UNITEDSTATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 20-F

(Mark One)



[  ]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[ü]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2007

OR

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[  ]

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .



For the transition period from ___________________________to ___________________________



Commission file number 050963

KIMBER RESOURCES INC.

______________________________________________________________________________________

(Exact name of Registrant as specified in its charter)



______________________________________________________________________________________

(Translation of Registrants name into English)

British Columbia, Canada

______________________________________________________________________________________

(Jurisdiction of incorporation or organization)

Suite 215  800 West Pender Street, Vancouver, British Columbia, Canada, V6C 2V6

______________________________________________________________________________________

(Address of principal executive offices)



Securities registered or to be registered pursuant to Section 12(b) of the Act.

|                                 |                                          
|-------------------------------- | -----------------------------------------
|Title of each class              | Name of each exchange on which registered
|Common Shares, without par value | American Stock Exchange                  
|___________________________      | ____________________________________     
|___________________________      | ____________________________________     



Securities registered or to be registered pursuant to Section 12(g) of the Act.

______________________________________________________________________________________

(Title of Class)



______________________________________________________________________________________

(Title of Class)





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2



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.



______________________________________________________________________________________

(Title of Class)



Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.

As at June 30, 2007, 49,423,620 Common Shares without par value were issued and outstanding



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

[  ]Yes  [ü] No



If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

[  ]Yes  [ü] No



Note  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[ü]Yes  [  ] No



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer

Accelerated filer

Non-accelerated filer  [ü]



Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ]Yes  [ü] No



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

[  ]Yes  [  ] No











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3



TABLE OF CONTENTS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|GLOSSARY
5
FORWARD LOOKING STATEMENTS
12

PART I
13
ITEM 1 - IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
13
A.
Directors and Senior Management
13
B.
Advisers
13
C.
Auditors
13
ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE
13
A.
Offer Statistics
13
B.
Method and Expected Timetable
13
ITEM 3 - KEY INFORMATION
13
A.
Selected Financial Data
13
B.
Capitalization and Indebtedness
15
C.
Reasons for the Offer and Use of Proceeds
15
D.
Risk Factors
15
ITEM 4 - INFORMATION ON THE COMPANY
24
A.
History and Development of Kimber Resources Inc.
24
B.
Business Overview
25
C.
Organizational Structure
27
D.
Property, Plants and Equipment
28
ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS
55
A.
Operating Results
56
B.
Liquidity and Capital Resources
59
C.
Research and Development, Patents and Licenses, Etc.
60
D.
Trend Information
60
E.
Off-Balance Sheet Arrangements
61
F.
Tabular Disclosure of Contractual Obligations
61
ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
61
A.
Directors and Senior Management
61
B.
Compensation
66
C.
Board Practices.
68
D.
Employees
69
E.
Share Ownership
69
ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
72
A.
Major Shareholders
72
B.
Related Party Transactions
73
C.
Interests of Experts and Counsel.
73
ITEM 8 - FINANCIAL INFORMATION
73
A.
Consolidated Statements and Other Financial Information
73
B.
Significant Changes
74
ITEM 9 - THE OFFERING AND LISTING
74
A.
Offer and Listing Details
74
B.
Plan of Distribution
74
C.
Markets.
74
D.
Selling Shareholders
74
E.
Dilution
74
F.
Expenses of the Issue
74







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4





|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ITEM 10 - ADDITIONAL INFORMATION
74
A.
Share Capital
74
B.
Notice of Articles and Articles
74
C.
Material Contracts.
78
D.
Exchange Controls
79
E.
Taxation
79
F.
Dividends and Paying Agents
88
G.
Statement by Experts.
88
H.
Documents on Display
88
I.
Subsidiary Information
88
ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
89
ITEM 12 - DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
89
A.
Debt Securities
89
B.
Warrants and Rights
89
C.
Other Securities.
89
D.
American Depository Shares
89


PART II
89
ITEM 13 - DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
89
ITEM 14 - MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS
89
ITEM 15 - CONTROLS AND PROCEDURES
89
ITEM 16 - RESERVED
88
ITEM 16A - AUDIT COMMITTEE FINANCIAL EXPERT
90
ITEM 16B - CODE OF ETHICS
90
ITEM 16C - PRINCIPAL ACCOUNTANT FEES AND SERVICES
90
ITEM 16D - EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES
91
ITEM 16E - PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
91


PART III
92
ITEM 17 - FINANCIAL STATEMENTS
92
ITEM 18 - FINANCIAL STATEMENTS
92
ITEM 19 - EXHIBITS
92









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5



GLOSSARY OF TERMS



Glossary of Non-Geological Terms



Certain terms and abbreviations used in this Annual Report are defined below:



AMEX means the American Stock Exchange



Atna means Atna Resources Ltd.;



Canaccord means Canaccord Capital Corporation, the agent for Kimbers Initial Public Offering;



Carmen deposit is the name given to the volume of gold and silver-bearing rock in and around the former Monterde mine. Until drilling is complete, the boundaries of the deposit will remain undefined. (See Figure 2, Figure 3 and Figure 4);



Carmen structure is a geological fracture, which was one of the principal conduits for the introduction of the mineral-bearing fluids which formed the Carmen deposit;



Chemex means ALS Chemex, Aurora Laboratory Services Ltd.;



Common Shares means the common shares without par value in the capital of Kimber Resources Inc.;



Ejido (aa-hee-do) is a Mexican legal entity, which owns a specific area of land and holds it collectively for its members. Ejidos were formed by way of a resolution from the Federal Government of Mexico under the Agrarian Act for the administration and development of collective property rights over agricultural land owned by the Federal Government. Ejidos are administered and controlled by an Ejido council. The consent of an Ejido council is a requirement for access to such lands for mineral exploration and development. Since 1990 Mexican law has permitted the "partition and privatization" of Ejido land from the Government to the Ejidos and from the Ejidos to individual members;



El Coronel Concessions means the mineral concessions located in the Monterde Mining District, State of Chihuahua, Mexico, listed under the heading El Coronel Concessions in Table 1of this Annual Report;



Golden Treasure means Golden Treasure Explorations Ltd.;



Group 1 Concessions means the mineral concessions forming part of the Monterde Property, located in the Monterde Mining District, State of Chihuahua, Mexico, listed under the heading Group 1 Concessions in Table 1of this Annual Report;



Group 2 Concessions means the mineral concessions forming part of the Monterde Property, located in the Monterde Mining District, State of Chihuahua, Mexico, listed under the heading Group 2 Concessions in Table 1of this Annual Report;



Group 3 Concessions means the mineral concession forming part of the Monterde Property, located in the Monterde Mining District, State of Chihuahua, Mexico, listed under the heading Group 3 Concessions in Table 1of this Annual Report;



Group 4 Concessions means the mineral concession forming part of the Monterde Property, located in the Monterde Mining District, State of Chihuahua, Mexico, listed under the heading Group 4 Concessions in Table 1of this Annual Report;



IPO means the Initial Public Offering of Kimber Resources Inc., closed July 12, 2002;







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6



July 12 Warrants means the transferable share purchase warrants of Kimber issued July 12, 2002.  Each Warrant entitled the holder thereof to purchase one Common Share at a price of $0.45 until July 12, 2003 and thereafter at a price of $0.55 until January 12, 2004;



Kimber or the Companymeans Kimber Resources Inc., its wholly owned subsidiaries Minera Monterde, S. de R.L. de C.V, Kimber Resources de Mexico S.A de C.V and Minera Pericones, S.A. de C.V. collectively;



Kimber Resources de Mexico means Kimber Resources de Mexico, S.A. de C.V., the wholly owned subsidiary of Kimber Resources Inc.;



MineQuest means MineQuest Exploration Associates Ltd.;



Minera Monterde means Minera Monterde, S. de R.L. de C.V., the wholly owned subsidiary, and the holder of the Monterde Property and the Setago Property;



Minera Pericones means Minera Pericones, S.A. de C.V., the wholly owned subsidiary of Kimber Resources Inc. and the holder of the Pericones Property;



Monterde Property or the Property means the mineral concessions located in the Monterde Mining District, State of Chihuahua, Mexico, listed in Table 1of this Annual Report;



Monterde Concessions means the mineral concessions located in the Monterde Mining District, State of Chihuahua, Mexico, listed under the heading Monterde Concessions in Table 1of this Annual Report;



Option Plan means the Kimber Resources Inc. 2002 Stock Option Plan;



Pericones Property or Pericones means the staked mineral concession located approximately 100 kilometres southwest of Mexico City in the Municipality of Tejupilco in Estado de Mexico.



QA/QC means a quality assurance and quality control program;



Setago Property or Setago means the staked mineral concessions located in the Monterde Mining District, State of Chihuahua, Mexico



Sierra Madre de Mexico means Sierra Madre Gold de Mexico, S.A. de C.V.;



Staked Concessions means the mineral concessions forming part of the Monterde Property located in the Monterde Mining District, State of Chihuahua, Mexico, listed under the heading Staked Concessions in Table 1of this Annual Report;



Subdivision means the subdivision of Kimbers share capital on the basis of 1.6 new shares for each old share on April 30, 2002.



TSX means the Toronto Stock Exchange







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7



Geological or Technical Terms



AA means atomic absorption determination of metal content;



Agis the chemical symbol for silver;



aliquot is that portion of a sample that is actually analyzed;



alteration is a change in the chemical and mineralogical composition of a rock caused by hydrothermal fluids;



alunitic refers to a type of hydrothermal alteration usually formed by sulphuric acid solutions acting on rocks rich in potash feldspar, and characterized by the mineral alunite;



andesite is a fine-grained volcanic rock, typically grey to dark grey, containing plagioclase, hornblende, biotite, or pyroxene phenocrysts;



aphanitic is a texture in igneous rock too fine to be observed with a naked eye;



aqua-regia leach means the dissolution of metals, especially gold and silver, in a mixture of concentrated hydrochloric and nitric acids;



argillic alteration is an alteration type characterized by the development of clay minerals at the expense of the original constituents of the rock;



Auis the chemical symbol for gold;



breccia is a rock that has been broken  by natural forces such as fault movements or volcanic explosions into very irregular fragments of varying sizes  with the spaces between the larger fragments filled by smaller fragments of the same material;



CIM Standards means the standards of disclosure for mineral projects under the guidelines set out in The Canadian Institute of Mining, Metallurgy and Petroleum;



caldera is a large basin-shaped volcanic depression, more or less circular in shape;



comagmatic is a term describing igneous rocks regarded as having been derived from common parent magma;



dikes are tabular bodies of igneous rock that cut structurally across adjacent rock;



dip is the maximum angle that a structural surface, such as layering in a rock or a fault makes with the horizontal, measured perpendicular to the strike and in the vertical plane;



epithermal refers to a hydrothermal mineral deposit formed within about 1 kilometre of the earths surface and in the temperature range of 50o to 200o C;



euhedra is a term describing mineral grains (crystals) with well-formed crystal faces;



fault is a fracture or fracture zone along which there has been displacement of the sides relative to one another;



feldspars are a group of aluminum-silica minerals with calcium, sodium or potassium.  They are major rock-forming minerals in igneous rocks;







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8



felsic is a description applied to light-coloured igneous rock compositionally high in quartz, feldspars, feldspathiods, and muscovite;



fire assay is the assaying of metallic ores, usually of gold and silver, by methods requiring furnace heat;



g/t means grams per tonne;



grade is the relative quantity or the percentage of a commodity content in a resource, expressed as grams per tonne or ounces per ton for precious minerals, such as gold, or as a weight percentage for most other metals;



hematite or hematitic refers to a common iron mineral consisting of iron and oxygen;



hornblende a dark mafic mineral, the commonest mineral in the amphibole family, and occurring as a primary constituent in igneous rocks of acidic and intermediate composition, and less frequently in basic igneous rocks;

hydrothermal - pertains to hot water or the action of heated water, often considered heated by magma or in association with magma;



hydrothermal alteration - alteration of rocks or minerals by the reaction of hot water (and other fluids) with pre-existing rocks. The hot water is generally heated groundwater with dissolved minerals;



hypabyssal is a term applied to minor igneous intrusions emplaced at a shallow depth, such as sills and dikes, and to the rocks that form these intrusions;



igneous rocks are rocks that have formed from lava;



Indicated Mineral Resource(1) is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed;



Inferred Mineral Resource(1)is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity.  The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes;



intrusive is an igneous rock that has solidified below the Earth's surface;



latitic tuffs are pale colored fragmental volcanic rocks with almost equal proportions of plagioclase and potassium feldspar and a porphyritic texture;



leaching  means the separation, selective removal or dissolving-out of soluble constituents from a rock or ore body by the natural actions of percolating water or applied solutions;



lithologies are groupings of rocks displaying similar physical characteristics including colour, mineral composition and grain size;







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9



magma is molten rock located below the Earth's surface. When a volcano erupts or a deep crack occurs in the Earth, the magma rises and overflows. When it flows out of the volcano or crack, usually mixed with steam and gas, it is called lava;



Measured Mineral Resource(1) is that part of Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity;



Mineral Resource(1) is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earths crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction.  The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. The terms Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource, Inferred Mineral Resource used in this Annual Report are Canadian mining terms as defined in accordance with NI 43-101 under the guidelines set out in the CIM Standards;



NI 43-101(1) means National Instrument 43-101  Standards of Disclosure for Mineral Projects.  A rule developed by the Canadian Securities Administrators (an umbrella group of Canadas provincial and territorial securities regulators) that governs public disclosure by mining and mineral exploration issuers. The rule establishes certain standards for all public disclosure of scientific and technical information concerning mineral projects;



ore is a naturally occurring material from which a mineral or minerals of economic value can be extracted at a profit under economic conditions that are specified and are generally accepted as reasonable, also, the mineral or minerals thus extracted;



phenocrysts are the larger crystals embedded in a finer-grained groundmass of surrounding igneous rock;



plagioclase is a feldspar series, that constitutes one of the most common of rock-forming minerals.  Potassium feldspars form the other feldspar series;



porphyry is an igneous rock with conspicuous well-formed crystals (phenocrysts) in a finer-grained groundmass;



preliminary feasibility study means a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established, and which, if an effective method of mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating, economic factors and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may demonstrate that economic extraction can be justified;



pyrophyllitic rock containing pyrophillite, a relatively rare clay mineral formed during metamorphism;







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10



Qualified Person or QPconforms to that definition under NI 43-101 for an individual (a) to be an engineer or geoscientist with at least five years experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; (b) with experience relevant to the subject matter of the mineral project and the technical report and (c) is a member in good standing of a professional association that, among other things, is self-regulatory, has been given authority by statute, admits members based on their qualifications and experience, requires compliance with professional standards of competence and ethics and has disciplinary powers to suspend or expel a member;



RC means reverse circulation, a type of drilling used to obtain mineral samples;



Reserve(2) (Mineral Reserve) is that portion of the Proven and Probable Reserves which may be mined and sold at a profit, taking in account all mining and licensing parameters;



Resource(1) (Mineral Resource) is a concentration or occurrence of material of intrinsically economic interest in or on the Earth's crust in such forms or quantities that there are reasonable prospects for eventual economic extraction.  The location, quantity, grade, geological characteristics, and continuity are known, estimated, or interpreted from specific geological evidence and knowledge.  Resources are subdivided, in order of increasing geological confidence, into Inferred, Indicated, and Measured categories;



sanidine is a potassium feldspar, occurring as clear crystals in unaltered acidic volcanic rocks;



shear is a fracture or fracture zone along which there has been differential movement of the sides relative to one another, typically leading to crushing, brecciation, and subsidiary fractures;



siliceous alteration is an alteration type characterized by the addition of silica or quartz to the original rock;



stockwork refers to a network of closely spaced veins in several orientations;



tuff is a general term for all volcanic rocks explosively or aerially ejected from a volcanic vent;



UTM coordinates means Universal Transverse Mercator coordinates, measured in metres from some fixed datum; and



welded is a term that refers to a tuff that has been indurated by the welding together of the glass shards that constitute the tuff.





Notes to U.S. investors:





1.

The terms Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource and Inferred Mineral Resource used in this Annual Report are Canadian mining terms as defined in accordance with National Instrument 43-101  Standards of Disclosure for Mineral Projects under the guidelines set out in the CIM Standards (The Canadian Institute of Mining, Metallurgy and Petroleum) on Mineral Resources and Mineral Reserves Definitions and guidelines adopted by the CIM Council on August 20, 2000.  A reader in the United States should be aware that the definition standards enunciated in National Instrument 43-101 differ from those set forth in SEC Industry Guide 7.







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11



2.

While the terms Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource and Inferred Mineral Resource are recognized and required by Canadian regulations, they are not defined terms under standards in the United States.  As such, information contained in this Annual Report concerning descriptions of mineralization and resources under Canadian standards may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.  Indicated Mineral Resource and Inferred Mineral Resource have a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an Indicated Mineral Resource or Inferred Mineral Resource will ever be upgraded to a higher category.  Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into Reserves.



3.

The terms Mineral Reserve, Proven Mineral Reserve and Probable Mineral Reserve used in this Annual Report are Canadian mining terms as defined in accordance with National Instrument 43-101  Standards of Disclosure for Mineral Projects under the guidelines set out in the CIM Standards.  In the United States, a Mineral Reserve is defined as part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made.



4.

The definition for Proven Mineral Reserves under CIM Standards differs from the standards in the United States, where Proven or Measured Reserves are defined as Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (b) grade and/or quality are computed from the results of detailed sampling and (c) the sites for inspection, sampling and measurement are spaced so closely and the geographic character is so well defined that size, shape, depth and mineral content of Reserves are well established.



5.

The definition for Probable Mineral Reserves under CIM Standards differs from the standards in the United States, where Probable Reserves are defined as reserves for which quantity and grade and/or quality are computed from information similar to that of Proven Reserves (under United States standards), but the sites for inspection, sampling and measurement are further apart or are otherwise less adequately spaced, and the degree of assurance, although lower than that for Proven Mineral Reserves, is high enough to assume continuity between points of observation.  The degree of assurance, although lower than that for Proven Mineral Reserves, is high enough to assume continuity between points of observation.







|                     |   |                       
|-------------------- | - | ----------------------
|Conversion Table    
|Metric               |   | Imperial              
|1.0 millimetre (mm)  | = | 0.039 inches (in)     
|1.0 metre (m)        | = | 3.28 feet (ft)        
|1.0 kilometre (km)   | = | 0.621 miles (mi)      
|1.0 hectare (ha)     | = | 2.471 acres (ac)      
|1.0 gram (g)         | = | 0.032 troy ounces (oz)
|1.0 metric tonne (t) | = | 1.102 short tons (ton)
|1.0 g/t              | = | 0.029 oz/ton          



Unless otherwise indicated, all dollar ($) amounts referred to herein are in Canadian dollars.







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12



FORWARD LOOKING STATEMENTS



This Annual Report contains forward-looking statements concerning the Companys plans for its properties and other matters. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.



Any statements that express or involve discussions with respect to predictions, expectations, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects or does not expect, is expected, anticipates or does not anticipate, plans, estimates or intends, or stating that certain actions, events or results may, could or would be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements.



Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties provided under headings ITEM 3D - Risk Factors, ITEM 4B - Business Overview, ITEM 4D  Property, Plants and Equipment and ITEM 5 - Operating and Financial Review and Prospects.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected.  Kimber does not intend to update these forward-looking statements.  Investors are cautioned against attributing undue certainty to forward-looking statements.



Statements concerning mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of reserves, such statements reflect the conclusion, based on reasonable assumptions, that the mineral deposit may be economically exploitable.









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13



PART I





ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS



Not Applicable





ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE



Not Applicable





ITEM 3. KEY INFORMATION



A. Selected Financial Data



The following tables set forth and summarize selected consolidated financial data for Kimber, prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP).  The tables also summarize certain corresponding information prepared in accordance United States generally accepted accounting principles (U.S. GAAP).  Canadian GAAP, as applied to Kimber, materially differs from U.S. GAAP.  For a discussion of these differences and their effect on Kimbers financial statements, refer to Item 5 - Operating and Financial Review and Prospects.



For each of the fiscal years ended June 30 presented, the information in the tables was extracted from the more detailed financial statements of Kimber for those years presented, which have been audited.  All of the information contained in the selected financial data is qualified in its entirety by reference to the more detailed financial statements and related notes included in Item 17 - Financial Statements, and should be read in conjunction with such financial statements and with the information appearing in Item 5 - Operating and Financial Review and Prospects.



Kimber has financed operations principally through the sale of its equity securities and will require additional capital for its business operations. While Kimber believes it has sufficient capital and liquidity to finance current operations until the end of the first quarter of 2008, nevertheless, its continued operations are dependent on its ability to obtain additional financing through the further sales of equity securities.  See Item 3D - Risk Factors.





Under Canadian Generally Accepted Accounting Principles (in Canadian dollars):



|                                 |            |            |            |           |          
|-------------------------------- | ---------- | ---------- | ---------- | --------- | ---------
|                                 | Year       | Year       | Year       | Year      | Year     
|                                 | Ended      | Ended      | Ended      | Ended     | Ended    
|                                 | June 30,   | June 30,   | June 30,   | June 30,  | June 30, 
|                                 | 2007       | 2006       | 2005       | 2004      | 2003     
|                                 | $          | $          | $          | $         | $        
|                                 |            |            |            |           |          
|Current Assets                   | 6,687,329  | 16,907,238 | 4,796,055  | 3,865,185 | 1,424,566
|Equipment                        | 644,230    | 603,347    | 436,736    | 442,408   | 75,943   
|Investment                       | -          | -          | 103,596    | 103,596   | 103,596  
|Deferred IPO Costs               | -          | -          | -          | -         | -        
|Unproven mineral right interests | 32,176,965 | 21,749,820 | 11,601,330 | 5,382,011 | 1,727,596
|Total Assets                     | 39,508,524 | 39,260,405 | 16,937,717 | 9,793,200 | 3,331,701







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14





|                                 |              |             |             |             |            
|-------------------------------- | ------------ | ----------- | ----------- | ----------- | -----------
|Current Liabilities              | 1,315,654    | 1,422,519   | 900,734     | 644,069     | 55,132     
|Total Liabilities                | 1,315,654    | 1,422,519   | 900,734     | 644,069     | 55,132     
|Net Assets (Liabilities)         | 38,192,870   | 37,837,886  | 16,036,983  | 9,149,131   | 3,276,569  
|Share Capital                    | 46,762,332   | 42,766,942  | 19,033,066  | 11,126,010  | 4,299,265  
|Contributed surplus              | 1,970,385    | 1,796,853   | 1,366,406   | 559,628     | -          
|Obligation to Issue Shares       | -            | -           | -           | -           | -          
|Revenues                         | -            | -           | -           | -           | -          
|Deficit                          | (10,539,847) | (6,725,909) | (4,362,489) | (2,536,507) | (1,022,696)
|Net Loss for the Period          | (3,813,938)  | (2,363,420) | (1,825,982) | (1,513,811) | (513,627)  
|Basic and Diluted Loss per Share | (0.08)       | (0.06)      | (0.06)      | (0.07)      | (0.04)     
|Weighted Average Number of       |              |             |             |             |            
|Common Shares Outstanding        | 48,118,320   | 40,026,359  | 30,612,668  | 21,977,441  | 13,381,406 





Under Canadian GAAP applicable to junior mining companies, mineral exploration expenditures are deferred for mineral properties under exploration or development until such time as it is determined that further exploration or development is not warranted, at which time the property costs are written-off.  Under U.S. GAAP, all exploration expenditures are expensed until an independent feasibility study has determined that the property is capable of economic commercial production. The following information has been reconciled for U.S. GAAP.





Under U.S. Generally Accepted Accounting Principles (in Canadian dollars):





|                                                     |              |              |              |             |            
|---------------------------------------------------- | ------------ | ------------ | ------------ | ----------- | -----------
|                                                     |              |              |              |             |            
|                                                     | Year         | Year         | Year         | Year        | Year       
|                                                     | Ended        | Ended        | Ended        | Ended       | Ended      
|                                                     | June 30,     | June 30,     | June 30,     | June 30,    | June 30,   
|                                                     | 2007         | 2006         | 2005         | 2004        | 2003       
|                                                     | Audited      | Audited      | Audited      | Audited     | Audited    
|                                                     | $            | $            | $            | $           | $          
|                                                     |              |              |              |             |            
|Current Assets                                       | 6,687,329    | 16,907,238   | 4,796,055    | 3,865,185   | 1,424,566  
|Equipment                                            | 644,230      | 603,347      | 436,736      | 442,408     | 75,943     
|Investment                                           | -            | -            | 103,596      | 103,596     | 103,596    
|Deferred IPO Costs                                   | -            | -            | -            | -           | -          
|Unproven mineral Right Interests                     | 2,752,945    | 2,245,360    | 1,500,920    | 981,188     | 494,256    
|Total Assets                                         | 10,084,504   | 19,755,945   | 6,837,307    | 5,392,377   | 2,098,361  
|Current Liabilities                                  | 1,315,654    | 1,422,519    | 900,734      | 644,069     | 55,132     
|Total Liabilities                                    | 1,315,654    | 1,422,519    | 900,734      | 644,069     | 55,132     
|Net Assets (Liabilities)                             | 8,768,850    | 18,333,426   | 5,936,573    | 4,748,308   | 2,043,229  
|Share Capital                                        | 46,762,332   | 42,766,942   | 19,033,066   | 11,126,010  | 4,299,265  
|Contributed surplus                                  | 1,970,385    | 1,796,853    | 1,366,406    | 559.628     | -          
|Obligation to Issue Shares                           | -            | -            | -            | -           | -          
|Deficit                                              | (39,963,867) | (26,230,369) | (14,462,899) | (6,937,330) | (2,256,036)
|Revenues                                             | -            | -            | -            | -           | -          
|Net Loss for the Period                              | (13,733,498) | (11,767,470) | (7,525,569)  | (4,681,294) | (1,613,534)
|Basic and Diluted Loss per Share                     | (0.29)       | (0.29)       | (0.25)       | (0.21)      | (0.15)     
|Weighted Average Number of Common Shares Outstanding | 48,118,320   | 40,026,359   | 30,612,668   | 21,977,441  | 10,708,817 





Except where otherwise indicated, all information extracted from or based on the Consolidated Financial Statements of Kimber are presented in accordance with Canadian GAAP.







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15



Dividends



No cash dividends have been declared nor are any currently expected to be declared. Kimber anticipates that all available cash will be required to further Kimbers exploration activities for the foreseeable future.  Kimber is not subject to contractual restrictions respecting the payment of dividends.



Exchange Rates



Unless otherwise indicated, all reference to dollar ($) amounts are in Canadian dollars.  The following table sets out the noon exchange rates for one Canadian dollar expressed in terms of one U.S. dollar for the periods indicated.  Rates of exchange are obtained from the Bank of Canada. Bank of Canada exchange rates are nominal quotations - not buying or selling rates - and are intended for statistical or analytical purposes. Rates available from financial institutions will differ. The noon exchange rate for the Canadian dollar against the U.S. dollar is calculated to reflect the trades that take place between 11:59 a.m. and 12:01 p.m.





Period End and Average - $C vs. $US

| |            |          |          |          |          |         
| | ---------- | -------- | -------- | -------- | -------- | --------
| |            | June 30, | June 30, | June 30, | June 30, | June 30,
| |            | 2007     | 2006     | 2005     | 2004     | 2003    
| |            |          |          |          |          |         
| | Period End | 0.9404   | 0.8931   | 0.8142   | 0.7440   | 0.7378  
| | Average    | 0.8830   | 0.8600   | 0.80118  | 0.7453   | 0.6622  





Monthly High and Low - $C vs. $US

| |                |        |        |        |        |          |        
| | -------------- | ------ | ------ | ------ | ------ | -------- | -------
| |                | June   | May    | April  | March  | February | January
| |                | 2007   | 2007   | 2007   | 2007   | 2007     | 2007   
| |                |        |        |        |        |          |        
| | High for Month | 0.9416 | 0.9150 | 0.8834 | 0.8577 | 0.8559   | 0.8524 
| | Low for Month  | 0.9360 | 0.9102 | 0.8794 | 0.8540 | 0.8521   | 0.8482 



As of June 30, 2007, the exchange rate to convert one Canadian dollar into the U.S. dollar was 0.9385.





B. Capitalization and Indebtedness



Not Applicable





C. Reasons for the Offer and Use of Proceeds



Not Applicable





D. Risk Factors



Kimber is subject to a number of significant risks due to the nature of its business and the present stage of its business development.  The following factors should be considered:







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16



INDUSTRY RISKS



Resource exploration and development is a high risk, speculative business.



Resource exploration and development is a speculative business, characterized by a high number of failures.  Most exploration projects do not result in the discovery of commercially mineable ore deposits and no assurance can be given that any particular level of recovery or ore reserves will in fact be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited.





Mineral exploration is subject to numerous industry operating hazards and risks, many of which are beyond Kimbers control and any one may have an adverse effect on its financial condition and operations.



The operations in which Kimber has a direct or indirect interest will be subject to all the hazards and risks normally incidental to resource companies, any of which could result in work stoppages and damage to persons or property or the environment and possible legal liability for any and all damage.  Fires, power outages, labour disruptions, flooding, explosions, cave-ins, land slides and the inability to obtain suitable or adequate machinery, equipment or labour are some of the industry operating risks involved in the operation of mines and the conduct of exploration programs.  Other risks include injury or loss of life, severe damage to or destruction of property, clean-up responsibilities, regulatory investigation and penalties and suspension of operations.  The occurrence of any of these operating risks and hazards may have an adverse effect on Kimbers financial condition and operations.



Kimber will, when appropriate, secure liability insurance in an amount which it considers adequate, however the nature of claims may exceed policy limits, or the liability and hazards might not be insurable.  Kimber might elect not to insure itself against such liabilities due to high premium costs or other reasons, in which event Kimber could incur significant costs that may have a material adverse effect upon its financial condition and operations.



The economics of developing gold, silver and other mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. The Company does not have producing mines at this time.  Properties on which mineral reserves are not found will have to be discarded causing the Company to write each respective property off thus sustaining a loss.





Metal prices have fluctuated widely in the past and are expected to continue to do so in the future which may adversely affect the amount of revenues derived from production of mineral reserves.



Kimber does not hold any known mineral reserves of any kind. Future revenues, if any, are expected to be in large part derived from the future mining and sale of gold and silver or interests related thereto.  The prices of these commodities fluctuate and are affected by numerous factors beyond Kimber’s control including:



·

international economic and political conditions,



·

expectations of inflation or deflation,



·

international currency exchange rates,







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17





·

interest rates,



·

global or regional consumptive patterns,



·

speculative activities,



·

levels of supply and demand,



·

increased production due to new mine developments,



·

decreased production due to mine closures,



·

improved mining and production methods,



·

availability and costs of metal substitutes,



·

metal stock levels maintained by producers and others, and



·

inventory carrying costs.



The effect of these factors on the price of base and precious metals, and therefore the economic viability of Kimber’s operations, cannot be accurately predicted.



Depending on the price to be received for any minerals produced, Kimber may determine that it is impractical to commence or continue commercial production.



The commercial feasibility of the Companys properties and its ability to arrange funding to conduct its planned exploration projects is dependent on the price of gold and silver.  The price of gold and silver may also have a significant influence on the market price of the Companys common shares and the value of the Companys properties.  A reduction in the price of gold or silver may prevent the Companys properties from being economically mined or result in the write-off of assets whose value is impaired as a result of low precious metals prices.





The Company faces substantial competition within the mining industry from other mineral companies with much greater financial and technical resources and may not be able to effectively compete which would have an adverse effect on Kimbers financial condition and operations.



The resource industry is intensively competitive in all of its phases, and Kimber competes with many companies possessing much greater financial and technical research resources.  Competition is particularly intense with respect to the acquisition of desirable undeveloped gold and silver properties.  The principal competitive factors in the acquisition of such undeveloped properties include the staff and data necessary to identify, investigate and purchase such properties, and the financial resources necessary to acquire and develop such properties.  Competition could adversely affect Kimbers ability to acquire suitable prospects for exploration in the future.



The mining industry is facing increasing operating and capital costs which may adversely affect the viability of existing and proposed mining projects.



Increasing operating costs are a factor that must be built in to the economic model for any mining project.  Significant operating cost increases have been experienced by the industry in recent years, the effect of which has been to reduce profit margin for some mining projects.







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18



As a result of the increase in the prices of the labour and materials, to some extent caused by the increase in commodity prices, including the prices of the metals being mined by the industry, the capital cost of mining projects has significantly increased in the past few years.  Such increases in both operating and capital costs need to be factored into economic assessments of existing and proposed mining projects and may increase the financing requirements for such projects or render such projects uneconomic.



Companies carrying on operations in countries other than their home country are subject to on-going currency risks.



Kimber carries on exploration in Mexico.  The cost of exploration and future capital and operating costs are affected by foreign exchange rates for the Canadian dollar, United States dollar and Mexican peso.  The Company can mitigate the effects of these rate fluctuations, to some extent, through forward purchases.  Because of its limited operating record and history of losses, it may not be able to hedge future risk to the extent it feels is warranted.



COMPANY RISKS



Kimbers exploration and development efforts may be unsuccessful in locating viable mineral resources.



Resource exploration and development is a speculative business, characterized by a number of significant risks, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits, which, though present, are insufficient in quantity and quality to return a profit from production.



There is no certainty that the expenditures to be made by the Company on the exploration of its properties as described herein will result in discoveries of mineralized material in commercial quantities.



Most exploration projects do not result in the discovery of commercially mineable ore deposits and no assurance can be given that any particular level of recovery or ore reserves will in fact be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited.





Kimber has a limited history as an exploration company and does not have any experience in putting a mining project into production.



Kimber has only been actively engaged in exploration since 1999. The Company does not hold any mineral reserves and does not generate any revenues from production.  Kimbers success will depend largely upon its ability to locate and develop commercially productive mineral reserves, which may never happen.  Further Kimber does not have any experience in taking a Mining project to the production stage.  As a result of these factors, it is difficult to evaluate Kimbers prospects, and its future success is more uncertain than if it had a longer or more proven history.





The Company may not be able to market the minerals acquired or discovered due to factors beyond the control of the Company.



The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return on invested capital.







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19



Kimber expects to continue to incur losses and may never achieve profitability, which in turn may harm the future operating performance and may cause the market price of Kimbers Common Shares to decline.



Kimber has incurred net losses every year since inception on March 31, 1995 and as of June 30, 2007 had an accumulated deficit of $10,539,847.  Kimber incurred a net loss of $3,813,938 for the year ended June 30, 2007 and $2,363,420 for the year ended June 30, 2006 (2005: $1,825,982; 2004: $1,513,811; 2003: $513,627).  If Kimber does not achieve a necessary  level of profitability it will have to raise additional financing or shut down its operations.





Kimber does not hold any known mineral reserves of any kind and may never be able to locate commercially productive mineral reserves. In the event such reserves are discovered, commercial production may not be possible or warranted.



All of Kimbers mineral properties are in the exploration stage and are without known mineral reserves. Kimber may discover mineral reserves through its exploration programs but commercial production may not be warranted due to any one or more possible reasons.  Few mineral properties that are explored are ultimately developed into producing mines.



In the event a commercially productive mineral reserve is discovered, substantial expenditures are required to establish mineral reserves through drilling, to develop metallurgical processes for extraction and to develop the mining and processing facilities and infrastructure at the production site.  The marketability of any minerals discovered may be affected by numerous factors which are beyond Kimbers control and which cannot be predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection.  Depending on the price of minerals produced, Kimber may determine that it is impractical to commence or continue commercial production.



If  mineral reserves are not located Kimber will have to raise additional financing to continue exploration on the Monterde Property or the other properties that it owns, or shut down.





Kimbers title to its mineral properties and its validity may be disputed in the future by others claiming title to all or part of such properties.



Kimber owns the mining concessions, which constitute its property holdings.  However, the concessions may be subject to prior unregistered agreements or transfers, which may affect the validity of Kimbers ownership of such concessions.



A claim on any of Kimbers mineral properties, especially where commercially productive mineral reserves have been located, could adversely affect Kimbers long-term profitability as it may preclude entirely the economic development of a mineral property.  Also, such a claim may potentially affect Kimbers current operations due to the high costs of defending against such claims and its impact on senior management's time.





The Companys properties are located in Mexico and are subject to changes in political conditions and regulations in that country.  If Kimber is not able to comply with all Mexican laws and regulations, this could negatively impact current or planned exploration and development activities.









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20



The Property, the Companys principal project, is located in Mexico.  Mexico has in the past been subject to political instability, changes and uncertainties, which, if they were to arise again, could cause changes to existing governmental regulations affecting mineral exploration and mining activities. The Companys operations and properties are subject to a variety of governmental regulations including, among others:  regulations promulgated by SEMARNAT, Mexicos environmental protection agency; the Mexican Mining Law; and the regulations of the Comisión National del Aquawith respect to water rights.  Mexican regulators have broad authority to shut down and/or levy fines against facilities that do not comply with regulations or standards.  The Companys mineral exploration and mining activities in Mexico may be adversely affected in varying degrees by changing government regulations relating to the mining industry or shifts in political conditions that increase the costs related to the Company activities or maintaining its properties.



Kimber's exploration and development activities are subject to extensive laws and regulations governing health and worker safety, employment standards, waste disposal, protection of historic and archaeological sites, mine development and protection of endangered and protected species and other matters. A number of other approvals, licenses and permits are required for various aspects of mine development. Obtaining and maintaining the necessary permits are critical to Kimber's business and it is uncertain if all necessary permits will be obtained on acceptable terms or in a timely manner.  Future changes in applicable laws and regulations or changes in their enforcement or regulatory interpretation could negatively impact current or planned exploration and development activities or any other projects in which Kimber may become involved. Any failure to comply with applicable laws and regulations or failure to obtain or maintain permits, even if inadvertent, could result in the interruption of exploration and development operations or material fines, penalties or other liabilities.



Operations could also be affected to varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, environmental legislation and mine safety, to the extent that such regulations may be imposed.  Mexicos status as a developing country may make it more difficult for the Company to obtain any required financing for its projects.





Kimber originally contemplated an open pit mining operation on the Carmen deposit however it is currently contemplating the possibility of a combined open pit and underground mining operation, the effect of which, if it were to proceed to production, would expose the Company to additional risks of increased costs, potential time delays and risks to underground workers.



The change in concept from an open pit to a combined open pit and underground mining operation will if it proceeds on this basis expose the Company to the inherent risks of underground mining including increased costs, time delays in developing underground operations and safety issues that must be minimized.  The development of any mine plan and feasibility study must take these factors into consideration and may negatively impact the viability of the project.    Kimber does not currently have an assessment of the economic viability of the Carmen deposit as a combined open pit/underground operation that complies with NI 43-101 standards.





The Company has not completed an environmental impact statement (an MIA), nor has it received the necessary permits for water or explosives to conduct mining operations.



The Companys current principal property is located in Mexico.



The department responsible for environmental protection in Mexico is SEMARNAT and has broad authority to shut down and/or levy fines against facilities that do not comply with environmental regulations or standards.







---

21



Regulations require that an environmental impact statement, known in Mexico as a Manifiesto de Impacto Ambiental(MIA), be prepared by a third-party contractor for submittal to SEMARNAT. An MIA is required prior to mine construction.  Studies required to support the MIA include a detailed analysis of the following areas:  soil, water, vegetation, wildlife, cultural resources and socio-economic impacts.  The regulatory process in Mexico does not have a public review component but proof of local community support for a project is required to gain final MIA approval.  A risk analysis must also be prepared in conjunction with the MIA for approval by SEMARNAT. To date this risk analysis has not been prepared



A number of other approvals, licenses and permits are required for various aspects of a mine development.  The most significant permits for the development of the Monterde Property, other than MIA approval, are water rights concessions, or permits to extract water, issued by the National Water Commission, and a permit for consumption, use and storage of explosives, or blasting permit, issued by the Mexican National Defence Secretariat.



Failure to obtain the necessary permits would adversely affect progress of its operations.





The Monterde Property is located in the Sierra Madre mountains of Mexico which have been subject to episodes of unusually high rainfall in the past two (2) years resulting in washouts and erosion of soil.  Continuing increased rainfall may result in increased costs and delays in operations.



Seasonal rains are a factor that must be considered when carrying on operations in areas such as the Sierra Madre where excessive rain fall may hamper operations.  Some other companies carrying on operations in areas of heavy seasonal rains have been severely impacted by the rainfall and on occasion have been required to cease operations.  Kimbers operations may be negatively impacted by such rainfall.





Kimber depends on key personnel for critical management decisions and industry contacts but does not maintain key person insurance.



Kimber is dependent on a relatively small number of key personnel, the loss of any of whom could have an adverse effect on the operations of Kimber.



Kimbers success is dependent to a great degree on its ability to attract and retain highly qualified management personnel.  The loss of such key personnel, through incapacity or otherwise, would require Kimber to seek and retain other qualified personnel and could compromise the pace and success of its exploration activities.  Kimber does not maintain key person insurance in the event of a loss of any such key personnel.



Additionally, Kimber has relied on and is expected to continue relying upon consultants, contractors and others for exploration expertise.  In the event a body of ore is discovered on any of Kimbers properties, it will likely require the expertise of such consultants and others for the development and operations of a producing mine.





Kimber will need to raise additional capital though the sale of its securities, resulting in dilution to the existing shareholders, and which may not be available, adversely affecting its operations.



Kimber does not generate any revenues from production and does not have sufficient financial resources to undertake by itself all of its planned exploration programs.  Kimber has limited financial resources and has financed its operations primarily through the sale of Kimbers securities such as Common Shares.







---

22



Kimber will need to continue its reliance on the sale of its securities for future financing, resulting in dilution to existing shareholders.  Kimber anticipates that it will have to obtain additional financing before the end of the first quarter of 2008.



Further exploration programs will depend on Kimbers ability to obtain additional financing which may not be available under favourable terms, if at all.  If adequate financing is not available, Kimber may not be able to commence or continue with its exploration programs.





Future sales of Kimbers Common Shares into the public market may lower the market price, which may result in losses to Kimbers shareholders.



As of September 14, 2007 Kimber had 49,848,620 Common Shares issued and outstanding.  In addition, as of September 14, 2007 2,270,000 Common Shares were issuable upon exercise of outstanding stock options, all of which may be exercised in the future resulting in dilution to Kimbers shareholders.  Of these amounts, officers and directors of Kimber own, as a group, 8,454,507 Common Shares (16.96%) and stock options to acquire an additional 1,680,000 Common Shares. Kimber may issue stock options to purchase an additional 938,381 Common Shares remaining under its existing stock option plan.  Most of these Common Shares, including the Common Shares to be issued upon exercise of the outstanding options, are freely tradable.



Sales of substantial amounts of Kimbers Common Shares into the public market, or even the perception by the market that such sales may occur, may lower the market price of its Common Shares.





Kimber has no history of paying dividends, does not expect to pay dividends in the immediate future and may never pay dividends.



Since incorporation, Kimber has not paid any cash or other dividends on its Common Shares and does not expect to pay such dividends in the foreseeable future, as all available funds will be invested primarily to finance its mineral exploration programs. Kimber will need to achieve profitability prior to any dividends being declared, which may never happen.





Mexico is a developing country and obtaining financing or finding or hiring qualified people or obtaining all necessary services for the Companys operations in Mexico may be difficult.



The Companys principal project is in Mexico which is a developing country and it may be difficult for the Company to obtain necessary financing for its planned exploration or development activities because of their location in Mexico.  It may be difficult to find or hire qualified people in the mining industry who are situated in Mexico or to obtain all of the necessary services or expertise in Mexico or to conduct operations on its projects at reasonable rates.  If qualified people and services or expertise cannot be obtained in Mexico, the Company may need to seek and obtain those services from people located outside of Mexico which will require work permits and compliance with applicable laws and could result in delays and higher costs to the Company to conduct its operations in Mexico.





The Companys business involves uninsurable risks and the Company does not have insurance for these risks.



In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes may occur.  It is not always possible to fully insure against such risks.







---

23



The Company does not currently have insurance against all such risks and may decide not to take out insurance against all such risks as a result of high premiums or other reasons.  Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of the Company.





Kimbers activities are subject to environmental liability, which would have an adverse effect on its financial condition and operations.



Kimber is not aware of any claims for damages related to any impact that its operations have had on the environment but it may become subject to such claims in the future.  An environmental claim could adversely affect Kimbers business due to the high costs of defending against such claims and its impact on senior management's time.



Kimber conducts exploration activities in Mexico.  Such activities are subject to various laws, rules and regulations governing the protection of the environment, including, in some cases, posting of reclamation bonds.  All phases of Kimbers operations are subject to environmental regulation in the jurisdictions in which it operates.  Environmental legislation is evolving in a manner requiring stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed properties and a heightened degree of responsibility for companies and their officers, directors, employees and contractors.





Also, environmental regulations may change in the future which could adversely affect Kimbers operations including the potential to curtail or cease exploration programs or to preclude entirely the economic development of a mineral property.  The extent of any future changes to environmental regulations cannot be predicted or quantified, but it should be assumed that such regulations would become more stringent in the future.  Generally, new regulations will result in increased compliance costs, including costs for obtaining permits, delays or fines resulting from loss of permits or failure to comply with the new regulations.





RISKS FOR U.S. HOLDERS



U.S. investors may not be able to enforce their civil liabilities against Kimber or its directors and officers.



It may be difficult to bring and enforce suits against Kimber which is incorporated in the Province of British Columbia, Canada.  With the exception of two (2) directors who are residents of the U.S., the officers and directors of Kimber are residents of British Columbia, Ontario and Ecuador having all or a substantial portion of their assets located outside of the U.S.  As a result, it may be difficult for U.S. shareholders of Kimber to effect service of process on these persons within the U.S. or to enforce judgements obtained in the U.S. based on the civil liability provisions of the U.S. federal securities laws against Kimber or its officers and directors.  In addition, U.S. shareholders of Kimber should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against Kimber, its officers or directors predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the U.S., or (ii) would enforce, in original actions, liabilities against Kimber, its officers or directors predicated upon the U.S. federal securities laws or other laws of the U.S.





The Company could be deemed a Passive Foreign Investment Company which could have negative consequences for U.S. investors.







---

24



Potential investors who are U.S. taxpayers should be aware that Kimber may be a passive foreign investment company (PFIC) for the current fiscal year, and may also have been a PFIC in prior years and may also be a PFIC in subsequent years.  If Kimber is a PFIC for any year during a U.S. taxpayers holding period, then such U.S. taxpayer generally will be required to treat any so-called excess distribution received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a valid qualified electing fund (QEF) election or a mark-to-market election with respect to the shares of Kimber.  In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer.  A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of Kimbers net capital gain and ordinary earnings for any year in which Kimber is a PFIC, whether or not Kimber distributes any amounts to its shareholders. A QEF election will only be effective if Kimber provides certain information to the U.S. holders. There can be no assurances Kimber can, or will comply with these requirements.  A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayers tax basis therein.



If Kimber is (or has been) a PFIC and at any time has a non-US corporate subsidiary that is a PFIC, U.S. Holders generally would be deemed to own, and also would be subject to the PFIC rules with respect to, their indirect ownership interests in any such lower-tier PFIC.  A mark-to-market election under the PFIC rules with respect to Kimber would not apply to a lower-tier PFIC, and a U.S. Holder would not be able to make such an election with respect to its indirect ownership interest in any lower-tier PFIC.  See Item 10 E  Additional Information  Taxation





ITEM 4. INFORMATION ON THE COMPANY



A. History and Development of Kimber



Kimber Resources Inc., a Canadian junior exploration company, was incorporated on March 31, 1995 by registration of its Memorandum and Articles under the Company Act (British Columbia) (which was replaced by the Business Corporations Act (British Columbia)that came into force on March 29, 2004), as amended effective on April 23, 1998, May 19, 1999, May 21, 2002 and June 3, 2004.



At the Extraordinary General Meeting of Kimber's shareholders held on April 30, 2002, a subdivision of Kimber's Common Shares on a 1.6 new shares for one old share basis (the Subdivision) was approved and the authorized capital of Kimber was increased to 80,000,000 Common Shares effective May 21, 2002.



At an Extraordinary General Meeting of Kimbers shareholders held on May 28, 2004, the shareholders approved the adoption of new Articles under the new Business Corporations Act (British Columbia) and the increase in the number of Kimber directors to six (6) from five (5) as well as electing Mr. James J. Puplava to Kimbers Board of Directors. The adoption of the new Articles became effective on June 3, 2004 upon filing a notice of alteration to the Notice of Articles with the Registrar of Companies on that date.



Kimber became a reporting issuer in the provinces of British Columbia and Alberta on June 5, 2002 and its Common Shares and July 12 Warrants were listed on the TSX Venture Exchange and commenced trading on July 16, 2002. Kimber voluntarily delisted its shares from the TSX Venture Exchange at the end of trading on June 17, 2004 and its shares were listed and commenced trading on the TSX on June 18, 2004. Kimber is now also a reporting issuer in the Province of Ontario. On July 21, 2005 Kimber filed an amended Form 20-F Registration Statement with the SEC and subsequently applied for and was listed on the American Stock Exchange (AMEX).  Trading on Amex commenced on December 22, 2005.







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The head office and registered and records office of Kimber are located at Suite 215 - 800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6. Telephone: (604) 669-2251.



The fiscal and head office of Minera Monterde, S. de R.L. de C.V. (Minera Monterde), Kimber Resources de Mexico S.A. de C.V. (Kimber Resources de Mexico) and Minera Pericones S.A. de C.V. (Minera Pericones), wholly owned subsidiaries of Kimber, are located at Camino al Campestre # 4302, Col. Quintas Campestre, CP 31214, Chihuahua, Chihuahua State, Mexico. Telephone: 52 6144 105 403.



Kimber Resources de Mexico and Minera Pericones, also have a corporate office at Ave. Ejercito Mexicano N0. 2004  206 Col. Insurgentes, Mazatlan, Sinaloa, Mexico.



Kimbers principal capital expenditures since inception relate to its mineral properties in Mexico.  At June 30, 2007, Kimber had a balance of $32,176,965 in unproven mineral right interests costs relating to expenditures on its mineral properties.  During the fiscal year ended June 30, 2007, Kimber incurred $10,346,976 in mineral property acquisition and exploration expenditures on the Monterde Property (the Property) ($499,437 for acquisition; $9,847,539 on exploration), the El Coronel Concessions ($nil_ for acquisition, $nil on exploration) the Setago Property ($nil for acquisition; $nil on exploration) and the Pericones Property ($8,148 for acquisition; $72,021 on exploration).





B. Business Overview



Kimber is a British Columbia, Canada junior resource company engaged in the acquisition, exploration and development of mineral resource properties.  Where management determines that it is in Kimbers best interest, joint venture partners may be sought to further explore and/or develop certain properties.  Kimber is in the process of exploring its mineral properties located in Mexico and has yet to determine whether any of these properties contain ore reserves that are economically recoverable.  Refer to Item 4D - Property, Plants and Equipment for a description of each of these mineral properties.



All of the properties in which Kimber currently holds interests are without a known body of commercial ore.  Kimber is an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on any of its mineral properties. Further exploration is required before a final evaluation as to the economic and legal feasibility can be determined.



As of June 30, 2007, Kimber had incurred $32,176,965 on the acquisition, exploration of the Property, of which Atna funded $444,628.  During the last five financial years ended June 30, 2007 Kimber has carried out a program of reverse circulation drilling, diamond core drilling, trenching and sampling on the Property.  In addition, as of June 30, 2007 Kimber had incurred $60,996 on the acquisition, exploration of the Setago Property and $80,169 on the acquisition, exploration of the Pericones Property.



Mr. Robert Longe, President and Chief Executive Officer of the Company is scheduled to retire on October 31, 2007.  Mr. Gordon Cummings, Kimbers current Chief Financial Officer, has been appointed to the position of President and Chief Executive Officer effective following Mr. Longes retirement.  The promotion of Mr. Cummings will necessitate the hiring of a new Chief Financial Officer.  In addition the Company intends to hire a new senior technical person to direct the Companys exploration and development programs.  Refer to Item 6B - Directors, Senior Management and Employees - Compensation for a description of the terms of settlement with Mr. Longe.



On February 28, 2008 Mr. Michael Hoole, the Companys Vice President and Secretary will resign as an officer of the Company.  Mr. Hooles resignation will necessitate the realignment of senior management duties and responsibilities and the appointment of a Secretary of the Company.  As of the date of this Annual Report a decision on the assignment of Mr. Hooles duties and responsibilities has not been made.  Refer to Item 6B - Directors, Senior Management and Employees - Compensation for a description of the terms of settlement with Mr. Hoole.







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COMPANY FINANCINGS



Initial Public Offering

On July 12, 2002, Kimber closed its Initial Public Offering with Canaccord Capital Corporation. Kimber placed a total of 7,000,000 units at $0.45 per unit for gross proceeds of $3,150,000. Each unit consisted of one share and one transferable share-purchase warrant exercisable at $0.45 until July 12, 2003 and thereafter at $0.55 until they expired on January 12, 2004. Canaccord received 10% of the gross proceeds totalling $315,000 and 1,400,000 non-transferable warrants exercisable at $0.45 until July 12, 2003 and $0.55 until January 12, 2004.  Kimber also issued Canaccord 250,000 Common Shares and paid a sponsorship fee of $30,000.



The Company issued the securities pursuant to its prospectus dated June 5, 2002 (effective date: June 6, 2002), and a sponsorship and agency agreement with Canaccord dated for reference April 29, 2002.  The prospectus was qualified only in the Provinces of British Columbia and Alberta.  The sponsorship and agency agreement authorized Canaccord to offer and sell the securities in the Selling Provinces, defined as the provinces of British Columbia and Alberta and such other Canadian provinces as may be agreed to between the Company and Canaccord.  No securities were issued to any U.S. Person (as defined in Rule 902 of Regulation S promulgated under the United States Securities Act of 1933, as amended) to Kimbers knowledge.



Private Placement No.1 (brokered)

As the prospectus for the IPO was not qualified in Ontario, following the initial public offering, Kimber completed a brokered private placement through Canaccord, as agent, of a further 500,000 units to Sprott Asset Management in Ontario at $0.45 per unit. Each unit consisted of one Common Share and one transferable share-purchase warrant entitling the holder to purchase an additional Common Share at a price of $0.45 to July 12, 2003 and then $0.55 until January 12, 2004. Canaccord received 10% of the gross proceeds for a total of $22,500 and was issued 100,000 non-transferable warrants exercisable at $0.45 until July 12, 2003 and thereafter $0.55 until January 12, 2004. The private placement was effective July 25, 2002. No securities were issued to any U.S. Person.



Private Placement No.2 (brokered)

On May 14, 2003, Kimber closed a private placement of 1,765,600 units at a price of $0.45 per unit to realize gross proceeds of $794,520.  Each unit consisted of one Common Share and one-half of one non-transferable share purchase warrant.  One whole warrant entitled the holder to purchase one additional Common Share of Kimber until November 14, 2004 at a price of $0.55.  Canaccord acted as agent for the offering, in consideration for which it received an 8% commission payable in cash and share purchase warrants for the purchase of 353,120 shares. Each warrant was exercisable into one Common Share until November 14, 2004 at a price of $0.55.  In addition, Kimber paid Canaccord a $4,000 administration fee.  The agency agreement specifically excluded U.S. Persons from the offering.



Private Placement No.3 (non-brokered)

On December 16, 2003, Kimber closed a non-brokered private placement of 1,000,000 units to Puplava Securities Inc., related and other parties at a price of $0.70 per unit. Each unit consisted of one Common Share and one-half of one non-transferable share purchase warrant.  One whole warrant entitles the holder to purchase one additional Common Share of Kimber for 12 months at a price of $0.80. The securities were issued to U.S. Persons who were accredited investors for the purposes of the exemption from the registration requirements of the United States Securities Act of 1933, as amended, provided by section 4(6) of Regulation D of that Act.



Private Placement No.4 (brokered)

On December 16, 2003, Kimber also closed a brokered private placement of 1,000,000 units with Canaccord at a price of $0.70 per unit.  Each unit consisted of one Common Share and one-half of one non-transferable share purchase warrant.  One whole warrant entitled the holder to purchase one additional Common Share of Kimber for 12 months from the date of closing at a price of $0.80.







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Canaccord received an 8% commission (paid one-half in cash and one-half in units) and non-transferable share purchase warrants for the purchase of 200,000 Common Shares.Each warrant was exercisable into one Common Share at $0.80 for a period of 12 months from the date of issue of the warrant.  In addition, Kimber paid Canaccord a $5,000 administration fee. The agency agreement between the Company and Canaccord dated for reference November 20, 2003 expressly excluded U.S. Persons from participating in the private placement.



Private Placement No.5 (brokered)

On September 9, 2004 the Company closed a brokered private placement for 1,270,000 units at a price of $1.50 per unit. Each unit consisted of one Common Share and half of one non-transferable share purchase warrant. One whole warrant entitled the holder to purchase an additional Common Share at a price of $1.80 until March 8, 2006. The agent received an 8% commission paid in cash and the agent and other members of the sales group received a non-transferable agents option to purchase a total of 127,000 units at $1.80 per unit, consisting of one Common Share and one-half of one non-transferable share purchase warrant. One whole warrant entitled the holder to purchase an additional Common Share at $1.80 until March 8, 2006. The Company also paid the agent a corporate finance fee of 40,000 units having the same terms as the units described above. Some of the units were sold to U.S. Persons in reliance on the U.S. accredited investor exemption.



Private Placement No.6 (non-brokered)

On February 24, 2005 Kimber closed a non-brokered private placement of 3,290,324 units to raise gross proceeds of $5,100,002.20 with four investment funds. All of the units were issued at a price of $1.55 per unit and each unit consisted of one common share and one-half of a non-transferable share purchase warrant, with one whole warrant entitling the holder to purchase one additional common share at $1.80 until March 8, 2006. No commissions or brokerage fees were paid with the exception of a finders fee of $31,000 in respect of 1 million units. The subscription agreements specifically excluded U.S. Persons from the financing.



Private Placement No.7 (non-brokered)

On August 26, 2005, the Company closed a non-brokered private placement of 3,333,332 units to raise gross proceeds of $4,999,998.  All of the units were issued at a price of $1.50 per unit and each unit consisted of one common share and one-half of a non-transferable warrant, with one whole warrant entitling the holder to purchase one additional common share at $1.80 until February 26, 2007.  A finder's fee of $40,000 was paid to an investment brokerage firm in respect of 1,333,332 units. Some of the units were sold to U.S. Persons in reliance on the U.S. accredited investor exemption.



Private Placement No.8 (brokered and non-brokered)

On March 1, 2006 the Company closed brokered and non-brokered private placements of a total of 7,047,500 common shares at a price of $2.00 for gross proceeds of $14,095,000. Puplava Securities Inc. ("PSI") of San Diego, California acted as agent for the brokered private placement and Dr. Leanne Baker, Managing Director of Investor Resources LLC and broker with PSI, acted as a consultant in the United States. Dr. Baker subsequently became a Director of the Company on October 30, 2006.  The Company paid cash commissions of 5.5% on the brokered placements to PSI. Mr. James Puplava, a Director and major shareholder of the Company, and a principal of PSI, did not acquire shares through the placement (see Note 10). The non-brokered private placement was to institutional and accredited investors in Canada and offshore. Blackmont Capital Inc., Canaccord Capital Corp., and PSI received finder's fees of 5.5% of the proceeds raised on certain placements. The total commissions and finder's fees paid on both the brokered and non-brokered placements was $428,725 and of that amount cash commissions and finders fees of $234,850 were paid by the Company to PSI.  No warrants were issued to investors or agents in connection with the offering.



C. Organizational Structure



Kimber Resources Inc. beneficially owns all of the corporate participation units in the capital stock of Minera Monterde, S. de R.L. de C.V.







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Currently, Kimber Resources Inc. holds 2,997 corporate participation units of Minera Monterde and Robert V. Longe, Kimbers President and CEO, holds three (3) corporate participation units on Kimbers behalf.  The nominal value of the corporate participation units of Minera Monterde is one Mexican nuevo peso each.



Minera Monterde is a Mexican mining enterprise that was formed under the laws of Mexico on January 21, 2000 as a limited liability partnership with variable capital stock.  The fiscal and head office of Minera Monterde is located at Camino al Campestre # 4302, Col. Quintas Campestre, CP 31214, Chihuahua, Chihuahua State, Mexico.



Kimber Resources de Mexico is a Mexican subsidiary that was formed under the laws of Mexico on March 16, 2005 as a limited liability mercantile corporation for the purposes of hiring employees, contractors and equipment and supplying them to Minera Monterde and Minera Pericones.  The fiscal and head office of Kimber Resources de Mexico is located at Camino al Campestre # 4302, Col. Quintas Campestre, CP 31214, Chihuahua, Chihuahua State, Mexico. Its corporate office is located at Ave. Ejercito Mexicano N0. 2004  206 Col. Insurgentes, Mazatlan, Sinaloa, Mexico.



Minera Pericones is also a Mexican subsidiary that was formed under the laws of Mexico on December 16, 2005 as a limited liability mercantile corporation for the purposes of owning the Pericones Property.  The fiscal and head office of Minera Pericones is located at Camino al Campestre # 4302, Col. Quintas Campestre, CP 31214, Chihuahua, Chihuahua State, Mexico.  Its corporate office is located at Ave. Ejercito Mexicano N0. 2004  206 Col. Insurgentes, Mazatlan, Sinaloa, Mexico.





D. Property, Plants and Equipment



Cautionary Note to U.S. Investors concerning Estimates of Measured and Indicated Resources



This section uses the terms Measured Resources, Indicated Resources. and Inferred Resources.  The Company advises U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize such terms.  U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.



The Company is an exploration stage company, as the Companys properties are currently in the exploratory stage.  In order to determine if a commercially viable mineral deposit exists in any of the Companys properties further geological work will need to be done and a final evaluation based upon the results obtained to conclude economic and legal feasibility.





The Property



The Property consists of the Monterde Concessions, the El Coronel Concessions and the Staked Concessions and is made up of a total of 34 mineral concessions described in the following Table 1. See Figure 1for reference to the Monterde Propertylocation in Mexico and Figure 2and Figure 3for the location of individual concessions.



Kimbers primary objective is the development of the Carmen deposit and the exploration of the rest of the Monterde Property located in the Monterde Mining District in the western part of the state of Chihuahua, Mexico.  The Carmen deposit is located in the Group 1 concession group seen below in Table 1 andFigure 2.



Kimbers principal targets on the Property are open-pittable and underground ore bodies, where gold and silver are amenable to extraction by heap leaching and/or conventional milling.







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Table 1

|                        |        |          |              
|----------------------- | ------ | -------- | -------------
|THE PROPERTY           
|                        |        |          |              
|Monterde Concessions    |        |          |              
|                        |        |          |              
|Concession              | Title  | Area in  | Expiry Date  
|Name                    | Number | Hectares | (mo/day/year)
|                        |        |          |              
|Group 1 Concessions     |        |          |              
|Monte Verde             | 209794 | 26.0000  | 08/08/2049   
|Los Hilos               | 209793 | 6.0000   | 08/08/2049   
|El Carmen               | 210811 | 11.0000  | 11/29/2049   
|El Carmen II            | 209795 | 22.0000  | 08/08/2049   
|                        |        |          |              
|Group 2 Concessions     |        |          |              
|Anexas de Guazapares    | 212541 | 20.0000  | 10/30/2050   
|Anexas de Guazapares    | 212552 | 18.8947  | 10/30/2050   
|Anexas de Guazapares    | 212542 | 9.7535   | 10/30/2050   
|                        |        |          |              
|Group 3 Concessions     |        |          |              
|Anexas de Guazapares    | 112692 | 90.0000  | 04/08/2011   
|                        |        |          |              
|Group 4 Concessions     |        |          |              
|Ampliacion Guadalupe    | 226011 | 59.0799  | 11/14/2055   
|                        |        |          |              
|El Coronel Concessions  |        |          |              
|                        |        |          |              
|Concession              | Title  | Area in  | Expiry Date  
|Name                    | Number | Hectares | (mo/day/year)
|                        |        |          |              
|La Bonanza              | 192039 | 98.2751  | 12/18/2041   
|Montaña de Oro          | 205334 | 183.0045 | 08/07/2047   
|La Verde                | 217341 | 195.0000 | 07/01/2052   
|La Flor de Oro          | 217342 | 148.1485 | 07/01/2052   
|San Cristobal           | 217344 | 196.1159 | 07/01/2052   
|El Carmen*              | 217345 | 10.8835  | 07/01/2052   
|Merlin                  | 217346 | 3.9176   | 07/01/2052   
|La Morena               | 217348 | 53.5533  | 07/01/2052   
|La Malinche             | 217347 | 248.1107 | 07/01/2052   
|Bola de Oro             | 216991 | 100.6203 | 06/04/2052   
|Venadito II             | 217349 | 167.8195 | 07/01/2052   
|                        |        |          |              
|Staked Concessions      |        |          |              
|                        |        |          |              
|Stratus                 | 219869 | 45.1100  | 04/24/2053   
|Dakota                  | 219107 | 74.2600  | 02/06/2053   
|Rubia                   | 223447 | 780.4720 | 01/10/2055   
|Rubia Fraccion 1        | 223448 | 23.4900  | 01/10/2055   
|Concession              | Title  | Area in  | Expiry Date  
|Name                    | Number | Hectares | (mo/day/year)
|                        |        |          |              
|Rubia Fraccion 2        | 223449 | 0.4950   | 01/10/2055   
|Los Abuelos Frac. Oeste | 218532 | 0.9416   | 11/21/2052   
|Los Abuelos Frac. Este  | 218533 | 0.1974   | 11/21/2052   







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|                   |             |             |           
|------------------ | ----------- | ----------- | ----------
|Rubia 2            | 226555      | 11,360.3100 | 01/26/2056
|Rubia 2 Fraccion 2 | 226556      | 1.0214      | 01/26/2056
|Rubia 3            | 226371      | 15,258.0241 | 01/12/2056
|Rubia 4            | 226372      | 1.7752      | 01/12/2056
|Rubia 5 Fraccion 1 | 226538      | 12.8394     | 01/25/2056
|Rubia 5 Fraccion 2 | 226539      | 4.0546      | 01/25/2056
|Rubia 5 Fraccion 3 | 226540      | 35.2419     | 01/25/2056
|                   | Total Area: | 29,266.4096 | hectares  



In late 1999, Kimber pursued the acquisition of options on the Monterde Concessions with the assistance of Thorne International Ltd. (Thorne), a Virginia, U.S.A. corporation, and Minera Ayutla, S.A. de

C.V. (Ayutla), a Mexican corporation.  By agreement dated February 18, 2000, (the Carried Interest Agreement) entered into between Kimber, Thorne and Ayutla, the parties agreed that Thorne and Ayutla would give up any rights that they may have had in some of the Monterde Concessions and to assist Kimber and Minera Monterde in securing options on some of the Monterde Concessions in consideration for a 10% carried interest in some of the Monterde Concessions, convertible, following the occurrence of a triggering event (as defined in the Carried Interest Agreement), into 10% of the outstanding Common Shares of Kimber.  The triggering event occurred on November 17, 2000, and pursuant to the Carried Interest Agreement the conversion of that carried interest was completed on June 7, 2001 when 60,502 and 242,012 Common Shares were issued to Thorne and Ayutla, respectively.  The Carried Interest Agreement also provides that upon the occurrence of the triggering event, Thorne and Ayutla could have exercised a right to acquire an additional combined 15% of the then outstanding Common Shares by exercising their rights as provided in the Carried Interest Agreement.  Neither Thorne nor Ayutla exercised its right to acquire the additional interest in accordance with the terms of the Carried Interest Agreement.  Thorne and Ayutla have the right to acquire certain of the Monterde Concessions that Kimber may decide to abandon in the future.



By option agreement dated February 14, 2000, as amended from time to time, between Minera Monterde, Miguel Orozco Franco and his spouse Griselda Palma Heredia, Minera Monterde was granted an option to acquire a 100% interest in the Group 1 Concessions.  Subsequently, Minera Monterde determined that unregistered interests in the Group 1 Concessions had been transferred to Jose Gildardo Estrada Ramirez and Barney Green Lee Portillo and by agreement (the Acknowledgment Agreement) dated February 13, 2001 entered into between Minera Monterde, Miguel Orozco Franco and his spouse Griselda Palma Heredia, Jose Gildardo Estrada Ramirez, his spouse Lilia Olivia Moreno Urista, Barney Green Lee Portillo and his spouse Susana Alicia Trejo Rubio, Minera Monterde received the acknowledgment of the option agreement on the Group 1 Concessions and an option on all of their interests in the Group I Concessions.  By agreement dated June 20, 2003 Minera Monterde acquired registered title to the Group 1 Concessions, subject to making semi-annual payments.  The Company made the final payment for this group of concessions on August 14, 2005. The total amount paid for the acquisition of the Group 1 Concessions was US$721,000.



By option agreement dated February 16, 2000, as amended from time to time, between Minera Monterde and Carlos Munoz Caballero, represented by Vicente Arturo Caballero Olivas, Minera Monterde was granted an option to acquire a 100% interest in the Group 2 Concessions.  By agreement dated June 20, 2003, Minera Monterde acquired registered title to the Group 2 Concessions, subject to making semi-annual payments. The Company made the final payment for this group of concessions on August 14, 2005. The total amount paid for the acquisition of the Group 2 Concessions was US$190,700.









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By option agreement dated February 14, 2000, as amended from time to time, between Minera Monterde, Vicente Arturo Caballero Olivas, his spouse Susana Otilia Quevedo Almazan, Maria Estela Caballero de Swanson and Gloria Caballero de Munoz, all represented by Vicente Arturo Caballero Olivas, Minera Monterde was granted an option to acquire an 87.5% interest in the Group 3 Concessions with the understanding that the remaining 12.5% registered in the name of a deceased sister of  Vicente Arturo Caballero Olivas would also be included in the option upon resolution of the estate of the deceased sister. Minera Monterde acquired title to the full 100% interest in the Group 3 Concessions by making the final payment for this group of concessions on June 22, 2004.  The total amount paid for the acquisition of the Group 3 Concessions was US$95,400.



By option agreement dated February 8, 2001 between Ismael Quezada Campos and his spouse Francisca Giron Duarte and Minera Monterde, Minera Monterde acquired exploration rights and the option to purchase the Group 4 Concessions for semi-annual payments totaling US$47,800, including payments made prior to execution of the option agreement.  Subsequent to the death of Ismael Quezada Campos, by agreement dated June 20, 2003, entered into between Francisca Giron Duarte, the widow and beneficiary of the Estate, and Minera Monterde, Minera Monterde exercised its option and acquired a 100% interest in the Group 4 Concessions by completing the outstanding payments.



On November 16, 2000, Kimber entered into an option agreement with Atna Resources Ltd. and granted Atna the option to acquire all of Kimbers interest in and to the Monterde Concessions by, among other provisions, paying to Kimber a total of US$500,000 in periodic cash payments, incurring a total of US$2,500,000 in exploration expenditures and making all of the payments pursuant to the underlying option agreements between Kimber and the owners of the Monterde Concessions. Atna also entered into a separate agreement with Kimber pursuant to which Kimber agreed to carry out an exploration program at Atnas expense costing approximately US$250,000 on the Monterde Concessions.  After making certain payments and paying Kimber US$261,840 to carry out the exploration program Atna elected to terminate its option agreement with Kimber effective May 16, 2001.



By option agreement dated August 14, 2001 entered into between Minera Monterde and Cia Minera el Coronel, S.A. de C.V., Minera Monterde acquired the exploration rights and option to purchase a 100% interest in the El Coronel Concessions. By agreement dated September 8, 2003 Minera Monterde acquired title to the El Coronel Concessions, subject to making semi-annual payments. The Company made the final payment on July 31, 2006. The total amount paid for the acquisition of the El Coronel Concessions was US$1,000,000.



Property Payments

All taxes on the concessions making up the Property have been paid and are current. Property payments on the Monterde Concessions and the El Coronel Concessions were made as required in 2000 to August 2007. As of July 31, 2006 all of the payments due in respect of the purchase of the Property had been paid.



Property Description and Location

The Property, located in the Sierra Madre Mountains of southwestern Chihuahua State, is approximately 75 kilometres northwest of Goldcorp Inc.s El Sauzal Mining Project and approximately 50 kilometres southeast of the Ocampo Mining District.  It is located at approximate geographic coordinates 27°35.5' North latitude, 108° 05' West longitude, in Guazapares Municipality, approximately 260 road kilometres southwest of Chihuahua, Mexico.



Refer to Figure 1andFigure 5for the location and directions to the Monterde Property in Mexico and Figure 2andFigure 3for the location of individual concessions.







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Figure 1



Monterde Project Location Map

June 2007

[kimber20fjune001.jpg]







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Figure 2

Land Status  Core Concessions

May 2007

[kimber20fjune002.jpg]







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Monterde Project Claim Holdings

June 2007





[kimber20fjune003.jpg]







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Figure 4



Mineralization and Structure on the Monterde Property

As at July 17, 2007



[kimber20fjune005.jpg]









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Figure 5



Access to the Monterde Property

June 2007



[kimber20fjune006.jpg]







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Non-Reserves



Cautionary Note to U.S. Investors concerning estimates of Inferred Resources.This Section uses the term Inferred resources.  We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it.  Inferred resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic feasibility.  It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category.  Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.  U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically mineable.



Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources.This section uses the terms Measured and Indicated resources.  We advise U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them.  U.S.  investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.



Resource Estimate M



On April 20, 2006, the Company announced a polygonal estimate based on 344 reverse circulation (RC) holes drilled on the Carmen deposit for which results were available to February 15, 2006. The estimate was prepared by the Companys geological and engineering staff.



The same assay database was used to make a block model estimate (Carmen Deposit Resource Estimate M, see table below). The block model estimate was prepared by G. Giroux, P.Eng. of Micon International. His report dated July 17th, 2006 is filed on SEDAR.  This report has since been amended to include the restatement of some tonnages of resource that were included in the original report but were not included in the summary table.  The amended report dated May 29th, 2007 has been filed on SEDAR.  The table below reflects the values in the amended report.



A block model is a mathematical representation of the metal distribution on a regular grid of points in three dimensions that extend over the mineralized volume of rock tested by the drill holes.  It is based on the same volume of rock from which the polygonal estimate was made.  The grid intervals over which the estimate is made is set from assumptions made on how the deposit would be mined.  In this case, the block dimensions were set at 6 by 6 metres square on benches 6 metres high, that is 6 metre cubes.  A block model is desirable because it can be used as the input to computer software used in mine design.



The grade distribution of both gold and silver separately were modeled by interpretation of assay data on bench plans within the previously determined mapable limits of 0.1 g/t and 35 g/t for gold and silver, respectively.  The grade values at the block centres were estimated by ordinary kriging.  Kriged estimates typically contain more tonnes at lower grade than polygonal estimates due to the smoothing effect of averaging block grades from several adjacent drill holes.



As is usually the case, tonnage is higher and grade less than in the polygonal estimate.  The Measured and Indicated categories in the block model indicate similar metal content to the polygonal estimate.  Inferred resources are reduced because the criteria for this category in block models are more stringent than in polygonal estimates.  In any case Inferred resources cannot be raised to reserve status.







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|                                                                                  |                   |            |              |                 |              |                |                 
|--------------------------------------------------------------------------------- | ----------------- | ---------- | ------------ | --------------- | ------------ | -------------- | ----------------
|Carmen Deposit  Resource Estimate M  (Block Model) above 0.3g/t Au, or 35g/t Ag |                  
|                                                                                  | Tonnes
(millions) | Gold
(g/t) | Silver (g/t) | Gold Eq.* (g/t) | Gold, ounces | Silver, ounces | Gold Eq.* ounces
|Measured                                                                          | 23.3              | 0.78       | 44           | 1.37            | 583,100      | 33,180,000     | 1,025,500       
|Indicated                                                                         | 9.9               | 0.68       | 26           | 1.03            | 218,000      | 8,460,000      | 330,800         
|Measured & Indicated                                                              | 33.2              | 0.75       | 39           | 1.27            | 801,100      | 41,640,000     | 1,356,300       
|Inferred                                                                          | 3.5               | 0.64       | 17           | 0.87            | 72,600       | 1,950,000      | 98,600          

*conversion factor of 75 ounces of silver to one ounce of gold



A preliminary examination of the Carmen resource data for possible underground mining, implying the exploitation of narrower but higher grade structures than those mineable by surface methods was made by Mr. A.A. Burgoyne, P.Eng. of Burgoyne Geological Inc. and Mr. J.B. Richards, P.Eng. of Kimber.  Their report dated July 17th, 2007 has been filed on SEDAR.  The polygonal method was used for the resource estimate. Because of the preliminary nature of the work and the uncertainty of the exact locations of the high-grade bands, all the resource reported is classified as Inferred.  The total resource estimated to be mineable by underground methods is tabled below.  Economic analysis of mining operations balancing open pit and underground mining will optimize the project value.





|                                                                                             |                   |            |              |                 |              |                |                 
|-------------------------------------------------------------------------------------------- | ----------------- | ---------- | ------------ | --------------- | ------------ | -------------- | ----------------
|Carmen Deposit  Underground Resource Estimate, Structures >=1.2m true thickness, >=3.gt AuEq
|The Resource is classified as Inferred                                                       | Tonnes
(millions) | Gold
(g/t) | Silver (g/t) | Gold Eq.* (g/t) | Gold, ounces | Silver, ounces | Gold Eq.* ounces
|Resource Total                                                                               | 3.8               | 4.94       | 145          | 7.01            | 607,300      | 17,763,000     | 860,600         
|Resource contained within previously announced block model (Estimate M)                    | 3.1               | 4.61       | 162          | 6.92            | 462,500      | 16,250,000     | 694,200         
|Additional to Resource Estimate M                                                          | 0.7               | 6.41       | 67           | 7.30            | 144,800      | 1,513,000      | 165,000         

*conversion factor of 70 ounces of silver to one ounce of gold





Bulk Density

The bulk density value used in current resource estimates, 2.30 tonnes per cubic metre, is based on 197 drill core samples.





Veta Minitas Resource Estimate



Veta Minitas is a 500 metre structure lying 250 metres to the west of the Carmen deposit. Resources outlined by 23 holes drilled on the first 150 metre portion of the structure are listed below. This resource estimate was reviewed and approved by Mr. J.B. Richards, P.Eng. in his capacity as Qualified Person.



The resource estimate on the partially-drilled Veta Minitas structure was originally reported in November, 2004.







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| |                      |                   |            |              |                  |           |             |                  
| | -------------------- | ----------------- | ---------- | ------------ | ---------------- | --------- | ----------- | -----------------
| |                      | Tonnes (millions) | Gold (g/t) | Silver (g/t) | Gold Eq  (g/t) * | Gold (oz) | Silver (oz) | Gold Eq (oz) 75:1
| | Measured  Resources  | .7                | 0.63       | 88           | 1.80             | 14,200    | 1,974,900   | 40,600           
| | Indicated  Resources | .176              | 1.03       | 105          | 2.42             | 6,000     | 591,800     | 13,700           
| | Inferred Resources   | .4                | 0.37       | 69           | 1.28             | 4,500     | 840,000     | 15,700           

*Gold-equivalent assumes equivalence of 75 units of silver to one unit of gold



As with the Carmen deposit,grade cut-off is 0.3 grams gold per tonne or 35 grams silver per tonne if the gold grade is less than 0.3grams per tonne.



Carotare Resource Estimate



On November 8, 2005, the company delivered a resource estimate on the Carotare deposit based on the 28 holes drilled. This was the first mineral resource estimate since the Carotare was discovered in April 2005. The estimate was prepared under the supervision of external qualified person, Mr. A.A. Burgoyne, P. Eng. of Burgoyne Geological Inc.



| |                      |                   |            |              |                  |           |             |                  
| | -------------------- | ----------------- | ---------- | ------------ | ---------------- | --------- | ----------- | -----------------
| |                      | Tonnes (millions) | Gold (g/t) | Silver (g/t) | Gold Eq  (g/t) * | Gold (oz) | Silver (oz) | Gold Eq (oz) 75:1
| | Measured  Resources  | 1.68              | 0.81       | 29           | 1.20             | 44,000    | 1,578,000   | 65,000           
| | Indicated  Resources | 1.02              | 0.83       | 29           | 1.21             | 27,000    | 945,000     | 40,000           
| | Inferred Resources   | 3.78              | 0.85       | 25           | 1.18             | 103,000   | 2,987,000   | 143,000          

*Gold-equivalent assumes equivalence of 75 units of silver to one unit of gold



Again,grade cut-off is 0.3 grams gold per tonne or 35 grams silver per tonne if the gold grade is less than 0.3 grams per tonne.



Total Resources



Combined resources of gold and silver on the Carmen, Veta Minitas, and Carotare deposits are shown in the table below.



|                                                                                                |            |           |             |               
|----------------------------------------------------------------------------------------------- | ---------- | --------- | ----------- | --------------
|Total Resources on The Monterde Property                                                       
|                                                                                                | Tonnes     | Gold (oz) | Silver (oz) | Gold eq.* (oz)
|Measured                                                                                        | 25,651,000 | 641,300   | 36,732,900  | 1,131,100     
|Indicated                                                                                       | 11,146,000 | 251,000   | 9,996,800   | 384,500       
|Measured & Indicated                                                                            | 36,797,000 | 892,300   | 46,729,700  | 1,515,600     
|Inferred                                                                                        | 8,413,000  | 180,100   | 5,777,000   | 422,300       
|*Gold-equivalent assumes equivalence of 75 units of silver to one unit of gold for all deposits



Mineral Rights



In Mexico, companies incorporated pursuant to Mexican law and Mexican nationals may acquire mining concessions, which are valid for a renewable term of fifty years.  Each mining concession must be legally surveyed and is subject to a semi-annual tax for the mining rights and as well, a certain amount of work must be done annually; proof of which must be filed each year with the proper authorities.







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Failure to perform the required work and file the receipts, can lead to the concession being cancelled. The amount of the tax on mining rights and work required increases with each passing year.



Prior to the expiration of the fifty year term, an application for a renewal of the mining concession title must be filed to extend the title for a renewable term of 50 years, subject to certain conditions.  Again, there is a semi-annual tax for the mining rights as well as a requirement that a certain amount of assessment work be done on the concession.



In order to take advantage of the fact that in any given year, work might only be done in one area of a mining property the Mexican government allows claims or concessions to be grouped, and work done on one of the claims to be applied to the entire group.  However, in the event of grouping, each claim or concession in the group is deemed to be the same age as the oldest claim or concession in the group for the purpose of determining mining rights taxes.



Surface Rights



The land area encompassing the Monterde Property is subject to Ejido-controlled surface rights. Surface rights to the land required for mine development of the Group 1, Group 2, Group 3 and Group 4 concessions belong to the Ejido Monterde.



The ejido system is a system where rural communities collectively own the surface rights to agricultural lands, which have been acquired from the federal government for the purposes of agricultural development and/or cattle ranching.  Based on the Agrarian Law of 1992, an ejido has the right to lease the property under its control and in some cases, can sell the land.



Residents of the community may belong to the ejido, however only one delegate per household can belong to the Asamblea de Ejidatarios,the governing body of the ejido.



By agreement dated July 13, 2003 (an Ocupación Temporal), as amended from time to time, between Minera Monterde and the Ejido Monterde the right to use and occupy land under the control of the Ejido Monterde for exploration and mining purposes was granted to Minera Monterde for a term of 30 years, subject to the payment of annual rent commencing 30 days following the commencement of commercial production. The rent is to be determined by the Commission for the Appraisal of National Property under the National Property Act of Mexico. The areas to be used for exploration and mining presently cover a total of 11,007 hectares of land.



By agreement dated May 7, 2006 (an Ocupación Temporal) between Minera Monterde and the Ejido Ocobiachi the right to use and occupy land under the control of the Ejido Ocobiachi for exploration and mining purposes was granted to Minera Monterde for a term of 30 years, subject to the payment of annual rent commencing 30 days following the commencement of commercial production. The rent is to be determined by the Commission for the Appraisal of National Property under the National Property Act of Mexico. Prior to that Minera Monterde has the obligation to provide community services to the Ejido for the improvement of the community infrastructure and the betterment of the community as a whole in an amount of not less than US$40,000 per year. The areas to be used for exploration and mining presently cover a total of 2,184 hectares of land. Certain procedural omissions in the manner in which of the Ejido called the meeting to approve the May 7, 2006 agreement necessitate the calling of a new meeting and the ratification of the existing agreement or the approval of a new agreement.  The meeting for this purpose has not yet been called.



An Ocupación Temporal is analogous to a surface easement in that the area agreed upon with the surface rights holder is registered with the government and as such, the surface owner must allow the mining concession owner access and use.  The Agreements have been accepted and registered in the Registro Agrario Nacional,the government land registry.







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Permits



The department responsible for environmental protection in Mexico is SEMARNAT which has broad authority to shut down and/or levy fines against facilities that do not comply with environmental regulations or standards.



Regulations require that an environmental impact statement, known in Mexico as a Manifiesto de Impacto Ambiental(MIA), be prepared by a third-party contractor for submittal to SEMARNAT.  Studies required to support the MIA include environmental, socio-economic and archaeological baseline studies, impact assessments and risk assessment. The baseline studies are expected to be completed by the end of the second quarter of 2008, with impact assessments and risk assessment to be carried out upon completion of the baseline studies.  Although the regulatory process in Mexico does not have a public review component, proof of local community support for a project is required to gain final MIA approval.



Kimber is currently operating with Cambio de Uso (change in use of land) permits, granted by SEMARNAT which allow the Company to undertake exploration activities in specified locations. Cambio de Uso permits are valid for three years and are renewable.



A number of other approvals, licenses and permits are required for various aspects of a mine development.  The most significant permits for the development of the Monterde Property, other than MIA approval, are water rights concessions, or permits to extract water, issued by the National Water Commission, and a permit for consumption, use and storage of explosives, or blasting permit, issued by the Mexican National Defence Secretariat.



A limited permit allowing small-scale blasting has been granted to a contractor for road construction for the purposes of exploration on the Monterde Property.  As of the date of this Annual Report, the Company has not applied for an explosives permit required for full-scale blasting operations from the Mexican National Defence Secretariat. Once the Companys operations require the permit, a powder magazine will be constructed based on projected need or usage and the permit would be applied for.



As of the date of this Form 20-F Annual Report, the Company has not obtained a water rights concession from the National Water Commission, the regulatory body of the Government of Mexico that issues permits for water extraction.  Under Mexican aquifer laws selected land areas do not require water rights permits for mining purposes. As the Companys Monterde Property is located in a designated non-controlled aquifer, water that derives from its mining concessions is open for usage by the Company.



Accessibility, Climate, Local Resources, Infrastructure and Physiography



Access to the Property is by approximately 230 km of paved highway via state Route 16 from the city of Chihuahua, the regional centre and nearest airport, to La Junta, south from La Junta to San Pedro, then from San Pedro to Creel. The paved Divisadero Highway connects Creel to San Rafael. A logging road leads to the Temoris Junction, a distance of 11 kilometres. Straight through the junction, a further 20 kilometres of logging road leads to a sign to make a left turn and a further 6 kilometres along this road leads to the site. Refer to Figure 5 for road access directions to the Property from San Rafael.



The unpaved road from San Rafael to Monterde is of varying quality. It is impassable by tractor-trailer units because of hairpin turns, and to automobiles because of the irregularity of the surface, but light trucks and SUVs can easily navigate the road. The road is heavily utilized by single-axle logging trucks.



A modern, standard gauge rail line called the Chihuahua el Pacifico Railway passes through San Rafael from Chihuahua to the Pacific Ocean port of Los Mochis to the west and the national network to the east.

There is excellent access by unpaved roads within the Property, particularly in the area of defined mineral resource and its projected extension.







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Creel, with a population of approximately 3,200, is the closest town having a full service infrastructure base.  Creel is approximately a two and one half-hour drive east-northeast from the Property via San Rafael.



The region is one of deeply incised plateau with elevations ranging from 2,000 metres to over 2,400 metres.  Topography is locally steep, with a relatively high density of canyons and watercourses.  Numerous annual streams traverse the area. The Monterde area is forested with a variety of conifers; the predominant specie is Ponderosa pine.  Arbutus is locally seen.  Other tree species include oak, alder, and various poplars.  Shrubs include manzanita, magnolias, wild rose and numerous additional plants.  Two plant types of limited distribution are maguey and cacti, noted at scattered locales.



Fauna in the area includes black-tailed jack rabbits, cottontail rabbits, skunks, raccoon, squirrels, chipmunks, mice, white-tailed deer, and possibly mule deer.  Historically, puma, jaguar, wolves, wild boar, brown bear, black bear, and cougar were found in the area but they have not generally been seen since the 1960s. Coati and coyotes are present in the area   Reptiles include rattlesnakes, king snakes, bull snakes and corn snakes. Lizards exist in abundance.



The climate is marked by dry, cold winters and a distinct rainy season.  During the winter, Monterde receives snow to depths of one metre on occasion.  Most of the snow falls from December to mid-February.  Temperature during the winter is variable, daytime highs range from 0 to 20 degrees Celsius, morning lows from -20 degrees to 5 degrees Celsius.  Temperatures during the summer, or rainy season, are moderate and range from 10 to 20 degrees Celsius.



The rainy season typically begins in May or June and continues until late September to October. In most years roads remain passable and exploration can be done throughout the rainy season. The amount of rainfall received and the frequency of storms are dependent on the severity of the hurricane season in the eastern Pacific Ocean.  The storms and thunderstorms that mark the rainy season are usually remnants of Pacific hurricanes that have moved inland, east into the Sierra Madre Occidental.  Spring and fall are generally cool and mild.



In September, 2006 Kimber engaged an earth sciences engineering firm to advise on water surface management and erosion mitigation. Measures implemented included re-sloping and decommissioning drill pads and exploration roads; installing gabion barriers, culverts, berms, cross-drains, fords, french drains, silt fences, and jute matting. Non-invasive, indigenous saplings (2,750) were planted and hay, grass seeds, and manure were spread over cleared areas.



During the month of July 2007, a severe storm (producing 95 mm of rain within four hours) caused unusually severe erosion of drill pads and roads in the Carmen and Carotare areas.  Measures to control erosion (principally the building of gabions and installation of culverts), which had been in progress since September 2006, served to mitigate the effect of the storm. Remediation work resulting from the storm is anticipated to cost approximately $150,000 and continuation of the planned erosion control program is estimated to cost an additional $57,000 during October, November and December, 2007.



Numerous streams are present and water supply is not expected to be a problem. Provision may have to be made for some water storage.  There is good local infrastructure centred in Creel, the local centre for supply. Abundant labour is available locally from Creel and the surrounding small towns and villages.  The region has a history of mining and the people are familiar with it.  Electricity is available from the national power grid at either 34 or 115 kilovolts at San Rafael. A substation and approximately 30 kilometres of line will be required.







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History and Previous Work



Historic reports, copies of which have been obtained by Kimber, indicate production of gold and silver ores from the Monterde Property was underway during the period 1937 to 1944.  The reports indicate that the production was from two underground mines located on adjacent shears and total ore production was 68,000 tonnes grading 19.29 g/t gold and 311.5 g/t silver at a cut off grade of 15.0 g/t gold.  The historic records indicate all of the ore produced was oxide and mining depths were greater than 250 metres vertical.



The early reports state that the ore was processed in a 25 ton per day mill and gold and silver were extracted through cyanidization.  Based on the production records of tonnes mined and ounces of gold and silver sold, the gold recovery is estimated at 85% to 90% and silver recovery at 65% to 70%.



The records indicate that the mine shut down in June 1944.  Minor production of 1,810 tons was credited from July 1944 to October 16, 1944. Historic data states that the mine shut down due to a variety of factors, but not because of a lack of ore.



Modern exploration on any part of the Property began in 1994 when it was optioned by Pandora Industries Inc. (Pandora) of Vancouver, British Columbia.  Pandora then formed a joint venture with Mill City Gold Mining Corp. of Vancouver, British Columbia and commenced surface exploration.  The program results were encouraging and prompted the project geologist, Harold Jones, P.Eng., to recommend a drill program targeted at the historic underground mine.  However, the joint venture was dissolved prior to drilling.



Golden Treasure Explorations Inc. optioned the Monterde Concessions in June 1998, and initiated an exploration program consisting of mapping and rock chip sampling.  The results were positive and drilling was recommended.  The first ever drilling of the Monterde Concessions commenced in early December 1998 under the direction of Alan Hitchborn, prior to him joining the Company.  Approximately 760 metres in eight drill holes (MTR-01 through MTR-08) were completed shortly after.  Assay results were favourable, but in late summer 1999, Golden Treasure failed to make the required option payments under the option agreements with the vendors and relinquished control of the Monterde Concessions.



In the fall of 1999 Kimber began negotiations with the owners of the Monterde Concessions. Option agreements between Minera Monterde and the owners were signed in February 2000.



Regional Geology



The Sierra Madre Occidental mountain range is a region of northwest trending volcanic-intrusive centres and scattered calderas approximately 1,250 kilometres long and 250 kilometres wide, Tertiary to Late Cretaceous in age.  The geology is notable for the great thickness of pyroclastics ranging in size from dust to boulder tuffs on an andesite basal unit, all on a basement of Jurassic marine sediments.   The Sierra Madre Occidental mountain range is recognized as having a high density of precious and base metal deposits genetically and spatially related to the volcanic-intrusive centres and associated faults. On the west the Sierra Madre is bounded by the Sonora Basin and Range Province and on the east by the central Mexican carbonate platform.



Three crudely defined stratigraphic units comprise the lithologic sequences.  The Jurassic marine sediments are overlain by an Upper Cretaceous to Lower Tertiary sub-aerial and submarine volcanic assemblage termed the Lower Volcanic Sequence ("LVS"), approximately 1,000 metres thick.  At the base of the LVS, the lithologies are predominately andesite flows and hypabyssal porphyry intrusives.  The LVS is unconformably overlain by a thick series of latitic tuffs, the Upper Volcanic Sequence ("UVS").  These units are Tertiary, possibly Oligocene in age.







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Property Geology



The Monterde Mining District, emplaced in a volcanic complex, is classified as a low sulphidation, epithermal gold-silver deposit based on the mapped alteration assemblages.  The following descriptions on geology, lithology, and structure are from Hitchborn and Richards (2001) and modifications made during the 2003 program.



The host lithologies range from slightly welded intermediate tuffaceous rocks to welded intermediate tuffaceous rocks.  Comagmatic intrusive rocks are present and are variably altered.



The volcanic complex is localized at the intersection of two regional scale structural trends, one striking northwest with a right lateral sense of movement, and the other striking northeast with a left lateral sense of movement.  At the deposit scale, the controls on gold-silver mineralization reflect the regional right lateral strike slip shear system and the associated antithetic shears, synthetic shears and normal faults.



Alteration styles mapped include early stage propylitic, silicic, phyllic, argillic, quartz vein stock work, and iron oxides.  Gold and silver mineralization is hosted in all of the stated alteration styles, the exception being, no gold-silver mineralization has been encountered in the propylitic and silicic alteration styles.  The mapped alteration assemblages and quartz vein morphology suggests that the Carmen Deposit is located in the upper levels of the hydrothermal system.



Data collected to date demonstrates low values for arsenic and antimony.



The Carmen deposit is oxidized to at least three hundred metres vertical depth.  Figure 6 presents the generalized geologic map of the Monterde District.  Figure 7 is a geological cross section through the Carmen deposit and adjacent area.



Lithology



The volcanic complex that hosts the Monterde District is composite in nature. The evolution of the complex follows a common extrusive rock pattern of lower intermediate rocks, followed by intermediate rocks with a slightly more felsic component, capped by a series of siliceous rocks.



Figure 8 presents the volcanic-intrusive stratigraphy of the Monterde District.  Discussion of the compositional classification of the following lithologies is based on hand sample description and petrographic studies.



Intermediate Rocks

The lowest outcropping lithologies of the complex are porphyritic intermediate rocks.  Phenocryst content consists of plagioclase euhedra, and well-formed hornblende phenocrysts.  The groundmass is aphanitic, grey to dark grey when fresh, greenish grey when propylitically altered.  Based on phenocryst mineralogy, the intermediate rocks would be classified as andesite, which occur as flows and perhaps minor tuffaceous rocks.



Outcrops of the andesitic lithologies are mapped south and west of the deposit area.  The rocks rarely occur completely fresh, most outcrops exhibit some propylitic alteration.  Supergene argillization is present in some outcrops.  Supergene argillic alteration is the result of oxidation of pyrite, which was emplaced with the propylitic alteration event.  Sparse quartz veins are also noted in some areas.  No sampling has been conducted on these exposures.









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Tuffaceous Rocks - TxTL, Tbx, FTU, FTUa, WLT

Overlying the basement andesite is a series of three tuffaceous lithologies. The contact between the tuffaceous rocks and the underlying andesite are assumed to be unconformable.  Measured dips on the tuffs are gentle, 5 to 10 degrees southeast.  This series of tuffaceous lithologies hosts the gold-silver mineralization in the Monterde District.



The lowest unit is white to light grey, slightly to moderately welded, fine-grained lithic tuff (TxTL).  The lithic tuff contains fragmentals of the parent tuff lithology and fragments of the underlying andesitic lithologies.  Phenocryst mineralogy suggests a latite composition for these tuffs. Phenocrysts consist of plagioclase, sanidine, quartz, and occasional biotite.  In some occurrences of biotite, it is not clear if the biotite is primary or secondary and related to alteration. The groundmass is generally fine to medium grained.  Where welding is more pronounced, the groundmass exhibits eutaxitic texture.  The andesitic lithic component of this unit is deemed fine-grained.  Most lithic fragments are smaller than 2.5 centimetres in the largest dimension.







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[kimber20fjune007.jpg]







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[kimber20fjune009.jpg]







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[kimber20fjune010.jpg]







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The next unit in the tuff series is a coarse grained lithic tuff (Tbx).  The designation, coarse grained is derived from the larger size of the andesite lithic fragments present in the unit.  The andesite lithic fragments range in largest dimension from less than 2.5 centimetres to over 2 metres.  At some mapped localities, the amount of andesite lithic component present in the tuff gives the rock the appearance of agglomerate.  The coarse grained lithic tuff has the same phenocryst composition as the fine-grained lower tuff unit and would be termed a latite on this basis.  The degree of welding present is mostly moderate to slight.



Overlying and intruding the Tbx are non-welded fragmental tuffs and associated flow banded dykes (FTU).  The flow banded dykes are seen in outcrop to grade into the fragmental tuffaceous rocks (FTUa).  The fragmental unit is tan to white.  Phenocryst content suggests a latite composition.



Capping the coarse grained lithic tuff is a welded tuff (WLT) that displays distinct eutaxitic textures.  This unit has the same phenocryst composition as the two underlying tuff units.  Minor andesite fragments are present in the unit.



Quartz Feldspar Intrusive, Plagioclase Biotite Intrusive - Pre-mineralization  Pfq, Ppb

Outcrop of pre-mineralization feldspar quartz porphyry (Pfq) intrusive is present west and northwest of the Carmen Deposit.  This lithology occurs as plugs and dikes intruding the tuffaceous lithologies.  Phenocryst content is composed of plagioclase, quartz, sparse sanidine, and minor biotite.  The groundmass is aphanitic.  Based on phenocryst mineralogy, the interpretation is that this intrusive lithology is comagmatic with the tuffaceous rocks.



Plagioclase biotite intrusive (Ppb) crops out northeast of the Carmen deposit.  The phenocryst mineralogy is predominately plagioclase and biotite with sparse quartz phenocrysts.  Outcrop occurrence is as small plugs and dykes.  This intrusive phase is interpreted as comagmatic with the tuffaceous rocks.



The pre-mineralization intrusives are variably altered.  The most notable alteration style is hematization of the groundmass.  Sericite is seen to replace plagioclase phenocrysts on occasion.  In drill holes, these rocks are pervasively altered showing quartz vein stock works, intense argillic alteration, extensive iron oxides and host gold and silver values.



Obsidian  Obs

Obsidian dikes occur in fault and intrusive contact with altered tuffaceous lithologies northwest of the Carmen Deposit. The obsidian dikes are plainly post mineralization as drill holes, which cut the obsidian contain no gold and alteration is lacking.



Structure



The controls on mineralization of the Carmen Deposit reflect the regional structural setting of the Sierra Madre Occidental mountain range.  The Sierra Madre Occidental is comprised of numerous caldera complexes, composite volcanic centres and vast ignimbrite fields.  The eruptive centres of these volcanic and intrusive features were generally emplaced at areas of dilation on regional northwest trending structural zones, or at intersections of the northwest features and associated northeast trending structural zones.



The Monterde District is located at a structural intersection.  Examination of the Landsat imagery on Monterde shows two distinct lineament trends, northwest and northeast.  These features have been ground truthed via mapping at 1:5000 scale. At this scale the two structural trends are well marked by outcrop mapping, prospect pits and underground workings.  The Landsat image is too large to be included in this report.  It is retained in the Kimber Resources office.



Primary structural control of the Carmen Deposit is a northwest striking, southeast dipping shear zone with both right lateral movement and normal displacement.







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The setting is in a half-graben or pull-apart basin.  Splays branching off the main shear are evident and are related to the extension of the half graben.  The intersection of north striking normal faults with the shear features contributes to the localization of the gold-silver mineralization. Gold-silver mineralization is present on all of the noted structures.  Several parallel northwest trending structures that are now included in the Carmen Deposit include, from southwest to northeast, the primary Carmen shear or structure, Los Hilos, Cob and Cocos.



Spatial analysis of high-grade assays (>5g/t Au) showed them to be largely confined to two sets of essentially parallel structures, the C for Carmen and S for splay. The C shears trend approximately 290 - 295 degrees and dip steeply northerly (C-1, 69°; C-2, 67 °; C-3, 86°; C-4, 85°) and include parallel structures to Carmen and Los Hilos while the S structures trend 342 - 348 degrees and dip steeply to the east. These C shears are well documented by surface and underground mapping.  The S shears (also known as splays) have been defined underground (S-1, S-2) and are identified as faults on 1998 Golden Treasure Exploration Ltd. Brunton and Chain mapping (S-2, S-3, S-4) of the Carmen and Los Hilos area. Within these C and S Shear Zones there are several parallel structures containing gold-silver mineralization.



The La Veta Minita deposit, located 250 metres southwest of Carmen Deposit, features structural control dominated by a northwest striking, right lateral shear zone.  This northwest-striking shear is interpreted to be a parallel structure related to the major northwest structural trend. Mineralization appears to be related to northwest trending structures or faults that intersect a northeast striking shear.  Two high-grade structures occur in the La Veta Minita deposit. The LM-1 structure trends 313 to 319 degrees and dips about 70 degrees southwest; the LM-2 structure trends 090 degrees in the west and changes to 052 degrees at the intersection of LM-1 with a dips 44 degrees to the north.  They do not appear to be as strongly developed as those on the Carmen Deposit.



The Carotare zone of mineralization, located 2 km west of Carmen Deposit, is controlled by a westerly to north-westerly trending shear zone.



Alteration & Mineralization



The mapped alteration styles of the Monterde area characterize it as a low sulfidation system consisting of an early lead-zinc base metal mineralizing event overprinted by a gold-silver mineralizing event.  The early base metal event is marked by spatially limited occurrences of white to clear, massive bull quartz with low gold and silver assays.  The early alteration is cross cut by a spatially extensive, gold-silver bearing argillic and banded chalcedonic quartz vein stock work alteration assemblage.



The areas of alteration define zones of potential economic gold-silver mineralization including, Carmen Deposit, Las Minitas, El Orito and Carotare targets.



The following discussion is based on hand sample petrology (Hitchborn and Richards 2001) as well as thin section and polished thin section petrography Quirt and Shewfelt (2005), Northcote (2002), and McLeod, (2003).  The presence of phyllic alteration, capped by argillic alteration and crosscut by multiple silica events, suggests alteration patterns comparable to alteration zoning seen in other low sulfidation, epithermal gold-silver districts.



The earliest alteration event is propylitic alteration mostly confined to the footwalls of the Carmen and Las Minitas Shear Zones.  Greenish brown chlorite is seen to replace biotite phenocrysts of the various tuffaceous lithologies.  Additionally, the groundmass of the tuffs is greenish brown suggesting chloritic replacement of groundmass constituents.  Propylitic alteration does not host gold and silver mineralization.







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Two areas of silica replacement are mapped in the Carmen Shear Zone.  These exposures are typically white to very light grey, forming resistant, cliff-like outcrop.  Silica replacement is not gold-silver bearing.



Two styles of phyllic alteration are mapped in the target areas. One is seen in limited outcrop exposure mostly along the footwall structures of the Carmen and Las Minitas Shear Zones.  This style of phyllic alteration, which manifests as sericite replacement of phenocryst plagioclase, may be related to the lead-zinc mineralization.   Phyllic alteration also occurs as cross cutting, fracture-controlled coatings of mixed sericite-illite (?).  This implies that two separate phyllic events are present.  Both styles of phyllic alteration host gold and silver mineralization.



Silica-hematite breccias commonly outcrop along gold and silver mineralized structures and are encountered in the drilling.  These breccias typically are greyish, exhibiting multiple pulses of silica as matrix filling, quartz veins and breccia cement. Hematite occurrence is noted as fracture fillings, stains, and disseminated.  Rock chip sampling and drilling establishes that silica hematite breccias host gold and silver mineralization.



Argillic alteration ranges from incipient to pervasive. Incipient argillic alteration is marked by the replacement of plagioclase phenocrysts by clay. Progressing further, argillic alteration replaces the groundmass of the altered lithology and taken to the extreme, results in a rock that has undergone complete textural destruction.



Iron oxides mapped include hematite, goethite and limonite.  Hematite is defined as dark red stain or coating on rock surfaces and pervasive, identified by a red streak on a porcelain plate. Goethite is defined, on a hand sample basis, as brownish to brown red iron oxides.   Limonite is defined as yellow to orange iron oxides.



Gold mineralization is associated with argillic alteration in both drill holes and surface sampling, and with goethite-hematite stained siliceous breccias. The goethite and hematite amounts range from sparse to pervasive.   Limonite is present in the hematite-goethite iron oxide regime, but where limonite is the most abundant iron oxide, gold and silver values are low.  Gold is not associated with massive (i.e. not brecciated) silicification.



No visible gold is seen in hand specimen but has been observed in polished sections in 1 to 5 micron sized particles as noted in Northcote (2002), and as electrum McLeod (2003).  Silver has been seen is 30-40 micron rounded masses within the volcanic matrix, and as silver sulphosalts in micron sized inclusions in coarser sulphides, (pyrite, chalcopyrite, sphalerite) There is no known placer gold associated with the Monterde District.



Deposit Type



Based on the host lithologies and mapped alteration assemblages, the Property is classified as a low sulphidation, volcanic hosted, structurally controlled epithermal gold-silver deposit.  The presence of hypogene argillic alteration and banded quartz veins with a chalcedonic, waxy lustre, underlain by phyllic alteration, suggests the deposit is high in the hydrothermal regime.  Compared to other deposits hosted in similar geologic settings, the Carmen deposit should have greater than 500 metres of down dip extent.



Exploration



A first pass geochemical reconnaissance sampling of the Monterde property took place in February and March, 2007. Several anomalous areas were identified. Further investigation of each of these anomalies is incomplete. Two drill targets were identified principally from following the continuation of known structures. The Carmen South, covers mapped extensions of one of the structures forming the Carmen deposit.







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This has been followed for some 800 metres to the south of the Carmen deposit which itself is approximately 600 metres in length. The Arimo target lies two kilometres to the south west of Carmen on a major regional structure. It exhibits locally altered and mineralized volcanics with scattered gold values and a highly silicified hydrothermal breccia also exhibiting values in gold and silver. Both targets require additional work in preparation for drilling.



Drilling



A total of 127,638 meters of reverse circulation drilling in 615 drill holes and 30,695 metres of core drilling has been completed from 1998 through to May of 2007 on the Monterde property.  See table below.



SUMMARY OF DRILLING ON THE MONTERDE PROPERTY

(To June 30,  2007)

|                    |             |               |             |    
|------------------- | ----------- | ------------- | ----------- | ---
|Location            | RC DRILLING | CORE DRILLING
|Metres              | Drill Holes | Metres        | Drill Holes
|Carmen              | 98,977      | 467           | 23,450      | 103
|Carmen geotechnical |             |               | 2,345       | 7  
|Carotare            | 14,441      | 68            | 3768        | 17 
|Las Minitas         | 10,464      | 53            | 1752        | 6  
|De Nada             | 420         | 2             |             |    
|El Orito            | 2,469       | 16            | 253         | 1  
|Piezometer wells    | 867         | 9             |             |    
|TOTAL               | 127,638     | 615           | 30,694      | 134

The location of all drill holes on Carmen Deposit is illustrated on Figure 9.



Company personnel surveyed the drill collars with differential Global Positioning System (GPS). Down-hole deviation surveys were completed by a contractor or Company personnel on all holes deeper than 66m, which remained open after the drill pipe had been removed. In some cases, holes collapsed before the deviation survey could be done.



The drill samples were collected on 2 metre intervals and assayed by Chemex in North Vancouver, British Columbia following sample preparation at their laboratory in Hermosillo, Mexico.



A series of duplicates, blanks, and reference samples served for quality assurance and quality control.



All field operations were under the direction of A.D. Hitchborn, B.Sc., and Vice-President, Development of Kimber until June 18, 2006. Since June 18, 2006 field operations have been under the direction of Robert V. Longe, B.A., M.Sc., President and CEO of Kimber.



J. Byron Richards, P. Eng., Vice-President, Engineering is responsible for Quality Control and is the designated Qualified Person.



Significant intersections from all the drill programs can be found in Kimbers news releases on its website at www.kimberresources.com and are filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.



Metallurgy



Historic

Historically the Monterde mine recovery, from cyanide vat leaching, ranged from 85 to 90% gold and 65 to 70% silver, back-calculated from historic records.







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Kimber commenced significant recovery testing in 2002 with cyanide assays on retained RC pulps. A program of gravity, flotation and cyanide leach tests done in 2003 on RC rejects seemed to indicate that generally the metallurgy would not be a significant issue. Subsequent column tests done on trench and core samples in 2004 gave drastically different results and indicated that geological issues would be a complicating factor, especially for silver.



As a generalization, gold recovery is good to very good, while silver recoveries range from very poor to very good, with very considerable scatter.  From 2005 to the present, efforts have centred on characterization studies.



Column Tests

In 2004, column tests on 3/8 and 3⁄4 material were done on samples from two trenches and four large diameter core holes.  The gold recoveries were excellent but the very poor silver recoveries, (averaging 12%) were a great surprise.    A series of bulk samples were shipped to Vancouver during 2006 for a further series of column tests.  Preliminary roll bottle tests on the material indicated that cyanidation of such coarse material (3/8 and 3/4 inch crush) would not provide economically acceptable results, so the column test work was cancelled.



Characterization Tests

The characterization studies are 72 hour roll bottle cyanide leach tests with a 5g/l cyanide strength done after a standard grind with constant conditions of charge weight, pulp density and grind time giving an average K80 of 110microns.    It is designed to be a mapping tool to delineate zones of equal amenability to cyanidation.  In addition to the cyanide leach data, these samples have detailed whole rock and ICP analysis as well as the original gold and silver assays.



247 characterization tests on drill core have been completed to January of 2007.  The gross results are tabled below. The significance of these tests will be apparent on completion of interpretation and analysis in their geological context.





Gold & Silver Metallurgical Recoveries

Characterization Bottle Roll Tests on Drill Core Crusher Rejects

|                          |                          |                  |                     
|------------------------- | ------------------------ | ---------------- | --------------------
|Gold Minimum Recovery %   | Gold Maximum Recovery %  | Gold Average  %  | Standard Deviation %
|22.8                      | 99.4                     | 90               | 11                  
|                          |                          |                  |                     
|Silver Minimum Recovery % | Silver Maximum Recover % | Silver Average % | Standard Deviation %
|8.6                       | 97.3                     | 42.4             | 59                  



The much larger standard deviation in the silver recoveries reflects the very large scatter in the results.  When analysis of these results is complete in their geologic context, it is hoped that silver recovery may be modeled by zone and the confidence increased in expected recoveries.



Gold Equivalence of Silver

The gold equivalence of silver is useful for comparing assay intercepts on a particular property.  It is calculated by taking into account the projected gold and silver prices and the estimated percentage of recoveries of each metal depending on the type of recovery method used (i.e. mill processing vs. heap leach).  In a full analysis it would include all costs related to the production of each metal, including refining charges, freight and security etc.  At the present time Kimber is of the opinion that an average estimate of 75:1 (silver: gold) is appropriate until further metallurgical tests are performed.

Trenching



Approximately 465 metres of trench were cut in six trenches of the exploration targets, Las Minitas and El Orito areas of the concessions in 2002.







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In 2003 a further 1,545 metres in 17 trenches were cut in the Las Minitas area and two new alteration zones, the Veta Minitas and De Nada zones, which were located in 2003 (See Figure 4).  The trenches were mapped and sampled by Kimber crews. Sampling was done by continuous chip sampling on lines marked on outcrop face with samples 1 to 3 metres long. Approximately 7 kg of chips were taken over each sample interval. Assaying of the chip samples was dealt with under the same assay protocol as the RC chips, except that no sample duplicates or standards were included.





Other Significant Acquisitions and Dispositions





Setago and Oribo Properties

The 100% owned Setago Property, which was staked by the Company during 2003, lies approximately 24 kilometres to the west of Monterde and consists of one exploration concession covering a rectangular area of 3,000 hectares (5 x 6 kilometres). As a result of work in 2007, Kimber has staked two (2) additional concessions, Ampliacion Setago and Ampliacion Setago 2 consisting of 3,000 and 4,500 hectares respectively (documentation confirming title has not yet been granted).  The property covers well-altered Tertiary volcanics of the Upper Volcanic Series (similar to Monterde). Alteration types include argillic, alunitic, pyrophyllitic and silicification, together with siliceous breccias, quartz vein stockworks and extensive iron oxide features which are typical of high sulphidation epithermal systems. Kimbers geological team in Mexico completed a limited mapping and sampling program on the property in July 2003 resulting in the identification of anomalous gold values.   Follow-up reconnaissance work, consisting of mapping and sampling carried out during the first half of 2007, identified areas of potential epithermal gold/silver and possible polymetallic deposits.



Kimber staked the Oribo Property in 2003 but abandoned it in 2005 due to difficulties working in the area.



Pericones  Property

The 100% owned Pericones Property is 6300 hectares in size and is located approximately 100 kilometres southwest of Mexico City. The Pericones Property is located in a belt that is well known for silver veins, some of which have been mined. Throughout the property there are numerous workings that appear to be at least 100 years old. The property was acquired through staking and covers areas of altered volcanic rock thought to be prospective for bulk tonnage silver deposits. Kimbers acquisition of the Pericones property was first announced in October 2006. Although staked earlier, the Company waited to announce it until title could be fully secured.

There are two principal areas of alteration, mineralization, and old workings identified so far, Aguacate and Tejamanil. The numerous old workings indicate mineralization in several locations. The Tejamanil target requires additional mapping and sampling before drill targets can be identified.  Preliminary surface sampling and chip sampling from the old workings as well as geological mapping on the Aguacate area have identified several areas with silver values of potential economic interest. Information on two of these areas is now sufficient to warrant drill testing. Results from two metre chip samples on Aguacate are listed below:

|       |              |                   |                        |     |         | 
|------ | ------------ | ----------------- | ---------------------- | --- | ------- | 
|Target |              |                   | Grade ( g/t of silver)
|       |              | Number of Samples | From                   | To  | Average
|# 1    | Old workings | 23                | 9                      | 380 | 193    
|       | Surface      | 24                | 2                      | 332 | 73     
|# 2    | Old workings | 24                | 20                     | 420 | 114    



ITEM 4A. UNRESOLVED STAFF COMMENTS



Not applicable



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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS



The following discussion of the financial condition, changes in financial condition and results of operations of Kimber for each of the years in the four-year period ended June 30, 2007 should be read in conjunction with the financial statements of Kimber included in Item 17 - Financial Statements.  Kimbers financial statements are presented in Canadian dollars and have been prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP).  See Item 3A  Selected Financial Data for exchange rate information.



This section contains forward-looking statements involving risks and uncertainties. Kimbers actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under part Item 3 D - Risk Factors.



U.S. generally accepted accounting principles (U.S.GAAP) requires that all exploration and general and administrative costs related to projects be charged to expense as incurred.  As such, some of the costs accounted for as deferred mineral acquisition and exploration expenditures under Canadian GAAP would have been charged to earnings under U.S. GAAP.  Property acquisition costs are capitalized under both Canadian and U.S. GAAP.



The Company has not recorded revenue or cash flow from mining operations, and has experienced losses from operations for each of the last five years.  The Company is an exploration stage company and none of its properties have any known mineral reserves and the development of exploration properties, including the Companys Monterde Property or inclusive Carmen Deposit, and is subject to significant uncertainty and risk.  The Company anticipates that it will not record any significant revenue or cash flow from operations and that it will incur significant losses until the Property is fully developed and successfully put into production.  The Company intends to continue to rely upon the issuance of securities to finance its operations and exploration activities to the extent such instruments are issuable under terms acceptable to the Company.



The information contained herein should be read in conjunction with the consolidated financial statements of the Company.



Factors Affecting the Companys Business



Management periodically reviews results of operations both internally and externally through mining professionals. Decisions to abandon, reduce or expand exploration efforts are based upon many factors including general and specific assessments of mineral deposits, the likelihood of increasing or decreasing those deposits, land costs, estimates of future mineral prices, potential extraction methods and costs, the likelihood of positive or negative changes to the environment, permitting, taxation, labour and capital costs. There cannot be a pre-determined hold period for any property as geological or economic circumstances render each property unique.



Critical Accounting Policies and Estimates



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues earned and expenses incurred during the reporting period.  Actual results could differ from those estimates.







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The Companys financial statements are presented on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its liabilities in the normal course of operations. If future financing is unavailable, the Company may not be able to meet its ongoing obligations, in which case the realizable value of its assets may decline materially from current estimates.



Property acquisition costs and related direct exploration costs are deferred until the properties are placed into production, sold or abandoned.  These mineral property costs will be amortized on the unit-of-production basis over the estimated useful life of the properties, or written-off if the properties are abandoned.  Cost includes any cash consideration paid and the fair market value of shares issued, if any, on the acquisition of property interests.



Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are recorded in the accounts when the payments are made.  The recorded amounts of property claim acquisition costs and their related deferred exploration costs represent actual expenditures incurred and are not intended to reflect present or future values.  The Company reviews capitalized costs on its property interests on a periodic, or annual, basis and will recognize an impairment in value based upon current exploration results and upon managements assessment of the future probability of profitable revenues from the property or from the sale of the property.  As the carrying value and amortization of the Companys mineral property assets is, in part, related to managements assessment of the property, such estimations are significant to the Companys financial position and results of operations.



Effective July 1, 2003 the Company has adopted the new accounting standard of the Canadian Institute of Chartered Accountants (CICA) for accounting for stock-based compensation.  The Company has adopted the fair value method of accounting for all stock options granted.  Under this method, stock-based compensation on options granted to employees, directors and consultants is recorded as an expense in the period the options are vested, based on the estimated fair value at the measurement date using the Black-Scholes Option Pricing Model.



A. Operating Results



Kimber has financed its operations principally through the sale of its equity securities.Kimber does not have any sales or revenue from its mineral properties. The Company receives nominal interest income earned from funds held on deposit and from short-term marketable securities. Interest income earned is dependent on the amount of funds available for deposit and changes in the interest rates.  Unless Kimber is able to obtain additional funds through the sale of its equity securities, the amount of interest income earned is expected to decrease as Kimber continues exploring its mineral properties.



Year Ended June 30, 2007 Compared to Year Ended June 30, 2006



The Companys net loss for the fiscal year ended June 30, 2007 was $3,813,938 or $0.08 per common share compared with $2,363,420 or $0.06 per share loss for the same period ended June 30, 2006. The Companys increase in net loss for the year was $1,450,518.



In accordance with stock-based compensation policy required by the Canadian Institute of Chartered Accountants, the Company recorded an expense of $527,957 ($760,324 in 2006) on 1,125,000 stock options granted in the year and prior year options which vested during the year. This is a non-cash expense and does not affect the Companys operations. Without this non-cash expense, the Company would have recorded a loss of $3,285,981 or $0.07 loss per share during the year.



During the fiscal year ended June 30, 2007 the Company spent $10,427,145 on its mineral properties; $507,585 for property acquisition payments and had mineral property expenditures of $9,919,560. Drilling costs of $3,285,491 were the highest cost activity, representing 32% of expenditures, a decrease from 2006 as a result of reduced drilling activity in the third and fourth quarters of the year ($4,600,027 or 45% in 2006).







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Assay testing was the second highest cost category in fiscal year ending June 30, 2007 at $1,355,513 or 13% of property expenditures ($827,288 or 8% in fiscal year ended June 30, 2006). Geological and geophysical expenditures were $1,165,931 or 11% of property expenditures in 2007 compared to $1,300,005 or 13% in 2006.  The decrease in geological costs represents decreases in personnel required due to reduced drilling activity.  Other significant cost categories were road and drill site maintenance at $831,336, engineering at $543,942 and field supplies at $623,439 in fiscal year ending June 30, 2007.  The results of these expenditures are explained in the Mineral Properties section below.



Salary and benefits expenses rose during the year ended June 30, 2007 to $1,840,643 from $726,239 in the year ended June 30, 2006 due to Settlement Agreements with the CEO and the Vice President and Secretary (detailed more fully under Contractual Obligations herein), salary and fee increases, increased director activity and administrative demands that have grown due to increased regulatory compliance requirements.



Legal, consulting and audit costs increased significantly to $952,743 for the year ended June 30, 2007 from $150,424 in the previous year due to the impact of the now resolved proxy battle, recruitment fees, legal fees for acquisition due diligence, Sarbanes Oxley consulting fees as well as other fees in this category.



Investor relations and shareholder communications expenses of $211,187 (2006  $309,669) were reduced as there was reduced investor related travel and conference attendance.



Office and miscellaneous expenses increased during the year by $66,023 to $252,637 in 2007. The increase is mainly attributable to increased insurance costs and general office costs.



Rent expense for the head office increased to $161,508 in the year ended June 30, 2007 from $72,775 in the comparable period ended 2006 as the result of an increase in rent and additional office space occupied.



The Company recorded a loss from foreign exchange of $10,701 during the year ended June 30, 2007 as opposed to a loss of $22,636 in the period ended 2006. The loss originates from funds advanced to Mexico during the year that have depreciated in value due to fluctuations in the Mexican peso or United States Dollar relative to the Canadian dollar.



Year Ended June 30, 2006 Compared to Year Ended June 30, 2005



The Companys net loss for the fiscal year ended June 30, 2006 was $2,363,420 or $0.06 per common share compared with $1,825,982 or $0.06 per share loss for the same period ended June 30, 2005. The Companys increase in net loss for the year was $537,438.



In accordance with stock-based compensation policy required by the Canadian Institute of Chartered Accountants, the Company recorded an expense of $760,324 ($720,469 in 2005) on 527,000 stock options granted in the year and prior year options which vested during the year. This is a non-cash expense and does not affect the Companys operations. Without this non-cash expense, the Company would have recorded a loss of $1,603,096 or $0.04 weighted average loss per share during the year.



During the fiscal year ended June 30, 2006 the Company spent $10,148,490 on its mineral properties; $744,440 for property acquisition payments and had mineral property expenditures of $9,404,050. Drilling costs of $4,600,027 were the highest cost activity, representing 45% of expenditures, as a result of increased drilling activity ($2,251,312 or 35% in 2005). Geological and geophysical expenditures were $1,300,005 or 13% of property expenditures in 2006 compared to $861,051 or 15% in 2005.  The increase in geological costs represents increases in personnel required to supervise and process data from the increased drilling activity.  Also in line with higher drilling expenditures, assay testing was the third highest cost category in fiscal year ending June 30, 2006 at $827,288 or 8% of property expenditures ($647,785 or 10% in fiscal year ended June 30, 2005).







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Other significant cost categories and increases in expenditure were engineering, increasing by $460,632 to $636,299 and field supplies increasing by $334,389 to $516,519 in fiscal year ending June 30, 2006.  These latter increases were also derived from greater project activity at Monterde.



Salary and benefits expenses rose during the year ended June 30, 2006 to $726,239 from $570,991 in the year ended June 30, 2005 due to salary increases and administrative demands that have grown with the Companys operating activities and regulatory compliance.



Investor relations and shareholder communications expenses of $309,669 (2005  $195,163) were larger as a result of additional advertising, conference attendance and direct communication with a growing shareholder group to create greater awareness of the Companys progress.



Office and miscellaneous expenses increased during the year by $63,193 to $186,614 in 2006. The increase is mainly attributable to increased office supplies, printing costs and computer service and maintenance costs.



Rent expense for the head office increased to $72,775 in the year ended June 30, 2006 from $64,365 in the comparable period ended 2005 as the result of an increase in rent and additional office space occupied.



The Company recorded a loss from foreign exchange of $22,636 during the year ended June 30, 2006 as opposed to a gain of $17,103 in the period ended 2005. The loss originates from funds advanced to Mexico during the year that have depreciated in value due to fluctuations in the Mexican peso relative to the Canadian dollar. The rate of exchange for the Mexican peso began the fiscal year at 0.1147 and closed the year lower at 0.09832.



Year Ended June 30, 2005 Compared to Year Ended June 30, 2004



The Companys net loss for the fiscal year ended June 30, 2005 was $1,825,982 or $0.06 per common share compared with $1,513,811 or $0.07 per share loss for the same period ended June 30, 2004. The Companys increase in net loss for the year was $312,171.



In accordance with stock-based compensation policy required by the Canadian Institute of Chartered Accountants the Company recorded an expense of $720,469 on 982,000 stock options granted in the year ($533,448 in 2004). This is a non-cash expense and does not affect the Companys operations. Without this non-cash expense, the Company would have recorded a loss of $1,105,513 or $0.04 weighted average loss per share during the year.



During the fiscal year ended June 30, 2005 the Company spent $6,233,521 on its mineral properties; $528,458 for property acquisition payments and had mineral property expenditures of $5,703,063. Drilling costs of $2,251,312 were the highest cost activity, representing 36% of expenditures, as a second drill rig was added in March, 2004 ($1,069,739 or 29% in 2004). Geological and geophysical expenditures were $861,051 or 15% of property expenditures in 2005 compared to $495,843 or 14% in 2004.  The increase in geological staff represents personnel required to supervise and process data from the second drill rig. Also in line with higher drilling expenditures, assay testing was the third highest cost category in fiscal year ending June 30, 2005 at $647,785 or 10% of property expenditures ($443,757 or 12% in fiscal year ended June 30, 2004). The results of these expenditures are explained in the Mineral Properties section below.



Salary and benefits expenses rose during the year ended June 30, 2005 to $570,991 from $479,017 in the year ended June 30, 2004 due to salary increases and administrative demands that have grown with the Companys operating activities and regulatory compliance.



Investor relations and shareholder communications expenses of $195,163 (2004  $163,673) were larger as a result of additional advertising and attending investment conferences to create greater awareness of the Companys progress.







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Office and miscellaneous expenses increased during the year by $45,816 to $123,421 in 2005. The increase is mainly attributable to increased printing costs and computer service and maintenance costs.



Rent expense for the head office increased to $64,365 in the year ended June 30, 2005 from $43,016 in the comparable period ended 2004 as the result of an increase in rent and additional office space occupied.



The Company recorded a gain from foreign exchange of $17,103 during the year ended June 30, 2005 as opposed to a loss of $10,554 in the period ended 2004. The gain originates from funds advanced to Mexico during the year that have appreciated in value due to fluctuations in the Mexican peso relative to the Canadian dollar. The rate of exchange for the Mexican peso began the fiscal year at 0.1163 and closed the year lower at 0.1147.



B. Liquidity and Capital Resources



Kimber is presently exploring its properties for sufficient mineral reserves to justify production.  None of Kimbers properties are yet in production and consequently do not produce any revenue.  As a result, Kimbers ability to conduct operations, including the acquisition and exploration of mineral properties, is based on its ability to raise funds, primarily from equity sources.  While Kimber believes it has sufficient capital and liquidity to finance operations until the end of the first quarter of 2008, next fiscal year, its ability to continue operations and the recoverability of amounts recorded for mineral properties are dependent on the discovery of economically recoverable reserves on its mineral properties, the ability of Kimber to obtain additional financing to complete its exploration and upon future profitable production or on sufficient proceeds from disposition of such properties if they are sold or joint ventured.



Kimber will have to obtain financing in the future primarily through equity financing, and/or debt financing.  There can be no assurance that Kimber will succeed in obtaining additional financing, now or in the future.  Failure to raise additional financing on a timely basis could cause Kimber to suspend its operations and eventually to forfeit or sell its interest in its properties. In the past, Kimber has been successful at raising funds to continue work on its mining properties, including a financing completed in March 2006 for gross proceeds of $14,095,000. However, there are no certainties that the Company will be able to raise additional funding on reasonable terms if at all, in which case the property may be joint ventured, sold, abandoned or the outstanding agreements renegotiated.



At June 30, 2007, the Company had working capital of $5,371,675 (2006 - $15,484,719). The Company has no long-term indebtedness or long-term obligations. The change in working capital is the result of decreased available cash of $6,200,602 compared to the previous year (2006  $15,866,960). This cash decrease is due to the ongoing net expenditure and the absence of a financing during the year. In the fiscal year ended June 30, 2007 the Company received $2,819,999 from the exercise of 1,566,666 warrants and $825,013 from the exercise of 742,032 stock options. As at August 31, 2007 the Company had approximately $5.3 million in cash and liquid short-term bankers acceptance notes.



Current liabilities decreased to $1,315,654 as at June 30, 2007 from $1,422,519 on June 30, 2006. This was primarily due to a reduction in drilling expenditures in 2007 compared to the previous year, partially offset by the increase in amounts due to related parties in respect of the Settlement Agreements dated April 26, 2007.



The Company is committed to paying approximately $0.2 million at August 31, 2007 for expenses billed. The amounts due to related parties in respect of the Settlement Agreements with Mr Longe and Mr Hoole total $624,710 at August 31, 2007.

.

Up to June 30, 2007 the Company had made expenditures totalling $32,176,965 on its mineral properties (Monterde - $32,035,800; Setago - $60,996, Pericones - $80,169). These costs include property and mineral rights, capitalized exploration costs, equipment expenditures and on-going property management expenses.







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60



If existing vested options were exercised, the Company would generate $252,150.



Capital resources of the Company consist primarily of cash and liquid short-term investments. As at August 31, 2007 the Company had cash and bankers acceptance notes totaling $5,300,000 and approximately $270,000 in receivables.



At present, management believes that it has sufficient financial resources to complete planned expenditures to early 2008.



The Company does not anticipate the payment of dividends in the foreseeable future.



As of the date of this Annual Report Kimber has not fixed its planned expenditures on the Monterde Property for 2008.



Kimber generates cash flow from selling its shares either through financings or the exercise of existing stock options.  If existing stock options are not be exercised because Kimbers share price falls due to market conditions or otherwise, Kimbers cash flow will be adversely affected and Kimber will need to raise additional financing.



Share capital increased cash inflows by an aggregate of $3,645,012 through the issuance of 2,308,698 common shares during the fiscal year ended June 30, 2007 as follows:



|                                                              |                  |                
|------------------------------------------------------------- | ---------------- | ---------------
|                                                              | Number of Shares | Share Capital $
|Balance, June 30, 2006                                        | 47,114,922       | 42,766,942     
|                                                              |                  |                
|Private placements                                            | 0                | 0              
|Exercise of warrants                                          | 1,566,666        | 2,815,952      
|Exercise of options                                           | 742,032          | 825,013        
|                                                              | 49,423,620       | 46,407,907     
|1Reallocation from contributed surplus on exercise of options | -                | 354,425        
|Balance, June 30, 2007                                        | 49,423,690       | 46,762,332     
|                                                              |                  |                
|1Non-cash transfer from Contributed Surplus                  



Kimber had no long-term debt as of June 30, 2007 or at the time of filing this Annual Report and no significant expenditure commitments unrelated to exploration activities.  Kimbers current working capital position provides sufficient liquidity for its short-term requirements.



The Company does not anticipate the payment of dividends in the foreseeable future.



C. Research and Development, Patents and Licenses, Etc.



Kimbers main activity is the exploration of its mineral properties (see Item 4D - Property, Plants, and Equipment) and it does not engage in conventional research and development.  It has not incurred research and development expenses or adopted research and development policies.



D. Trend Information



Kimbers main activity is the exploration of its mineral properties and it has no production, sales, or inventory in the conventional sense.  Kimbers financial success will be dependent upon the extent to which it can demonstrate mineral reserves on its properties and the economic viability of developing such properties.  Such development may take years to complete and the amount of resulting income, if any, is difficult to determine with any certainty.  The sales value of any mineral reserves discovered by Kimber is largely dependent upon factors beyond Kimbers control such as the market value of the metals produced.







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61



Gold and silver prices have trended upward since 2001.  Year over year increases in gold and silver prices have had the effect of increasing the value of gold deposits, have made financing easier to obtain and have in some cases made previously uneconomic deposits viable.  However as with the price of gold and silver, the capital and operating costs of mining properties has also increased.  The economic assessment and viability of each mining project must be assessed on its own merits



Except as described above, Kimber is not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have a material effect upon Kimbers net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.



E. Off-Balance Sheet Arrangements



Kimber has no off-balance sheet arrangements.



F. Tabular Disclosure of Contractual Obligations



In the table below, sets forth the enforceable and legally binding obligations as of June 30 2007:





|                                   |          |                  |           |           |             
|---------------------------------- | -------- | ---------------- | --------- | --------- | ------------
|Contractual Obligations            | Total    | Less than 1 Year | 1-3 Years | 3-5 Years | Over 5 Years
|Rental Operating Lease Obligations | $311,698 | $85,163          | $173,035  | $53,500   | $0          



In addition, under the lease the Company has the obligation to pay its proportionate share of operating costs and taxes for the building.



ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



A. Directors and Senior Management



The members of the board of directors and senior officers of Kimber including a brief biography of each as at September 14, 2007 are as follows:



|                                                                                                                                                                                                                                |     |                                                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ---------------------------------------------------------------------------------------------------
|Name and Position in Kimber                                                                                                                                                                                                     | Age | Other Principal Directorships                                                                      
|Leanne M. Baker (3)(5)(6)
Director

Dr. Baker is, a member and Chair of the Corporate Governance Committee, a member of the Technical Committee and a member of Environmental and Safety Committee.                             | 55  | Director, Agnico-Eagle Mines Ltd.
Director,  Reunion Gold Corporation
Director, US Gold Corporation
|Keith M. Barron (1)(5)(6)
Director

Dr. Barron is an independent Director of the company and is a member of the Compensation Committee, a member of the Technical Committee and a member of Environmental and Safety Committee. | 45  | Director, Aurelian Resources, Inc.
Director, U308 Corp.                                            







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62





|                                                                                                                                                                                                                                                                                                                                                |    |                                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Lawrence (Larry) I. Bell (2)(3)(4)(6)
Director

Mr. Bell  is an independent Director of the Company and Chair of the Board of Directors. He is a member and Chair of the Audit Committee, a member of the Corporate Governance Committee, a member of the Nominating Committee and a member of Environmental and Safety Committee.              | 70 | Director, Hardwoods Distribution Income Fund
Director, International Forest Products Limited
Director, Miramar Mining Corporation
Director, Goldcorp Inc.
Director, Silver Wheaton Corp.     
|R. Dennis Bergen (2)(4)(5)(6)
Director

Mr. Bergen is an independent director of the Company, is a member and Chairman of the Technical Committee, a member of the Audit Committee and a member of Nominating Committee and a member of Environmental and Safety Committee.                                                                     | 55 | None                                                                                                                                                                                         
|Gordon Cummings
Chief Financial Officer

Mr. Cummings is responsible for the financial affairs of the Company, including the strategic financial direction of the Company, the financial control activities (record keeping, payroll, accounts payable, cash management, budget forecasts) and presenting all financial analysis and reporting. | 39 | None                                                                                                                                                                                         
|Michael E. Hoole
Vice-President and Secretary
Mr. Hoole provides management services to the Company and is in charge of compliance with corporate regulatory bodies.                                                                                                                                                                            | 63 | Director, RuralCom Corporation                                                                                                                                                               
|Robert V. Longe(6)
President, Chief Executive
Officer and Director

Mr. Longe provides management services and is responsible for the overall affairs of the Company.  He is a member of the Environmental and Safety Committee.                                                                                                                | 69 | Director, Huntingfield Investments Ltd. (owned by Mr. Longe and his wife)
Director, MineQuest Exploration Associates Ltd. (inactive mining consultant owned by Huntingfield Investments Ltd.)
|Peter Nixon(2)(3)(6)
Director

Mr. Nixon  is an independent director of the Company, a member of Corporate Governance Committee, a member of the Audit Committee and a member and a member of the Environmental and Safety Committee.                                                                                                           | 61 | Director, Miramar Mining Corporation
Director, Reunion Gold Corporation
Director, Stornaway Diamond Corporation
Director, Dundee Precious Metals Inc.                                        







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63





|                                                                                                                                                                                                                                                         |    |                                                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|James J. Puplava(1)(6)
Director

Mr. Puplava is a director for Kimber and a member of the Compensation Committee and a member of the Environmental and Safety Committee.                                                                                 | 57 | Puplava Financial Services Inc.
Puplava Securities Inc.                                                                                                                 
|Stephen P. Quin (1)(4)(6)
Director

Mr. Quin  is an independent director of the Company, a member and Chair of  the Compensation Committee, a member of the Nominating Committee and a member of the Environmental and Safety Committee.                 | 49 | Director, Sherwood Copper Corp.
Director, Mercator Minerals Ltd.
Director,  Chesapeake Gold Corp.
Director,  Maximus Ventures Ltd.
Director, Rare Element Resources Ltd.
|J. Byron Richards
Vice-President, Engineering

Mr. Richards is the designated Qualified Person for the Monterde Project and is responsible for quality control, sampling protocol, resource estimation process and verifies data before it is disclosed. | 63 | JB Engineering Ltd. (mining consultant owned by Mr. Richards and his wife)                                                                                              

Notes:

(1)Member of Compensation Committee

(2)Member of Audit Committee

(3)Member of Corporate Governance Committee

(4)Member of Nominating Committee

(5)Member of Technical Committee

(6)Member of Environmental and Safety  Committee



There are no familial relationships between any director or senior officer and any other director or senior officer.



There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or senior officer.



The business experience of each director and senior officer, including activities performed outside Kimber, are as follows:



Leanne M. Baker, Director

Dr. Baker is managing director of Investor Resources LLC and a registered representative with Puplava Securities, Inc., a broker-dealer with offices in the United States.  Dr. Baker has been consulting for the mining and financial services industries since January 2002.  Prior to that, she was an equity research analyst and managing director with Salomon Smith Barney from 1990 to 2001, where she helped build a research and investment banking franchise in the metals and mining sectors.



Keith M. Barron, Director

Dr. Barron is a noted geologist who has consulted for more than 20 companies on six continents. Dr. Barron is a founder and director of Aurelian Resources Inc. in Toronto where he served as Vice-President, Exploration from 2002 to 2005. For the past year he has been active in the founding and start-up of U308 Corp. in Toronto where he initially served as a director and Vice-President, Exploration.







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64



Dr. Barron is no longer Vice President, Exploration of U308 Corp. but continues as a director of that company.



Lawrence (Larry) I. Bell, Director

Mr. Bell is the non-executive Chairman of BC Hydro, one of the largest electric utilities in Canada. From 1987 to 1997 and from August 2001 to November 2003, he was Chairman and Chief Executive Officer of the BC Hydro. He is also a director of a number of other companies and is the former Chairman of the University of British Columbia Board of Governors. Prior to these positions, Mr. Bell was Chairman and President of the Westar Group and Chief Executive Officer of Vancouver City Savings Credit Union. In the provinces public sector, Mr. Bell has served as Deputy Minister of Finance and Secretary to the Treasury Board.



R. Dennis Bergen, Director

Mr. Bergen is a mining engineer with over 25 years of experience in the mining industry. A graduate of BCIT (Mining Technology 1972) and UBC (Bachelor of Applied Science -Mineral Engineering 1979), he is a Professional Engineer registered in B.C. and licensed in the Northwest Territories.  Mr. Bergens experience includes open pit and underground gold and base metal mines and his responsibilities have ranged from mine technician to mine engineering and supervisory positions, including mine manager and Vice President, Operations.  In these roles he worked on project construction, operations, mine closure and reclamation in a number of different remote locations.  He has spent considerable time in project evaluation and acquisition for several companies evaluating projects in Canada and abroad.  He was responsible for the reopening and subsequent operation of the Cantung mine after a 2 year suspension of operations and is currently engaged in mining consulting assignments.  Mr Bergen became an independent director of Kimber in December 2005.



Gordon Cummings, Chief Financial Officer

Mr. Cummings holds a Bachelor of Accountancy from the University of Glasgow (1988) and a postgraduate Diploma in Systems Analysis and Design from Glasgow College (1989). His career in finance started with KPMG in London, England in 1989 where he later qualified as a Chartered Accountant (1993) specializing in financial services.  After 6 years with KPMG, London, Mr. Cummings took on the role of Group Accountant with Terra Nova Insurance Group, a London, England based insurance group listed on the New York Stock Exchange.  He moved to Barbados in 1997 where, he was a senior audit manager at PricewaterhouseCoopers.  From early 2000 until March 2006 Mr Cummings was an officer of the Horizons Funds Group, initially as CFO and then subsequently CEO and Director.  Horizons Funds is a Canadian group distributing public alternative investment funds. Mr Cummings was appointed CFO of Kimber on July 18, 2006.



Michael E. Hoole, Vice President and Secretary

Mr. Hoole is a lawyer (Barrister & Solicitor #2922) who has worked in legal and management positions in resource industries (forestry and mining) for 29 years.  Mr. Hoole was Vice President, Secretary and Counsel of Westmin Resources Ltd. from November 1996 to August 1997. He was the Secretary of Kit Resources Ltd. from September 1998 to March 1999.  He was a self-employed legal consultant from September 1997 to December 2002. He has been employed in executive and/or legal capacities for a number of large public corporations, including Placer Development Ltd. (now Barrick Gold Corp.), British Columbia Forest Products Ltd. (now Catalyst Paper Corp.) and Gibraltar Mines Ltd/Westmin Resources Ltd. (now Boliden Limited). Mr. Hoole was a director of Kimber from April, 2002 to October 2006.



Robert V. Longe, President, Chief Executive Officer and Director

Mr. Longe is a Professional Engineer (B.C. Association of Professional Engineers and Geoscientists #118426) and has had a 35-year career in the mineral exploration and development business.  He has worked with both multinational and junior mining companies and as an independent consultant in North and South America and Africa.  Mr. Longe is currently President of MineQuest, an inactive exploration consulting company, which he co-founded in 1980.  MineQuest is owned as to 100% by Huntingfield Investments Ltd., which in turn is owned by Mr. Longe (as to 51%) and his wife (as to 49%).







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65



Mr. Longe obtained a Bachelor of Arts degree from Cambridge University and Masters in Science from McGill University.  Mr. Longe became a director of Kimber in May, 1995 and became the President and Chief Executive Officer in November, 1999.



Peter B. Nixon, Director

Peter Nixon has spent more than three decades in the investment industry, specializing in the natural resource sector and working primarily in research and institutional sales. He helped found the investment firm Goepel Shields & Partners and was subsequently President of the firms U.S. subsidiary. He later joined Dundee Securities, with the mandate to expand the companys activities in the United States.

During the past 5 years Mr. Nixons principal occupation has been as a corporate director for a number of other mining companies.

James J. Puplava, Director

Mr. Puplava, CFP is President of Puplava Financial Securities Inc. (PFS), an investment advisory and money management firm. Founded in 1985, PFS specializes in investment, retirement, tax, and estate planning services. Mr. Puplava is also President of Puplava Securities Inc. a Broker-Dealer and Member of NASD/SIPC. He is a member of the Market Technicians Association and a CMT candidate. Mr. Puplava graduated cum laude in History and Economics from Arizona State University. He then went on to graduate summa cum laude with a Masters Degree in Finance and Accounting from the American Graduate School of International Management (Thunderbird). Among his many awards and achievements, Mr. Puplava was honoured in 1992 as one of America's top ten Financial Representatives by Registered Representative Magazine.  Mr. Puplava became an independent director of Kimber in May 2004 and ceased to be independent under the AMEX rules in March 2006 after Puplava Securities Inc. (PSI), a company of which Mr Puplava is a principal, earned commissions and finders fees from the Company. See ITEM 4 B  Company Financings  Private Placement No. 8 (brokered and non-brokered)

The Company paid cash commissions and finders fees of $234,850 to PSI.



Stephen P. Quin, Director

Mr. Quin is a professional geologist with 26 years of international experience in exploration and corporate development and has been President and CEO of Sherwood Copper Corporation since September, 2005 which recently completed the construction of the Minto open pit copper/gold mine in the Yukon Territory.  From 1987 to 2005Mr. Quin was Executive Vice President of Miramar Mining Corporation, a TSX listed junior producer and explorer focused on gold in the Canadian North.



J. Byron Richards, Vice-President, Engineering

Mr. Richards is a Professional Engineer (Professional Engineer - B.C. Association of Professional Engineers and Geoscientists #8909) with 36 years experience in the mineral exploration and development business.  He and his wife own JB Engineering Ltd. (as to 50% each), a private consulting company providing services, particularly on resource estimation and sampling procedures, to the mining industry.  Mr. Richards provides ongoing services to Kimber on a consulting basis, as required, pursuant to a verbal agreement. Mr. Richards became Kimbers Vice-President, Engineering in March, 2002.



Cease Trade Orders or Bankruptcies



None of the directors, officers or promoters are, or have been within the past five years from June 30, 2007, directors, officers or promoters of other reporting companies which, during the period such position was held, were struck from the registry of the British Columbia Registrar of Companies or whose securities were the subject of a cease trading order or suspension order or order that denied the issuer access to any statutory exemptions for a period of more than 30 consecutive days.







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66



None of the directors, officer or promoters are, or have been within the past five years from June 30, 2007, directors, officers or promoters of other issuers which were declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that issuer.  None of the directors, officers or promoters during the past five years were declared bankrupt or made a voluntary assignment in bankruptcy or insolvency or been subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that person.



B. Compensation



The following table sets forth all compensation paid by Kimber to its directors and members of its administrative, supervisory or management bodies during its fiscal year ended June 30, 2007.





|                                             |                     |                                |                                           |                                     |                  |     |    
|-------------------------------------------- | ------------------- | ------------------------------ | ----------------------------------------- | ----------------------------------- | ---------------- | --- | ---
|Name and Principal Position                  | Annual Compensation | Long Term Compensation         | All Other Compen-
sation
($)             
|Awards                                       | Payouts            
|Salary ($)                                   | Bonus
($)           | Other Annual Compen-sation
($) | Securities Under Options/SARs Granted
(#) | Restricted Shares/Units Awarded
($) | LTIP Payouts
($)
|Leanne  M. Baker
Director                    | Nil                 | Nil                            | 33,267                                    | 50,000                              | Nil              | Nil | Nil
|Keith M. Barron
Director                     | Nil                 | Nil                            | 24,252                                    | 50,000                              | Nil              | Nil | Nil
|Lawrence I. Bell
Director                    | Nil                 | Nil                            | 46,169                                    | 50,000                              | Nil              | Nil | Nil
|R. Dennis Bergen
Director                    | Nil                 | Nil                            | 50,900                                    | 30,000                              | Nil              | Nil | Nil
|Gordon Cummings
Chief Financial Officer      | 156,658             | Nil                            | Nil                                       | 275,000                             | Nil              | Nil | Nil
|Michael E. Hoole
Vice-President, & Secretary | 209,812             | Nil                            | Nil                                       | 50,000                              | Nil              | Nil | Nil
|Robert V. Longe
President, CEO & Director    | 163,812             | Nil                            | Nil                                       | Nil                                 | Nil              | Nil | Nil







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67





|                                                       |        |     |         |        |     |     |    
|------------------------------------------------------ | ------ | --- | ------- | ------ | --- | --- | ---
|Peter Nixon
Director                                   | Nil    |     | 27,000  | 50,000 | Nil | Nil | Nil
|James J. Puplava,
Director                             | Nil    | Nil | 25,500  | 30,000 | Nil | Nil | Nil
|Stephen P. Quin
Director                               | Nil    | Nil | 44,287  | 50,000 | Nil | Nil | Nil
|J. Byron Richards
Vice-President, Engineering          | Nil    | Nil | 155,967 | 50,000 | Nil | Nil | Nil
|Peter J.A. de Visser,
Former Chief Financial Officer   | 15,000 | Nil | Nil     | Nil    | Nil | Nil | Nil
|Abraham Urias,
Secretary of Kimber Resources de Mexico | 93,054 | Nil | Nil     | 30,000 | Nil | Nil | Nil



Kimber does not have a pension plan, retirement fund or similar benefits plan or other arrangement for non-cash compensation to the directors or senior officers of Kimber, with the exception of incentive stock options.



Kimber has Change of Control Agreements with two corporate executive Officers.  One (1) of  the agreements, dated January 13, 2004, provides for payment to the Officer of up to 36 months salary, plus the costs to Kimber of the benefits provided by Kimber to him, in the event of his resignation after a material adverse change in his position occurring within 12 months following a change in control of Kimber or dismissal by Kimber of the Officer without cause within two (2) years following a change in control of Kimber.  The other Change of Control Agreement, dated April 26, 2007, and amended by agreement dated September 25, 2007 provides for payment to the Officer of 24 months salary, plus the costs to Kimber of the benefits provided by Kimber to him, in the event of his resignation after a material adverse change in his position occurring within 12 months following a change in control of Kimber or dismissal by Kimber of the Officer without cause within 12 months following a change in control of Kimber.



By Settlement Agreement dated April 26, 2007 Kimber settled any claims which Robert V. Longe, President and CEO of the Company, may have in respect to a Change of Control Agreement with him dated January 13, 2004.  Pursuant to that Settlement Agreement Mr. Longe will retire as President and CEO on October 31, 2007 and in lieu of three (3) years salary and benefits Kimber agreed to pay him two (2) years salary and benefits ($339,657) plus the value of any unused vacation on the date of retirement.  Mr. Gordon Cummings, Kimbers current Chief Financial Officer, has been appointed to the position of President and Chief Executive Officer effective upon Mr. Longes retirement.  The promotion of Mr. Cummings will necessitate the hiring of a new Chief Financial Officer.



By Settlement Agreement dated April 26, 2007 Kimber settled all claims with Michael E. Hoole, Vice President and CEO of the Company, arising out of his resignation dated January 23, 2007 pursuant to a Change of Control Agreement with him dated January 13, 2004.







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68



Pursuant to that Settlement Agreement Mr. Hoole agreed to remain as Vice President and Secretary of the Company until February 28, 2008 and in lieu of three (3) years salary and benefits Kimber agreed to pay him two (2) years salary and benefits ($339,657) in the form of salary continuance for the period May 1, 2007 up to the date on which he ceases to be an officer and employee of Kimber and the balance of the said amount upon ceasing to be an officer and employee. As at June 30, 2007 $312,355 remained owing to Mr. Hoole.  In addition Kimber will pay Mr. Hoole $1,000/day for each day that he works for the Company.  Mr, Hoole will also be paid the value of any unused vacation on April 30, 2007.  When Mr. Hoole leaves the Company a  realignment of his duties and responsibilities and the appointment of a Secretary of the Company will be necessary.  As of the date of this Annual Report a decision on the assignment of Mr. Hooles duties and responsibilities has not been made.



C. Board Practices



The Board of Directors consists of eight (8) directors, six (6) of whom were elected at meetings of the shareholders of Kimber.  The Directors currently have staggered terms of office.  One (1) director, Mr. Longe, was elected at an Annual General Meeting of Kimber in 2004 for a three (3) year term expiring at the Annual General Meeting in 2007 and one (1) director, Mr. Bell, who was appointed to fill a vacancy created by the resignation of Mr. Hoole as a Director, continues for the balance of the three (3) year term expiring at the Annual General Meeting in 2007; two (2) Directors, Mr. Puplava and Mr. Bergen, were elected at the Annual General Meeting of Kimber on December 7, 2005 for a three (3) year term expiring at the Annual General Meeting in 2008; two (2) directors, Dr. Baker and Dr. Barron, were elected at the Annual General Meeting of Kimber on December 12, 2006 for a term expiring at the Annual General Meeting in 2009 and one director, Mr. Nixon, was appointed as additional Director pursuant to the provisions of the Companys Articles for a term expiring at the next Annual General Meeting.



Robert V. Longe has served as a director of Kimber since March 1995, President of Kimber since November 1999 and Chief Executive Officer of Kimber since April 2002.  Michael E. Hoole has served as Vice-President and Secretary of Kimber since November 1999 and was Chief Financial Officer of Kimber from April 2002 to  January 14, 2004.  Mr. Hoole was a Director from April 2002 to October 30, 2006.  Leanne Baker and Larry Bell have served as Directors of Kimber since October 30, 2006. Keith Barron and Stephen Quin have served as a Directors of Kimber since December 12, 2006 and James Puplava has served as a director since May 2004.  Dennis Bergen has served since December 7, 2005 and Peter Nixon has served as a Director since March 1, 2007. J. Byron Richards was appointed as Vice-President, Engineering of Kimber in April 2002. Gordon Cummings was appointed as Chief Financial Officer of Kimber in July, 2006 to succeed Peter J.A. de Visser who was Chief Financial Officer from January 2004 to July 2006.



Pursuant to Section 224 of the Business Corporations Act (British Columbia), Kimber is required to have an Audit Committee.  As at September 14, 2007, the members of the Audit Committee are Larry Bell,  Dennis Bergen and Peter Nixon.  The Business Corporations Act requires the directors of a public company to elect from among their number a committee composed of not fewer than three directors, of whom a majority must not be officers or employees of Kimber or an affiliate of Kimber.  The election must occur at the first meeting of the directors following each annual general meeting, and those elected will hold office until the next annual general meeting.  Section 225 provides that before the annual financial statements are published, the financial statements and the auditors report must be submitted to the audit committee for review with the auditor, and, after that, the report of the audit committee on the financial statement must be submitted to the directors.  Section 224(5) provides that the auditor must be given notice of, and has the right to appear before and to be heard at, every meeting of the audit committee, and must appear before the audit committee when requested to do so by the committee.  Finally, section 224(6) provides that on the request of the auditor, the chair of the audit committee must convene a meeting of the audit committee to consider any matters the auditor believes should be brought to the attention of the directors or shareholders.







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69



The Directors have established a Compensation Committee and as at September 14, 2007 the members of Kimbers Compensation Committee are Stephen Quin, James Puplava and Keith Barron.  The mandate established for the Compensation Committee is for the purposes of:



1.

considering alternative types of compensation for the Directors and Officers of Kimber and making recommendations to the Board for the establishment of appropriate compensation plans, strategies and policies:

2.

considering appropriate levels of compensation for the Directors and Officers of Kimber and making recommendations to the Board as to the remuneration and other compensation to be provided to the Directors, the President and the other Officers of Kimber;

3.

reviewing personnel policies and benefit plans available to the employees of Kimber and making recommendations to the Board; and

4.

carrying out periodic performance assessments of the President.



D. Employees



Kimber has a total of nine (9) employees in Canada and 43 employees in Mexico as of September 14, 2007.



At Kimbers head office in Vancouver, there are nine (9) full-time employees, one part-time employee and one officer who is a consultant to the Company as at September 18, 2007. These numbers include four (4) members of senior management, four (4) full time employees provide technical expertise in the Companys engineering, geology and environmental and community relations areas. One part-time employee has a separate office in Vancouver and Mexico and provides legal services relating to operations in Mexico. All employees are non-union and Kimber is not subject to any collective bargaining agreements.



Kimber Resources de Mexico employs additional full-time or part-time employees or consultants to assist with the ongoing exploration work at the Monterde Property in Mexico. All employees of Kimbers subsidiary in Mexico, Kimber Resources de Mexico., are non-union and Kimber is not subject to any collective bargaining agreements.



Kimber competes with other mining companies in connection with hiring and retaining qualified employees. At the present time a sufficient supply of qualified workers is available for operations in Vancouver and in Mexico. The continuation of such supply depends upon a number of factors, including, principally, the demand occasioned by other companies. There can be no assurance that Kimber will continue to be able to retain or attract qualified employees. There is a risk that increased labour costs could have a material adverse effect on its operations.



E. Share Ownership



With respect to the persons referred to above in Item 6B  Compensation, the following table discloses the number of Common Shares (each Common Share possessing identical voting rights) beneficially held by those persons who are directors and/or officers of Kimber including the percentage of the shares outstanding as at September 14, 2007.



|                         |               |                               |               
|------------------------ | ------------- | ----------------------------- | --------------
|Name and Title           | No. of Shares | Percent of Shares Outstanding | No. of Options
|Leanne M. Baker
Director | 50,000        | 0.1%                          | 50,000        







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70





|                                                        |               |        |                    
|------------------------------------------------------- | ------------- | ------ | -------------------
|Keith M. Barron
Director                                | 0             | 0      | 50,000             
|Lawrence I. Bell
Director                               | 10,000        | 0.02%  | 50,000             
|R. Dennis Bergen
Director                               | 0             | 0      | 110,000            
|Gordon Cummings
Chief Financial Officer                 | 0             | 0      | 275,000            
|Michael E. Hoole
Vice-President  & Secretary            | 793,550       | 1. 6%  | 300,000
200,000 (1)
|Robert V. Longe
President, CEO & Director               | 1,809,525 (2) | 3.6%   | 260,000            
|Peter Nixon
Director                                    | 0             | 0      | 50,000             
|James J. Puplava
Director                               | 5,386,400     | 10. 8% | 170,000            
|Stephen P. Quin
Director                                | 0             | 0      | 50,000             
|J. Byron Richards
Vice-President, Engineering           | 399,032       | 0.8%   | 315,000            
|Abraham Urias,
Secretary of Kimber Resources de Mexico  | 0             | 0      | 135,000            
|Peter J.A. de Visser (3)
Former Chief Financial Officer |               |        | 0                  

Notes:

(1)Grant of personal stock options to purchase an additional 200,000 shares from Robert V. Longe

(2)200,000 of these shares are subject to a personal option to purchase in favour of Michael E. Hoole

(3)The exact number of shares, if any, owned by these former directors and officers is unknown.



Incentive Stock Options







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The following table discloses the stock options beneficially held by the aforementioned persons, as at September 14, 2007.  The stock options are for Common Shares of Kimber:



|                      |                                      |                          |                   
|--------------------- | ------------------------------------ | ------------------------ | ------------------
|Name of Person        | Number of Shares Subject to Issuance | Exercise Price per Share | Expiry Date       
|Leanne M. Baker       | 50,000                               | $2.59                    | November 9, 2011  
|Keith M. Barron       | 50,000                               | $2.67                    | December 18, 2011 
|Lawrence I. Bell      | 50,000                               | $2,59                    | November 9, 2011  
|R. Dennis Bergen      | 25,000                               | $2.05                    | January 16, 2009  
|R. Dennis Bergen      | 5,000                                | $2.14                    | October 6, 2009   
|R. Dennis Bergen      | 50,000                               | $1.50                    | December 7, 2010  
|R. Dennis Bergen      | 30,000                               | $1.95                    | April 12, 2012    
|Gordon Cummings       | 150,000                              | $2.40                    | July 18, 2011     
|Gordon Cummings       | 125,000                              | $1.95                    | April 12, 2012    
|Peter J. A. de Visser | 0                                    |                          |                   
|Michael E. Hoole      | 100,000                              | $0.73                    | August 13, 2008   
|Michael E. Hoole      | 100,000                              | $2.14                    | October 6, 2009   
|Michael E. Hoole      | 50,000                               | $1.65                    | September 19, 2010
|Michael E. Hoole      | 50,000                               | $2.59                    | November 9, 2011  
|Robert V. Longe       | 100,000                              | $0.73                    | August 13, 2008   
|Robert V. Longe       | 110,000                              | $2.14                    | October 6, 2009   
|Robert V. Longe       | 50,000                               | $1.65                    | September 19, 2010
|Peter B. Nixon        | 50,000                               | $1.95                    | April 12, 2012    
|James J. Puplava      | 50,000                               | $1.77                    | May 28, 2009      
|James J. Puplava      | 130,000                              | $2.14                    | October 6, 2009   
|James J. Puplava      | 10,000                               | $1.65                    | September 19, 2010
|James J. Puplava      | 30,000                               | $1.95                    | April 12, 2012    
|Stephen P. Quin       | 50,000                               | $2.67                    | December 18, 2011 
|J. Byron Richards     | 25,000                               | $0.45                    | October 29, 2007  
|J. Byron Richards     | 100,000                              | $0.73                    | August 13, 2008   
|J. Byron Richards     | 90,000                               | $2.14                    | October 6, 2009   
|J. Byron Richards     | 50,000                               | $1.65                    | September 19, 2010
|J. Byron Richards     | 50,000                               | $1.95                    | April 12, 2012    
|Peter J.A. de Visser  | 0                                    |                          |                   



The Option Plan provides for the issuance of stock options to acquire up to a total of 5,294,613 Common Shares for a period not exceeding five years, subject to standard anti-dilution adjustments was approved December 10, 2003. The Directors may, from time to time, appoint an administrator (the Administrator) for the purposes of administering the Option Plan.  Initially, the Administrator will be the Secretary of Kimber.



The subscription price at which a stock option may be exercised shall be:

a)

the closing trading price of the Common Shares on the stock exchange on which the Common Shares are traded at the Date of Grant on the last trading day before the Date of Grant;

b)

if the Board determines that the Subscription Price determined in accordance with paragraph a) above is not a representative price, the weighted average of the trading prices for the Common Shares on the five trading days before the Date of Grant, subject to regulatory and exchange approval of any stock exchange having jurisdiction; or

c)

if the Common Shares are listed on more than one stock exchange at the Date of Grant, then as calculated in a) and b) above using the trading price or prices on the stock exchange on which the majority of the Common Shares traded, subject to the approval of any stock exchange having jurisdiction;







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The stock options are non-assignable, except that they are exercisable by the personal representative of the stock option holder in the event of the stock option holders death for a period of up to one year from the date of the option holders death.  The stock options expire not more than 90 days after the director or employee ceases to be a director or employee of Kimber or, in the alternative, if they are fired or removed from their office, as the case may be, for cause, then 10 days following the date of their termination.



If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of shares in respect of which that stock option expired or terminated shall again be available for the purposes of the Option Plan.



The Option Plan provides that other terms and conditions may be attached to a particular stock option.



Prior to the issuance of Kimbers Common Shares for any exercise of stock options, the Common Shares must be fully paid for.  Kimber will not provide financial support to assist holders in exercising their stock options.



The Option Plan provides that it is solely within the discretion of the Directors to determine who should receive stock options and in what amounts.  The Directors may from time to time amend the Option Plan and may seek shareholder approval for such amendments as required by law or under the policies of the TSX and any regulatory authority.  Disinterested shareholder approval must be obtained if Kimber proposes to decrease the exercise price of previously granted stock options to insiders, or if the Option Plan, together with any previously issued or proposed stock option grants, could at any time result in:



i)

the number of Common Shares reserved for issuance under stock options granted to insiders of Kimber exceeding 10% of the outstanding Common Shares;

ii)

the issuance to insiders, within a one year period, of a number of shares exceeding 10% of the outstanding Common Shares; or

iii)

the issuance to any one insider and such insiders associates, within a one year period, of a number of Common Shares exceeding 5% of the outstanding Common Shares.



Disinterested shareholders are defined as the shareholders of Kimber other than the insiders and their associates to whom stock options may be issued under the Option Plan.



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



A. Major Shareholders



As of September 14, 2007, to the best of the knowledge of Kimber the following table sets forth the beneficial ownership of each major shareholder, defined as beneficial owners of 5% or more of Kimbers issued and outstanding Common Shares:



|                             |               |                              
|---------------------------- | ------------- | -----------------------------
|Identity of Person or Group  | No. of Shares | Percent of Shares Outstanding
|Sprott Asset Management Inc. | 6,943,898     | 13.9%                        
|James J. Puplava             | 5,386,400     | 10. 8%                       
|Sun Valley Gold LLC          | 3,000,000     | 6.0%                         



The Common Shares held by each of the major shareholders have the same voting rights as all other shareholders of Kimber. To the best of Kimbers knowledge, it is not owned or controlled, directly or indirectly, by another company, by any foreign government or by any other natural or legal person severally or jointly.  To the best of Kimbers knowledge, there are no arrangements, the operation of which at a subsequent date will result in a change in control of Kimber.







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59.9% of the outstanding common shares of Kimber are registered in the name of 10 people and entities having addresses in Canada.





B. Related Party Transactions



None of the directors, officers or principal shareholders of the Company, nor any family members of the directors, officers or principal shareholders, have any material interest, direct or indirect in any transactions in which the Company participated during the period commencing July 1, 2006 and ending on the date hereof which transactions were material to the Company, or its subsidiary, except as stated elsewhere in this Annual Report or as indicated below.  See Item6B  Directors, Senior Management and Employees - Compensation.  None of the directors, officers or principal shareholders of the Company, or family members of the directors, officers or principal shareholders of the Company, were involved in any transaction with the Company, or subsidiary, that was unusual in its nature or conditions, involving goods, services, or tangible or intangible assets except as herein disclosed.



Directors and officers of Kimber were paid an aggregate of $1,565,968during the year ended June 30, 2007 for wages, directors fees, consulting, legal, accounting and administrative services.  These transactions have occurred in the normal course of operations and were measured at the exchange amount, which is that amount of consideration established and agreed to by the related parties.



During the year ended June 30, 2007, fees and expense disbursements of $191,685 were paid to J.B. Engineering Ltd (2006 - $173,244).  Mr. J. Byron Richards, an officer of the Company, is a principal of J.B. Engineering Ltd.





C. Interests of Experts and Counsel



Not Applicable





ITEM 8. FINANCIAL INFORMATION



A. Consolidated Statements and Other Financial Information



Financial Statements



Attached hereto are the audited financial statements of Kimber for the year ended June 30, 2007 and 2006, which were prepared by management and have been audited by Kimbers auditors, D&H Group LLP.  Also attached are the audited financial statements of Kimber for the fiscal years ended June 30, 2005, which were audited by the Companys auditors, D&H Group LLP.



The financial statements are accompanied by auditors reports and related notes.  See Item 17. -Financial Statements.



Legal Proceedings



There are no legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have had in the recent past, significant effects on Kimbers financial position or profitability.  There are no legal proceedings to which Kimber is a party, nor to the best of the knowledge of Kimbers management are any legal proceedings contemplated except as herein disclosed.









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On September 12, 2006 an employee of Minera Monterde was involved in a road collision with a group of cyclists while driving a truck owned by the subsidiary. $89,401 was paid in December 2006 to the Mexican authorities in respect of this matter.  The Company does not believe that there will be any further legal liability in relation to this incident but has not yet received formal releases from all potential claimants.



Dividend Policy



Kimber has not paid dividends in the past and it has no present intention of paying dividends on its shares as it anticipates that all available funds will be invested to finance the growth of its business.  The Directors of Kimber will determine if and when dividends should be declared and paid in the future based upon Kimbers financial position at the relevant time.  The Common Shares of Kimber are entitled to an equal share of any dividends declared and paid.



B. Significant Changes



Since June 30, 2007, the date of the most recent consolidated financial statements, no significant changes have occurred that have not been disclosed elsewhere in this Annual Report.



ITEM 9. THE OFFERING AND LISTING



Not Applicable



ITEM 10. ADDITIONAL INFORMATION



A. Share Capital



Not Applicable



B. Notice of Articles and Articles.



This information is incorporated by reference to our Form 20-F filed with the SEC on May 13, 2005.



Objects and Purposes of Kimber



The charter documents of Kimber place no restrictions upon Kimbers objects and purposes.



Directors Powers



Section 17.4 of the Articles of Kimber (the Articles) provides that a director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act(British Columbia).  Furthermore, section 17.2 provides that a director who holds a disclosable interest (as that term is defined in the Business Corporations Act)in a contract or transaction into which Kimber has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.



Section 18.10 of the Articles provides that the quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.







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Section 13.5 of the Articles provides that the directors are entitled to the remuneration for acting as directors as the directors may determine from time to time.  If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders.  There are no restrictions in the Articles upon the directors power, in the absence of an independent quorum, to vote compensation to themselves or any members of their body.



The borrowing powers of Kimber are set out in Article 8 of the Articles.  Kimber, if authorized by the directors, may:



a)

borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

b)

issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of Kimber or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

c)

guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

d)

mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of Kimber.



The borrowing powers set forth in the Articles can be varied by amending the Articles.  Section 9.4 of the Articles and Section 259 of the Business Corporations Act(British Columbia) have the effect of requiring a special resolution to be adopted by Kimber and a notice of alteration to the notice of articles to be filed with the Registrar of Companies for the Province of British Columbia.  A special resolution is a resolution passed by a majority of not less than three quarters of the votes cast by those members of a company who, being entitled to do so, vote in person or by proxy at a general meeting of Kimber, or consented to in writing by every member of a company who would have been entitled to vote in person or by proxy at a general meeting of Kimber.  Under the Business Corporations Act(British Columbia), an ordinary resolution of shareholders requires approval by a majority of the votes cast at a meeting of shareholders, present in person or represented by proxy.



Qualifications of Directors



There is no provision in the Articles imposing a requirement for retirement or non-retirement of directors under an age limit requirement.



Section 13.4 of the Articles provides that a director is not required to hold a Common Share as qualification for his or her office but must be qualified as required by the Business Corporations Act(British Columbia) to become, act or continue to act as a director.  Section 124(2) of the Business Corporations Act(British Columbia) provides that no person is qualified to act as a director if that person is:



(a)

under the age of 18 years;

(b)

found to be incapable of managing the persons own affairs;

(c)

an undischarged bankrupt;

(d)

convicted of an offence in connection with the promotion, formation or management of a corporation, or unincorporated business, or involving fraud, unless:

i)

the court orders otherwise;

ii)

5 years have elapsed since the expiration of the period set for suspension of the passing of sentence without sentencing or since a fine was imposed, or the term of imprisonment and probation imposed, if any, was concluded, whichever is the latest;

iii)

a pardon was granted under the Criminal Records Act(Canada).







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Every person who acts as a director of a company and who is not qualified to act as a director of Kimber under section 124(2) commits an offence.



Sections 14.10 and 14.11 of the Articles provides for the removal of a director.  Kimber may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. Further, the directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy



Share Rights



All of the authorized shares of common stock of Kimber are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets and in all other respects, on liquidation, dissolution or winding up of Kimber, whether voluntary or involuntary, or any other distribution of the assets of Kimber among its shareholders for the purpose of winding up its affairs after Kimber has paid out its liabilities.  The issued Common Shares are not subject to call or assessment rights or any pre-emptive or conversion rights.  The holders of common shares are entitled to one vote for each Common Share on all matters to be voted on by the shareholders.  The directors have staggered terms of office but there are no cumulative voting rights.  There are no provisions for redemption, purchase for cancellation, surrender or purchase funds.



Pursuant to section 61 of the Business Corporations Act(British Columbia) the rights attached to an issued class or series of shares must not be prejudiced or interfered with, unless the consent by a special separate resolution of the holders of the class or series of shares, as the case may be, is obtained. A special resolution requires a majority of 75% of the votes cast.



Meetings



Section 182(1) of the Business Corporations Act(British Columbia) provides that Kimber must hold an annual general meeting at least once in every calendar year and not more than 15 months after the date that the last annual general meeting was held.  Under section 10.4 of the Articles Kimber must give to its members entitled to receive notice of a general meeting not less than 21 days notice of any general meeting.  Section 169(1) of the Business Corporations Act(British Columbia) provides that the notice of a general meeting be sent not more than 2 months before the meeting.  The directors of a public company are required to provide, in addition to the notice of a general meeting, a form of proxy for use by every member entitled to vote at such meeting as well as an information circular containing prescribed information regarding the matters to be dealt with and conduct of the general meeting.  Prior to each annual general meeting of its shareholders the directors of Kimber must place before the shareholders comparative financial statements, made up to a date not more than 6 months before the annual general meeting, and the report of the auditor.



Section 167(2) of the Business Corporations Act(British Columbia) provides that shareholders of a company holding not less than 1/20 of the issued shares of the company may requisition the holding of a general meeting by delivering or sending notice to the company in accordance with the provisions of the Business Corporations Act(British Columbia).



Limitations on Ownership of Securities



There are no limitations on the right to own securities, imposed by foreign law or by the charter or other constating documents of Kimber.







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The Investment Canada Act (the Act), enacted on June 20, 1985, requires prior notification to the Government of Canada on the acquisition of control of Canadian businesses by non-Canadians, as defined in the Act. Certain acquisitions of control, discussed below, are reviewed by the Government of Canada. The term acquisition of control is defined as any one or more non-Canadian persons acquiring all or substantially all of the assets used in carrying on the Canadian business, or the acquisition of the voting shares of a Canadian corporation carrying on the Canadian business or the acquisition of the voting interests of an entity carrying on the Canadian business. The acquisition of the majority of the outstanding shares of another entity is deemed to be an acquisition of control of a corporation. The acquisition of less than a majority, but one-third or more, of the voting shares of a corporation is presumed to be an acquisition of control of a corporation unless it can be established that the purchaser does not in fact  control the corporation through the ownership of voting shares.



An investment requiring notification and review is any direct acquisitions of a Canadian business with assets of CDN$5,000,000 or more (subject to the comments below on World Trade Organization (WTO) investors; any indirect acquisition of a Canadian business (subject to the comments below on WTO investors) where the purchaser acquires control of entities in Canada having assets valued at CDN$50,000,000 or more; or any acquisition of a business with assets between CDN$5,000,000 and CDN$50,000,000 which represent more than 50% of the value of the total international transaction. In addition, specific acquisitions or new businesses in designated types of business activities related to Canadas cultural heritage or national identity could be reviewed if the Government of Canada considers that it is in the public interest to do so.



The Act was amended with the implementation of the Agreement establishing the WTO to provide for special review thresholds for WTO investors, as defined in the Act. WTO investor generally means (i) an individual, other than a Canadian, who is a national of a WTO member (such as, for example, the United States), or who has the right of permanent residence in relation to that WTO member, (ii) governments of WTO members, and (iii) entities that are not Canadian controlled, but which are WTO investor controlled, as determined by rules specified in the Act.  The special review thresholds for WTO investors do not apply, and the general rules described above do apply, to the acquisition of control of certain types of businesses specified in the Act, including a business that is a engages in the production of uranium and owns an interest in a producing uranium property in Canada. If the WTO investor rules apply, an investment in the shares of Kimber by or from a WTO investor will be reviewable only if it is an investment to acquire control of Kimber and the value of the assets of Kimber is equal to or greater than a specified amount (the WTO Review Threshold). The WTO Review Threshold is adjusted annually by a formula relating to increases in the nominal gross domestic product of Canada.  The 2006 WTO Review Threshold is CDN$281,000,000.



If any non-Canadian, whether or not a WTO investor, acquires control of Kimber by the acquisition of shares, but the transaction is not reviewable as described above, the non-Canadian is required to notify the Canadian government and to provide certain basic information relating to the investment. A non-Canadian, whether or not a WTO investor, is also required to provide a notice to the government on the establishment of a new Canadian business. If the business of Kimber is then a prescribed type of business activity related to Canadas cultural heritage or national identity, and if the Canadian government considers it to be in the public interest to do so, then the Canadian government may give notice in writing within 21 days requiring the investment to be reviewed.



If an investment is reviewable, an application for review in the form prescribed by the regulations is normally required to be filed with the Director appointed under the Act (the Director) prior to the investment taking place and the investment may not be consummated until the review has been completed and the Minister (a person designated as such under the Act) is satisfied or is deemed to be satisfied that the investment is likely to be of net benefit to Canada. There are, however, certain exceptions. Applications concerning indirect acquisitions may be filed up to 30 days after the investment is consummated and applications concerning reviewable investments in culture-sensitive sectors are required upon receipt of a notice for review.







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In addition, the Minister (a person designated as such under the Act) may permit an investment to be consummated prior to completion of the review, if he is satisfied that delay would cause undue hardship to the acquiror or jeopardize the operations of the Canadian business that is being acquired. The Director will submit the application to the Minister, together with any other information or written undertakings given by the acquiror and any representation submitted to the Director by a province that is likely to be significantly affected by the investment.



The Minister will then determine whether the investment is likely to be of net benefit to Canada, taking into account the information provided and having regard to certain factors of assessment where they are relevant. Some of the factors to be considered are (i) the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, on resource processing, and on the utilization of parts, components and services produced in Canada; (ii) the effect of the investment on exports from Canada; (iii) the degree and significance of participation by Canadians in the Canadian business and in any industry in Canada of which it forms or would form a part; (iv) the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada; (v) the effect of the investment on competition within any industry or industries in Canada; (vi) the compatibility of the investment with national industrial, economic and cultural policies taking into consideration industrial, economic and cultural objectives enunciated by the government or legislature of any province likely to be significantly affected by the investment; and (vii) the contribution of the investment to Canadas ability to compete in world markets.



The Act sets certain time limits for the Director and the Minister. Within 45 days after a completed application has been received, the Minister must notify the acquiror that (a) he is satisfied that the investment is likely to be of net benefit to Canada, or (b) he is unable to complete his review, in which case he shall have 30 additional days to complete his review (unless the acquiror agrees to a longer period), or (c) he is not satisfied that the investment is likely to be of net benefit to Canada.



Where the Minister has advised the acquiror that he is not satisfied that the investment is likely to be of net benefit to Canada, the acquiror has the right to make representations and submit undertakings within 30 days of the date of the notice (or any further period that is agreed upon between the acquiror and the Minister). On the expiration of the 30 day period (or the agreed extension), the Minister must quickly notify the acquiror (i) that he is now satisfied that the investment is likely to be of net benefit to Canada or (ii) that he is not satisfied that the investment is likely to be of net benefit to Canada. In the latter case, the acquiror may not proceed with the investment or, if the investment has already been consummated, must divest itself of control of the Canadian business.



The Act provides civil remedies for non-compliance with any provision. There are also criminal penalties for breach of confidentiality or providing false information.



Change in Control of Registrant



No provision of Kimbers Articles or other constating documents would have the effect of delaying, deferring, or preventing a change in control of Kimber, and operate only with respect to a merger, acquisition or corporate restructuring involving Kimber or any of its subsidiaries.



Ownership Threshold



There are no provisions of Kimbers Articles or other documents governing the ownership threshold above which shareholder ownership must be disclosed.



C. Material Contracts



The material contracts of Kimber are listed under Item 19  Exhibits and copies are appended to this Form 20-F







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D. Exchange Controls



Canada has no system of exchange controls. There are no exchange restrictions on borrowing from foreign countries, nor on the remittance of dividends, interest, royalties and similar payments, management fees, loan repayments, settlement of trade debts, or the repatriation of capital. Any such remittances to United States residents, however, may be subject to a withholding tax pursuant to the Canadian Income Tax Act as modified by the reciprocal tax treaty between Canada and the United States. Refer to Item 10E  Taxation.



E. Taxation



A brief description of certain provisions of the tax treaty between Canada and the United States is included below, together with a brief outline of certain taxes, including withholding provisions, to which United States security holders are subject under existing laws and regulations of Canada. The consequences, if any, of provincial, state and local taxes are not considered.



THE FOLLOWING INFORMATION IS GENERAL AND SECURITY HOLDERS SHOULD SEEK THE ADVICE OF THEIR OWN TAX ADVISORS, TAX COUNSEL OR ACCOUNTANTS WITH RESPECT TO THE APPLICABILITY OR EFFECT ON THEIR OWN INDIVIDUAL CIRCUMSTANCES OF THE MATTERS REFERRED TO HEREIN AND OF ANY PROVINCIAL, STATE OR LOCAL TAXES.  NO OPINION WAS REQUESTED BY KIMBER, OR IS PROVIDED BY ITS LEGAL COUNSEL AND/OR AUDITORS.





Certain Canadian Federal Income Tax Consequences



The discussion under this heading summarizes the principal Canadian federal income tax consequences of acquiring, holding and disposing of shares of Common Shares of Kimber for a shareholder of Kimber who is not a resident of Canada but is a resident of the United States and who will acquire and hold shares of Common Shares of Kimber as capital property for the purposes of the Income Tax Act (Canada) (the Canadian Tax Act). This summary does not apply to a shareholder who carries on business in Canada through a permanent establishment situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholders holding in Kimber is effectively connected with such permanent establishment or fixed base. This summary is based on the provisions of the Canadian Tax Act and the regulations thereunder and on an understanding of the administrative practices of Canada Revenue Agency, and takes into account all specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as of the date hereof. It has been assumed that there will be no other relevant amendment of any governing law although no assurance can be given in this respect. This discussion is general only and is not a substitute for independent advice from a shareholders own Canadian and U.S. tax advisors.



The provisions of the Canadian Tax Act are subject to income tax treaties to which Canada is a party, including the Canada-United States Income Tax Convention (1980), as amended (the Convention).



Dividends on Common Shares and Other Income



Under the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian withholding tax at the rate of 25 percent on dividends paid or deemed to have been paid to him or her by a corporation resident in Canada. The Convention limits the rate to 15 percent if the shareholder is a resident of the United States and the dividends are beneficially owned by and paid to such shareholder and to 5 percent if the shareholder is also a corporation that beneficially owns at least 10 percent of the voting stock of the payor corporation.







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The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the paid up or stated capital of Kimber had increased by reason of the payment of such dividend. The Corporation will furnish additional tax information to shareholders in the event of such a dividend.



The Convention generally exempts from Canadian income tax dividends paid to a religious, scientific, literary, educational or charitable organization or to an organization constituted and operated exclusively to administer a pension, retirement or employee benefit fund or plan, if the organization is a resident of the United States and is exempt from income tax under the laws of the United States.



The tax payable on dividends is to be withheld at source by Kimber or people acting on its behalf. Kimber is liable for the amount of the tax, penalties and interest if it fails to so withhold. The taxpayer is liable in any event if Kimber fails to withhold.



Dispositions of Common Shares



Under the Canadian Tax Act, a taxpayers capital gain or capital loss from a disposition of a share of Common Shares of Kimber is the amount, if any, by which his or her proceeds of disposition exceed (or are exceeded by, respectively) the aggregate of his or her adjusted cost base of the share and reasonable expenses of disposition. The capital gain or loss must be computed in Canadian currency using a weighted average adjusted cost base for identical properties. Fifty percent of a capital gain are included in income. The amount by which a shareholders capital loss exceeds the capital gain in a year may be deducted from a capital gain realized by the shareholder in the three previous years or any subsequent year, subject to certain restrictions in the case of a corporate shareholder.



Under the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains, and may deduct allowable capital losses, realized on a disposition of taxable Canadian property. Shares of Common Shares of Kimber will constitute taxable Canadian property of a shareholder at a particular time if the shareholder used the shares in carrying on business in Canada, or if at any time in the five years immediately preceding the disposition 25% or more of the issued shares of any class or series in the capital stock of Kimber belonged to one or more persons in a group comprising the shareholder and persons with whom the shareholder and persons with whom the shareholder did not deal at arms length and in certain other circumstances.



The Convention relieves United States residents from liability for Canadian tax on capital gains derived on a disposition of shares unless:



(a) the value of the shares is derived principally from real property situated in Canada, including the right to explore for or exploit natural resources and rights to amounts computed by reference to production,

(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him when he or she ceased to be resident in Canada, or

(c) the shares formed part of the business property of a permanent establishment that the holder has or had in Canada within the 12 months preceding the disposition.



United States Federal Income Tax Consequences



The following is a general discussion of certain possible U.S. federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of Common Shares of Kimber. This discussion is of a general nature only and does not take into account the particular facts and circumstances, with respect to U.S. federal income tax issues, of any particular U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences. (See Canadian Federal Income Tax Consequences above).







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The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial, of any proposed legislation, which, if enacted, could be applied, possibly on a retroactive basis, at any time.



This discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any U.S. Holder or prospective U.S. Holder of Common Shares of Kimber, and no opinion or representation with respect to the U.S. federal income tax consequences to any such U.S. Holder or prospective U.S. Holder is made. Accordingly, U.S. Holders and prospective U.S. Holders of Common Shares of Kimber should consult their own financial advisor, legal counsel or accountant regarding the U.S. federal, state, local and foreign tax consequences of purchasing, owning and disposing of Common Shares of Kimber.



U.S. Holders



As used herein, a U.S. Holder means a holder of Common Shares of Kimber who is (i) a citizen or individual resident of the U.S., (ii) a corporation (other than a corporation subject to Subchapter S of the Code) created or organized in or under the laws of the U.S. or of any political subdivision thereof, (iii) an estate whose income is taxable in the U.S. irrespective of source or (iv) a trust subject to the primary supervision of a court within the U.S. and control of a U.S. fiduciary as described Section 7701(a)(30) of the Code.





Persons Not Covered



This summary does not address the U.S. federal income tax consequences to persons (including persons who are U.S. Holders) subject to special provisions of U.S. federal income tax law, including (i) tax-exempt organizations, (ii) qualified retirement plans, (iii) individual retirement accounts and other tax-deferred accounts, (iv) financial institutions, (v) insurance companies, (vi) real estate investment trusts, (vii) regulated investment companies, (viii) broker-dealers, (ix) persons or entities that have a functional currency other than the U.S. dollar, (x) persons subject to the alternative minimum tax, (xi) persons who own their Common Shares of Kimber as part of a straddle, hedging, conversion transaction, constructive sale or other arrangement involving more than one position, (xii) persons who acquired their Common Shares of Kimber through the exercise of employee stock options or otherwise as compensation for services, (xiii) persons that own an interest in an entity that owns Common Shares of Kimber, (xiv) persons who own, exercise or dispose of any options, warrants or other rights to acquire Common Shares of Kimber, (xv) entities treated as partnerships for U.S. federal income tax purposes, (xvi) corporations subject to Subchapter S of the Code, or (xvii) persons who own their Common Shares of Kimber other than as a capital asset within the meaning of Section 1221 of the Code.



Distributions on Common Shares of Kimber



U.S. Holders receiving distributions (including constructive distributions) with respect to Common Shares of Kimber are required to include in gross income for U.S. federal income tax purposes the gross amount of such distributions, equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that Kimber has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions.







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Canadian income tax withheld from distributions may result in a credit or deduction for United States federal income tax purposes. (See more detailed discussion at Foreign Tax Credit below.) To the extent that distributions from Kimber exceed current or accumulated earnings and profits of Kimber, such distributions will be treated first as a return of capital, to the extent of the U.S. Holders adjusted basis in the Common Shares, and thereafter as gain from the sale or exchange of the Common Shares of Kimber. (See more detailed discussion at Disposition of Common Shares of Kimber below.)  In general, dividend distributions are taxed as ordinary income.  At present, such dividends may be subject to a preferential tax rate for individuals, estates and trusts of no more than 15% if such dividends are qualified dividends.  However, this preferential tax rate may not be available if Kimber is, or was, a Passive Foreign Investment Company (PFIC). (See Passive Foreign Investment Company discussion below.)



In the case of foreign currency received as a distribution that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt.  Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss.



Certain information reporting and backup withholding rules may apply with respect to certain payments related to Kimbers Common Shares. In particular, a payor or middleman within the U.S., or in certain cases outside the U.S., will be required to withhold 28% of any payments to a U.S. Holder of Kimbers Common Shares of dividends on, or proceeds from the sale of, such Common Shares within the U.S., if a U.S. Holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, the backup withholding tax requirements. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holders U.S. federal income tax liability, provided the required information is furnished to the IRS.



U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding the information reporting and backup withholding rules applicable to Kimbers Common Shares.



Foreign Tax Credit



A U.S. Holder who pays (or has withheld from distributions) Canadian or other foreign income tax with respect to the ownership of Common Shares of Kimber may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for U.S. federal income tax purposes with respect to such foreign tax paid or withheld.  This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from distributions to) the U.S. Holder during that year.  If the taxpayer chooses to deduct foreign taxes, the allowable deduction may be limited by various tax rules.



There are significant and complex limitations that apply to the foreign tax credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holders U.S. income tax liability that the U.S. Holders foreign source income bears to his or its worldwide taxable income. In applying this limitation, the various items of income and deduction must be classified as either foreign source or U.S. source. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as passive income, high withholding tax interest, financial services income, shipping income, and certain other classifications of income. Dividends distributed by Kimber will generally constitute foreign source income, and will be classified as passive income or, in the case of certain U.S. Holders, financial services income for these purposes.







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Recent legislation will significantly modify the foreign tax credit rules discussed above.  Effective for tax years beginning after December 31, 2006, there will be only two specific classes of income for purposes of calculating foreign tax credit limitations (a passive category and a general category).  Other income that would have been included in one of the current categories will be included in one of these two categories.



In some limited circumstances, a U.S. individual taxpayer may be able to claim a foreign tax credit without regard to the foregoing limitation.  This would be the case if the taxpayers entire foreign source income for such year was passive income subject to information reporting (generally Form 1099) and the associated foreign income taxes were no more than $300 ($600 in the case of a joint return).



In addition, U.S. Holders that are corporations and that own 10% or more of the voting stock of Kimber may be entitled to an indirect foreign tax credit under Section 902 of the Code with respect to the payment of dividends by Kimber under certain circumstances and subject to complex rules and limitations.



The availability of the foreign tax credit and the application of the limitations with respect to the foreign tax credit are fact specific, and each U.S. Holder of Common Shares of Kimber is urged to consult their own financial advisor, legal counsel or accountant regarding the foreign tax credit rules.



Disposition of Common Shares of Kimber



A U.S. Holder will recognize gain or loss upon the sale or other taxable disposition of Common Shares of Kimber equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholders tax basis in the Common Shares of Kimber. This gain or loss will be capital gain or loss if the Common Shares are a capital asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the Common Shares of Kimber are held for more than one year.



Preferential tax rates apply to long-term capital gains of U.S. Holders that are individuals, estates or trusts. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder that is a corporation. Deductions for net capital losses are subject to significant limitations. For U.S. Holders that are not corporations, any unused portion of such net capital loss may be carried forward to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations, an unused net capital loss may be carried back three years and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.  The availability of preferential tax rates on capital gains is subject to Kimbers status as a PFIC. (See Passive Foreign Investment Company discussion below.)



Other Considerations for U.S. Holders



In the following circumstances, the above sections of this discussion may not describe the U.S. federal income tax consequences to U.S. Holders resulting from the ownership and disposition of Common Shares of Kimber:



Controlled Foreign Corporation



If more than 50% of the total voting power or the total value of Kimbers outstanding shares is owned, directly, indirectly, or by attribution by citizens or residents of the U.S., U.S. partnerships or corporations, or U.S. estates or trusts (as defined by the Code Section 7701(a)(30)), each of which own, directly, indirectly, or by attribution 10% or more of the total voting power of Kimbers outstanding shares (each a 10% Shareholder), Kimber could be treated as a Controlled Foreign Corporation (CFC) under Section 957 of the Code.







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The classification of Kimber as a CFC would effect many complex results, including that 10% Shareholders of Kimber would generally (i) be treated as having received a current distribution of their pro rata shares of Kimbers Subpart F income and (ii) be subject to current U.S. federal income tax on their pro rata shares of Kimbers earnings invested in U.S. property. The foreign tax credit may reduce the U.S. federal income tax on these amounts for such 10% Shareholders who are corporations (See more detailed discussion at Foreign Tax Credit above). In addition, under Section 1248 of the Code, gain from the sale or other taxable disposition of Common Shares of Kimber by a U.S. Holder that is or was a 10% Shareholder at any time during the five-year period ending with the sale is treated as ordinary (dividend) income to the extent of earnings and profits of Kimber attributable to the Common Shares sold or exchanged.



If Kimber is classified as both a Passive Foreign Investment Company as described below and a CFC, Kimber generally will not be treated as a Passive Foreign Investment Company with respect to 10% Shareholders. This rule generally will be effective for taxable years of 10% Shareholders beginning after 1997 and for taxable years of Kimber ending with or within such taxable years of 10% Shareholders.



Kimber does not believe that it currently qualifies as a CFC. However, there can be no assurance that Kimber will not be considered a CFC for the current or any future taxable year.



The CFC rules are very complex, and U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding the CFC rules and how these rules may impact their U.S. federal income tax situation.



Passive Foreign Investment Company



Certain U.S. income tax legislation contains rules governing PFICs, which can have significant tax effects on U.S. Holders of foreign corporations. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the U.S. and, for any taxable year, either (i) 75% or more of its gross income is passive income or (ii) the average percentage, by fair market value (or, if the corporation is not publicly traded and either is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of passive income is 50% or more. Passive income includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions. However, gains resulting from commodities transactions are generally excluded from the definition of passive income if such gains arise out of commodity hedging transactions or are active business gains, but only if substantially all the corporations commodities are inventory or other certain ordinary income property.



For purposes of the PFIC income test and the assets test, if a foreign corporation owns (directly or indirectly) at least 25% by value of the stock of another corporation, such foreign corporation shall be treated as if it (a) held a proportionate share of the assets of such other corporation, and (b) received directly its proportionate share of the income of such other corporation. Also, for purposes of such PFIC tests, passive income does not include any interest, dividends, rents or royalties that are received or accrued from a related person to the extent such amount is properly allocable to the income of such related person which is not passive income. For these purposes, a person is related with respect to a foreign corporation if such person controls the foreign corporation or is controlled by the foreign corporation or by the same persons that control the foreign corporation. For these purposes, control means ownership, directly or indirectly, of stock possessing more than 50% of the total voting power of all classes of stock entitled to vote or of the total value of stock of a corporation.



Kimber believes that it may have qualified as a PFIC for its most recent taxable year, may have qualified as a PFIC in prior years and may qualify as a PFIC in subsequent years. There can be no assurance that Kimbers determination concerning its PFIC status will not be challenged.







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In addition, one or more of Kimbers corporate subsidiaries may have qualified as a PFIC for its most recent taxable year, may have qualified as a PFIC in prior years and may qualify as a PFIC in subsequent years.



A U.S. Holder who holds stock (directly or indirectly) in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to U.S. federal income taxation under one of three alternative tax regimes at the election of each such U.S. Holder. The following is a discussion of such three alternative tax regimes applied to such U.S. Holders of Kimber. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a CFC (as defined above) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation (see more detailed discussion at Controlled Foreign Corporation above).



QEF Election



A U.S. Holder who elects in a timely manner to treat Kimber as a QEF (an Electing U.S. Holder) will generally be subject, under Section 1293 of the Code, to current U.S. federal income tax for any taxable year in which Kimber qualifies as a PFIC on his or its pro rata share of Kimbers (i) net capital gain (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder and (ii) ordinary earnings (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case for the shareholders taxable year in which (or with which) Kimbers taxable year ends, regardless of whether such amounts are actually distributed.  If Kimber has a deficit in earnings and profits for the year, there will be no income inclusion for the U.S. Holders but no loss will flow through to the U.S. Holders.



A QEF election will only be effective if Kimber provides certain information to the U.S. Holders.  There can be no assurances that Kimber can, or will, comply with these requirements.  U.S. Holders are urged to consult a tax advisor regarding the availability of and procedure for making a QEF election.



An effective QEF election, if in force for all PFIC years in the U.S. Holders holding period, or if made in conjunction with an election to purge the PFIC taint for prior years, also allows the Electing U.S. Holder to (i) generally treat any gain realized on the disposition of his or its Kimber Common Shares as capital gain; and (ii) either avoid interest charges resulting from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of Kimbers annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the Electing U.S. Holder is not a corporation, such an interest charge would be treated as personal interest that is not deductible.  If no QEF election is in force for all PFIC years in a taxpayers holding period, Section 1291 treatment, discussed below, will apply.



The U.S. federal income tax consequences of the QEF election will depend on whether the year of the election is the first year in the U.S. Holders holding period in which Kimber is a PFIC. If Kimber qualified as a PFIC in a prior year in the holding period, then in order to purge the PFIC taint for prior years, in addition to making the QEF election, the U.S. Holder must elect to recognize (i) under the rules of Section 1291 of the Code (discussed herein), any gain that he or it would otherwise recognize if the U.S. Holder sold his or its stock on the qualification date or (ii) if Kimber is a CFC, the U.S. Holders pro rata share of Kimbers post-1986 earnings and profits as of the qualification date. The qualification date is the first day of Kimbers first tax year in which Kimber qualified as a QEF with respect to such U.S. Holder.   U.S. Holders are urged to consult a tax advisor regarding the availability of and procedure for electing to recognize gain or earnings and profits under the foregoing rules. In addition to the above rules, under very limited circumstances, a U.S. Holder may make a retroactive QEF election if such U.S. Holder failed to file the QEF election documents in a timely manner.



A QEF election, once made with respect to Kimber, applies to the tax year for which it was made and to all subsequent tax years, unless the election is invalidated or terminated, or the IRS consents to revocation of the election.







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If a QEF election is made by a U.S. Holder and Kimber ceases to qualify as a PFIC in a subsequent tax year, the QEF election will remain in effect, although not applicable, during those tax years in which Kimber does not qualify as a PFIC. Therefore, if Kimber again qualifies as a PFIC in a subsequent tax year, the QEF election will be effective and the U.S. Holder will be subject to the rules described above for Electing U.S. Holders in such tax year and any subsequent tax years in which Kimber qualifies as a PFIC. In addition, the QEF election remains in effect, although not applicable, with respect to an Electing U.S. Holder even after such U.S. Holder disposes of all of his or its direct and indirect interest in the shares of Kimber. Therefore, if such U.S. Holder reacquires an interest in Kimber, that U.S. Holder will be subject to the rules described above for Electing U.S. Holders for each tax year in which Kimber qualifies as a PFIC.



Section 1291 Rules



If a U.S. Holder does not have a QEF election in effect during a year in which it holds the Common Shares in question and Kimber is a PFIC (a Non-Electing U.S. Holder), then special punitive taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be realized by reason of a pledge) of his or its Common Shares and (ii) certain excess distributions (generally, distributions received in the current taxable year that are in excess of 125% of the average distributions received during the three preceding years or, if shorter, the U.S. Holders holding period) by Kimber.



A Non-Electing U.S. Holder generally would be required to prorate all gains realized on the disposition of Kimber Common Shares and all excess distributions on Kimber Common Shares over the entire holding period for the Common Shares. All gains or excess distributions allocated to prior years of the U.S. Holder (other than years prior to the first taxable year of Kimber during such U.S. Holders holding period for which it was a PFIC) would be taxed at the highest tax rate for each such prior year applicable to ordinary income. The Non-Electing U.S. Holder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-Electing U.S. Holder that is not a corporation must treat this interest charge as personal interest which, as discussed above, is wholly non-deductible. The balance of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance.



The punitive consequences of Section 1291 fund status extend beyond the rules discussed above.  For example, under Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases the basis of Kimber Common Shares in the hands of the transferee and the basis of any property received in the exchange for those Common Shares would be increased by the amount of gain recognized. However, the specific U.S. federal income tax consequences to the U.S. Holder and the transferee may vary based on the manner in which the Common Shares are transferred.



In addition, certain special adverse rules may apply with respect to the holding of Kimber Common Shares while Kimber is a PFIC. For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such shares.



If Kimber is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds Kimber Common Shares, then Kimber will continue to be treated as a PFIC with respect to such Kimber Common Shares, even if it is no longer a PFIC by definition. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such Kimber Common Shares had been sold on the last day of the last taxable year for which it was a PFIC.







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Mark-to-Market Election



U.S. Holders who hold, actually or constructively, marketable stock (as specifically defined in the Treasury Regulations) of a foreign corporation that qualifies as a PFIC may annually elect to mark such stock to market (a mark-to-market election). If such an election is made, such U.S. Holder will generally not be subject to the special taxation rules of Section 1291 discussed above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder effective after the beginning of the holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on and other amounts taxable with respect to Kimber Common Shares (including any gain from the initial mark-to-market). A U.S. Holder who makes the mark-to-market election will include in ordinary income for the taxable year for which the election was made and subsequent years an amount equal to the excess, if any, of the fair market value of the Common Shares of Kimber as of the close of such tax year (or, in the case of a sale or other disposition, the amount realized) over such U.S. Holders adjusted basis in such Common Shares. In addition, the U.S. Holder is allowed an ordinary deduction for the lesser of (i) the excess, if any, of such U.S. Holders adjusted tax basis in the Common Shares over the fair market value of such shares as of the close of the tax year (or in the case of a sale or other disposition, the amount realized), or (ii) the excess, if any, of (A) the mark-to-market gains for the Common Shares in Kimber included by such U.S. Holder for prior tax years, including any amount which was included pursuant to the Section 1291 rules discussed above, over (B) the mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holders adjusted tax basis in the Common Shares of Kimber will be adjusted to reflect the amount included in or deducted from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in which the election is made and to each subsequent taxable year Kimber is a PFIC, unless Kimber Common Shares cease to be marketable, as specifically defined, or the IRS consents to revocation of the election. U.S. Holders should consult their tax advisor regarding the manner of making such an election.



Kimber believes that its Common Shares should presently qualify as marketable stock for purposes of Section 1296, but there is no assurance that the Common Shares will continue to so qualify.



Kimbers Subsidiaries



If Kimber is (or has been) a PFIC and at any time has a non-US corporate subsidiary that is a PFIC, U.S. Holders generally would be deemed to own, and also would be subject to the PFIC rules with respect to, their indirect ownership interests in any such lower-tier PFIC.  If a U.S. Holder does not make a QEF election in respect of a lower-tier PFIC, the U.S. Holder could incur liability for the deferred tax and interest charge described above if either (i) Kimber receives a distribution from, or disposes of all or part of its interest in, the lower-tier PFIC or (ii) the U.S. Holder disposes of all or part of its interest in Kimber.  A QEF election will only be effective with respect to a lower-tier PFIC if the lower-tier PFIC provides certain information to the U.S. Holders.  There can be no assurances that Kimber can, or will, cause any lower-tier PFIC to comply with these requirements.  U.S. Holders are urged to consult a tax advisor regarding the availability of and procedure for making a QEF election for any lower-tier PFIC.



A mark-to-market election under the PFIC rules with respect to Kimber would not apply to a lower-tier PFIC, and a U.S. Holder would not be able to make such an election with respect to its indirect ownership interest in any lower-tier PFIC.  Accordingly, U.S. holders could be subject to the PFIC rules with respect to income of any lower-tier PFIC the value of which has already been taken into account indirectly via a mark-to-market election made with respect to Kimber.  Similarly, if a U.S. Holder made a mark-to-market election under the PFIC rules with respect to Kimber and made a QEF election with respect to a lower-tier PFIC, that U.S. Holder could be subject to current taxation with respect to income from the lower-tier PFIC, the value of which was taken into account indirectly via the mark-to-market election.







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The PFIC rules are very complex, and U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding the PFIC rules, including the advisability of and procedure for making a QEF election or a mark-to-market election, and how these rules may impact their U.S. federal income tax situation.



Other Reporting Rules



Under a number of circumstances, United States investors acquiring Common Shares may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns. In particular, any United States investor who becomes the owner, directly or indirectly, of 10% or more of the Common Shares will be required to file such a return. Other filing requirements may apply and United States investors should consult their own tax advisors concerning these requirements.



F. Dividends and Paying Agents



Not applicable



G. Statement by Experts



Not applicable.



H. Documents on Display



The documents described herein may be inspected at the head office of Kimber at Suite 215 - 800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6, during normal business hours.



The current Annual Report, including all exhibits has been filed with the Securities and Exchange Commission and it is available for review in the Commissions public reference room or on the Commissions website at www.sec.gov.



I. Subsidiary Information



The following is information regarding the Companys wholly owned subsidiaries:





|                                        |                               |                                                                                      |                
|--------------------------------------- | ----------------------------- | ------------------------------------------------------------------------------------ | ---------------
|Business
Name                           | Jurisdiction of Incorporation | Office
Address                                                                       | Telephone      
|Minera Monterde, S. de R.L. de C.V.     | Mexico                        | Camino al Campestre # 4302
Col. Quintas Campestre, CP 31214
Chihuahua, Chih.  Mexico | 52-614-410-8344
|Kimber Resources de Mexico S.A. de C.V. | Mexico                        | Camino al Campestre # 4302
Col. Quintas Campestre, CP 31214
Chihuahua, Chih.  Mexico | 52-614-410-8344
|Minera Pericones S.A. de C.V.           | Mexico                        | Camino al Campestre # 4302
Col. Quintas Campestre, CP 31214
Chihuahua, Chih.  Mexico | 52-614-410-8344







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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



In summary, the principal market risks which the Company is exposed to are changes in the price of gold and silver and adverse movements in foreign exchange rates.  The Company uses the Canadian dollar as its reporting currency and is therefore exposed to foreign exchange movements in the United States Dollar and the Mexican Peso. For more detailed disclosure of industry risks please see above Item 3 D Risk Factors  Industry Risks.



During the financial year and up to the date of this report the Company has not used financial instruments to reduce its exposure to market risks.  Additional disclosure on financial instruments held by the Company at June 30, 2007 is contained in note 2 Financial instruments to the financial statements.





ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



A. Debt Securities



Not Applicable



B. Warrants and Rights



Not Applicable



C. Other Securities



Not Applicable



D. American Depository Shares



Not Applicable



PART II



ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES



Not Applicable





ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS



Not Applicable





ITEM 15. CONTROLS AND PROCEDURES



As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision of the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Companys disclosure controls and procedures pursuant to Rule 13a-15 of the United States Securities Exchange Act of 1934 (Exchange Act).







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Based upon that evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

The Companys management, with the participation of its Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting.  Under the supervision of the Chief Financial Officer, the Companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”).  The Company’s controls include policies and procedures that:

·

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP; and

·

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the annual financial statements or interim financial statements.



There has been no significant change in the Companys internal control over financial reporting during the year ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.





ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT



The Companys Board of Directors has determined that Larry Bell, a member and Chair of its audit committee, qualifies as an audit committee financial expert as defined in Item 16.A of Form 20-F. The Company has adopted the criteria for director independence and unrelatedness for members of public company audit committees that are consistent with the criteria prescribed by the Sarbanes-Oxley Act of 2002, Section 10A(m)(3) of the Exchange Act and Rule 10A-3(b)(1) promulgated thereunder, and the rules of the American Stock Exchange as currently in effect. Each member of the Companys audit committee satisfies the criteria for director independence.





ITEM 16B. CODE OF ETHICS



Kimbers Code of Conduct is available on the Companys website at www.kimberresources.com.





ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES



Audit Fees



The Companys audit committee appointed D&H Group LLP (D&H Group) as independent auditors to audit the Companys financial statements for the fiscal year ended June 30, 2007. The aggregate fees billed by D&H Group for professional services rendered and expenses for the audit of our annual financial statements included in this Annual Report during the fiscal year ended June 30, 2007 were $38,000 and $27,210 during the fiscal year ended June 30, 2006.  The services provided by D&H Group included performance of the audit of the Companys financial statements and the reconciliation of Canadian and US GAAP.







---

91



Audit Related Fees



During the fiscal year ended June 30, 2007, the aggregate fees billed for assurance and related services by D&H Group relating to our quarterly financial statements which are not reported under the caption Audit Fees above, were $450 and $992 during the fiscal year ended June 30, 2006.  The services provided by D&H Group included attendance at Audit Committee meetings and discussions with management.



Tax Fees



During the fiscal year ended June 30, 2007, the aggregate fees billed for tax compliance, tax advice and tax planning by D&H Group were $1,900 and $1,870 during the fiscal year ended June 30, 2006.  The services provided by D&H Group included the preparation of Canadian corporate income tax returns, Information Returns in Respect of Controlled Foreign Affiliates and forms in respect of Transactions with Non-Resident Persons.



All Other Fees



During the fiscal year ended June 30, 2007, the aggregate fees billed by D&H Group for other non-audit professional services, other than those services listed above, totalled $9,850 and $nil during the fiscal year ended June 30, 2006.  The services provided by D&H Group were for review of interim financial statements in 2007



Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before D&H Group is engaged by the Company or our subsidiaries to render any auditing or permitted non-audit related service, the engagement be approved by the audit committee; or entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committees responsibilities to management.



The audit committee pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules. Therefore, the audit committee does not have records of what percentage of the above fees were pre-approved. However, all of the above services and fees were reviewed and approved by the audit committee either before or after the respective services were rendered.



The audit committee has considered the nature and amount of the fees billed by D&H Group and believes that the provision of the services for activities unrelated to the audit is compatible with maintaining D&H Group independence.





ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES



Not Applicable





ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS



None







---

92



PART III



ITEM 17. FINANCIAL STATEMENTS



The financial statements were prepared in accordance with Canadian GAAP and are presented in Canadian dollars.  There are material differences between United States and Canadian GAAP.



The financial statements are in the following order:



1.

Auditors' Reports;

2.

Consolidated Balance Sheets;

3.

Consolidated Statements of Operations and Deficit;

4.

Consolidated Statements of Cash Flows;

5.

Consolidated Statement of Unproven Mineral Right Interests; and

6.

Notes to the Consolidated Financial Statements.





ITEM 18. FINANCIAL STATEMENTS



Not Applicable



ITEM 19. EXHIBITS



The exhibits included in this Form 20-F are in the following order:



1.

Articles of Incorporation and Bylaws



This information is incorporated by reference to our Form 20-F filed with the SEC on May 13, 2005.



3.

Voting Trust Agreements



Not Applicable



4.

Material Contract



Except for contracts made in the ordinary course of the Company's business, the following are the material contracts to be performed in whole or in part on or after the date of filing this Form 20-F or entered into by Kimber or Minera Monterde within two years before the date of this Form 20-F:



a.

Intentionally left blank



b.

Intentionally left blank



c.

Intentionally left blank



d.

Intentionally left blank



e.

Carried Interest Agreement dated February 18, 2000 among Kimber, Thorne International Ltd. and Minera Ayutla S. A. de C. V. 1;



f.

Intentionally left blank







---

93



g.

Temporary Occupation of Ejido Land Agreement dated July 13, 2004 between the Ejido Monterde, represented by the members of its board of directors, Blas Quezada Ozuna, Ramon Balois Munoz, Miguel Palacios Trias, and Manuel Quezada Ponce and Minera Monterde 1;



h.

Management Agreement dated as of the 15th day of March 2002, between Kimber and Robert V. Longe, subsequently amended as to a salary by verbal agreement 1;



i.

Management Agreement dated as of the 15th day of March 2002, between Kimber and Michael E. Hoole, subsequently amended as to a salary and employment status rather than independent consultant status by verbal agreement 1;



j.

Management Agreement dated as of the 15th day of March 2002, between Kimber and Alan D. Hitchborn 1;



k.

Intentionally left blank



l.

Transfer Agent, Registrar and Dividend Disbursing Agent Agreement dated as of the 29th day of April 2002 between Kimber and Computershare Trust Company of Canada 1;



m.

Stock Option Plan dated for reference March 28, 2002, as amended by Shareholder resolutions passed December 10, 2003 1;



n.

Stock Option Agreements between Kimber and various directors, consultants, employees and officers of and to Kimber. Samples of the various standard form option agreements are attached 1.



o.

Change of Control Agreements dated January 13, 2004, between Kimber and each of Robert V. Longe, Michael E. Hoole and J. Byron Richards. A sample of the agreement is attached 1;



p.

Listing Agreement dated June 11, 2004 between the Toronto Stock Exchange, the TSX, and Kimber 1;



q.

Intentionally left blank;



r.

Intentionally left blank



s.

Intentionally left blank



t.

Intentionally left blank



u.

Intentionally left blank



v.

Intentionally left blank



w.

Intentionally left blank



x.

Intentionally left blank



y.

Intentionally left blank



z.

Intentionally left blank



aa.

Agency Agreement  Private placement of up to 9,400,000 Common Shares dated January 31, 2006 between Puplava Securities Inc. and Kimber Resources Inc. 2;







---

94



bb.

Financial Advisory Agreement dated January 30, 2006 between Investor Resources LLC and Kimber Resources Inc. 2;



cc.

Finders fee agreement dated February 22, 2006 between Blackmont Capital Inc. and Kimber Resources Inc.2;



dd.

Various Private Placement Subscription Agreements in connection with the brokered and non-brokered private placement of a total of 7,047,500 Common Shares of Kimber consisting of one which closed on March 1, 2006. An unsigned copy of the form of the forms of Private Placement Subscription Agreements are attached as an examples 2;



ee.

Temporary Occupation of Ejido Land Agreement dated May 7, 2006 between the Ejido Ocobiachi, represented by the members of its board of directors, Octavio Castro Marquez, Guadalupe Ortiz Rivas, and the President of its Supervisory Board, Fernando Trias Aranda and Minera Monterde 2;



ff.

Settlement
  Agreement dated April 26, 2007 between Robert V. Longe and Kimber Resources
  Inc.



gg.

Settlement
  Agreement dated April 26, 2007 between Michael E. Hoole and Kimber Resources
  Inc.



hh.

Change
  of Control Agreement dated April 26, 2007 between Gordon Cummings and Kimber
  Resources Inc.



ii.

Employment
  Agreement dated September 25, 2007 between Gordon Cummings and Kimber Resources
  Inc.





1These material contracts (items e,g, h to j,and l to p) are incorporated by reference to Kimbers Form 20-F filed with the SEC on May 13, 2005.



2

These material contracts (items aa to ee) are incorporated by reference to our Form 20-F filed with the SEC on September 29, 2006.



10.

Additional Exhibits



Not Applicable







RECENT DEVELOPMENTS



By agreement reached on September 25, 2007 Mr. Gordon Cummings, Kimbers Chief Financial Officer, agreed to accept the position of President and Chief Executive Officer effective upon the retirement of Mr. Robert Longe.  The promotion of Mr. Cummings will necessitate the hiring of a new Chief Financial Officer.









---

95







SIGNATURE PAGE





Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, Kimber Resources Inc. certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report be signed on its behalf by the undersigned, thereunto duly authorized.





Dated: September 28, 2007





On Behalf of KIMBER RESOURCES INC.,











"R. V. Longe"



Robert V. Longe

President, Chief Executive Officer and Director



"M.E. Hoole"



Michael E. Hoole

Vice-President and Corporate Secretary









---























KIMBER
  RESOURCES INC.



Consolidated
  Financial Statements

(stated
  in Canadian dollars)



June
  30, 2007

June
  30, 2006

June
  30, 2005

(Audited)



(An
  exploration stage Company)





















---



[fs002.jpg]





AUDITORS'
  REPORT









To the Shareholders of

Kimber Resources Inc.





We have audited the consolidated
  balance sheets of Kimber Resources Inc. as at June 30, 2007 and 2006 and the
  consolidated statements of operations and deficit and cash flows for the years
  ended June 30, 2007, 2006 and 2005.  These financial statements are the
  responsibility of the Company's management.  Our responsibility is to express
  an opinion on these financial statements based on our audits.



We conducted our audits
  in accordance with Canadian generally accepted auditing standards and the standards
  of the Public Company Accounting Oversight Board (United States).  Those
  standards require that we plan and perform an audit to obtain reasonable assurance
  whether the consolidated financial statements are free of material misstatement.
   An audit includes examining, on a test basis, evidence supporting the
  amounts and disclosures in the financial statements.  An audit also includes
  assessing the accounting principles used and significant estimates made by management,
  as well as evaluating the overall financial statement presentation.



In our opinion, these consolidated
  financial statements present fairly, in all material respects, the financial
  position of the Company as at June 30, 2007 and 2006 and the results of its
  operations and cash flows for the years ended June 30, 2007, 2006 and 2005 in
  accordance with Canadian generally accepted accounting principles.



Canadian generally accepted
  accounting principles vary in certain significant respects from accounting principles
  generally accepted in the United States.  Application of accounting principles
  generally accepted in the United States would have affected assets and deficit
  as at June 30, 2007, 2006 and 2005 and results of operations and cash flows
  for the years then ended to the extent summarized in Note 11 to the consolidated
  financial statements.







|                           |  |                              
|-------------------------- |  | -----------------------------
|Vancouver,
        B.C.    |  | D&H
        Group LLP      
|September
        14, 2007 |  | Chartered
        Accountants
|                           |  |                              
|[afs004.jpg]              

---

KIMBER
  RESOURCES INC.

Consolidated
  Balance Sheets

(stated
  in Canadian dollars)



|                                                                |  |  |                  |  |                       |  |                      
|--------------------------------------------------------------- |  |  | ---------------- |  | --------------------- |  | ---------------------
|                                                                |  |  | June
        30,
|                                                                |  |  |                  |  | 2007                  |  | 2006                 
|                                                                |  |  |                  |  |                       |  |                      
|A
        S S E T S                                            
|Current
        Assets                                          |  |  |                  |  |                       |  |                      
|Cash
        and cash equivalents                               |  |  |                  |  | $
         6,200,602  |  | $
         15,866,960
|Amounts
        receivable (note 4)                             |  |  |                  |  | 429,481               |  | 993,441              
|Prepaid
        expenses                                        |  |  |                  |  | 57,246                |  | 46,837               
|                                                                |  |  |                  |  | 6,687,329             |  | 16,907,238           
|                                                                |  |  |                  |  |                       |  |                      
|Equipment
        (note 5)                                      |  |  |                  |  | 644,230               |  | 603,347              
|Unproven
        mineral right interests (Schedule, note 2 & 3) |  |  |                  |  | 32,176,965            |  | 21,749,820           
|                                                                |  |  |                  |  | $
         39,508,524 |  | $
         39,260,405
|                                                                |  |  |                  |  |                       |  |                      
|L
        I A B I L I T I E S                                  
|Current
        liabilities                                     |  |  |                  |  |                       |  |                      
|Accounts
        payable and accrued liabilities                |  |  |                  |  | $
          663,642   |  | $
          1,422,519
|Due
        to related parties (note 9)                         |  |  |                  |  | 652,012               |  | -                    
|                                                                |  |  |                  |  | 1,315,654             |  | 1,422,519            
|Commitment
        (note 13)                                    |  |  |                  |  |                       |  |                      
|Contingent
        liability (note 14)                          |  |  |                  |  |                       |  |                      
|S
        H A R E H O L D E R S   E Q U I T Y                 
|                                                                |  |  |                  |  |                       |  |                      
|Share
        capital (note 7)                                  |  |  |                  |  | 46,762,332            |  | 42,766,942           
|Contributed
        surplus (note 8)                            |  |  |                  |  | 1,970,385             |  | 1,796,853            
|Deficit                                                         |  |  |                  |  | (10,539,847)          |  | (6,725,909)          
|                                                                |  |  |                  |  | 38,192,870            |  | 37,837,886           
|                                                                |  |  |                  |  | $
         39,508,524 |  | $
         39,260,405



|                                                                                |  |                                  
|------------------------------------------------------------------------------- |  | ---------------------------------
|Nature
        of operations (note 1)
      Subsequent
        events (note 12)
|Approved
        on behalf of the Board of Directors:                          
|R.
        V. Longe                                                           |  | S.P.
        Quin              
|Robert
        V. Longe, Director                                               |  | Stephen
        P. Quin, Director



See notes to the consolidated financial statements





---

KIMBER
  RESOURCES INC.

Consolidated
  Statements of Operations and Deficit

(stated
  in Canadian dollars)



|                                                       |  |                                            |  |                             |  |                             |  |                             |  |  | 
|------------------------------------------------------ |  | ------------------------------------------ |  | --------------------------- |  | --------------------------- |  | --------------------------- |  |  | 
|                                                       |  | Years
        ended
      June
        30,
|                                                       |  |                                            |  | 2007                        |  | 2006                        |  | 2005                       
|                                                       |  |                                            |  |                             |  | (Note
        2(n))         |  | (Note
        2 (n))       
|                                                       |  |                                            |  |                             |  |                             |  |                            
|Revenue                                                |  |                                            |  | $
                        - |  | $
                        - |  | $
                        -
|                                                       |  |                                            |  |                             |  |                             |  |                            
|Expenses                                               |  |                                            |  |                             |  |                             |  |                            
|Amortization
        of equipment                      |  |                                            |  | $
              28,819      |  | $
              38,406      |  | $
              24,034     
|Foreign
        exchange (gain)/loss                   |  |                                            |  | 10,701                      |  | 22,636                      |  | (17,103)                   
|General
        exploration                            |  |                                            |  | 39,398                      |  | 124,730                     |  | 24,893                     
|Interest
        and bank charges                      |  |                                            |  | 2,367                       |  | 1,671                       |  | 4,043                      
|Investor
        relations                             |  |                                            |  | 211,187                     |  | 309,669                     |  | 195,163                    
|Office
        and miscellaneous                       |  |                                            |  | 252,637                     |  | 186,614                     |  | 123,421                    
|Legal,
        consulting and audit                    |  |                                            |  | 952,743                     |  | 150,424                     |  | 51,380                     
|Rent                                                   |  |                                            |  | 161,508                     |  | 72,775                      |  | 64,365                     
|Salaries
        and benefits (note 9)                 |  |                                            |  | 1,840,643                   |  | 726,239                     |  | 570,991                    
|Stock-based
        compensation                       |  |                                            |  | 527,957                     |  | 760,324                     |  | 720,469                    
|Transfer
        and filing fees                       |  |                                            |  | 90,478                      |  | 133,767                     |  | 39,386                     
|Travel
        and accommodation                       |  |                                            |  | 120,257                     |  | 132,127                     |  | 85,231                     
|                                                       |  |                                            |  |                             |  |                             |  |                            
|Net
        loss before other items                    |  |                                            |  | (4,238,695)                 |  | (2,659,382)                 |  | (1,886,273)                
|Other
        items                                    |  |                                            |  |                             |  |                             |  |                            
|Interest
        income                                |  |                                            |  | 415,493                     |  | 295,962                     |  | 74,784                     
|Other
        income                                   |  |                                            |  | 9,264                       |  | -)                          |  | -)                         
|Unprovenmineral right interests written-off            |  |                                            |  | -)                          |  | -)                          |  | (14,493))                  
|                                                       |  |                                            |  |                             |  |                             |  |                            
|Net
        loss for the year                          |  |                                            |  | (3,813,938)                 |  | (2,363,420)                 |  | (1,825,982)                
|Deficit
        - beginning of year                    |  |                                            |  | (6,725,909)                 |  | (4,362,489)                 |  | (2,536,507)                
|Deficit
        - end of year                          |  |                                            |  | $(10,539,847)               |  | $
        (6,725,909)       |  | $
        (4,362,489)      
|                                                       |  |                                            |  |                             |  |                             |  |                            
|Loss
         per share, basic and diluted (note 2(g)) |  |                                            |  | $
                (0.08)    |  | $
                (0.06)    |  | $
                (0.06)   
|                                                       |  |                                            |  |                             |  |                             |  |                            
|Weighted
        average number of shares outstanding  |  |                                            |  | 48,118,320                  |  | 40,026,359                  |  | 30,612,668                 



See notes to the consolidated financial statements





---

KIMBER
  RESOURCES INC.

Consolidated
  Statements of Cash Flows

(stated
  in Canadian dollars)



|                                                           |                                            |  |                           |  |                        
|---------------------------------------------------------- | ------------------------------------------ |  | ------------------------- |  | -----------------------
|                                                           | Years
        ended
      June
        30,
|                                                           | 2007                                       |  | 2006                      |  | 2005                   
|Cash
        provided by (used for):                       |                                            |  | (Note
        2(n))       |  | (Note
        2(n))    
|Operating
        Activities                               |                                            |  |                           |  |                        
|Net
        loss for the year                              | $
         (3,813,938)                     |  | $
         (2,363,420)    |  | $
         (1,825,982) 
|Items
        not involving cash:                          |                                            |  |                           |  |                        
|Amortization
        of equipment                          | 28,819                                     |  | 38,406                    |  | 24,034                 
|Stock-based
        compensation                           | 527,957                                    |  | 760,324                   |  | 720,469                
|Unproven
        mineral right interests written-off       | -)                                         |  | -)                        |  | 14,493                 
|                                                           | (3,257,162)                                |  | (1,564,690)               |  | (1,066,986)            
|Changes
        in the following:                          |                                            |  |                           |  |                        
|Amounts
        receivable                                 | 76,740                                     |  | 26,132                    |  | 45,496                 
|Due
        from related parties                           | -                                          |  | 16,702                    |  | 3,000                  
|Prepaid
        expenses                                   | (10,409)                                   |  | (6,603)                   |  | (9,262)                
|Accounts
        payable and accrued liabilities           | 332,760                                    |  | 19,750                    |  | (17,691)               
|Due
        to related parties                             | 652,012)                                   |  | (465)                     |  | (1,002)                
|                                                           | (2,206,059)                                |  | (1,509,174)               |  | (1,046,445)            
|                                                           |                                            |  |                           |  |                        
|Investing
        Activities                               |                                            |  |                           |  |                        
|Redemption
        of preferred shares                     | -                                          |  | 103,596                   |  | -                      
|Purchase
        of equipment                              | (192,505)                                  |  | (269,079)                 |  | (64,182)               
|Unproven
        mineral right interests                   | (10,908,759)                               |  | (10,151,030)              |  | (5,873,935)            
|                                                           | (11,101,264)                               |  | (10,316,513)              |  | (5,938,117)            
|Financing
        Activities                               |                                            |  |                           |  |                        
|Common
        shares issued for cash                      | 3,645,012                                  |  | 24,048,306                |  | 8,339,517              
|Share
        issuance costs                               | (4,047)                                    |  | (644,307)                 |  | (346,152)              
|                                                           | 3,640,965                                  |  | 23,403,999                |  | 7,993,365              
|                                                           |                                            |  |                           |  |                        
|(Decrease)/Increase
        in cash during the year        | (9,666,358)                                |  | 11,578,312                |  | 1,008,803              
|Cash
        and cash equivalents - beginning of year      | 15,866,960                                 |  | 4,288,648                 |  | 3,279,845              
|Cash
        and cash equivalents - end of year            | $
         6,200,602                       |  | $
         15,866,960     |  | $
           4,288,648 
|Supplementary
        financial information                |                                            |  |                           |  |                        
|Non-cash
        Financing activities                      |                                            |  |                           |  |                        
|Shares
        and securities issued for finders fees     | $
                      -                  |  | $
                      - |  | $
            146,309* 
|Share
        issue costs                                  | -                                          |  | -                         |  | (146,309)*             
|*
         includes $86,309 fair value of agents options  |                                            |  |                           |  |                        
|Non-cash
        Investing activities                      |                                            |  |                           |  |                        
|Accounts
        receivable for unproven mineral interests | 487,220                                    |  | (569,102)                 |  | 38,699                 
|Accounts
        payable for unproven mineral interests    | (1,091,637)                                |  | 502,500                   |  | 275,358                
|Amortization                                               | 122,803                                    |  | 64,062                    |  | 45,289                 
|                                                           | $
            (481,614)                    |  | $
               (2,540)  |  | $
            359,346  
|Cash
        and cash equivalents comprise of:             |                                            |  |                           |  |                        
|Cash                                                       | 1,303,133                                  |  | 799,808                   |  | 1,289,297              
|Bankers
        acceptance notes                          | 4,897,469                                  |  | 15,067,152                |  | 2,999,351              
|                                                           | $
          6,200,602                      |  | $
         15,866,960     |  | $
            4,288,648



See notes to the consolidated financial statements





---



KIMBER
  RESOURCES INC.

Consolidated
  Statements of Unproven Mineral Right Interests (note 2 & 3)

(stated
  in Canadian dollars)



|                                               |  |                             |  |                         |  |                             |  |                         |  |                            
|---------------------------------------------- |  | --------------------------- |  | ----------------------- |  | --------------------------- |  | ----------------------- |  | ---------------------------
|                                               |  | June
        30,
      2005 |  | Net
      Costs         |  | June
        30,
      2006 |  | Net
      Costs         |  | June
        30,
      2007
|MEXICO                                         |  |                             |  |                         |  |                             |  |                         |  |                            
|Monterde
        Property                      |  |                             |  |                         |  |                             |  |                         |  |                            
|Acquisition                                    |  | $
           1,496,346      |  | $
              742,262 |  | $
            2,238,608     |  | $
              499,437 |  | $
            2,738,045    
|Exploration                                    |  |                             |  |                         |  |                             |  |                         |  |                            
|Amortization                                   |  | 57,954                      |  | 64,062                  |  | 122,016                     |  | 122,803                 |  | 244,819                    
|Assays                                         |  | 1,204,299                   |  | 827,288                 |  | 2,031,587                   |  | 1,353,120               |  | 3,384,707                  
|Drilling                                       |  | 3,644,609                   |  | 4,600,027               |  | 8,244,636                   |  | 3,272,194               |  | 11,516,830                 
|Engineering                                    |  | 373,531                     |  | 636,299                 |  | 1,009,830                   |  | 543,942                 |  | 1,553,772                  
|Environmental
        study                    |  | 421,416                     |  | 225,175                 |  | 646,591                     |  | 512,289                 |  | 1,158,880                  
|Field,
        office                          |  | 288,669                     |  | 108,015                 |  | 396,684                     |  | 155,200                 |  | 551,884                    
|Geological,
        geophysical                |  | 1,577,704                   |  | 1,300,005               |  | 2,877,709                   |  | 1,148,043               |  | 4,025,752                  
|Legal                                          |  | 202,475                     |  | 98,408                  |  | 300,883                     |  | 118,832                 |  | 419,715                    
|Maps,
        reports, reproductions           |  | 296,927                     |  | 217,230                 |  | 514,157                     |  | 240,332                 |  | 754,489                    
|Metallurgy                                     |  | 217,132                     |  | 50,360                  |  | 267,492                     |  | 327,678                 |  | 595,170                    
|Road
        and drill site maintenance        |  | 664,522                     |  | 321,967                 |  | 986,489                     |  | 831,336                 |  | 1,817,825                  
|Salaries
        and wages                     |  | 182,813                     |  | 124,794                 |  | 307,607                     |  | 212,833                 |  | 520,440                    
|Scoping
        study                          |  | 11,392                      |  | -                       |  | 11,392                      |  | -                       |  | 11,392                     
|Socioeconomic
        studies                  |  | -                           |  | 26,619                  |  | 26,619                      |  | 12,187                  |  | 38,806                     
|Stakeholder
        costs                      |  | 22,040                      |  | 20,235                  |  | 42,275                      |  | 7,910                   |  | 50,185                     
|Supplies                                       |  | 386,406                     |  | 516,519                 |  | 902,925                     |  | 611,238                 |  | 1,514,163                  
|Travel,
        accommodation                  |  | 504,208                     |  | 267,047                 |  | 771,255                     |  | 377,602                 |  | 1,148,857                  
|Third
        party recoveries                 |  | (9,931)                     |  | -                       |  | (9,931)                     |  | -                       |  | (9,931)                    
|                                               |  | 10,046,166                  |  | 9,404,050               |  | 19,450,216                  |  | 9,847,539               |  | 29,297,755                 
|                                               |  | 11,542,512                  |  | 10,146,312              |  | 21,688,824                  |  | 10,346,976              |  | 32,035,800                 
|Setago
        Property                        |  |                             |  |                         |  |                             |  |                         |  |                            
|Acquisition                                    |  | 4,574                       |  | 2,178                   |  | 6,752                       |  | -                       |  | 6,752                      
|Exploration                                    |  | 54,244                      |  | -                       |  | 54,244                      |  | -                       |  | 54,244                     
|                                               |  | 58,818                      |  | 2,178)                  |  | 60,996                      |  | -)                      |  | 60,996                     
|Pericones
        Property                     |  |                             |  |                         |  |                             |  |                         |  |                            
|Acquisition                                    |  | -                           |  | -                       |  | -                           |  | 8,148                   |  | 8,148                      
|Exploration                                    |  | -                           |  | -                       |  | -                           |  | 72,021                  |  | 72,021                     
|                                               |  | -                           |  | -                       |  | -                           |  | 80,169                  |  | 80,169                     
|                                               |  |                             |  |                         |  |                             |  |                         |  |                            
|Total
        unproven mineral right interests |  | $
         11,601,330       |  | $
         10,148,490   |  | $
          21,749,820      |  | $
         10,427,145   |  | $
          32,176,965     
|                                               |  |                             |  |                         |  |                             |  |                         |  |                            



See notes to consolidated financial statements





---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)





1.

NATURE
  OF OPERATIONS



The
  Company is incorporated in British Columbia, Canada, and is involved in the
  acquisition and exploration of mineral right interests in Mexico.  At the
  date of these financial statements, the Company has not yet determined whether
  any of its mineral rights contain economically recoverable mineral reserves.
   Accordingly, the carrying amount of deferred unproven mineral rights represents
  expenditures made to date and does not necessarily reflect present or future
  values.  The recovery of these costs is dependent upon the discovery of
  economically recoverable mineral reserves and the ability of the Company to
  obtain the necessary financing to complete their exploration and development
  and to resolve any environmental, regulatory, or other constraints.



The
  Company has taken steps to verify title to its mineral right interests in accordance
  with industry standards for the current stage of exploration of these properties,
  however, these procedures do not guarantee that title to these rights may not
  be subject to unregistered prior agreements or other undetected defects.



The
  Company does not generate cash flow from operations and accordingly, the Company
  will need to raise additional funds through future issuance of securities.  Although
  the Company has been successful in raising funds in the past, there can be no
  assurance the Company will be able to raise sufficient funds in the future,
  in which case the Company may be unable to meet its obligations as they come
  due in the normal course of business.  Should the Company be unable to
  realize its assets and discharge its liabilities in the normal course of business,
  the net realizable value of its assets may be materially less than the amounts
  on the balance sheet.





2.

SUMMARY
  OF SIGNIFICANT ACCOUNTING POLICIES



a)

Basis
  of Presentation



These
  consolidated financial statements have been prepared by management in accordance
  with Canadian generally accepted accounting principles (GAAP) and are reconciled
  to U.S. GAAP in note 11.



The
  consolidated financial statements include the accounts of the Company, its principal
  wholly owned subsidiary, Minera Monterde S. de R.L de C.V. (Mexico) and two
  other recently activated subsidiaries, Minera Pericones S. A. de C.V. and Kimber
  Resources de Mexico S. A. de C.V. Intercompany balances and transactions are
  eliminated on consolidation.





b)

Estimates



The
  preparation of financial statements requires management to make estimates and
  assumptions that affect the reported amount of assets and liabilities at the
  date of the financial statements, and the reported amounts of expenses incurred
  during the reporting period.  Significant areas requiring the use of management
  estimates relate to the determination of environmental obligations, stock compensation,
  impairment of deferred mineral right interests and amortization.  Actual
  results could differ from those estimates.



c)

Unproven
  Mineral Right Interests



Mineral
  right acquisition costs, exploration and direct field costs are deferred until
  the rights to which they relate are placed into production, at which time these
  deferred costs will be amortized over the estimated useful life of the rights
  following commencement of production, or written-off if the rights are disposed
  of.  Administration costs and other exploration costs that do not relate
  to a specific mineral right are expensed as incurred.











---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



2.

SUMMARY
  OF SIGNIFICANT ACCOUNTING POLICIES(continued)



c)

Unproven
  Mineral Right Interests(continued)



Cost
  includes the cash consideration and the fair value of shares issued on the acquisition
  of mineral rights.  Rights acquired under option agreements or joint ventures,
  whereby payments are made at the sole discretion of the Company, are recorded
  in the accounts when the payments are made.  Proceeds from property option
  payments received by the Company are netted against the deferred costs of the
  related mineral rights, with any excess being included in operations.



Management
  reviews the carrying amounts of mineral rights on a periodic basis and will
  recognize impairment based upon current exploration results and upon assessment
  of the probability of profitable exploitation of the rights.  Managements
  assessment of the mineral rights fair value is also based upon a review
  of other mineral right transactions that have occurred in the same geographic
  area as that of the rights under review.



d)

Equipment



Equipment
  is carried at cost less accumulated amortization.  Amortization is provided
  over the estimated useful life of the equipment using the declining balance
  method at an annual rate of 20% for office fixtures and equipment; 30% for computer
  equipment and automobiles; 100% for computer software and 10% for camp and equipment.



e)

Translation
  of Foreign Currencies



The
  Companys wholly owned Mexican subsidiaries are integrated foreign operations
  and are translated into Canadian dollars using the temporal method.  For
  the Company and its subsidiaries, the Company translates monetary items at the
  rate of exchange in effect at the balance sheet date.  Non-monetary items
  are translated at average rates in effect during the period in which they are
  incurred.  Expenses are translated at average rates in effect during the
  period except for amortization, which is translated using historical rates.
   Gains and losses resulting from the fluctuations in foreign exchange rates
  have been included in the determination of income (loss).



f)

Investments



Investments
  are carried at cost and are classified as a non-current asset as the Company
  intends to hold them for a period greater than one year.  A provision for
  impairment would be made if there were a loss in value that was believed to
  be other than temporary.



g)

Loss
  Per Share



Basic
  earnings (loss) per share is computed based upon the weighted average number
  of common shares outstanding during the year.  Fully diluted earnings per
  share is disclosed when the conversion, exercise or issuance of securities would
  have a dilutive effect on earnings per share.  The Company has a loss per
  share and accordingly basic and fully diluted loss per share are the same.



h)

Stock-Based
  Compensation



Stock-based
  compensation is accounted for at fair value as determined by the Black-Scholes
  option pricing model using amounts that are believed to approximate the volatility
  of the trading price of the Companys stock, the expected lives of awards
  of stock-based compensation, the fair value of the Companys stock and
  the risk-free interest rate. The estimated fair value of awards of stock-based
  compensation are charged to expense as awards vest, with offsetting amounts
  recognized as contributed surplus.









---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



2.

SUMMARY
  OF SIGNIFICANT ACCOUNTING POLICIES(continued)



i)

Income
  Taxes



Income
  tax liabilities and assets are recognized for the income tax consequences attributable
  to differences between their carrying amounts in the financial statements and
  their tax bases.  The effect of a change in income tax rates on future
  income tax liabilities and assets is recognized in income in the period that
  the change occurs.  Future income tax assets are recognized to the extent
  that they are considered more likely than not to be recognized.  The Company
  has taken a valuation allowance against all of its potential tax assets.



j)

Asset
  Retirement Obligations



The
  fair value of a liability for an asset retirement obligation is recognized when
  a reasonable estimate of its fair value can be made.  The asset retirement
  obligation is recorded as a liability with a corresponding increase to the carrying
  amount of the related long-lived asset.  Subsequently, the asset retirement
  cost is allocated to expenses using a systematic and rational method and is
  adjusted to reflect period-to-period changes in the liability resulting from
  the passage of time and revisions to either timing or the amount of the original
  estimate of the undiscounted cash flow.  As at June 30, 2007, the Company
  does not have any asset retirement obligations.



k)

Impairment
  of Long-Lived Assets



Long-lived
  assets are assessed for impairment when events and circumstances warrant. The
  carrying value of a long-lived asset is impaired when the carrying amount exceeds
  the estimated undiscounted net cash flow from use and fair value. In that event,
  the amount by which the carrying value of an impaired long-lived asset exceeds
  its fair value is charged to earnings.



l)

Financial
  Instruments



The
  Companys financial instruments consist of cash and cash equivalents, amounts
  receivable, and accounts payable and accrued liabilities, the fair value of
  which approximates their carrying value due to the short term to maturity.



The
  Company carries on business operations in Mexico and is exposed to foreign exchange
  risk due to fluctuations in the relative values of the Canadian dollar, the
  Mexican nuevo peso and the United States dollar.  The Company currently
  does not use any financial instruments to reduce this exposure.



m)

Cash
  Equivalents



Bankers
  acceptances maturing within 90 days of the original date of acquisition are
  considered to be cash equivalents.



n)

Comparative
  figures



Certain
  2006 and 2005 figures have been reclassified to conform to the presentation
  used in the current year.



3.

UNPROVEN
  MINERAL RIGHT INTERESTS



The
  Companys mineral rights are located in the States of Chihuahua and Estado
  de Mexico, Mexico.



Monterde
  Property



The
  Monterde Property consists of the Monterde concessions, the contiguous El Coronel
  concessions and staked concessions. The entire Monterde Property is comprised
  of 34 mineral concessions in the Sierra Madre in the State of Chihuahua, Mexico.



---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



3.

UNPROVEN
  MINERAL RIGHT INTERESTS(continued)



Monterde
  concessions

The
  Company owns a 100% interest in the Monterde concessions having acquired the
  concessions by payment of total consideration of US$1,054,900.



El
  Coronel concessions

The
  Company owns a 100% interest in the El Coronel mineral concessions by having
  made total payments of US$1,000,000.



Staked
  concessions

The
  Company has a 100% interest in concessions that were staked adjacent to the
  Monterde concessions and El Coronel concessions.  There are no payment
  obligations for these staked concessions aside from annual taxes.



Setago
  Property



The
  Company staked the Setago Property in 2004, which lies approximately 24 kilometres
  to the west of the Monterde Property and consists of one concession.  Two
  additional concessions have been staked and applications for title are pending.
   The property requires no payments, other than for annual taxes.



Pericones
  Property



The
  Company, through its wholly-owned Mexican subsidiary, Minera Pericones S. A.
  de C.V. (Mexico), has acquired a property, approximately 6300 hectares in size
  in Estado de Mexico. The property ("Pericones") covers at least two
  areas which are prospective for bulk tonnage silver deposits. Only limited work
  was carried out on the Pericones property during the year.



4.

AMOUNTS
  RECEIVABLE



Amounts
  receivable at June 30, 2007 are comprised mainly of an IVA TAX refundable from
  the Government of Mexico.  The IVA Tax is 15% of expenditures in Mexico
  and amounts due were $374,501 at June 30, 2007 (2006 - $862,803).







5.

EQUIPMENT



| |                                       |         |                                |                  
| | ------------------------------------- | ------- | ------------------------------ | -----------------
| |                                       | 2007   
| |                                       | Cost    | Accumulated
      Amortization | Net
        value
| |                                       | $       | $                              | $                
| | Camp
        and equipment            | 466,671 | 101,626                        | 365,045          
| | Camp
        vehicles                 | 223,970 | 79,828                         | 144,142          
| | Computer
        equipment            | 142,828 | 64,794                         | 78,034           
| | Computer
        software             | 54,408  | 44,914                         | 9,494            
| | Office
        fixtures and equipment | 63,607  | 16,092                         | 47,515           
| |                                       | 951,484 | 307,254                        | 644,230          





















---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)





5.

EQUIPMENT(continued)







| |                                       |         |                                |                  
| | ------------------------------------- | ------- | ------------------------------ | -----------------
| |                                       | 2006   
| |                                       | Cost    | Accumulated
      Amortization | Net
        value
| |                                       | $       | $                              | $                
| | Camp
        and equipment            | 377,708 | 67,838                         | 309,870          
| | Camp
        vehicles                 | 221,010 | 48,079                         | 172,931          
| | Computer
        equipment            | 126,776 | 48,600                         | 78,176           
| | Computer
        software             | 49,053  | 32,129                         | 16,924           
| | Office
        fixtures and equipment | 36,216  | 10,770                         | 25,446           
| |                                       | 810,763 | 207,416                        | 603,347          







6.

SEGMENTED
  INFORMATION



| |                                               |                         |  |                         |  |                         
| | --------------------------------------------- | ----------------------- |  | ----------------------- |  | ------------------------
| |                                               | 2007                    |  | 2006                    |  | 2005                    
| | Assets
        by geographic segment, at cost |                         |  |                         |  |                         
| | Canada                                        |                         |  |                         |  |                         
| | Current                                       | $
           5,850,929  |  | $
           15,613,404 |  | $
             3,855,613
| | Equipment                                     | 77,665                  |  | 77,503                  |  | 90,339                  
| | Investment                                    | -                       |  | -                       |  | 103,596                 
| |                                               | 5,928,594               |  | 15,690,907              |  | 4,049,548               
| | Mexico                                        |                         |  |                         |  |                         
| | Current                                       | 836,400                 |  | 1,293,834               |  | 940,442                 
| | Equipment                                     | 566,565                 |  | 525,844                 |  | 346,397                 
| | Unproven
        mineral right interests      | 32,176,965              |  | 21,749,820              |  | 11,601,330              
| |                                               | 33,579,930              |  | 23,569,498              |  | 12,888,169              
| |                                               | $
           39,508,524 |  | $
           39,260,405 |  | $
            16,937,717



---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)





7.

SHARE
  CAPITAL AND RELATED INFORMATION



a)

Authorized:80,000,000 common shares without par value



b)

Issued
  and outstanding:



| |                                        |                          |  |                            
| | -------------------------------------- | ------------------------ |  | ---------------------------
| |                                        | Number
        of Shares |  | Amount                     
| |                                        |                          |  |                            
| | Balance
        - June 30, 2004        | 27,401,540               |  | $
               11,126,010
| |                                        |                          |  |                            
| | Private
        placements             | 4,600,324                |  | 7,065,002                  
| | Exercise
        of options            | 233,217                  |  | 155,200                    
| | Exercise
        of warrants           | 1,497,747                |  | 1,119,315                  
| | Less
        share issue costs         | -                        |  | (346,152)                  
| | Less
        stock-based-compensation  | -                        |  | (86,309)                   
| |                                        | 6,331,288                |  | 7,907,056                  
| | Balance
         June 30, 2005        | 33,732,828               |  | 19,033,066                 
| |                                        |                          |  |                            
| | Private
        placements             | 10,380,832               |  | 19,095,038                 
| | Exercise
        of options            | 549,570                  |  | 540,218                    
| | Exercise
        of warrants           | 2,451,692                |  | 4,413,050                  
| | Less
        share issue costs         | -                        |  | (644,307)                  
| | Reallocation
        from contributed  |                          |  |                            
| | surplus
        on exercise of options | -                        |  | 329,877                    
| |                                        | 13,382,094               |  | 23,733,876                 
| | Balance
         June 30, 2006        | 47,114,922               |  | 42,766,942                 
| | Exercise
        of options            | 742,032                  |  | 825,013                    
| | Exercise
        of warrants           | 1,566,666                |  | 2,819,999                  
| | Less
        share issue costs         | -                        |  | (4,047)                    
| | Reallocation
        from contributed  |                          |  |                            
| | surplus
        on exercise of options | -                        |  | 354,425                    
| | Balance
         June 30, 2007        | 49,423,620               |  | $
               46,762,332



c)

Warrants



| |                                     |             |             |            
| | ----------------------------------- | ----------- | ----------- | -----------
| |                                     | 2007        | 2006        | 2005       
| |                                     |             |             |            
| | Balance
        - beginning of year | 1,566,666   | 2,355,712   | 1,489,797  
| | Issued                              | -           | 1,666,666   | 2,363,662  
| | Expired                             | -           | (4,020)     | -          
| | Exercised                           | (1,566,666) | (2,451,692) | (1,497,747)
| | Balance
        - end of year       | -           | 1,566,666   | 2,355,712  



At
  June 30, 2007, nil warrants are outstanding.



d)

Stock
  Options



The
  Companys stock option plan allowed the Company to grant up to 5,294,613
  stock options, exercisable at the market price as determined on the last trading
  date preceding their grant, and vesting as to 1/3 of their number on the date
  of their grant and then 1/3 at the end of each nine month period thereafter.
  As at June 30, 2007, 938,381 options were available to be granted under the
  Plan.





---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



7.

SHARE
  CAPITAL AND RELATED INFORMATION(continued)



d)
   Stock Options(continued)



Summary
  of stock option activity:



| |                                    |                           |                                                       |                           |                                                      
| | ---------------------------------- | ------------------------- | ----------------------------------------------------- | ------------------------- | -----------------------------------------------------
| |                                    | 2007                      | 2006                                                 
| |                                    | Options
      Outstanding | Weighted
        average
      exercise
        price | Options
      Outstanding | Weighted
        average
      exercise
        price
| |                                    |                           |                                                       |                           |                                                      
| | Balance,
        beginning of year | 3,402,800                 | $
         1.21                                       | 3,435,450                 | $
         1.11                                      
| | Granted                            | 1,125,000                 | 2.24                                                  | 527,000                   | 1.64                                                 
| | Exercised                          | (742,032)                 | 1.11                                                  | (549,570)                 | 1.26                                                 
| | Forfeited/expired                  | (1,090,768)               | 1.23                                                  | (10,080)                  | 1.80                                                 
| | Balance,
        end of year       | 2,695,000                 | $
         1.66                                       | 3,402,800                 | $
         1.21                                      



Stock
  options outstanding and exercisable at June 30, 2007 are as follows:



| |                      |                            |                             |                                 
| | -------------------- | -------------------------- | --------------------------- | --------------------------------
| | Exercise
      price | Number
        outstanding | Number
        exerciseable | Expiry
      date               
| | $                    |                            |                             |                                 
| | 0.45                 | 450,000                    | 450,000                     | July
        2007  October 2007
| | 0.73                 | 330,000                    | 330,000                     | August
        2008             
| | 2.05                 | 75,000                     | 75,000                      | January
        2009            
| | 2.14                 | 495,000                    | 495,000                     | October
        2009            
| | 1.80                 | 25,000                     | 25,000                      | December
        2009           
| | 1.65                 | 245,000                    | 245,000                     | September
        2010          
| | 1.50                 | 50,000                     | 50,000                      | December
        2010           
| | 2.40                 | 150,000                    | 100,000                     | July
        2011               
| | 2.59                 | 225,000                    | 75,000                      | November
        2011           
| | 2.67                 | 100,000                    | 33,333                      | December
        2011           
| | 1.95                 | 550,000                    | 183,333                     | April
        2012              
| |                      | 2,695,000                  | 2,061,666                   |                                 



e)

Private
  Placements





On
  February 10, 2005, the Company announced a non-brokered private placement of
  securities with three placees including a one-year, 5% convertible debenture
  of $2,000,000 to be issued to a director. Subsequently, the private placement
  units were over-subscribed and the convertible debenture with the director was
  not completed. On February 22, 2005 the Company closed a non-brokered private
  placement of 3,290,324 units to raise gross proceeds of $5,100,002 with four
  investment funds. All of the units were issued at a price of $1.55 per unit
  and each unit consists of one common share and one-half of a non-transferable
  share purchase warrant, with one whole warrant entitling the holder to purchase
  one additional common share at $1.80 until March 8, 2006. Two of the funds each
  purchased 1 million units. In addition, two other funds each purchased 645,162
  units.  A finder's fee of $31,000 was paid to an investment brokerage firm
  in respect of 1 million units.



---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



7.

SHARE
  CAPITAL AND RELATED INFORMATION(continued



e)
   Private Placements(continued)



On
  August 26, 2005, the Company closed a non-brokered private placement for 3,333,332
  units at $1.50 per unit.  Each unit consists of one common share and half
  of one non-transferable share purchase warrant.  One whole warrant entitles
  the holder to purchase an additional common share at a price of $1.80 until
  February 26, 2007.  There was a finders fee of $40,000 paid on behalf
  of one of the placees.



On
  March 1, 2006 the Company closed brokered and non-brokered private placements
  of a total of 7,047,500  common shares at a price of $2.00 for gross proceeds
  of $14,095,000. Puplava Securities Inc. ("PSI") of San Diego, California
  acted as agent for the brokered private placement and Dr. Leanne Baker, a Director
  of the Company and Managing Director of Investor Resources LLC, acted as a consultant
  in the United States. The Company paid cash commissions of 5.5% on the brokered
  placements. Mr. James Puplava, a Director and major shareholder of the Company,
  and a principal of PSI, did not acquire shares through the placement (see Note
  9). The non-brokered private placement was to institutional and accredited investors
  in Canada and offshore. Blackmont Capital Inc., Canaccord Capital Corp., and
  PSI received finder's fees of 5.5% of the proceeds raised on certain placements.
  The total commissions and finder's fees paid on the both brokered and non-brokered
  placements was $428,725.  No warrants were issued to investors or agents
  in connection with the offering.





8.

CONTRIBUTED
  SURPLUS AND STOCK-BASED COMPENSATION



The
  fair value of stock options granted are estimated using the Black-Scholes option
  pricing model with the following assumptions:



| |                                          |                       |                       |                      
| | ---------------------------------------- | --------------------- | --------------------- | ---------------------
| |                                          | 2007                  | 2006                  | 2005                 
| | Risk-free
        interest rate          | 3.9
         4.2     | 3.2
         3.3     | 3.1
        - 3.6    
| | Estimated
        share price volatility | 57
        - 64%      | 41
        - 45%      | 59
        - 62%     
| | Expected
        life                    | 1.5
        - 5 years | 1.5
        - 5 years | 1.5
        - 5 years



Option
  pricing models require the use of estimates and assumptions including the expected
  volatility.  Changes in these underlying assumptions can materially affect
  the fair value estimates and, therefore, existing models do not necessarily
  provide a reliable measure of the fair value of the Companys stock options.



Contributed
  Surplus



Stock-based
  compensation has been recognized in Contributed Surplus for the following grants:



| |                                                            |  |                               
| | ---------------------------------------------------------- |  | ------------------------------
| | Balance
        and expense at June 30, 2004               |  | $
                     559,628
| | Options
        granted to employees and consultants       |  | 720,469                       
| | Options
        granted to agent for private placement     |  | 86,309                        
| | Expense
        - June 30, 2005                            |  | 806,778                       
| | Balance
        - June 30, 2005                            |  | 1,366,406                     
| |                                                            |  |                               
| | Options
        granted to employees and consultants       |  | 760,324                       
| | Options
        granted to agent for private placement     |  | -                             
| | Expense
        - June 30, 2006                            |  | 760,324                       
| | Share
        options exercised, transfer to share capital |  | (329,877)                     
| | Balance
        - June 30, 2006                            |  | 1,796,853                     
| | Options
        granted to employees and consultants       |  | 527,957                       
| | Share
        options exercised, transfer to share capital |  | (354,425)                     
| | Balance
        - June 30, 2007                            |  | $
                  1,970,385 







---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)





8.

CONTRIBUTED
  SURPLUS AND STOCK-BASED COMPENSATION(continued)





For
  stock options granted and not vested, compensation expense is recognizable in
  future periods as follows:



| |                       |                       
| | --------------------- | ----------------------
| | June
        30, 2008 | $
             446,224
| | June
        30, 2009 | 143,241               
| |                       | $
             589,465





9.

RELATED
  PARTY TRANSACTIONS



Unless
  otherwise stated, related party transactions are measured at the exchange amount,
  being the amount of consideration established and agreed to by the related parties.
   Amounts due to or from related parties are unsecured, non-interest bearing
  and are due on demand.



a)

By
  Settlement Agreements dated April 26, 2007 the Company settled any claims which
  Robert V. Longe, President, CEO and Director and Michael E. Hoole, Vice President
  and Secretary may have in respect to Change of Control Agreements with each
  of them dated January 13, 2004.



Pursuant
  to the settlement agreement with Mr Longe, the Company has agreed to pay him
  $339,657 plus unused vacation upon retirement on or before October 31, 2007.
   All of the $339,657 due has been accrued at year end.



Pursuant
  to the settlement agreement with Mr Hoole, it has been agreed that Mr Hoole
  will remain as Vice President and Secretary of the Company until his date of
  termination as an officer on or before February 28, 2008 and he will be paid
  $339,657 by way of salary continuance from May 1, 2007 until he ceases to be
  an officer and employee of the Company with the balance payable at that time.
  At June 30, 2007, the balance of this commitment to Mr. Hoole is $312,355.  In
  addition, Mr Hoole is being paid at the rate of $1,000/day for each day worked
  for the Company.  All of the $312,355 due has been accrued at year end.



b)

During
  the year ended June 30, 2007, fees and expense disbursements of $191,685 were
  paid to J.B. Engineering Ltd (2006 - $173,244).  An officer of the Company
  is a principal of J.B. Engineering Ltd.



c)

During
  2006, commissions of $234,850 were paid to Puplava Securities Inc. (PSI).
   A director of the Company is a principal at PSI.



10.

INCOME
  TAXES



Future income tax assets and liabilities
  of the Company as at June 30, 2007 and 2006 are as follows:



| |                              |  |  |                                      |  |                                   
| | ---------------------------- |  |  | ------------------------------------ |  | ----------------------------------
| |                              |  |  | 2007                                 |  | 2006                              
| | Future income tax assets     |  |  |                                      |  |                                   
| |                              |  |  |                                      |  |                                   
| | Losses carried forward       |  |  | $         10,029,000                 |  | $          3,911,000              
| | Share issue costs            |  |  | 185,000                              |  | 315,000                           
| | Other                        |  |  | 26,000                               |  | 31,000                            
| |                              |  |  |                                      |  |                                   
| |                              |  |  | 10,240,000                           |  | 4,257,000                         
| | Valuation allowance          |  |  | (10,240,000)                         |  | (4,257,000)                       
| |                              |  |  |                                      |  |                                   
| | Net future income tax assets |  |  | $
                                 - |  | $
                               -
| |                              |  |  |                                      |  |                                   





---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



10.

INCOME
  TAXES(continued)



The recovery of income taxes shown in
  the consolidated statements of operations and deficit differs from the amounts
  obtained by applying statutory rates to the loss before provision for income
  taxes due to the following:



| |                                                         |  |  |                                     |  |                                   
| | ------------------------------------------------------- |  |  | ----------------------------------- |  | ----------------------------------
| |                                                         |  |  | 2007                                |  | 2006                              
| | Income tax rate reconciliation                          |  |  |                                     |  |                                   
| |                                                         |  |  |                                     |  |                                   
| | Combined federal and provincial
        income tax rate |  |  | 34.12%                              |  | 34.12%                            
| |                                                         |  |  |                                     |  |                                   
| | Expected income tax recovery                            |  |  | $        (1,198,000)                |  | $          (761,000)              
| | Share issue costs                                       |  |  | (118,000)                           |  | (115,000)                         
| | Other                                                   |  |  | 180,000                             |  | 259,000                           
| | Unrecognized benefit of
        income tax losses       |  |  | 1,136,000                           |  | 617,000                           
| |                                                         |  |  |                                     |  |                                   
| | Actual income tax recovery                              |  |  | $
                                - |  | $
                               -
| |                                                         |  |  |                                     |  |                                   





At
  June 30, 2007, the Company has non-capital losses of approximately $8,620,000
  in Canada (which expire between 2008 and 2027) and $21,472,000 in Mexico available
  to reduce taxable income earned during future years.  The potential future
  tax benefits relating to these amounts have not been reflected in the financial
  statements as their utilization is currently not considered likely.





11.

DIFFERENCES
  BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
  (GAAP)



Under
  Canadian GAAP mineral exploration expenditures can be deferred on prospective
  mineral rights until such time as it is determined that further exploration
  work is not warranted, at which time the mineral right costs are written-off.
   Under U.S. GAAP, all exploration expenditures are expensed until an independent
  feasibility study has determined that the mineral rights are capable of economic
  commercial production.



For
  U.S. GAAP purposes, the Company has adopted the provisions of EITF 04-2, Whether
  Mineral Rights are Tangible or Intangible Assets and FSP FAS 141-1 and
  142-1 which concludes that mineral rights are tangible assets. The effect of
  adopting EITF 04-2 is reduction of previously reported loss and loss per share
  for fiscal 2006 and 2005 by $744,440 and $519,732 and $0.02 and $0.02, respectively.
  In addition, total assets are increased by $2,245,360 and shareholders
  deficiency is decreased by $2,245,360 as at June 30, 2006.  For 2005, total
  assets are increased by $1,500,920 and shareholders deficiency is decreased
  by $1,500,920.



---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



11.

DIFFERENCES
  BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
  (GAAP)(continued)



i)

The
  following items (a) to (e) provide a summary of the adjustments required to
  reconcile Canadian GAAP to U.S. GAAP.

| |                                                                                                                                     |  |                                                    |  |                            |  |                            
| | ----------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------- |  | -------------------------- |  | ---------------------------
| |                                                                                                                                     |  | For
        the years ended
      June
        30,
| |                                                                                                                                     |  | 2007                                               |  | 2006                       |  | 2005                       
| | a)
      Assets
      Unproven
        Mineral Right Interests                                                                      |  |                                                    |  |                            |  |                            
| | Unproven
        Mineral Right Interests  Canadian GAAP                                                                            |  | $
            32,176,965                           |  | $
            21,749,820   |  | $
             11,601,330  
| | Less
        Unproven Mineral Right Interests                                                                                       |  | (29,424,020)                                       |  | (19,504,460)               |  | (10,100,410)               
| | Unproven
        Mineral Right Interests - U.S. GAAP                                                                                |  | 2,752,945                                          |  | 2,245,360                  |  | 1,500,920                  
| |                                                                                                                                     |  |                                                    |  |                            |  |                            
| | b)
      Operations                                                                                                                 |  |                                                    |  |                            |  |                            
| | Net
        loss - Canadian GAAP                                                                                                    |  | (3,813,938)                                        |  | (2,363,420)                |  | (1,825,982)                
| | Unproven
        Mineral Right Interests expensed
      under
        U.S. GAAP                                                     |  | (9,919,560)                                        |  | (9,404,050)                |  | (5,699,587)                
| | Net
        loss - U.S. GAAP                                                                                                        |  | (13,733,498)                                       |  | (11,767,470)               |  | (7,525,569)                
| | Net
        loss per share - U.S. GAAP                                                                                              |  | 0.29                                               |  | 0.29                       |  | 0.25                       
| |                                                                                                                                     |  |                                                    |  |                            |  |                            
| | c)
      Deficit                                                                                                                    |  |                                                    |  |                            |  |                            
| | Closing
        deficit - Canadian GAAP                                                                                             |  | (10,539,847)                                       |  | (6,725,909)                |  | (4,362,489)                
| | Adjustment
        to deficit for accumulated
      Unproven
        Mineral Right Interests expensed under
      U.S.
        GAAP |  | (29,424,020)                                       |  | (19,504,460)               |  | (10,100,410)               
| | Closing
        deficit - U.S. GAAP                                                                                                 |  | (39,963,867)                                       |  | (26,230,369)               |  | (14,462,899)               
| |                                                                                                                                     |  |                                                    |  |                            |  |                            
| | d)
      Cash
        Flows  Operating Activities                                                                                  |  |                                                    |  |                            |  |                            
| | Cash
        applied to operations - Canadian GAAP                                                                                  |  | (2,206,059)                                        |  | (1,509,174)                |  | (1,046,445)                
| | Add
        net loss - Canadian GAAP                                                                                                |  | )((3,813,938                                       |  | )((2,363,420               |  | 1,825,982)                 
| | Less
        net loss - U.S. GAAP                                                                                                   |  | (13,733,498)                                       |  | (11,767,470)               |  | (7,525,569)                
| | Cash
        applied to operations - U.S. GAAP                                                                                      |  | (12,125,619)                                       |  | (10,913,224)               |  | (6,746,032)                
| |                                                                                                                                     |  |                                                    |  |                            |  |                            
| | e)
      Cash
        Flows  Investing Activities                                                                                  |  |                                                    |  |                            |  |                            
| | Cash
        applied - Canadian GAAP                                                                                                |  | (11,101,264)                                       |  | (10,316,513)               |  | (5,938,117)                
| | Add
        Unproven Mineral Right Interests
      expensed
        - U.S. GAAP                                                     |  | 9,919,560                                          |  | 9,404,050                  |  | 5,699,587                  
| | Cash
        applied under U.S. GAAP                                                                                                |  | $
           (1,181,704)                           |  | $
               (912,463) |  | $
                (238,530)



ii)
  The functional currency is Canadian dollars.



iii)

Recent
  Accounting pronouncements:



The
  Financial Accounting Standards Board (FASB) has issued Statement
  of Financial Accounting Standards (SFAS) 157, Fair Value Measurements
  (SFAS 157), which defines fair value, establishes a framework for
  consistently measuring fair value under GAAP and expands disclosures about fair
  value pronouncements. SFAS 157 is effective beginning November 15, 2007, and
  the provisions of SFAS 157 will be applied prospectively as of that date.  The
  adoption of SFAS 157 is not expected to have an effect on the Companys
  financial position.



---

KIMBER
  RESOURCES INC.

Notes
  to Consolidated Financial Statements

For the
  Years Ended June 30, 2007, 2006 and 2005

(stated
  in Canadian dollars)



11.

DIFFERENCES
  BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
  (GAAP)(continued)



iii)

Recent
  Accounting pronouncements:



The
  FASB has also issued FAS interpretation No. 48, Accounting for Uncertainty
  in Income Taxes (FIN 48).  FIN 48 clarifies the accounting
  for uncertainty in income taxes recognized in an enterprises financial
  statements in accordance with FAS Interpretation No. 109, Accounting for
  Income Taxes.  FIN 48 prescribes a recognition threshold and measurement
  attributable for the financial statement recognition and measurement of a tax
  position taken or expected to be taken in a tax return.  FIN 48 also provides
  guidance on derecognition, classification, interest and penalties, accounting
  in interim periods, disclosures and transitions.  FIN 48 is effective for
  fiscal years beginning after December 15, 2006. The adoption of FIN 48 is not
  expected to have an effect on the Companys financial position.





12.

SUBSEQUENT
  EVENTS



a)

Since
  the year end of June 30, 2007, 425,000 common shares have been issued upon exercise
  of stock options for total proceeds of $191,250.



b)

During
  the month of July 2007 a severe storm caused erosion of some roads and drill
  pads on the Monterde property.  Approximately $150,000 is scheduled for
  remediation, most of it to be spent during the last calendar quarter of 2007.



c)

Subsequent
  to the year end of the Company there have been proposed changes to the Mexican
  tax regulations which may have an impact on the future tax rate and overall
  tax regime applicable to the Mexican subsidiaries.



13.

COMMITMENT



Operating
  Lease



The
  Company leases its premises in Vancouver under an operating lease which expires
  in the fiscal year ending June 30, 2011.  The Company is obligated to make
  the following basic rent payments under its operating lease in each of the fiscal
  years ending:



June
  30, 2008

$

85,163

June
  30, 2009

85,163

June
  30, 2010

87,872

June
  30, 2011

_______53,500



$311,698



In
  addition, under the lease the Company has the obligation to pay its proportionate
  share of operating costs and taxes for the building.





14.

CONTINGENT
  LIABILITY



On
  September 12, 2006 an employee of Minera Monterde, S. de R.L. de C.V., a subsidiary
  of Kimber Resources Inc., was involved in a road collision with a group of cyclists
  while driving a truck owned by the subsidiary. $89,401 was paid in December
  2006 to the Mexican authorities in respect of this matter.  The Company
  does not believe that there will be any further legal liability in relation
  to this incident but has not yet received formal releases from all potential
  claimants.





---



Kimber
  Resources Inc.

Managements
  Discussion and Analysis

September
  14, 2007



The
  following management discussion and analysis of the Companys financial
  position is for the year ended June 30, 2007 compared to June 30, 2006 and covers
  information up to the date of this report. This discussion should be read in
  conjunction with the attached financial statements and related Notes to
  the Consolidated Financial Statements which have been prepared in accordance
  with Canadian Generally Accepted Accounting Principles (GAAP).  The discussion
  and analysis may contain certain forward-looking statements about the Companys
  future prospects, and the Company provides no assurance that actual results
  will meet managements expectations.



All
  amounts are stated in Canadian dollars unless indicated otherwise. Additional
  information regarding the Company is available on SEDAR at www.sedar.com
  and on the Companys website at www.kimberresources.com.



The
  information is current to September 14, 2007, unless otherwise stated, and the
  Companys external auditor has audited the financial statements to June
  30, 2007.





Introduction



Kimber
  Resources Inc. is a Canadian-based company principally engaged in the exploration
  of the Monterde gold/silver property (the Property) located in the
  Monterde Mining District in the state of Chihuahua, Mexico. The Companys
  primary targets are open-pittable or underground ore bodies, where gold and
  silver are amenable to extraction by heap leaching and, possibly, conventional
  milling. The Companys policy allocates the greater part of its funds to
  exploring for additional gold-silver resources on its principal asset, the Monterde
  Property.



The
  Companys priority is to advance the Carmen deposit towards pre-feasibility
  status so that its full value can be recognized. A second priority is to find
  and develop additional gold and silver resources. To this end, two drill targets
  have already been defined, and others will be sought on the 29,000 hectare property.





Results
  of Operations



The
  Companys net loss for the fiscal year ended June 30, 2007 was $3,813,938
  or $0.08 per common share compared with $2,363,420 or $0.06 per share loss for
  the same period ended June 30, 2006. The Companys increase in net loss
  for the year was $1,450,518.



In
  accordance with stock-based compensation policy required by the Canadian Institute
  of Chartered Accountants, the Company recorded an expense of $527,957 ($760,324
  in 2006) on 1,125,000 stock options granted in the year and prior year options
  which vested during the year. This is a non-cash expense and does not affect
  the Companys operations. Without this non-cash expense, the Company would
  have recorded a loss of $3,285,981 or $0.07 loss per share during the year.



1



---

During
  the fiscal year ended June 30, 2007 the Company spent $10,427,145 on its mineral
  properties; $507,585 for property acquisition payments and had mineral property
  expenditures of $9,919,560. Drilling costs of $3,285,491 were the highest cost
  activity, representing 32% of expenditures, a decrease from 2006 as a result
  of reduced drilling activity in the third and fourth quarters of the year ($4,600,027
  or 45% in 2006). Assay testing was the second highest cost category in fiscal
  year ending June 30, 2007 at $1,355,513 or 13% of property expenditures ($827,288
  or 8% in fiscal year ended June 30, 2006). Geological and geophysical expenditures
  were $1,165,931 or 11% of property expenditures in 2007 compared to $1,300,005
  or 13% in 2006.  The decrease in geological costs represents decreases
  in personnel required due to reduced drilling activity.  Other significant
  cost categories were road and drill site maintenance at $831,336, engineering
  at $543,942 and field supplies at $623,439 in fiscal year ending June 30, 2007.
   The results of these expenditures are explained in the Mineral Properties
  section below.



Salary
  and benefits expenses rose during the year ended June 30, 2007 to $1,840,643
  from $726,239 in the year ended June 30, 2006 due to Settlement Agreements with
  the CEO and the Vice President and Secretary (detailed more fully under Contractual
  Obligations herein), salary and fee increases, increased director activity
  and administrative demands that have grown due to increased regulatory compliance
  requirements.



Legal,
  consulting and audit costs increased significantly to $952,743 for the year
  ended June 30, 2007 from $150,424 in the previous year due to the impact of
  the now resolved proxy battle, recruitment fees, legal fees for acquisition
  due diligence, Sarbanes Oxley consulting fees as well as other fees in this
  category.



Investor
  relations and shareholder communications expenses of $211,187 (2006  $309,669)
  were reduced as there was reduced investor related travel and conference attendance.



Office
  and miscellaneous expenses increased during the year by $66,023 to $252,637
  in 2007. The increase is mainly attributable to increased insurance costs and
  general office costs.



Rent
  expense for the head office increased to $161,508 in the year ended June 30,
  2007 from $72,775 in the comparable period ended 2006 as the result of an increase
  in rent and additional office space occupied.



The
  Company recorded a loss from foreign exchange of $10,701 during the year ended
  June 30, 2007 as opposed to a loss of $22,636 in the period ended 2006. The
  loss originates from funds advanced to Mexico during the year that have depreciated
  in value due to fluctuations in the Mexican peso or United States Dollar relative
  to the Canadian dollar.



Selected
  Annual Information



The
  following information is for each of the three fiscal years ended June 30, 2007,
  2006 and 2005:



|                                               |             |             |            
|---------------------------------------------- | ----------- | ----------- | -----------
|                                               | 2007        | 2006        | 2005       
|Interest
        / investment income           | 415,493     | 295,962     | 74,784     
|Net
        loss                               | (3,813,938) | (2,363,420) | (1,825,982)
|Net
        loss per share  basic and diluted | (0.08)      | (0.06)      | (0.06)     
|Total
        assets                           | 39,508,524  | 39,260,405  | 16,937,717 
|Long-term
        liabilities                  | -           | -           | -          
|Dividends                                      | -           | -           | -          





2



---

The
  Companys income from interest and investments increased over the past
  three fiscal years due to higher amounts of cash and cash equivalents that were
  available for short-term investment. The net losses for the Company in the fiscal
  years ended June 30, 2007 and 2006 include non-cash charges for stock-option
  compensation expenses of $527,957 in 2007 and $760,324 in 2006.



The
  Companys net assets have increased over the fiscal periods mainly because
  of share capital proceeds raised through private placements and increased deferred
  mineral property expenditures capitalized during the years.



Summary
  of Quarterly Results September 30, 2005 to June 30, 2007



|                        |                   |                   |                   |                  
|----------------------- | ----------------- | ----------------- | ----------------- | -----------------
|                        | Q1
      Sep30/05 | Q2
      Dec31/05 | Q3
      Mar31/06 | Q4
      Jun30/06
|Interest
        income | 24,456            | 34,169            | 74,470            | 162,867          
|Total
        Loss      | (502,769)         | (608,484)         | (546,797)         | (705,370)        
|Loss
        per share  | (0.01)            | (0.02)            | (0.01)            | (0.02)           





|                        |                   |                   |                   |                  
|----------------------- | ----------------- | ----------------- | ----------------- | -----------------
|                        | Q1
      Sep30/06 | Q2
      Dec31/06 | Q3
      Mar31/07 | Q4
      Jun30/07
|Interest
        income | 144,861           | 117,901           | 85,841            | 66,890           
|Total
        Loss      | (418,217)         | (737,982)         | (606,468)         | (2,051,271)      
|Loss
        per share  | (0.01)            | (0.01)            | (0.01)            | (0.04)           





The
  Company is in the exploration stage, and therefore, variances in its quarterly
  losses are not affected by sales or production-related factors. Increases in
  costs are generally attributed to growth in operations and success in financing
  activities, which allow the Company to undertake further development and exploration
  on its properties.



Revenues
  for the Company are for interest and gains received on cash or short-term investments
  (low-risk bankers acceptance notes that yield 3.8% to 4.3% on an annual
  basis) classified as cash.  Interest revenues fluctuate according to the
  amounts of funds held in deposit and interest rates offered during the period.
  Kimber does not have revenues from mining operations and does not expect to
  have revenues in the near future other than interest received on cash balances.



Financial
  Condition



At
  June 30, 2007, the Company had working capital of $5,371,675 (2006 - $15,484,719).
  The Company has no long-term indebtedness or long-term obligations. The change
  in working capital is the result of decreased available cash of $6,200,602 compared
  to the previous year (2006  $15,866,960). This cash decrease is due to
  the ongoing net expenditure and the absence of a financing during the year.
  In the fiscal year ended June 30, 2007 the Company received $2,819,999 from
  the exercise of 1,566,666 warrants and $825,013 from the exercise of 742,032
  stock options. As at August 31, 2007 the Company had approximately $5.3 million
  in cash and liquid short-term bankers acceptance notes.



Current
  liabilities decreased to $1,315,654 as at June 30, 2007 from $1,422,519 on June
  30, 2006. This was primarily due to a reduction in drilling expenditures in
  2007 compared to the previous year, partially offset by the increase in amounts
  due to related parties in respect of the Settlement Agreements dated April 26,
  2007.



3



---

The
  Company is committed to paying approximately $0.2 million at August 31, 2007
  for expenses billed. The amounts due to related parties in respect of the Settlement
  Agreements with Mr Longe and Mr Hoole total $624,710 at August 31, 2007.





Cash
  Flows



The
  Company generates cash inflow from selling its shares either through financings
  or the exercise of existing stock options. There is a liquidity risk that these
  options may not be exercised if the Companys share price falls below the
  exercise price due to market conditions.  The exercise prices of a significant
  number of these options are currently below the current market price.



Amounts
  receivable decreased by $563,960 to $429,481 during the fiscal year ended June
  30, 2007 mainly because of decreased IVA Tax receivable from the Government
  of Mexico. Receivables for IVA, which is 15% of expenditures in Mexico, decreased
  during the year from $862,803 to $374,501, as a result of decreased expenditure
  for the last six months of the year ended June 30, 2007.



Prepaid
  expenses increased by $10,409 to $57,246 during the year mainly due to an increase
  in advance payments for various insurance policies.



The
  Company made equipment purchases of $192,505 during the year ended June 30,
  2007 including: $2,960 for camp vehicles, $21,407 for computer equipment and
  software; $140,747 for the exploration camp and related equipment and $27,391
  for office fixtures and equipment.



Property
  acquisition costs of $507,585 were incurred for option payments and concession
  taxes on the Monterde Property ($499,437) and the Pericones Property ($8,148).
  The amount paid for Monterde includes the acquisition of concessions that were
  staked adjacent to the Property and not previously held by the Company. Future
  acquisition expenditures on these staked concessions will be minimal as there
  are no property payments.



Share
  capital increased cash inflows by an aggregate of $3,645,012 through the issuance
  of 2,308,698 common shares during the fiscal year ended June 30, 2007.





Contractual
  Obligations



The
  Company has no long-term debt and does not anticipate that it will require debt
  financing for current planned expenditures. Kimber has no future contractual
  obligations to property vendors for the Monterde Property.



The Company leases
  its premises under an operating lease which expires in the fiscal year ending
  June 30, 2011.  The Company is obligated to make basic rent payments under
  its operating lease in each of the fiscal years from 2007 to 2011 totaling $311,698.
  In addition, under the lease the Company has the obligation to pay its proportionate
  share of operating costs and taxes for the building.



By
  Settlement Agreements dated April 26, 2007 the Company settled any claims which
  Robert V. Longe, President, CEO and Director and Michael E. Hoole, Vice President
  and Secretary may have in respect to Change of Control Agreements with each
  of them dated January 13, 2004.



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Pursuant
  to the settlement agreement with Mr Longe, the Company has agreed to pay him
  $339,657 plus unused vacation upon retirement on or before October 31, 2007.
   This amount has been accrued at year end.



Pursuant
  to the settlement agreement with Mr Hoole, it has been agreed that Mr Hoole
  will remain asVice President and Secretary of the Company until his
  date of termination as an officer on or before February 28, 2008 and he will
  be paid $339,657 by way of salary continuance from May 1, 2007 until he ceases
  to be an officer and employee of the Company with balance payable at that time.
  At June 30, 2007 the Company owes $312,355 of remaining commitments to Mr. Hoole.
   In addition, Mr Hoole is being paid at the rate of $1,000/day for each
  day worked for the Company.  This amount has been accrued at year end.



Capital Resources
  and Liquidity



Capital
  resources of the Company consist primarily of cash and liquid short-term investments.
  As at August 31, 2007, the Company had cash and bankers acceptance notes
  totaling approximately $5.3 million and approximately $0.27 million in receivables.



If
  existing vested, in the money options were exercised, the Company would generate
  $252,150.



At
  present, management believes that it has sufficient financial resources to complete
  planned expenditures to the end of the 1st Quarter of 2008.



The Company does
  not anticipate the payment of dividends in the foreseeable future.





Related
  Party Transactions



Unless
  otherwise stated, related party transactions are measured at the exchange amount,
  being the amount of consideration established and agreed to by the related parties.





Mineral Properties



The
  Monterde Property, located in the Sierra Madre Mountains of southwestern Chihuahua
  State, is the Companys principal asset. It covers 29,000 hectares in claims
  which stretch for 37 kilometres along the trend of mineralization. Access to
  the developed part of the property is by 230 km of paved highway from Chihuahua
  city followed by 35 km of logging road from San Rafael, where railroad and power
  are also available.



The
  Company holds 100% of the Monterde property, free of royalties, through its
  wholly-owned Mexican subsidiary, Minera Monterde, S. de R.L. de C.V. In its
  northern part, three mineral deposits, the Carmen, Carotare, and Veta Minitas
  have been developed to the point of having gold and silver resources, most of
  them in the Measured and Indicated categories. Details of these resources are
  listed in the Annual Report, filed on SEDAR, and displayed on the Companys
  website.

The principal
  deposit is the Carmen on which 570 holes have been drilled. Like many other
  deposits in the Sierra Madre, it falls in the category oxidized, low sulphidation,
  epithermal. There are two satellite deposits: the Veta Minitas which is adjacent
  to the Carmen, and the Carotare, two kilometres to the east.



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Carmen
  deposit



There were minor
  changes (a slight increase) to mineral resources on the Carmen deposit during
  this reporting period. The block model estimate of July 17, 2006 has been adjusted
  (May, 2007) and an estimate of resources which are likely to be minable from
  underground has been prepared by polygonal methods.  No drilling was carried
  out during the fourth quarter of the year ended June 30, 2007. There is no immediate
  requirement for further drilling on the Carmen deposit. Current estimates on
  the Carmen deposit are shown in the table below.





[mda002.jpg]



Gold-equivalent
  assumes equivalance of 75 units of silver to one unit of gold.



During the period
  May to September the principal focus on the Carmen deposit has been to compile
  all geologic data (from drill holes, mapping and sampling) so that greater detail
  can be applied to resource estimates (for both open pit and underground mining)
  and to the distribution of high and low recovery zones for silver within the
  deposit. This definitive geologic compilation and the accompanying interpretation
  are pre-requisites for the next resource estimates and for all economic studies
  to follow.



The next phase
  of metallurgical testing will involve agitation leach tests. The samples have
  been collected but, with the exception of a small pilot study, these samples
  await completion of the geologic compilation which will outline the different
  silver-recovery zones within the deposit.



Carotare and Veta
  Minitas Deposits



Resource estimates
  on both the Carotare deposit (November, 2005) and the Veta Minitas deposit (November,
  2004) remain unchanged and are shown below.



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[mda004.jpg]





Exploration Drilling
  at Carotare & El Orito



Drilling on the
  El Orito Norte and on extensions to the Carotare deposit ended in January
  2007. No additional resources have been identified on these targets
  but final analyses of the results from the drilling and geological interpretation
  have not been completed.



New Drill Targets



During March and
  April two new drill targets were identified by geological mapping and sampling.



Structures on the
  Carmen deposit were followed to the south of the resources currently defined
  by drilling. The type of alteration typically associated with such structures
  has been extended for 900 metres and remains open. This drill target, now known
  as Carmen South, consists of at least two structureswhich appear to
  be extensions of those on the Carmen deposit.Application has been made
  for a drilling permit.



The Arimo target
  was identified by mapping and sampling. Lying to the immediate south of one
  of the villages and on a major regional structure, an outcrop of silicified
  hydrothermal breccia has been shown to be auriferous. Further mapping and sampling
  is being carried out and a drill permit application has been filed.



Exploration on
  the Monterde Property



The first stage
  of the reconnaissance exploration program  has been completed. Results
  from the northern part of the Monterde property identified five catchment basins
  with significantly anomalous values in silver and gold on which follow up investigations
  are required.



Other Properties



The Company holds
  two other properties, the Setago, also in the Sierre Madre, 24 km to the west
  of Monterde, and Pericones in Estado de Mexico.  Both were acquired by
  staking and are 100% owned.



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Safety



Kimber
  continues to encourage a safe work environment. Safety meetings have been held
  and first aid instruction given. Protective equipment is mandatory in the vicinity
  of heavy machinery and underground.



Erosion
  Control



Measures
  to control erosion caused by periodic heavy rain in areas disturbed by drilling
  and road building continue. The effect of an exceptional storm on July 8 was
  mitigated by the structures (gabions and culverts) already installed, however
  remediation work necessitated by the storm is anticipated to cost approximately
  $150,000.



Off-Balance
  Sheet Arrangements



The
  Company has no off-balance sheet arrangements or transactions and none are contemplated.



Financial
  and Other Instruments



The
  Company maintains the majority of its cash balances in Canadian dollars and
  converts them to United States dollars or Mexican Pesos when payments are required.
   No hedging has been undertaken to date as management has viewed the Canadian
  dollar as the stronger currency in recent years. No funds have been invested
  in asset-backed commercial paper.



The
  Companys financial instruments consist of cash and cash equivalents, amounts
  receivable, accounts payable and accrued liabilities, the fair value of which
  approximates their carrying value due to the short term to maturity.  Property
  payment commitments are due in United States dollars which will vary with the
  Canadian/US dollar exchange rate.



Legal Proceedings



The
  Company and its subsidiaries are not parties to any legal proceedings and have
  no contingent liabilities, except as follows:



On September 12,
  2006 an employee of Minera Monterde, S. de R.L. de C.V., a subsidiary of Kimber
  Resources Inc., was involved in a road collision with a group of cyclists while
  driving a truck owned by the subsidiary. $89,401 was paid in December 2006 to
  the Mexican authorities in respect of this matter.  The Company does not
  believe that there will be any further legal liability in relation to this incident
  but has not yet received formal releases from all potential claimants.



Changes
  in Accounting Policy



There
  were no changes to accounting policies adopted in the year ended June 30, 2007.



Internal
  Controls Over Financial Reporting



The
  Companys management, with the participation of its Chief Executive Officer
  and Chief Financial Officer, are responsible for establishing and maintaining
  adequate internal control over financial reporting.  Under the supervision
  of the Chief Financial officer, the Companys internal control over financial
  reporting is a process designed to provide reasonable assurance regarding the
  reliability of financial reporting and the preparation of financial statements
  for external purposes in accordance with generally accepted accounting principles
  (GAAP).



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The
  Companys controls include policies and procedures that:

·

Pertain
  to the maintenance of records that, in reasonable detail, accurately and fairly
  reflect the transactions and dispositions of the assets of the Company;

·

Provide
  reasonable assurance that transactions are recorded as necessary to permit preparation
  of financial statements in accordance with GAAP; and

·

Provide
  reasonable assurance regarding prevention or timely detection of unauthorized
  acquisition, use or disposition of the Companys assets that could have
  a material effect on the annual financial statements or interim financial statements.



There
  has been no significant change in the Companys internal control over financial
  reporting during the year ended June 30, 2007 that has materially affected,
  or is reasonably likely to materially affect, the Companys internal control
  over financial reporting.



Disclosure
  Controls and Procedures



The
  Company hasdisclosure controls and procedures in place to provide reasonable
  assurance that material information is made known to the President and Chief
  Financial Officer and other officers and have concluded that its disclosure
  controls and procedures are effective.



Outstanding
  Share Data



The
  Company has one class of shares and at June 30, 2007 the Company had 49,423,620
  shares issued and 52,118,620 outstanding on a fully diluted basis.



The
  Company has a stock option plan and at June 30, 2007 there were 2,695,000 options
  outstanding. Of the 2,695,000 options granted to employees, directors and consultants
  2,061,666 had vested.



The
  Company had no warrants outstanding as at June 30, 2007.



Risk
  and Uncertainties



Except
  for historical information contained in this discussion and analysis, disclosure
  statements contained herein are forward-looking, which statements are subject
  to risks and uncertainties, which could cause actual results to differ materially
  from those in such forward-looking statements.



The
  Company is a mineral exploration company and is exposed to a number of risks
  and uncertainties that are common to other companies in the same business; some
  of these risks have been discussed elsewhere in this report and in the notes
  to financial statements.



The
  Companys financial success is subject to general market conditions, which
  affect mining and exploration companies.  The value of the Companys
  mineral resources and future operating profit and loss may be affected by fluctuations
  in precious metal prices, over which the Company has no control, although it
  may choose to hedge some of its future production.  The cost of exploration
  and future capital and operating costs are affected by foreign exchange rates
  for the Canadian dollar, United States dollar and Mexican peso.  The Company
  can mitigate the effects of these rate fluctuations, to some extent, through
  forward purchases.  Because of its limited operating record and history
  of losses, it may not be able to hedge future risk to the extent it feels is
  warranted.  The Company also competes with other mining companies, which
  are larger and have more economic resources to acquire prospective exploration
  properties or producing mines.



9



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The
  Company also faces certain risks and uncertainties specific to its circumstances.
   The Companys ability to obtain financing to explore for mineral
  deposits and to continue and complete the development of those properties it
  has classified as assets is not assured; nor is there assurance that the expenditure
  of funds will result in the discovery of an economic mineral deposit.  The
  Company has not completed a feasibility study on any of its deposits to determine
  if it hosts a mineral resource that can be economically developed and profitably
  mined. While the Company has used its best efforts to secure title to all its
  properties and secured access to surface rights, these titles or rights may
  be disputed.





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