tri origin minerals ltd abn 22 062 002 475 directors’ … 20… · abn 22 062 002 475 2 principal...

TRI ORIGIN MINERALS LTD

ABN 22 062 002 475

1

DIRECTORS’ REPORT Your Directors present this report on the Company for the financial year ended 30 June 2006. Directors The names of each person who has been a Director during the year and to the date of this report are: J T Shaw – Chairman B M Robertson R I Valliant W F Killinger B D Kay A Snowden – alternate for R I Valliant Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Company Secretary The company secretary at the date of this report and throughout the year is Mr J Falconer. Operating Result The loss of the Company for the financial year after providing for income tax amounted to $679,194 (2005 – loss of $1,244,430). Review of Operations During the year the Company continued to explore and evaluate its tenements consistent with its objective of defining a pathway to and developing cash flow projects. Significant evaluation activities were undertaken at Lewis Ponds and a conceptual mining strategy defined. The geological database continued to be upgraded and a number of potential cash flow opportunities defined for Woodlawn. Regional exploration continued within the district and additional tenements applied for and granted. Financial Position The net assets of the Company have decreased by $491,734 from $11,803,410 at 30 June 2005 to $11,311,676 at 30 June 2006, mainly as a result of the loss incurred from continuing operations. Significant Changes in State of Affairs There were no significant changes in the state of affairs of the Company during the financial year, other than those referred to elsewhere in this report.


ABN 22 062 002 475

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Principal Activities The principal activities of the Company during the course of the year were the exploration of mineral tenements, business development activities and the investment of funds. No significant change in the nature of these activities occurred during the year. Future Developments, Prospects and Business Strategies Likely developments in the operations of the Company, prospects and business strategies and their expected results in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Company. After Balance Date Events

• On the 10th August 2006 the Company was granted EL 6611 for Group 2 minerals.

• On the 15th August 2006 PlatSearch NL elected to withdraw from the Woodlawn South Joint Venture (EL’s 5652, 6551 and 6611) and convert its interest to a 2.5% Net Smelter Royalty.

• On the 16th August 2006 the Company announced that it had entered into the North Woodlawn Project Joint Venture whereby it may earn a 60% interest in EL 5812 from Universal Resources Ltd (URL). EL 5812 is currently held by URL (90%) and private interests (10%). Tri Origin is required to expend $500,000 over a period of five years or less to earn its interest.

• On the 17th August 2006, at a Company General Meeting of shareholders a resolution was approved to issue 2,000,000 options to Mr. Bruce Roberson at an exercise price of 25 cents, expiring of the 9th March 2011. The cost of these options is estimated at $358,000 ($184,000 per the “Explanatory Statement” to the Notice of General Meeting). Of this cost, $34,825 has been recognised in the Income Statement for the current year as a Share based Directors remuneration expense. The balance of $323,175 will be recognised as a Share based Directors remuneration expense in the Income Statements of future years, on a pro rata basis to vesting dates up to 9th March 2009.

Other than the information mentioned above no other material events or matters have occurred since 30 June 2006 to the date of this financial report. Environmental and Title Issues The Company’s activities in the mining industry are subject to regulations and approvals including mining heritage and environmental regulation, the implications of the High Court of Australia in what are generally known as the “Mabo” and “Wik” cases and any laws of the Commonwealth or of a State or Territory regarding native and mining titles. Approvals, although granted in most cases are discretionary. The question of native title has yet to be determined and could affect any mining title area granted by the state or not. The Company lodges an environmental rehabilitation plan with each exploration licence application. The plans have been adhered to and no breaches have occurred during the period.


ABN 22 062 002 475

3

Dividends No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made. Indemnifying Officer or Auditor During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums of $26,974, to insure each of the Directors or former Directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other than conduct involving a wilful breach of duty in relation to the Company. Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. Corporate Governance The Directors are responsible for the corporate governance practices of the Company. The main corporate governance practices that were in operation during the financial year are set out in the Corporate Governance section of this annual report. Options Options that were granted over unissued shares or interests during or since the end of the financial year by the Company to Directors as part of their remuneration are as follows:

Director Expiry Date Issue price of shares

Number under option

B Robertson 09 March 2011 $0.25 2,000,000

At the date of this report, options over unissued shares or interests of the Company are as follows: Expiry Date Issue price of shares Number under option 21 October 2006 $0.20 2,725,00006 November 2006 $0.20 500,00001 November 2009 $0.20 3,000,00017 February 2010 $0.20 75,00026 October 2010 $0.20 400,00009 March 2011 $0.25 2,000,00008 June 2011 $0.30 370,000

No shares or interests were issued by the Company during or since the end of the financial year, as a result of the exercise of options.


ABN 22 062 002 475

4

Auditor’s Independence Declaration The auditor’s independence declaration for the year ended 30 June 2006 has been received and can be found on page 9 of the Directors’ report. Directors’ Particulars

John T Shaw BSC, FAUSIMM, FAICD, MCIM, SME Non-Executive Chairman John Shaw aged 66, is a geological engineer and is presently a director of Lodestone Exploration Ltd (Chairman) and IAMGold Corporation. Formerly he was a director of Gallery Gold Ltd (Chairman), Kingsgate Consolidated Ltd, Aurion Gold Ltd, Zimbabwe Platinum Mines Ltd (Chairman) and Delta Gold Ltd. He was, until his retirement Vice President of Australian Operation of Placer Dome Asia Pacific Ltd and Managing Director of Kidston Gold Mines Ltd. While at Placer, Mr Shaw was responsible for the Australian mines, including Kidston, Big Bell, Granny Smith and Osborne. In addition, he was a director of Misima Mines Pty Ltd and on the JV committee of the Porgera JV. He has more than forty years experience in Au, Cu, Ag and W exploration, development and operations. Mr Shaw is also a member of the Audit Committee. Interest in shares 100,000 Interest in options (expiry 21 October 2006) 275,000

Bruce M Robertson BSc (Hons), MBA Managing Director Bruce Robertson aged 50 was appointed to the board on 1 November 2004 and is a qualified geologist. He has held a number of senior management roles, including CEO of AEF Limited, General Manager of Business Development and an Executive Director of Ross Mining NL and Non-Executive Director of Sheet Metal Supplies. He has a 27 year industry track record of project and business development within the resource and financial sectors. His experience covers exploration, mining operations, consulting and investment in Australia and overseas. Interest in shares 944,840 Interest in options (expiry Various) 5,000,000


ABN 22 062 002 475

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Dr Robert I Valliant BSc, PhD, MAIG, FGAC, MSEG, MCIMM Executive Director Dr Robert Valliant aged 53, was appointed to the board on 21 October 1993 and is a qualified geologist. He is President and an Executive Director of Tri Origin Exploration Ltd (TOE). Dr Valliant was co-founder of TOE and founded Tri Origin Australia NL, the predecessor to Tri Origin Minerals (TRO) in 1993. He was responsible for the public listing of TRO on the Australian Stock Exchange. His work in Australia during this period resulted in discovery of the Lewis Ponds polymetallic deposit. Prior to Tri Origin, Dr Valliant was employed by LAC Minerals Ltd from 1981 to 1988 and subsequently became Vice President Exploration for LAC. His responsibility for exploration activities in North America included significant discoveries in the Bousquet and Doyon area that has become the largest gold producing district in Quebec. Dr Valliant was also responsible for the management and direction of all exploration work conducted by LAC at Hemlo including the Page-Williams mine, Canada’s largest gold deposit. He is a Director of the Prospectors and Developers Association of Canada. Dr Valliant is also a member of the Audit Committee. Interest in shares 1,450,002 Interest in options (expiry 21 October 2006) 1,100,000

Bruce D Kay BSc, BEcon, MSc, FAusIMM, CPGeo Non-executive Director Bruce Kay aged 57 was appointed to the board on 21 October 2003 and is a qualified geologist. He is presently a Director of Heemskirk Consolidated Limited (Chairman). Formerly he served as Chairman of both Normandy NFM Limited and Otter Gold Mines Ltd as well as holding numerous Directorships in Normandy’s publicly listed subsidiaries and a director of NiQuest Ltd. He has a geological career that spans more than 30 years with extensive experience in international exploration, mine, geological and corporate operations. Before retiring in 2003 he managed worldwide exploration for Newmont, the world’s largest gold producer based in Denver, Colorado, USA. From 1989 to 2002, prior to the takeover of Normandy Mining by Newmont, Mr Kay was responsible for managing the global exploration programs for the Normandy Group. He was involved in major greenfield and near mine discoveries in Australia and abroad. Prior to joining Normandy, he worked for WMC for 16 years in numerous management roles including Regional Exploration Manager for North America. Interest in shares 300,000 Interest in options (expiry 21 October 2006) 275,000


ABN 22 062 002 475

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William F Killinger BE, FIE (aust) Non-executive Director Mr Killinger aged 61 was appointed to the board on 19 July 1996 and is a civil engineer. He is currently a Director of Barclay Mowlem Construction Limited and a Group General Manager with the company in Sydney. He is a past Director of other companies in the mining and construction industries in Australia and USA. Mr Killinger has 39 years experience in civil engineering construction associated with mineral and industrial projects in Australia, Africa, the Middle East, South East Asia, the United States of America and South America. His experience includes a six year term as Managing Director of Minproc Engineers Limited, one of the world’s leading engineering and construction companies in the mining and mineral treatment industry. He has held senior management positions with Fluor Corporation of the USA and Murray and Roberts Group of South Africa. Mr Killinger is also Chairman of the Audit Committee. Interest in shares 692,500 Interest in options (expiry 21 October 2006) 275,000

Information on Company Secretary Mr John Falconer – Mr Falconer is a fellow of the Institute of Chartered Accountants in Australia and a Fellow of the Financial Services Institute of Australia. He is Principal of Carbone Falconer & Co, a firm of Chartered Accountants practicing in Sydney, whose client base includes small publicly listed companies as well as a number of successful family businesses. He is a Director and Company secretary of Kingsgate Consolidated Limited and TZ Limited. Mr Falconer was appointed Company Secretary on 18 May 2004. Meetings of Directors There were ten Directors meetings held during the year and two audit committee meeting.

Directors Meetings Audit Committee Meetings

Attended Eligible to attend

Attended Eligible to attend

J T Shaw 10 10 2 2 B M Robertson 10 10 - - R I Valliant 10 10 2 2 W F Killinger 10 10 2 2 B D Kay 10 10 - - A Snowden – Alternate - - 2 2


ABN 22 062 002 475

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Directors’ and Executive Officers’ Emoluments The emoluments of each Director are as follows:

Director Salary, Fees & Commissions

Superannuation Contributions

Options Shares Total

J T Shaw 40,000 3,600 - - 43,600B M Robertson 132,500 41,900 184,000 - 358,400R I Valliant 33,000 - - - 33,000B D Kay 25,000 2,250 - - 27,250W F Killinger 25,000 2,250 - - 2,7250A Snowden - - - - - 255,500 50,000 184,000 - 489,500

There were no executive officers other than the Directors employed by the Company during the year. The Company's policy for determining the nature and amounts of emoluments of Directors and senior executives of the Company is as follows;

- The remuneration structure for executive officers, including executive Directors, is based on a number of factors including particular experience of the individual concerned and overall performance of the Company. The contracts for service between the Company and Directors and executives are on a continuing basis, the terms of which are not expected to change in the immediate future. Upon retirement specified Directors and executives are paid employee benefit entitlements accrued to the date of retirement.

- Executive Directors and senior executives may receive bonuses based

on the achievement of specific performance hurdles. There is no separate profit-share plan.

- The constitution provides that the remuneration of Non-executive

Directors will not be more than the aggregate fixed sum determined by a general meeting of shareholders. The aggregate remuneration has been set at an amount of $150,000 per annum.


ABN 22 062 002 475

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Performance Based Payments The prospectus of the Company indicated to investors that the Directors were considering an incentive or performance based payments system to assist in rewarding those employees and consultants that contribute to the success of the Company. The balanced score card approach to bonus systems has been adopted by the Company. It is a relatively simple system with performance criteria that aligns and focuses the employee and contractor behaviour and contribution to that of the Company corporate vision, strategy and goals. Signed in accordance with a resolution of the Board of Directors

J T Shaw Chairman 13 September 2006

9

brentnalls assurance chartered accountants

13 September 2006. Mr. W Killinger Chairman, Audit Committee Tri Origin Minerals Ltd Level 2, 2 O’ Connell Street Sydney, NSW 2000. Dear Mr. Killinger Tri Origin Minerals Ltd. We declare that to the best of our knowledge and belief, during the year ended 30 June 2006 there has been:

i. No contraventions of auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and

ii. No contraventions of any applicable code of professional conduct in relation to

the audit. Yours faithfully

GK Day Member of the Firm of:

Brentnalls Assurance


ABN 22 062 002 475

10

INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2006

Note

2006 2005

$ $

Revenue 2 123,278 195,934

Depreciation and amortisation 3 (13,769) (19,378)

Capitalised exploration expenses written off 8 - (460,427)

Salary costs (including Directors’ fees) (365,007) (453,789)

Professional and legal fees (76,113) (163,160)

Share registry expenses (28,862) (29,166)

Share based payment expense (187,460) (148,735)

Occupancy expense (47,487) (45,911)

Travel and accommodation (22,370) (32,875)

Other expenses (61,404) (86,923)

Total expenses (802,472) (1,440,364)

Loss before income tax expense (679,194) (1,244,430) Income tax expense 4 - -

Loss from continuing operations

(679,194) (1,244,430)

Loss for the year 27 (679,194) (1,244,430)

Loss attributable to members of the Company

(679,194)

(1,244,430)

Basic loss per share - cents per share 19 (0.92) (1.69)

Diluted loss per share - cents per share 19 (0.92) (1.69)

The accompanying notes form part of these financial statements


ABN 22 062 002 475

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BALANCE SHEET

AS AT 30 JUNE 2006

Note 2006 2005

$ $

CURRENT ASSETS Cash assets 18(a) 1,628,853 2,886,318 Receivables 5 18,200 31,129 Other 6 26,034 34,583

TOTAL CURRENT ASSETS 1,673,087 2,952,030

NON-CURRENT ASSETS Property, plant & equipment 7 220,620 242,905 Exploration expenditure 8 9,671,365 8,823,084

TOTAL NON-CURRENT ASSETS 9,891,985 9,065,989

TOTAL ASSETS 11,565,072 12,018,019

CURRENT LIABILITIES Payables 10 212,226 174,691 Provisions 11 11,170 9,918 TOTAL CURRENT LIABILITIES 223,396 184,609

NON-CURRENT LIABILITIES Provisions 11 30,000 30,000

TOTAL NON-CURRENT LIABILITIES 30,000 30,000

TOTAL LIABILITIES 253,396 214,609

NET ASSETS 11,311,676 11,803,410

EQUITY Contributed equity 12 15,837,379 15,837,379 Reserves 399,708 212,248 Accumulated losses (4,925,411) (4,246,217)

TOTAL EQUITY 11,311,676 11,803,410



ABN 22 062 002 475

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STATEMENT OF CHANGES IN EQUITY

FOR YEAR ENDED 30 JUNE 2006

Contributed

equity Contributed

equity Options

Reserves Accumulated

losses Total

Ordinary shares

Performanceshares

Note $ $ $ $ $ Balance at 1 July 2004 10,158,675 5,672,255

63,514 (3,001,787)

12,892,657

Share issued during the period 12 6,449 - - - 6,449 Transfer of Options expensed during the period - -

148,734 -

148,734

Loss attributable to members of parent entity - - - (1,244,430)

(1,244,430)

Sub-total 10,165,124 5,672,255

212,248 (4,246,217)

11,803,410

Dividends paid or provided for - - - - -

Balance at 30 June 2005 10,165,124 5,672,255

212,248 (4,246,217)

11,803,410

Balance at 1 July 2005 10,165,124 5,672,255

212,248 (4,246,217)

11,803,410

Transfer of Options expensed during the period - -

187,460 -

187,460

Loss attributable to members of parent entity - - - (679,194)

(679,194)

Sub-total 10,165,124 5,672,255

399,708 (4,925,411)

11,311,676

Dividends paid or provided for - - - - -

Balance at 30 June 2006 10,165,124 5,672,255

399,708 (4,925,411)

11,311,676



ABN 22 062 002 475

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CASH FLOW STATEMENT


Note

2006 2005

$ $

CASH FLOWS FROM OPERATING ACTIVITIES:

Payments to suppliers and employees

(592,758) (774,711) Deposit paid - (1,150) Deposit repaid 250 - Interest received 110,893 189,955 Other Income - 1,540

Net cash used in operating activities

(481,615) (584,366)

CASH FLOWS FROM INVESTING ACTIVITIES:

Payment for exploration activities (773,396) (918,883)

Payment for property, plant & equipment (2,454) (74,331)

Net cash used in investing activities

(775,850) (993,215)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issue of shares - 6,450

Net cash provided by financing activities - 6,450

Net increase/(decrease) in cash held (1,257,465) (1,571,131)

Cash at beginning of year

2,886,318 4,457,449

Cash at end of year

1,628,853 2,886,318



ABN 22 062 002 475

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NOTES TO THE FINANCIAL STATEMENTS


1. STATEMENT OF ACCOUNTING POLICIES

a) General The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers Tri Origin Minerals Ltd (the “Company”) as an individual entity. Tri Origin Minerals Ltd is a listed public company, incorporated and domiciled in Australia.

The financial report complies with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

The following is a summary of the material accounting policies adopted in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

First-time Adoption of Australian Equivalents to International Financial Reporting Standards

The financial statements of the Company have been in accordance with the Australian equivalents to International Financial Reporting Standards (A-IFRS) from 1 July 2005.

In accordance with the requirements of AASB 1: First-time Adoption of Australian Equivalents to International Financial Reporting Standards, adjustments resulting from the introduction of A-IFRS have been applied retrospectively to 2005 comparative figures excluding cases where optional exemptions available under AASB 1 have been applied. These are the first annual financial statements of the Company to be prepared in accordance with Australian equivalents to IFRS.

The accounting policies set out below have been consistently applied to all years presented. The Company has however elected to adopt the exemptions available under AASB 1 not to apply AASB 2, Share Based Payments, to options that were granted to Directors before7 November 2002; or that were granted after 7 November 2002 and vested before the later of the date of transition to A-IFRS and 1 January 2005.

Reconciliations of the transition from previous Australian GAAP to AIFRS have been included in Note 27 to this report.

b) Principles of Consolidation

A controlled entity is any entity controlled by Tri Origin Minerals Ltd whereby the Company has the power to control the financial and operating policies of an entity so as to obtain benefits from its activities.

A separate consolidated financial report covering the economic entity, being the Company and its wholly owned controlled entity, Tri Origin Mining Pty Limited, has not been prepared on the grounds of immateriality. A consolidated financial report is normally prepared based on the following principles.

All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.


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1. STATEMENT OF ACCOUNTING POLICIES (continued)

b) Principles of Consolidation (continued)

Where controlled entities have entered or left the economic entity during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

c) Income tax

The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

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

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

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

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

d) Cash flows

For the purposes of the statement of cash flows, cash includes bank accepted bills which are readily convertible to cash on hand and which are used in the management function on a day-to-day basis, net of outstanding bank overdrafts.

e) Property, plant and equipment

Property, plant and equipment are included in the accounts at cost or at independent or Directors’ valuation less, where applicable, any accumulated depreciation or amortisation.

The carrying value of property, plant and equipment is reviewed annually by the Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

All fixed assets, including capitalised leased assets but excluding freehold land, are depreciated over their estimated useful lives to the Company. Mining plant and equipment is depreciated in this manner over the estimated life of the relevant mine with due regard to each item’s physical life limitations.


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e) Property, plant and equipment (continued)

The depreciation rates used for each class of asset are:

Plant and equipment 20-40% Diminishing Value

Motor Vehicle 12.5% Diminishing Value

Depreciation and amortisation charged on fixed assets used in the Company’s exploration activities is capitalised as exploration expenditure as it is incurred.

The gain or loss on disposal of all fixed assets, including revalued assets, is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is included in operating profit before income tax in the year of disposal. Any realised revaluation increment relating to a disposed asset which is included in the asset revaluation reserve is transferred directly to capital profits reserve.

f) Exploration expenditure and mineral leases

Expenditure incurred on exploration, evaluation and development is accumulated in respect of each identifiable area of interest of the Company. The costs are carried forward where the Company’s rights to tenure of the area of interest are current and provide further that:

• such costs are expected to be recouped by successful development and/or exploitation of the area of interest, or

• by sale of the area of interest, or

• exploration and evaluation activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing.

Should any area of interest be abandoned or considered to be of no value, accumulated expenditure applicable to such area of interest is written off to the income statement in the year in which the decision is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

g) Leased assets

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Company, are classified as finance leases and are capitalised and amortised on a straight line basis over the estimated useful life of the asset where it is assumed the Company will obtain ownership of the asset or over the term of the lease. Finance lease payments are allocated between interest expense and reduction of lease liability over the term of the lease. The interest expense is determined by applying the interest rate implicit in the lease to the outstanding lease liability at the beginning of each lease payment period.

Lease payments for operating leases where substantially all the risks and benefits remain with the lessor are charged as expenses in the periods in which they are incurred.

h) Business undertakings – joint ventures

The Company has certain exploration activities conducted through joint ventures with other parties. The Company’s interest in these joint ventures is shown in the balance sheet under the appropriate heading. Details of the interests in the joint venture assets and liabilities are set out in Notes 22.


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i) Earnings per share

Basic earnings per share:

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

Diluted earnings per share:

Diluted earnings per share adjusts the figures used in determining earnings per share by taking into account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of options outstanding during the financial year.

j) Comparative information

Comparative figures are, where appropriate, reclassified so as to be compatible with the figures presented for the financial year. Refer also to Notes 1(a) and 27

k) Restoration, rehabilitation and environmental expenditure

Restoration, rehabilitation and environmental expenditure to be incurred during the production phase of operations is accrued when the need for such expenditure is established, and then written off as part of the costs of production of the mine property concerned. Significant restoration, rehabilitation and environmental expenditure to be incurred subsequent to the cessation of production at each mine property is accrued, in proportion to production, when its extent can be reasonably estimated.

l) Employee benefits

Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year together with entitlements arising from wages and salaries, annual leave and sick leave which will be settled after one year, have been measured at their nominal rate. Contributions are made by the Company to employee superannuation funds and are charged as expenses when incurred.

m) Shares based payments

The cost to the Company of share options granted to Directors, executive officers and consultants, is included at fair value as part of the Directors’ and executive officers’ aggregate remuneration in the financial year the options are granted. The fair value of the share option is calculated using the Black Scholes option pricing model, which takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the current price and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The cost of these options is expensed in the Income Statement on a pro rata basis to the vesting dates.

n) Foreign currency transactions and balances

Foreign currency transactions during the year are converted to Australian currency at the rates of exchange applicable at the date of the transactions. Amount receivable and payable in foreign currencies at balance date are converted to the rates of exchange ruling at that date.

The gains and losses from conversion of short-term assets and liabilities, whether realised or unrealised, are included in profit from ordinary activities as they arise.


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o) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

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

p) Critical Accounting Estimates and Judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company.

2006 2005 $ $

2. REVENUE Revenue from operating activities Operating activities - Interest received from other persons 123,278 195,934 Total Revenue 123,278 195,934 3. LOSS FOR THE YEAR a) Loss from continuing operations has been determined after: Expenses Depreciation of plant and equipment: -Plant and equipment 13,769 19,378 Bad and doubtful debts: - Trade receivable 2,630 - Rental expense on operating leases 45,145 43,196 Capitalised exploration expenses written off - 460,427

Movements in provisions – employee entitlements 1,252 6,976


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2006 2005 $ $

4. INCOME TAX The prima facie tax payable on profit/(loss) is reconciled to

the income tax expense as follows:

Prime facie tax payable on profit/(loss) before income tax at 30% (2005: 30%) (203,758)

(328,709)

Add: Tax effect of: - Net Deferred Tax Asset 203,758 328,709 Income Tax Expense - -

The Director’s estimate that the potential net deferred tax asset at 30 June 2006 at 30% (2005: 30%) in respect of tax losses and timing differences not brought to account is:

Tax losses 3,537,572 3,139,441 Net Timing differences (3,104,125) (2,850,016) 433,448 289,425

The net deferred tax asset will only be obtained if:

(a) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the loss to be realised;

(b) the Company continues to comply with the conditions for deductibility imposed by law, including compliance with the continuity of ownership test, or failing that, with the continuity of business test; and

(c) no changes in tax legislation adversely affect the Company in realising the benefit from the deduction of the loss.

5. CURRENT ASSETS – RECEIVABLES GST receivable 18,200 28,236 Other debtors - 2,893 18,200 31,129

The above assets are not subject to interest and the full amounts are expected to be received in the ordinary course of business

6. CURRENT ASSETS – OTHER Deposits Paid 900 1,150 Prepayments 25,134 33,433 26,034 34,583


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FOR THE YEAR ENDED 30 JUNE 2006 2006 2005 $ $ 7. NON-CURRENT ASSETS - PROPERTY, PLANT AND EQUIPMENT Freehold land at cost 125,000 125,000 Equipment at cost 117,047 114,593 Accumulated depreciation (60,549) (41,200) 56,498 73,393 Motor vehicle at cost 46,364 46,364 Accumulated depreciation (7,242) (1,852) 39,122 44,512 Total property, plant and equipment 220,620 242,905

The Company has in past years, entered into performance bonds with the National Australia Bank Limited in relation to environmental rehabilitation ($90,000) and rental commitments ($17,070). These commitments are secured by a way of registered mortgage against the Company’s Lewis Ponds freehold land.

Reconciliation of property, plant & equipment

Plant & Motor Freehold Equipment Vehicle Land Total 2006 Carrying amount at beginning of year 73,793 44,512 125,000 242,905 Additions 2,454 - - 2,454 Depreciation (19,749) (5,390) - (25,139) Carrying amount at end of year 56,498 39,122 125,000 220,620

2005

Carrying amount at beginning of year 73,766 - - 73,766 Additions 20,962 46,364 - 67,326

Transfer from Capitalised Exploration Expenditure - - 125,000 125,000

Depreciation (21,335) (1,852) - (23,187)

Carrying amount at end of year 73,393 44,512 125,000 242,905


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NOTES TO THE FINANCIAL STATEMENT


2006 2005 $ $ 8.

NON-CURRENT ASSETS - EXPLORATION EXPENDITURE

Mining expenditure (pre-production) Exploration and evaluation expenditure carried forward in respect of mining areas of interest. Balance at beginning of year 8,823,084 8,511,849 Transfer to Property, Plant & Equipment - (125,000) Capitalised exploration expenses written off - (460,427) Capitalised exploration expenditure, at cost 848,281 896,662 Balance at end of year 9,671,365 8,823,084

Depreciation written back included in exploration expenditure 9,166 1,216

The above carrying values do not purport to be the amount receivable by the Company in the event the interests in the mining leases were farmed out or sold, with the recovery of this capitalised exploration expenditure otherwise dependent upon future successful development and/or exploitation of this asset. The Company’s Exploration License in respect of the Area of Interest for which Exploration Expenditure totalling $8,574,666 expired on 24 June 2006. An application for renewal has been lodged and it is expected that the license will be renewed in the normal course.

9. COMMITMENTS FOR EXPENDITURE Operating lease commitments : Non-cancellable operating leases contracted for but not capitalised in the accounts: Rental of premises - Not later than 1 year 42,363 56,047 Later than 1 year and not later than 5 years - 42,363 42,363 98,410 Exploration expenditure commitments:

In order to maintain current rights of tenure to granted exploration tenements, the Company is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various State governments. These obligations are subject to renegotiation when application for a mining lease is made and at other times. These obligations are not provided for in the financial report and are payable:

Not later than 1 year 284,250 290,000 Later than 1 year and not later than 5 years 327,250 289,000 Later than 5 years 315,000 385,000 926,500 964,000


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FOR THE YEAR ENDED 30 JUNE 2006 2006 2005 $ $

9. COMMITMENTS FOR EXPENDITURE (continued) Share based expenses: Refer Note 12 (c) 584,261 204,527

10. CURRENT LIABILITIES – PAYABLES

Trade creditors (including related parties of $9,000 (2005: $10,500)) 170,180 104,178

Sundry creditor and accruals 42,046 70,513 212,226 174,691

The above amounts all relate to normal unsecured creditors incurred in the normal course of the Company's business operations and are within the credit terms of each relevant supplier or service provider.

11. CURRENT LIABILITIES – PROVISIONS Employee entitlements 11,170 9,918 NON-CURRENT LIABILITIES – PROVISIONS Provision for rehabilitation 30,000 30,000

12. CONTRIBUTED EQUITY

73,699,510 (2005: 73,699,510) ordinary fully paid share 12(a) 10,165,124 10,165,124

11,500,000 (2005:11,500,000) Performance shares 12(b) 5,672,255 5,672,255

15,837,379 15,837,379 (a) Ordinary Shares: At the beginning of the reporting period 10,165,124 10,158,689 Shares issued during the year: 195,000 on the 28 October 2004 - 6,435 At reporting date 10,165,124 10,165,124 No. No. At the beginning of reporting period 73,699,510 73,504,510 Share movement during the year: - 28 October 2004 - 195,000 At reporting date 73,699,510 73,699,510


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2006 2005 $ $ 12. CONTRIBUTED EQUITY (continued) (b) Performance shares: At the beginning of the reporting period 5,672,255 5,672,255 At reporting date 5,672,255 5,672,255 No. No. At the beginning of the reporting period 11,500,000 11,500,000 At reporting date 11,500,000 11,500,000 (c) Movement in issued share options during the year:

Date Details Exercise

price Expiry date Number Unquoted options 1 July 2005 opening balance Various Various 7,050,000 1 January 2006 options issued 20 cents 26 October 2010 400,000 09 March 2006 options issued 25 cents 09 March 2011 2,000,000 31 March 2006 options cancelled 20 cents 29 March 2010 (750,000) 08 June 2006 options issued 30 cents 08 June 2011 370,000

30 June 2006

closing balance outstanding and exercisable

23.75 cents weighted average Various 9,070,000

The value of the issued Options outstanding at year end was $660,794 (2005: $416,775). Of this, $399,708 (2005: $212,248) has been expensed in the Income Statement of this and prior years, and the balance of $261,086 together with a further $323,175 arising after balance date will be expensed in future years on a pro rata basis to vesting dates up to 8 June 2009.

(d) Uncalled capital : No calls are outstanding at year end. All issued shares are fully paid. (e) Terms and conditions of unquoted options:

All unquoted options are held by prior or current Directors, employees, consultants to the Company or their associates. Each option entitles the holder to subscribe for one fully paid share in the Company at the exercise price per share at any time from the date of issue until expiry of the options.


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FOR THE YEAR ENDED 30 JUNE 2006 13. KEY MANAGEMENT PERSONNEL a) Names and positions held by key management personnel J T Shaw Chairman - Non executive B M Robertson Managing Director - Executive R I Valliant Director - Executive B D Kay Director - Non executive W F Killinger Director - Non executive A Snowden Alternate to R I Valliant - Non executive Director There were no Key Management Personnel employed by the Company during the year other than Directors. b) Director remuneration

Primary Salary, Fees &

Commissions Superannuation

contribution Equity

Options Shares Total

2006 J T Shaw 40,000 3,600 - - 43,600B M Robertson 132,500 41,900 184,000 - 358,400R I Valliant 33,000 - - - 33,000B D Kay 25,000 2,250 - - 27,250W F Killinger 25,000 2,250 - - 27,250A Snowden - - - - - 255,500 50,000 184,000 - 489,5002005 J T Shaw 32,500 2,925 - - 35,425B M Robertson 100,000 9,000 165,000 - 274,000R I Valliant 44,500 - - - 44,500B D Kay 25,000 2,250 - - 27,250W F Killinger 25,000 2,250 - - 27,250J Malnic 89,735 1,267 - - 91,002A Snowden - - - - -Total 316,735 17,692 165,000 - 499,427

c) Options and rights holdings

Number of Options held by Directors Balance

01/07/05 Granted as

Remuneration Options

exercised Net Change

Other Balance 30/06/06

J T Shaw 275,000 - - - 275,000 B M Robertson 3,000,000 2,000,000 - - 5,000,000R I Valliant 1,100,000 - - - 1,100,000B D Kay 275,000 - - - 275,000 W F Killinger 275,000 - - - 275,000 A Snowden 150,000 - - - 150,000Total 5,075,000 2,000,000 - - 7,075,000The value of the Options issued to the Directors and outstanding at year end was $481,800 (2005: $288,200)


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FOR THE YEAR ENDED 30 JUNE 2006 13. KEY MANAGEMENT PERSONNEL (continued)

d) Shareholdings Number of Shares held by Directors Balance

01/07/05 Received as

Remuneration Options

ExercisedNet Change

Other Balance 30/06/06

J T Shaw 100,000 - - - 100,000B M Robertson 125,000 - - 819,840 944,840R I Valliant 1,450,002 - - - 1,450,002B D Kay 300,000 - - - 300,000W F Killinger 467,500 - - 225,000 692,500A Snowden 150,000 - - - 150,000Total 2,592,502 - - 1,044,840 3,637,342

e) Remuneration Practices The Company's policy for determining the nature and amounts of emoluments of Directors and senior executives of the company is as follows;

The remuneration structure for executive officers, including Executive Directors, is based on a number of factors, including the length of service, particular experience of the individual concerned, and overall performance of the Company. The contracts for service between the Company and nominated Directors and executives are on a continuing basis the terms of which are not expected to change in the immediate future. Upon retirement nominated Directors and executives are paid employee benefit entitlements accrued to date of retirement.

Executive Directors and senior executives may receive bonuses based on the achievement of specific performance hurdles. There is no separate profit-share plan.

The constitution provides that the remuneration of Non-Executive Directors will not be more than the aggregate fixed sum determined by a general meeting of shareholders. The aggregate remuneration has been set at an amount of $150,000 per annum.

Performance based remuneration is paid by way of incentive options. (Note 1m)

2006 2005 $ $ 14. REMUNERATION OF AUDITORS Amounts received or due and receivable by the auditors for: Auditing and reviewing the accounts 27,685 19,114 15. ECONOMIC DEPENDENCY

The Company's principal activities are mineral exploration and investment of funds on deposit. Other than interest derived from funds on deposit the Company does not derive income from any trading activity and is dependent upon the support of shareholders and the market to finance its on-going exploration program.


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FOR THE YEAR ENDED 30 JUNE 2006 16. CONTINGENT LIABILITIES

The Company has in past years, entered into performance bonds with the National Australia Bank Limited in relation to environmental rehabilitation ($90,000) and rental commitments ($17,070). These commitments are secured by a way of mortgage against the Company’s Lewis Ponds freehold land.

17. RELATED PARTY TRANSACTIONS The names of persons who were Directors of the Company at any time during the year are: J T Shaw

B M Robertson R I Valliant

B D Kay W F Killinger A Snowden – alternate for R I Valliant

Transactions between related parties are on normal commercial terms and

conditions unless otherwise stated. Details of Directors remuneration is set out in Note 13.

18. STATEMENT OF CASH FLOWS (a) Reconciliation of cash: For the purposes of the statement of cash flows, cash includes:

(i) cash on hand and at bank, cash on deposit, net of outstanding bank overdrafts; and

(ii) investments in money market instruments with 30 days or less to maturity.

Cash as at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

2006 2005 $ $

Cash at 30 June 2006 is shown in the statement of financial position as:

Cash on hand - 887 Cash at bank 28,853 99,299 Bank accepted bills 1,600,000 2,786,132 1,628,853 2,886,318


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FOR THE YEAR ENDED 30 JUNE 2006 18. STATEMENT OF CASH FLOWS (continued) 2006 2005 $ $

(b) Reconciliation of cash flow from operations with loss from continuing operations :

Loss from continuing operations (679,194) (1,244,430) Non-cash flows in loss Share options expensed 187,460 148,735 Depreciation 13,769 19,378 Write-off of capitalised exploration expenditure - 460,427 Exchange rate fluctuation - 548

Changes in assets and liabilities :

(Increase)/decrease in receivables 12,929 69,404 Increase/(decrease) in provisions 1,252 3,856 (Increase)/decrease in prepayments 8,549 (28,586)

Increase/(decrease) in trade creditors and accruals net of exploration expenditure (26,380) (13,698)

Net cash (used in)/provided by operating activities (481,615) (584,366)

The Company does not have any formal loan facilities in place at the date of these financial statements.

19. EARNINGS PER SHARE

The following reflects the income and share data used in the calculations of basic and diluted earnings per share:

Basic earnings/(loss) per share (0.92)c (1.69)c Diluted earnings/(loss) per share (0.92)c (1.69)c

Weighted average number of ordinary shares outstanding during the year 73,699,510 73,434,211

Loss from continuing operations (679,194) (1,244,430)


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FOR THE YEAR ENDED 30 JUNE 2006 20. SEGMENT INFORMATION

The Company operates predominantly in Australia. Industry segment information is as follows:

Revenue Results Assets

Liabilities 2006 Mineral exploration - - 9,671,365 164,896 Other investments 123,278 116,503 1,628,853 -

Unallocated - (795,697) 264,854 88,500 123,278 (679,194) 11,565,072 253,396 2005 Mineral exploration - (460,427) 8,823,084 71,457 Other investments 195,934 190,430 2,886,318 - Unallocated - (974,433) 308,617 143,152 195,934 (1,244,430) 12,018,019 214,609 21. FRANKING CREDITS The Company has no franking credits available.

22. JOINT VENTURES

The Company has the following material joint venture interests:

2006 2005 Woodlawn South JV# 80% 80%Overflow JV* 100% 100%Black Range JV 70% 70% Interest shown in the Balance Sheet as Exploration Expenditure

283,350

219,249

# Since balance date the Company has been notified that it will retains 100% interest in the Woodlawn South JV as PlatSearch NL has elected to change its 20% JV interest to a 2.5% net smelter royalty.

* The Company retained 100% interest of the Overflow Joint Venture as Triako Resources failed to earn a 70% interest in the unincorporated joint venture by expending $1 million in exploration by February 2006.


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23. FINANCIAL INSTRUMENTS (a) Interest rate risk exposure

The Company is exposed to interest rate risk through primary financial assets and financial liabilities. The following table summarises the interest rate risk for the Company, together with the effective weighted average interest rate for each class of financial assets and liabilities.

FloatingFixed Interest maturing

in Non

2006 Note interest

rate 1 year or

less over 1 to 5 years

interest bearing Total

$ $ $ $ $ Financial assets Cash 28,853 1,600,000 - - 1,628,853 Receivables - - - 18,200 18,200 Total financial assets 28,853 1,600,000 - 18,200 1,647,053 Weighted average interest rate 4.19% 5.44% - - - Financial liabilities Trade and sundry creditors - - - 212,226 212,226 Total financial liabilities - - - 212,226 212,226 Weighted average interest rate - - - - - Net financial assets 28,853 1,600,000 - (194,026) 1,434,827

2005 Financial assets Cash 99,299 2,786,132 - 887 2,886,318 Receivables - - - 31,129 31,129 Total financial assets 99,299 2,786,132 - 32,016 2,917,447Weighted average interest rate 3.29% 5.58% - - -

Financial liabilities Trade and sundry creditors - - - 174,691 174,691 Total financial liabilities - - - 174,691 174,691Weighted average interest rate

- - - - -

Net financial assets 99,299 2,786,132 - (142,675) 2,742,756


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23. FINANCIAL INSTRUMENTS (continued)

2006 2005

$ $ Reconciliation of net financial assets to net assets: Net financial assets detailed above 1,434,827 2,742,756 Non-financial assets and liabilities: Other assets 26,034 34,583 Property, plant and equipment 220,620 242,905 Capitalised exploration expenditure 9,671,365 8,823,084 Provision for employee entitlements (11,170) (9,918) Provision for Rehabilitation (30,000) (30,000) Net assets per balance sheet 11,311,676 11,803,410 (b) Net fair values of financial assets and liabilities

(i) The net fair values of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities approximate their carrying values as disclosed in the Balance Sheet and the notes to the financial statements.

(ii) The carrying amounts and estimated net fair values of equity investments

approximate their carrying values as disclosed in the Balance Sheet and the notes to the financial statements.

(c) Foreign exchange risk exposure

The Company is not exposed to any currency exchange risk through primary financial assets or liabilities or anticipated future transactions.

(d) Credit risk exposure

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the Balance Sheet and notes to the financial statements. The Company does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the Company. Receivables due from major debtors are not normally secured by collateral, however the credit worthiness of debtors is monitored.


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FOR THE YEAR ENDED 30 JUNE 2006 24. REHABILITATION COSTS

The Company is a signatory to the Mining Council of Australia Framework for Sustainable Development - Enduring Value. This commits the Company to reporting its environmental performance as well as publicly declaring its commitment to ethical business practices. This commitment requires the Company to also report on its Occupational, Health & Safety and Environmental performance at a project level. On this basis the Company has reviewed its environmental liabilities and where it would ordinarily address the outstanding issues in the normal course of its business it now provisions for these liabilities where the Directors deem it appropriate as stated in Note 11.

25. EVENTS SUBSEQUENT TO BALANCE DATE

• On the 10th August 2006 the Company was granted EL 6611 for Group 2 minerals.

• On the 15th August 2006 PlatSearch NL elected to withdraw from the Woodlawn South Joint Venture (EL’s 5652, 6551 and 6611) and converts its interest to a 2.5% Net Smelter Royalty.

• On the 16th August 2006 the Company announced that it had entered into the North Woodlawn Project Joint Venture whereby it may earn a 60% interest in EL 5812 from Universal Resources Ltd (URL). EL 5812 is currently held by URL (90%) and private interests (10%). Tri Origin is required to expend $500,000 over a period of five years or less to earn its interest; or a minimum of $30,000 prior to being able to withdraw from the Joint Venture.

• On the 17th August 2006, at a Company General Meeting of shareholders a resolution was approved to issue 2,000,000 options to Mr. Bruce Roberson at an exercise price of 25 cents, expiring of the 9th March 2011. The cost of these options is estimated at $358,000 ($184,000 per the “Explanatory Statement” to the Notice of General Meeting). Of this cost, $34,825 has been recognised in the Income Statement for the current year as a Share based Directors remuneration expense. The balance of $323,175 will be recognised as a Share based Directors remuneration expense in the Income Statements of future years, on a pro rata basis to vesting dates up to 9 March 2009.

Other than the information mentioned above no other material events or matters have occurred since 30 June 2006 to the date of this financial report.


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26. CONTROLLED ENTITIES

Country of

incorporation Percentage owned Parent entity: 2006 2005 Tri Origin Minerals Ltd Australia - - Controlled entities: Tri Origin Mining Pty Limited (i) Australia 100% -

(i) The above subsidiary company has no activities other than as holders of exploration rights on certain tenements. Separate consolidated financial statements of the economic entity formed by the Company and these wholly owned subsidiaries have not been prepared on the grounds of immateriality.


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27. EXPLANATION TO TRANSITION TO AUSTRALIAN EQUIVALENTS OF IFRSs

Reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to IFRSs (AIFRS) as referred to in Note 1(a).

i) Effect of A-IFRS on the balance sheet as at 1 July 2004

Consolidated

Note

Superseded policies

$

Effect of transition to

A-IFRS $

A-IFRS $

CURRENT ASSETS

Cash assets 4,457,449 - 4,457,449

Receivables 100,533 - 100,533

Other 5,997 - 5,997

TOTAL CURRENT ASSETS 4,563,979 - 4,563,979

NON-CURRENT ASSETS

Property, plant & equipment 73,766 - 73,766

Exploration expenditure 8,511,849 - 8,511,849

TOTAL NON-CURRENT ASSETS 8,585,615 - 8,585,615

TOTAL ASSETS

13,149,594 -

13,149,594

CURRENT LIABILITIES

Payables 250,876 - 250,876

Provisions 6,062 - 6,062

TOTAL CURRENT LIABILITIES

256,938 -

256,938

TOTAL LIABILITIES 256,938 - 256,938

NET ASSETS

12,892,656 -

12,892,656

EQUITY

Contributed equity 15,830,930 - 15,830,930

Reserves a - 63,514 63,514

Accumulated losses c (2,938,274) (63,514) (3,001,788)

TOTAL EQUITY

12,892,656 -

12,892,656


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27. EXPLANATION TO TRANSITION TO AUSTRALIAN EQUIVALENTS OF IFRSs (continued)

i) Effect of A-IFRS on the balance sheet as at 30 June 2005.

30 June 2005

Note

Superseded policies

$


A-IFRS $

A-IFRS $

CURRENT ASSETS

Cash assets 2,886,318 - 2,886,318

Receivables 31,129 - 31,129

Other 34,583 - 34,583

TOTAL CURRENT ASSETS 2,952,030 - 2,952,030

NON-CURRENT ASSETS

Property, plant & equipment 242,905 - 242,905

Exploration expenditure 8,823,084 - 8,823,084

TOTAL NON-CURRENT ASSETS 9,065,989 - 9,065,989

TOTAL ASSETS

12,018,019 -

12,018,019

CURRENT LIABILITIES

Payables 174,691 - 174,691

Provisions 9,918 - 9,918

TOTAL CURRENT LIABILITIES

184,609 -

184,609

NON CURRENT LIABILITIES

Provisions 30,000 - 30,000

TOTAL NON CURRENT LIABILITIES 30,000 - 30,000

TOTAL LIABILITIES 214,609 - 214,609

NET ASSETS

11,803,410 -

11,803,410

EQUITY

Contributed equity 15,837,379 - 15,837,379

Reserves a - 212,248 212,248

Accumulated losses c (4,033,969) (212,248) (4,246,217)

TOTAL EQUITY

11,803,410 -

11,803,410


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ii) Effect of A-IFRS on the income statement for the financial year ended 30 June 2005.

Half-year ended 30 June 2005

Note

Superseded policies

$


A-IFRS $

A-IFRS $

Revenue from ordinary activities 195,934 - 195,934

Depreciation and amortisation (19,378) - (19,378)

Capitalised exploration expenses written off (460,427) - (460,427)

Employee benefits expense a (453,789) (106,289) (560,078)

Professional and Legal fees (163,160) - (163,160)

Borrowing expenses - - -

Shares maintenances expenses (29,166) - (29,166)

Occupancy expenses (45,911) - (45,911)

Shares based payment a - (42,446) (42,446)

Travel & accommodation (32,875) - (32,875)

Other expenses (86,923) - (86,923)

Profit/(Loss) before income tax expense

(1,095,695) (148,735) (1,244,430)

Income tax expense - - -

Profit/(Loss) after income tax expense (1,095,695) (148,735) (1,244,430)

Net Profit/(Loss) (1,095,695) (148,735) (1,244,430)

Profit attributable to minority interest - - -

Profit/(Loss) attributable to members of the parent entity (1,095,695) (148,735) (1,244,430)

iii) Effect of A-IFRS on the cash flow statement for the financial year ended 30 June 2005

There are no material differences between the cash flow statement presented under A-IFRS and the cash flow statement presented under the superseded policies.


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iv) Notes to the reconciliations of income and equity

(a) Share-based payments

For the financial year ended 30 June 2004 and 30 June 2005, share-based payments of $63,514 and $148,735 included in ‘employee benefit expenses’ which were not recognised under the superseded policies and are now required under AIFRS, with a corresponding increase in the employee equity-settled benefits reserve. As noted in Note 1, the Company has elected to adopt the exemptions available under AASB1 not to apply the requirements of the relevant AIFRS prior to the transition date of 1 July 2004. Such options were generally issued on terms and conditions similar to those described in Notes 1(m), 12 and 13.

These adjustments had no material tax or deferred tax consequences.

(b) Income tax

Under AIFRS, tax balances are determined using a ‘balance sheet’ approach, which significantly differs from the previous methodology prescribed and applied as described in note 1. Changes in deferred tax assets and deferred tax liabilities will arise as a consequence of the different method of measurement. No deferred tax asset has been recognised due to Tri Origin Minerals Ltd not meeting the probable criteria for recognition of a deferred tax asset as defined in AASB 112 ‘Income Taxes’. A deferred tax liability arises but tax losses carried forward have been offset to that extent and therefore there is no deferred tax liability recognised on the balance sheet.

(c) Retained earnings

The effect of the above adjustments on retained earnings is as follows:

Consolidated

Note

1 July 2004

$

31 December 2004

$

30 June 2005

$ Expensing share-based

payments a (63,514) (74,617) (74,118) Adjustments to tax balances b - - - Total adjustment to retained

earnings (63,514) (74,617) (74,118) Attributable to members of the parent

entity (63,514) (74,617) (74,118) Attributable to minority interests - - - (63,514) (74,617) (74,118)


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FOR THE YEAR ENDED 30 JUNE 2006 (V) Pending application of accounting standards

Several A-IFRS standards have been issued or amended but will not be effective until

future accounting periods, including: AASB

No. Title Operative

Date 1 First – time adoption of Australian Equivalents to

International Financial Reporting Standards 01/01/2007

7 Financial Instruments: Disclosures 01/01/2007 114 Segment Reporting 01/01/2007 117 Leases 01/01/2007 132 Financial Instruments: Presentation 01/01/2007 133 Earnings Per Share 01/01/2007 139 Financial Instruments: Recognition and

Measurement 01/01/2007

2005-10 Amendments to Australian Accounting Standards 01/01/2007 2006-1 Amendments to Australian Accounting Standards

(121) 31/12/2006

No known or reliably estimable information relevant to assessing the possible impact

of these standards on the Company is presently available


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DIRECTORS’ DECLARATION

The directors of the company declare that: 1. the financial statements and notes, as set out on pages 10 to 37 are in

accordance with the Corporations Act 2001 and:

a. comply with Accounting Standards and the Corporations Regulations 2001; and

b. give a true and fair view of the Company’s financial position as at 30

June 2006 and of its performance for the year ended on that date of the Company;

2. the Chief Executive Officer and Chief Finance Officer have each

declared that:

a. the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

b. the financial statements and notes for the financial year comply with

the Accounting Standards; and c. the financial statements and notes for the financial year give a true

and fair view. 3. in the directors’ opinion, there are reasonable grounds to believe that the

Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Chairman Director John T Shaw Bruce M Robertson Dated this 13th day of September 2006


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Independent Audit Report To The Members Scope We have audited the accompanying Financial Report of Tri Origin Ltd (“The Company”) which comprises the Balance Sheet as at 30 June2006, and the Income Statement, Statement of Changes in Equity, Cash Flow Statement for the year ended on that date, summary of significant accounting policies, other explanatory notes, and the Directors’ Declaration. Directors’ Responsibility for the Financial Report The Company’s Directors are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the Financial Report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express an opinion on the Financial Report to the Members of the Company based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the Financial Report is free from material misstatement. An audit involves performing procedures on a test basis to obtain audit evidence about the amounts and disclosures in the Financial Report. The procedures selected depend upon the Auditor’s judgement, including the assessment of the risks of material misstatement of the Financial Report, whether due to fraud or error. In making those risk assessments, the Auditor considers internal controls relevant to the Company’s preparation and fair presentation of the Financial Report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s overall internal control structure. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the Financial Report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Auditor’s Opinion In our opinion the Financial Report of the Company is in accordance with the Corporations Act 2001, including:

a. Giving a true and fair view of the Company’s financial position as at 30 June 2006 and of its performance for the year ended on that date; and

b. Complying with Australian Accounting Standards( including the Australian Accounting Interpretations) and the Corporation Regulations 2001.

GK Day

Name of Member: Graeme Keith Day

Brentnalls Assurance Sixth Floor, 222 Clarence Street Sydney NSW 2000.

Date: 13 September 2006


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STOCK EXCHANGE INFORMATION Statement of quoted securities as at 31 August 2006 • There are 454 shareholders holding a total of 73,699,510 ordinary fully

paid shares. • The twenty largest shareholders between them hold 76.84% of the total

shares on issue. • Voting rights are that on a show of hands each member present in person

or by proxy or attorney or representative shall have one vote and upon a poll every member so present shall have the vote for every fully paid share held and for each partly paid share held shall have a fraction of a vote pro-rata to the amount paid up on each partly paid share relative to its issue price.

Distribution of quoted shares and options as at 31 August 2006 Shares Range Number of holders I – 1,000 5 1,001 – 5,000 41 5,001 – 10,000 76 10,001 – 100,000 281 100,001 and over 51 Total holders 454 There were 8 shareholders whose total holding had a market value of less than $500 at 31 August 2006. Substantial shareholdings as at 31 August 2006 The following shareholders have notified the Company that, pursuant to the provisions of section 671B of the Corporations Act 2001, they are substantial shareholders. Substantial shareholder

Total relevant interest

% of total voting rights at 30 August 2006

Tri Origin Exploration Ltd 37,537,010 ordinary shares

50.93


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Directors’ shareholdings As at 31 August 2006, directors of the Company held a relevant interest in the following securities on issue by the Company. Director Ordinary shares Unquoted optionsJ T Shaw 100,000 275,000B M Robertson 944,840 5,000,000R I Valliant 1,450,002 1,100,000B D Kay 300,000 275,000W F Killinger 692,500 275,000A SNOWDEN 150,000 150,000 On-market buy-backs There is no on-market buy back currently in place. Restricted securities The Company no longer has any restricted securities subject to mandatory ASX escrow arrangements. Top twenty holders of ordinary shares at 31 August 2006 Shareholder Name Number of

shares held %*

Tri Origin Exploration Ltd 37,537,010 50.93Alcardo Investments Limited <Styled 102501 A/C> 2,623,132 3.56Auriferous Mining Limited 2,500,000 3.39CVC Limited 1,865,000 2.53WHI Securities Pty Ltd <Crown Credit Corporation A/C> 1,545,000 2.10Martin Place Securities Staff S/Fund P/L <MPSSF No 2 A/C> 1,475,330 2.00National Nominees Limited 1,261,010 1.71Chemical Trustee Limited 1,084,358 1.47Dr Robert Irwin Valliant 950,000 1.29B M Robertson & F E Robertson <Pitlochry S/Fund A/C> 944,840 1.28Mr William Fredrick Killinger 692,500 0.94Bigson Pty Ltd <Mike Gibson Super A/C> 600,000 0.81Mrs Rhonda Nerrida Chaplin 530,000 0.72ANZ Nominees Limited <Cash Income A/C> 516,000 0.70Super 1136 Pty Ltd 500,000 0.68Dronkay Pty Ltd <Dawes Family Fund A/C> 470,000 0.64Westglade (Pty) Ltd 412,200 0.56Mr Andrew Lynton Hurwitz <A&J Hurwitz S/Fund A/C> 400,000 0.54Tuxedo Investments Pty Ltd 379,500 0.52Mrs Nicole Martyr 350,000 0.48Melbourne Corporation of Australia Pty Ltd 350,000 0.48 Total 56,635,880 76.84*Rounding up may mean columns do not add exactly.


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CORPORATE DIRECTORY Directors John Shaw, Chairman Bruce Robertson, Managing Director Robert Valliant, Executive Director Bruce Kay, Director Bill Killinger, Director Company Secretary John Falconer Registered Office and Address for Correspondence Level 2, 2 O’Connell Street Sydney NSW 2000 Australia Telephone (02) 9221 4322 International +61 2 9221 4322 Facsimile (02) 9221 6477 Email [email protected] Website www.trioriginminerals.com.au Share Registry Registries Limited Level 2, 28 Margaret Street Sydney NSW 2000 Telephone (02) 9290 9600 Auditors Brentnalls Assurance Level 6 222 Clarence Street Sydney NSW 2000 Solicitors Kemp Strang Level 14 55 Hunter Street Sydney NSW 2000

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