareholder of El Aura Pty Ltd. This companyprovides consulting services to the Company. All dealings with this company are in the ordinary course of business and on normal termsand conditions. Fees paid and payable to El Aura Pty Ltd during the year were $160,111, (1999 $154,112). This amount has beenincluded in directors’ remuneration as disclosed in Note 17.

A director of the Company, Mr Michael Perrott has an interest in Perrott Management Services. This company provides consultingservices to the Company. All dealings with Perrott Management Services are in the ordinary course of business and on normal termsand conditions. Fees paid to Perrott Management Services during the year were $10,000, (1999 $Nil). This amount has been includedin directors’ remuneration as disclosed in Note 17.

A director of the Company, Mr Michael Dillon has an interest in Lentona Holdings Pty Ltd. This company provides consulting servicesto the Company. All dealings with Lentona Holdings Pty Ltd are in the ordinary course of business and on normal terms and conditions.Fees paid to Lentona Holdings Pty Ltd during the year were $4,800, (1999 $Nil). This amount has been included in directors’remuneration as disclosed in Note 17.

A former director of the Company, Mr A MacKinlay has an interest as the principal of MacKinlay & Co, Solicitors. This business providedlegal services to the Company. All dealings with this business were in the normal course of business and on normal terms andconditions. Fees paid to MacKinlay & Co during the year were $4,024, (1999 $Nil). This amount has been included in directors’remuneration as disclosed in Note 17.

During the year, the economic entity purchased an interest in Fastpath Pty Ltd. Mr A MacKinlay’s interest in Fastpath Pty Ltd whilst adirector of the Company was 1,500,000 shares.




During the year, a number of transactions occurred between Worldwidefm.net Pty Ltd and Both Barrels Pty Ltd on normal commercialterms and conditions. Worldwidefm.net Pty Ltd is a controlled entity of the Company and Mr D Bryant, a director of Worldwidefm.netPty Ltd is the principal of Both Barrels Pty Ltd. The transactions comprised:Rental paid to Both Barrels Pty Ltd: $18,618 (1999 $Nil)Consulting fees paid to Both Barrels Pty Ltd: $22,625 (1999 $Nil)This amount has been included in directors’ remuneration as disclosed in Note 17.

Purchase of assets from Both Barrels Pty Ltd: $11,000 (1999 $Nil)

At year end, a total of $27,406 (1999 $Nil) remains owing from Worldwidefm.net Pty Ltd to Both Barrels Pty Ltd.

During the year, a number of transactions occurred between Worldwidefm.net Pty Ltd and Countdown Promotions Pty Ltd on normalcommercial terms and conditions. Worldwidefm.net Pty Ltd is a controlled entity of the Company and Mr T Tapping, a former directorof Worldwidefm.net Pty Ltd is the principal of Countdown Promotions Pty Ltd. The transactions comprised:Consulting fees paid to Countdown Promotions Pty Ltd: $16,125 (1999 $Nil)This amount has been included in directors’ remuneration as disclosed in Note 17.

At year end, a total of $3,002 (1999 $Nil) remains owing to Worldwidefm.net Pty Ltd from Countdown Promotions Pty Ltd. Mr T Tapping resigned as a director of Worldwidefm.net Pty Ltd on 26 April 2000.

24. INVESTMENT IN CONTROLLED ENTITIES - UNQUOTED

Company Place of Incorporation Equity Holding2000 1999

% %PARENT ENTITYAllied Mining & Processing Ltd Australia - -CONTROLLED ENTITIESAdvance R&D Pty Ltd Australia 100 100Advance Mining NL Australia 100 100Allied Medical Ltd Australia 100 -Allied Internet Technology Ltd Australia 100 -Worldwidefm.net Pty Ltd Australia 52 -

NAME OF SUBSIDIARY PRINCIPAL DATE OF PROPORTION OF %COST ACQUIRED ACTIVITY ACQUISITION SHARES ACQUIRED OF ACQUISITION

% $Worldwidefm.net Pty Ltd Internet 24/02/00 52 213,000

The cost of acquisition was fully paid in cash.

During the financial year Allied Mining & Processing Ltd provided accounting and administration services to other entities in thewholly-owned group, at no cost.

25. ACQUISITION OF BUSINESS

NAME OF BUSINESS PRINCIPAL DATE OF PROPORTION OF %COST ACQUIRED ACTIVITY ACQUISITION SHARES ACQUIRED OF ACQUISITION

% $MedHealth Pty Ltd Medical 21/01/00 100 75,000

The cost of acquisition comprises of 300,000 ordinary fully paid shares issued at 25 cents per share for the acquisition of $5,000 plant& equipment and $70,000 goodwill.

Further details of the acquisition of business are disclosed in note 20(c) to the financial statements



26. CONTINGENT LIABILITIES

The details and estimated maximum amounts of contingent liabilities, classified according to the party from whom the contingentliability arises, are set out below.

Consolidated CompanyIN RESPECT OF THE COMPANY 2000 1999 2000 1999

$ $Benefits payable on termination in certain circumstances to Directors under service agreements. - 13,000 - 13,000

The Company has continued with proceedings in the Supreme Court of WA against Pharaoh Gold Mines NL, Mr Sami El-Raghy andassociated parties during this financial year in relation to a dispute over its Egyptian interests.

27. INTERESTS IN JOINT VENTURE OPERATIONS

Details of the economic entity’s interests in joint ventures are as follows:

Joint Venture Project PrincipalActivity

Egmont Beverley Exploration 90 90

South Pacific Mobile Mineral Development Processing Unit R&D 50 50Corporation

The joint ventures are not separate legal entities. They are contractual arrangements between the participants and do not inthemselves generate revenue or profit.

28. RESEARCH AND DEVELOPMENT SYNDICATIONS

In November 1995, the Federal Government’s Industry Research and Development Board approved the Company’s submission for a$7.18 million Research and Development programme to develop the Mobile Mineral Process Evaluation Unit "MMPEU".

On 22 February 1996, a Research and Development Syndicate (the "MMPEU Syndicate") was formed to invest in the researchprogramme and to commercialise any research results arising from the research programme. This MMPEU Syndicate was formedbetween Aretrend Pty Ltd with 95% equity and Advance R&D Pty Ltd with 5% equity. The two companies ("The Investors") are whollyowned controlled entities of Arrow Resource Management Pty Ltd and Allied Mining & Processing Ltd respectively. The MMPEUSyndicate agreements were concluded in October 1996 when all conditions subsequent were satisfied. Under the terms of theSyndicate agreement, the Investors will provide 100% of the Research and Development contract for the project. Allied Mining &Processing Ltd has the right to negotiate to market the technology of the Syndicate as Marketer. The receipt of commercial revenuewill give rise to an obligation on Allied Mining & Processing Ltd to pay royalties.

As at the 30th June 2003, the Investors have the option to continue in the Syndicate or exercise a put option which will result in AlliedMining & Processing Ltd acquiring all of the shares in Aretrend Pty Ltd (and thus the MMPEU technology) for a nominal amount.

As at the end of June 2000, Macquarie Bank Ltd, as Manager of the "MMPEU" Syndicate, held $21.96 million in a deposit account inthe name of Allied Mining & Processing Ltd. These funds have not been reflected in the balance sheet as the Company does nothave control of the funds. If the Investors choose to continue the Syndicate beyond 30th June 2003, these funds will be released tothe Company.

As at the 30th June 2000, the Company has received $7.18 million and expended $7.09 million of the $7.18 million non-recourseResearch and Development to be provided by the syndicate.

Interestin output

2000 1999% %



29. SUBSEQUENT EVENTS

On 24 August 2000, the Final Completion test of the MMPEU comminution circuit was satisfactorily completed at RAV8 Nickel Projectand Tectonic Resources NL issued a Final Completion Certificate.

30. NON-HEDGED FOREIGN CURRENCY BALANCES

The Australian dollar equivalent of foreign currency balances included in the financial statements which are not effectively hedged areas follows:


US Dollars 2000 1999 2000 1999$ $ $ $

Cash 35,643 31,278 35,643 31,278

Directors’ Declaration


The Directors of Allied Mining & Processing Ltd declare that:

(a) The attached financial statements and notes thereto comply with accounting standards;

(b) The attached financial statements and notes thereto give a true and fair view of the financial position and performance of the Company and the consolidated entity;

(c) In the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Law; and

(d) In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay itsdebts as and when they become due and payable.

Dated at Perth this 29th day of September 2000.

Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Law.

...........................................................................M. PerrottDirector

...........................................................................M. El-AnsaryDirector

Independent Audit Report


Independent audit report to the members of Allied Mining & Processing Limited

Scope

We have audited the financial report of Allied Mining & Processing Limited for the financial year ended 30 June 2000 as set out on pages

16 to 33. The financial report includes the consolidated financial statements 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. The company’s directors are responsible for the

financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of

the company.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial

report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and

other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These

procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in

accordance with Accounting Standards issued in Australia and other mandatory professional reporting requirements and statutory

requirements so as to present a view which is consistent with our understanding of the company’s and the consolidated entity’s financial

position, and performance as represented by the results of their operations and their cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of Allied Mining & Processing Limited is in accordance with:

(a) the Corporations Law, including:

(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2000 and of their

performance for the year ended on that date; and

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

(b) other mandatory professional reporting requirements.

Inherent uncertainty regarding loans and advances to subsidiaries

Without qualification to the opinion expressed above, attention is drawn to the following matter. The company has loans and advances

to Advanced R & D Pty Ltd, a subsidiary company, of $1,674,866 and as stated in note 6 to the financial statements, recovery of these

loans and advances is contingent on the successful commercialisation of the Mobile Mineral Processing Evaluation Unit technology.

Deloitte Touche Tohmatsu

GK McHarrie

Partner

Chartered Accountants

Perth, Western Australia

29 September 2000

Additional ASX Information


Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is asfollows. The information is made up to 15 September 2000.

substantial shareholders The number of ordinary shares fully paid held by the substantial shareholders listed in the Company’s register of substantialshareholders as at 15 September 2000 were:

SHAREHOLDER SHARES % El Aura Pty Ltd 3,340,529 7.52Boldbow Pty Ltd 3,088,644 6.96Rothschild Nominees Pty Limited 2,022,000 4.55

statement of shareholdings(a) ORDINARY SHARES - fully paid

NAMES OF THE 20 LARGEST SHAREHOLDERS NO. OF SHARES % HELDEl Aura Pty Ltd 3,340,529 7.52Boldbow Pty Ltd 3,088,644 6.96Rothschild Nominees Pty Limited 2,022,000 4.55Troika Securities Limited 2,005,540 4.52WSF Pty Ltd 1,349,620 3.04Synthe Pty Ltd 1,256,850 2.83Mr John Cunningham 1,000,000 2.25WWB Investments Pty Ltd 956,533 2.15N & E Royal Investments Pty Ltd 768,074 1.73Mr Michael Dillon (Lentona Super Fund A/C) 664,286 1.50Saltbush Nominees Pty Ltd 622,164 1.40Mr Warren Brown & Mrs Marilyn Brown (Super Fund A/C) 500,000 1.13Mr John Cunningham & Associates Pty Ltd (John Cunningham Pension A/C) 500,000 1.13Corcarr Nominees Pty Ltd 490,000 1.10Berne No 132 Nominees Pty Ltd 450,000 1.01Boulder Group NL 421,391 0.95Hichens Harrison & Co Plc 390,000 0.88Mr Alberto Vaiente & Mr Ernesto Vaiente 370,000 0.83ANZ Nominees Limited 302,200 0.68Andrew Potter Design Pty Ltd 300,000 0.68

HOLDING RANGENo of HOLDERS

1 - 1,000 621,001 - 5,000 2255,001 - 10,000 250

10,001 - 100,000 406100,001 or more 65

1,008

VOTING RIGHTSAll ordinary fully paid shares carry one vote pershare without restrictions.

Total Fully Paid Shares Issued 44,402,790

Proportion held by 20 Largest Shareholders 46.84

Number of Shareholders holding less than a marketable parcel 287



(b) OPTIONS - exercisable at 20c expiring 1 March 2001

NAMES OF THE 20 LARGEST SHAREHOLDERS NO. OF SHARES % HELDEl Aura Pty Ltd 2,768,836 12.35Rothschild Nominees Pty Limited 1,290,000 5.75State One Equities Pty Ltd 799,690 3.57Candida Pty Ltd 749,334 3.34Beachwalk Pty Ltd 661,900 2.95WSF Pty Ltd 560,549 2.50Mr Brian Lee & Mrs Audrey Lee 517,000 2.31Troika Securities Limited 500,000 2.23Vajacu Pty Ltd 400,000 1.78MMC Investments Pty Ltd 344,833 1.54Best Holdings Pty Ltd 325,000 1.45Gusmall Pty Ltd 300,000 1.34Howard Huin 300,000 1.34Budlex Pty Ltd 280,000 1.25Bruce Sceresini Holdings Pty Ltd 250,000 1.11Kefko Pty Ltd 250,000 1.11Ms Kristine May 250,000 1.11Technology Management & Marketing Pty Ltd 250,000 1.11John Cunningham & Associates Pty Ltd (John Cunningham Pension A/C) 219,532 0.98Boldbow Pty Ltd 215,400 0.96

HOLDING RANGE No of HOLDERS1 - 1,000 135

1,001 - 5,000 3485,001 - 10,000 159

10,001 - 100,000 200100,001 or more 35

483

Total Options Issued 22,428,491

Proportion held by 20 Largest Optionholders 50.08

(c) UNLISTED OPTIONS - exercisable at 20c expiring 30 June 2002

NAMES OF THE 20 LARGEST SHAREHOLDERS NO. OF SHARES % HELDMr Michael Dillon 1,000,000 50.00Mr Michael Perrott 1,000,000 50.00

HOLDING RANGENo of HOLDERS

1 - 1,000 -1,001 - 5,000 -5,001 - 10,000 -

10,001 - 100,000 -100,001 or more 2

2





(d) UNLISTED OPTIONS - exercisable at 30c expiring 30 June 2003

NAMES OF THE 20 LARGEST SHAREHOLDERS NO. OF SHARES % HELDMr Michael Dillon 1,000,000 50.00Mr Michael Perrott 1,000,000 50.00

HOLDING RANGE No of HOLDERS1 - 1,000 -

1,001 - 5,000 -5,001 - 10,000 -

10,001 - 100,000 -100,001 or more 2

2



Corporate Governance


CORPORATE GOVERNANCE

BOARD COMPOSITION

The Board is comprised of four directors, of which the Managing Director is the

only executive director. Details of the Directors are set out in the Directors’

Report.

The Board (subject to members voting rights in general meeting) is responsible

for selection of new members and has regard to a candidate’s experience and

competence in areas such as mining, exploration, geology, finance and

administration that can assist the Company in meeting its corporate objectives

and plans. The Board delegates responsibility for the Company’s administration

to its Managing Director who is accountable to the Board.

Under the Company’s Articles of Association:

• the minimum number of directors on the Board is three and the maximum

number of directors on the Board is fifteen;

• a director (other than the Managing Director) may not retain office for more

than three years without submitting for re-election; and

• at the Annual General Meeting each year effectively one third of the

directors in office (other than the Managing Director) retire by rotation and

must seek re-election by shareholders.

INDEPENDENT ADVICE

Each Director is entitled to independent professional advice at the Company’s

expense provided that prior reasonable approval of the Chairman is obtained.

COMPENSATION ARRANGEMENTS

All compensation arrangements for Directors and Senior Executives are

determined at Board level after taking into account the current competitive rates

prevailing in the market.

AUDIT COMMITTEE

As at the date of this report the Company does not have a formally constituted

audit committee of the Board of Directors. As matters arise they are

immediately addressed by the Board of Directors.

Corporate Governance


EXTERNAL AUDITORS

The auditors of the Company have open access to the Board of Directors at all

times.

MANAGING RISKS

The Board meets regularly to evaluate, control, review and implement the

Company’s operations and objectives.

Regular controls established by the Board includes:

• detailed quarterly financial reporting; and

• delegates authority to the Managing Director to ensure approval of

expenditure obligations.

The Board recognises the need to identify areas of significant business risk and

to develop and implement strategies to investigate these risks.

ETHICAL STANDARDS

The Board supports the highest standards of corporate governance and requires

its members and the staff of the Company to act with integrity and objectivity in

relation to:

• Compliance with the law;

• Record keeping;

• Conflicts of interests;

• Confidentiality; and

• Inside Information.

SHAREHOLDERS

The Board aims to ensure that shareholders are at all times fully informed in

accordance with the spirit and letter of the Stock Exchange’s continuous

disclosure requirements.


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MMPEU Comminution Installation at RAV 8

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