United States
                       Securities and Exchange Commission
                              Washington D.C. 20549

                                   FORM 10-KSB

                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934
 (Mark one)
[x]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended       December 31, 2006      or
                             ------------------------

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

For the transition period from  ________________  to _______________

Commission File Number   000-32551
                         -------------

                       LEGEND INTERNATIONAL HOLDINGS, INC.
             (Exact name of Registrant as specified in its charter)

              Delaware                                      233067904
              --------                                      ---------
     (State or other jurisdiction of                       (IRS Employer
     incorporation or organisation)                        Identification No.)

         Level 8, 580 St Kilda Road Melbourne, Victoria, 3004, Australia
                                    -------------------------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code   011 (613) 8532 2866
                                                     -------------------

Securities registered pursuant to Section 12 (b) of the Act:
         Title of each class                          Name of each exchange
                                                         on which registered
                 N/A                                            N/A
                -----                                          -----

Securities registered pursuant to Section 12(g) of the Act:
                     Common stock, par value $.001 per share
                     ---------------------------------------
                                (Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |_|

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 the past 90 days.

                           Yes    X                  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)

                  Yes                       No      X
                                                    -


<PAGE>

State Issuer's Revenues for its most recent fiscal year.

None

The aggregate market value based on the average bid and asked price on the
over-the-counter market of the Registrant's common stock, ("Common Stock") held
by non-affiliates of the Company was US$66,596,906 as at December 31, 2006.

There were 133,765,625 outstanding shares of Common Stock as of March 29, 2007.

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable

Transitional Small Business Issuer Yes:___  No:_X_




                                       2
<PAGE>

TABLE OF CONTENTS                                                          PAGE


PART I
Item 1        Business                                                        4
Item 2        Properties                                                     15
Item 3        Legal Proceedings                                              15
Item 4        Submission of Matters to a Vote of Security Holders            15

PART II
Item 5        Market for Common Equity and Related Stockholder Matters       17
Item 6        Management's Discussion and Analysis of
              Financial Condition or Plan of Operation                       19
Item 7        Financial Statements                                           24
Item 8        Changes in and Disagreements with Accountants on
              Accounting and Financial Statement Disclosure                  24
Item 8A       Controls and Procedures                                        24
Item 8B       Other Information                                              24

PART III
Item 9        Directors and Executive Officers of the Registrant             25
Item 10       Executive Compensation                                         27
Item 11       Security Ownership of Certain Beneficial Owners
              and Management and Related Stockholder Matters                 30
Item 12       Certain Relationships and Related Transactions                 30


Part IV
Item 13       Exhibits, Financial Statement Schedules, and Reports
              on Form 8-K                                                    33
Item 14       Principal Accounting Fees and Services                         33


              Signatures                                                     34
              Exhibit Index                                                  36


                                       3
<PAGE>

                                     PART I

Item 1            Business

General

The terms "Legend," "Company," "we," "our," and "us" refer to Legend
International Holdings, Inc. unless the context suggests otherwise.

         This report and other reports, as well as other written and oral
statements made or released by us, may contain forward looking statements.
Forward looking statements are statements that describe, or that are based on,
our current expectations, estimates, projections and beliefs. Forward looking
statements are based on assumptions made by us, and on information currently
available to us. Forward-looking statements describe our expectations today of
what we believe is most likely to occur or may be reasonably achievable in the
future, but such statements do not predict or assure any future occurrence and
may turn out to be wrong. You can identify forward-looking statements by the
fact that they do not relate strictly to historical or current facts. The words
"believe," "anticipate," "intend," "expect," "estimate," "project", "predict",
"hope", "should", "may", and "will", other words and expressions that have
similar meanings, and variations of such words and expressions, among others,
usually are intended to help identify forward-looking statements.

         Forward-looking statements are subject to both known and unknown risks
and uncertainties and can be affected by inaccurate assumptions we might make.
Risks, uncertainties and inaccurate assumptions could cause actual results to
differ materially from historical results or those currently anticipated.
Consequently, no forward-looking statement can be guaranteed. The potential
risks and uncertainties that could affect forward looking statements include,
but are not limited to the risks of mineral exploration and development stage
projects, political risks of development in foreign countries, risks associated
with environmental and other regulatory matters, mining risks and competitors,
the volatility of diamond and other mineral prices and movements in foreign
exchange rates, increased competition, governmental regulation, performance of
information systems, and the ability of the Company to hire, train and retain
qualified employees. In addition, other risks, uncertainties, assumptions, and
factors that could affect the Company's results and prospects are described in
this report, including under the heading "Risk Factors" and elsewhere and may
further be described in the Company's prior and future filings with the
Securities and Exchange Commission and other written and oral statements made or
released by the Company.

         We caution you not to place undue reliance on any forward-looking
statements, which speak only as of the date of this document. The information
contained in this report is current only as of its date, and we assume no
obligation to update any forward-looking statements.

         Legend has a 100% owned subsidiary company Legend Consolidated Group
Inc, a Delaware corporation. This company is inactive.

         Effective November 17, 2006, Legend issued one (1) new bonus share of
common stock for every two (2) shares of common stock outstanding on the record
at that date. The issue of the new bonus shares of common stock were on a
pro-rate basis to all shareholders. As a result, the Company issued 27,599,722
shares of its common stock. Effective December 31, 2006, Legend issued one (1)
new bonus share of common stock for every two (2) shares of common stock
outstanding on the record at that date. The issue of the new bonus shares of
common stock were on a pro-rata basis to all shareholders. As a result, the
Company issued 41,934,337 shares of its common stock.

         The Company has accounted for these bonus issues as a stock split and
accordingly, all share and per share data has been retroactively restated.

Currency

         We use the Australian dollar as our reporting currency, since we are
headquartered in Australia and our administrative expenses are incurred in
Australian dollars. References to dollars are to Australian dollars (A$) unless


                                       4
<PAGE>

otherwise indicated as being United States dollars (US$). For the convenience of
the reader, the Australian Dollar figures for the year ended December 31, 2006
have been translated into United States Dollars ("US$") using the rate of
exchange at December 31, 2006 of A$1.00=US$0.7893. Prior to July 31, 2006, the
Company's functional currency was the US dollar. However, as a result of the
purchase of diamond mining tenements in Northern Australia in July 2006, the
Company's 2006 revenue and expenses will be primarily denominated in Australian
dollars (A$). Statement of Financial Accounting Standards ("SFAS") No. 52,
Foreign Currency Translation, states that the functional currency of an entity
is the currency of the primary economic environment in which the entity
operates. Accordingly the Company determined that from August 1, 2006 the
functional currency of the Company is the Australian dollar. Assets, liabilities
and equity were translated at the rate of exchange at July 31, 2006. Revenue and
expenses were translated at actual rates. Translation gains and losses were
included as part of accumulated other comprehensive gain.

Restatement of comparative numbers was made for the change in functional and
reporting currency. The change was adopted prospectively beginning July 31, 2006
in accordance with SFAS No. 52.

History

         Legend was incorporated in the State of Delaware on January 5, 2001
under the name Sundew International, Inc., to engage in the business of selling
compatible inkjet cartridges and refill kits on the Internet.

         On March 13, 2003, Legend filed for an Amendment to its Certificate of
Incorporation (the "Amendment") pursuant to which the name of Sundew
International, Inc. was changed to "Legend International Holdings, Inc."

         In November 2004, Renika Pty Ltd, an Australian corporation ("Renika")
acquired an 88% interest in Legend from William and Michael Tay (the "Tays"),
the Tays resigned as Directors and Officers of Legend, Joseph Gutnick was
appointed President, Chief Executive Officer and a Director and Peter Lee was
appointed Secretary. The Tays also granted Renika an option to acquire an
additional 1,301,040 shares of common stock that Renika exercised in 2005.

         Commencing in fiscal 2005, Legend has decided to focus its business on
mineral exploration activities.

         Legend is an exploration stage company. Legend has not been involved in
any bankruptcy, receivership or similar proceeding. Legend has not been involved
in any material reclassification, merger consolidation, or purchase or sale of a
significant amount of assets not in the ordinary course of business.

Description of Business

Business

         The Company has never generated any significant revenues from
operations and is still considered an exploration stage company. The Company was
initially formed to engage in the business of selling compatible inkjet
cartridges and refill kits on the Internet for the consumer printer market. In
March 2003, management of the Company decided to engage in the business of
building and acquiring controlling or other interests in one or more companies
engaged in the contract sales and distribution of specialty medical products,
and raise additional capital for this purpose. Neither business was successful
and operations of both were eventually discontinued. During fiscal 2004,
management of the Company developed a plan of operations to acquire
income-producing real property. The Company did not acquire any properties
pursuant to such plan.


                                       5
<PAGE>

         Following the change of management in November 2004, the Company
developed a new plan of operations, which was to engage in mineral exploration
and development activities. Legend's business plan calls for the identification
of mineral properties, in South America and other parts of the world, where it
can obtain secure title to exploration, development and mining interests. Our
preference is to identify large gold deposits with low operating costs. We are
prepared to consider the exploration, development and mining of profitable base
metal interests. At the beginning of 2006, Legend expanded its areas of interest
to include diamond exploration activities which are discussed below.

Recent Developments

         Effective as of March 3, 2006, Legend entered into a Contract for the
Sale of Mining Tenements ("Contract") with Astro Diamond Mines N.L. ("Astro") an
Australian company pursuant to which the Company acquired certain diamond mining
tenements in Northern Australia from Astro. The consideration payable by Legend
to Astro was Australian dollars $1.5 million and Legend was also required to pay
to Astro any costs incurred on the tenements after February 1, 2006. Astro
provided commercial warranties which are usual for a transaction of this nature
in favour of Legend. Under Australian law, Astro was required to provide an
independent experts report to shareholders for this transaction. In order to
prepare the independent experts report, a mineral valuation was prepared on
behalf of Astro which indicated that the preferred value for the tenements that
are the subject of the transaction was A$1.5 million. This formed the basis of
the consideration agreed by the parties. The President and Chief Executive
Officer of the Company, Mr. J. I. Gutnick, is Chairman and Managing Director of
Astro and Dr DS Tyrwhitt, an independent Director of the Company is also a
Director of Astro. The tenements are located in the Northern Territory of
Australia and are prospective for diamonds.

Exploration History and Forward Work Program

         Legend controls 16,854 square kilometers of diamond prospective
tenements adjacent to the Gulf of Carpentaria in the Northern Territory of
Australia. The rocks underlying this area belong to the Northern Australian
Craton which forms an arc across the north of Australia hosting the Merlin,
Argyle and Ellendale diamond fields.

         Legend's diamond mining tenements are divided into five project areas

     o    Abner Range
     o    Glyde River
     o    Foelsche
     o    Cox
     o    Selby

         The Company has significant tenement positions in the Glyde River,
Abner Range, Foelsche, Cox and Selby areas with excellent kimberlite indicator
mineral and diamond occurrences adjacent to known pipe occurrences at Merlin and
Abner. Widespread macrodiamonds, microdiamonds and diamond indicator minerals
throughout this region indicate the potential for many possible diamond fields.

         The Company's main focus is within the McArthur Basin which hosts the
Merlin kimberlite pipes and the recently discovered Abner Range kimberlite
pipes.

Abner Range

         Airborne Electro-Magnetic ("EM"), magnetic and gravity surveys flown in
late 2006 have identified numerous anomalies on the Abner Range Plateau, which
hosts the diamondiferous Abner Range Kimberlite, less than 10km to the north. An
unabraded 2mm macro-diamond recovered during 2006 in the headwaters of a stream
within the Abner Range project is surrounded by numerous EM, magnetic and
gravity anomalies, all of which will be drilled in the current, ongoing diamond
core and reverse circulation drilling program.

Glyde Project

         The Company owns the Glyde River exploration license immediately south
of the Merlin Diamond Mine held by North Australian Diamonds Limited. An


                                       6
<PAGE>

airborne geophysical program flown in late 2006 has located many targets for
drilling. Stream and loam sampling in late 2006 has revealed numerous
kimberlitic chromites adjacent to geophysical targets. A brief drilling program
was undertaken in December 2006, however many geophysical and geological targets
remain to be drill tested in the coming dry season (April-November 2007).

         The Glyde River is host to alluvial gravels sourced from numerous
diamond bearing catchments including the entire Merlin diamond field. Over 40
kilometers strike of the alluvial gravels occur within Legend's Glyde River
tenements. Previous bulk sampling south of the Glyde River tenement returned 21
diamonds for 3.15 carats in one location (on a third party tenement) and 15
diamonds for 4.78 carats (on the Company's tenement) in a second location, and a
third bulk sample along the tenement boundary returned 75 diamonds for 5.3
carats (on the Company's tenement). The tenement covering the Glyde River to the
north will be examined for alluvial diamonds and additional targets will be
further assessed and tested in 2007.

Foelsche and Selby Projects

         The Foelsche and Selby Project tenements immediately to the east of the
Merlin Diamond Mine contain abundant trains of kimberlite indicator minerals in
streams draining the area. The area is bound by regional scale faults uplifting
basement rocks against younger sandstones. In 2005, selected areas were flown
with airborne EM/magnetics by Astro. Priority anomalies were followed up with
ground gravity surveys in 2006. A number of targets were drilled, however the
source of the geophysical anomalies was attributed to Cretaceous/Tertiary infill
sequences within depressions in the Proterozoic sandstone bedrock. Similar
infill sequences typically occur over kimberlites within the region and the
discrimination of infill sequences over sandstone from infill sequences over
kimberlite presents an exploration challenge. Nevertheless, geophysical
techniques remain an integral component of effective exploration within the
McArthur Basin.

         The prospectivity of the Foelsche and Selby regions remains high, with
many exploration targets not yet explored. The Foelsche region in particular has
numerous Kimberlite Indicator Mineral (KIM) trains which require further
follow-up and re-appraisal of airborne EM/magnetics. Further targets will be
drilled and aeromagnetic surveys are planned for the project areas.

Cox Project

         At Cox, numerous structural and KIM targets will be covered with EM and
magnetic surveys in 2007. Further follow up drill programs are also planned for
2007.

Geological History and Kimberlite Occurrence in the McArthur River Basin.

         The North Australian Craton is one of two principal tectonic domains in
the Northern Territory. The dominant tectonic episode for formation of the
Craton, reworking the Archaean basement, was the Barramundi Orogeny at
1865-1850Ma. Outcrops of the older deformed and metamorphosed,
Palaeo-proterozoic rocks are surrounded by younger basins. The McArthur Group is
the principal element of the North Australian Craton cover and is predominately
composed of mildly deformed and unmetamorphosed Meso-proterozoic (1800-570Ma)
dolomitic carbonate, evaporates and sediments. The McArthur River Basin extends
over an area of 180,000 square kilometers and its sediments host a number of
base metal occurrences, including the McArthur Lead-Zinc-Silver shale-hosted
deposit; strata-bound, disseminated Lead-Zinc deposits; the Redbank Copper
deposits as well as Cobalt, Uranium and Iron.

         The Basin is covered by Cambrian Bukalara sandstone, up to100 metres
thick, and Cambrian flood basalts in the south. Younger, widespread Cretaceous
sedimentation covers the region but much has been removed through erosion. One
remnant of Cretaceous sediment is host to the Merlin field which represents the
youngest volcanic event in the region. The major structural feature in the
McArthur Basin is the Batten Trough or Batten Fault Zone, a north north west
trending zone of extensive faulting, approximately 70 kilometres wide. The
Trough is bound on the west by the Emu Fault. The associated Mallapunyah and
Calvert faults are approximately 50 kilometres apart and also trend north west.


                                       7
<PAGE>

         Legend's land holdings are located on the eastern side of the Batten
Trough, comprised of Meso-Proterozoic rocks of the McArthur Group, unconformably
overlain in the south east by the Cambrian Bukalara Sandstone and containing
small regions of Cretaceous sediments. The presence of microdiamonds across the
North Australian Craton defies geological boundaries, extending right across its
heart. This wide distribution may be due to recycling of the microdiamonds
through the Cretaceous by fluvial processes. An element of high-level fracture
control is now evidenced by the Merlin deposits. Since the discovery of the
Merlin field, diamond exploration approaches have shifted from Proterozoic
mobile belts with little consideration of regional geology, to incorporate the
range of fracture zones in the North Australian Craton. The North Australian
Craton is extensively underlain by Archaean basement and deep lithospheric,
cratonic rocks may be tapped by younger kimberlites as they intrude into these
fractures. The Merlin kimberlites are certainly younger than their Cambrian
sandstone host, yet older than their Cretaceous cover. Due to the presence of
the overlying Cretaceous cover, kimberlite surface expression can be minimal,
despite occasional concentric fracturing.

History of Diamond Exploration in the North Australian Craton.

         There are a number of key, global companies currently interested in the
Northern Territory, including Rio Tinto, DeBeers, BHP Billiton, Legend, Elkedra,
Tawana and Flinders. In the late 1960's, Stockdale (now DeBeers) was the primary
explorer in the McArthur River Basin, predominately looking for diamonds. In
1976, the Ashton Exploration Joint Venture formed between Ashton, CRA and
others, resulting in the discovery of the diamond-bearing Ellendale
olivine-lamproite pipes that same year and, in 1978, the Argyle
olivine-lamproite pipes (1179 Ma). Subsequent exploration into the early 1980's
was heavily influenced by the nature of these two deposits which lay within the
King Leopold Mobile Zone, a Proterozoic mobile belt, similar in depositional
style to South African models.

         In the early 1980's, Stockdale re-entered the Northern Territory. CRA
Exploration (CRAE, now Rio Tinto) separated from the Australian Diamond
Exploration Joint Venture (ADEJV) and discovered E.Mu Pipes. E.Mu 1 and 2 are
breccia pipes infilled with micaceous peridotite, similar to kimberlite but are
different in their composition, age and emplacement style to those of Ellendale
and Argyle, broadening the approach of and possibilities for exploration in the
region. Also in 1983, the ADEJV discovered the Coanjula microdiamond field, a
region rich in alluvial microdiamonds. Pipes found in the area are considered
barren for diamonds, yet micro-diamond bearing lenses exist within the local
sediment. The origin of this diamondiferous anomaly is still largely
unexplained.

         In 1988, Stockdale found the Packsaddle and Blackjack kimberlite dykes.
These two thin dykes yield abundant garnet and microdiamonds. In 1992 Stockdale
followed the occurrence of alluvial chrome-spinel and microdiamonds to the
discovery of the Timber Creek Kimberlites (1462 Ma), five individual pipes in
the Victoria Basin which yield small, colored diamonds. In 1985 CRAE had
relinquished the tenements in the E.Mu area. Following an assessment of the Open
File Reports showing 27 `unexplained' chromite grains, Biddlecome claimed these
tenements and passed them to ADJEV. Fractures in barren sandstone contained
breccias rich in chromites and macrodiamonds. These were traced to a flat
depression in the sandstone which was drilled and the "Excaliber" kimberlite was
encountered at 26 metres. This led to the subsequent discovery of the Merlin
field (340Ma) of 14 kimberlites which now include the E.Mu pipes.

         The pipes in the Merlin field are located on the eastern shoulder of
the Battern Trough, 6 kilometres east of the Emu Fault and on the projected
trace of the Calvert fault. They have intruded the Cambrian Bukalara sandstone.
They spread over a 10-15 kilometre area, are only 40-60 metres in diameter and
were emplaced around the time of the Alice Springs Orogeny. The largest pipe is
E.Mu 1 which is 4.5 ha in diameter and has up to 42 metres of Cretaceous
sediment at its surface.


                                       8
<PAGE>

         The Calvert Hills region is is a collection of Legend's tenements to
the east of Merlin, in the extension of the Halls Creek Orogen into the Northern
Territory. The Calvert Hills Project area has recently been divided into the
Abner Range and Foelsche prospects. The Abner Range kimberlite is also a breccia
pipe and is considered a part of the Merlin diamondiferous intrusive field. Past
indicator mineral sampling by Ashton and Rio Tinto has recovered macrodiamonds,
microdiamonds and chromite indicator minerals with no primary source yet
determined.

         The Glyde River alluvial diamond project lies in the Batten Trough,
just south of the Merlin diamond field. There are at least two diamond fields
shedding diamonds into tributaries of the Glyde River and, as such, it is
targeted as a potential economic source of alluvial diamonds. The Legend
tenement is north of the HYC Pyritic Shale base metal prospect and this Member
has been intersected in several drill holes. CRAE has explored the tenement area
for kimberlite. Ashton collected two bulk samples from separate drainages and
had positive diamond responses. Helicopter magnetics and EM covered the northern
part of the tenement as part of Rio Tinto's exploration around the Merlin pipe
field.

         Legend's Cox Project is located on the north western part of the
Bauhinia Downs. In the 1980's indicator mineral sampling by Ashton and Rio Tinto
recovered numerous microdiamonds and three macrodiamonds. Magnetic anomolies and
some chromite indicator minerals were found, but follow-up by these companies
was unsuccessful and a primary source is yet to be found.

Uranium Exploration

A review of open file reports documenting past exploration on the Company's
tenements, in particular at Selby on EL22251, which has an area of 1,644 square
kilometres, has ascertained the existence of highly radioactive phosphates at
the surface. The "large number of uranium-dominant anomalies" have been
documented in past exploration by Argold Holdings (1992) and Arnhem Land Mining
(1981-1983). Two large outcrops are of note, each with a strike length of more
than 800 meters and over 200 meters wide and are reported to be "significantly
radioactive at 10 to 100 times the background ...uranium and copper are
anomalous" (Argold, 1992). An average phosphate grade ranging from 6% to 34.2%
has been returned from previous sampling. Uranium is a common by-product of
marine phosphate deposits, accounting for a significant proportion of the
world's uranium production and averaging grades of 6 to 120 parts per million
("ppm") uranium. The occurrences at Selby on EL22251 have returned past assay
values ranging from 250 ppm to 532 ppm uranium (ALM, 1982).

The deposits have potential for a wider regional occurrence on EL22251 at Selby.
According to Argold in 1992, "The occurrences appear to be of syngenetic organic
origin and can therefore be expected to occupy a specific stratigraphic facies
within the Masterton, and show lateral continuity [within EL22251 at Selby]. The
occurrences...give very strong indications of the enormous potential of the host
unit which covers an area of several thousand square kilometers, to host
commercial deposits. The occurrences have substantial commercial potential and
further exploration work is warranted."

In light of increased commodity prices, an investigation to resolve the specific
extent and grades of these anomalies will be incorporated into the current
drilling program, which is expected to include surface reconnaissance, reverse
circulation drilling, further loam and stream sampling during the year. Uranium
prices were at approximately US$15/lb in the 1980's, reduced in the early 1990's
around the time of Argold's exploration of this area, and has recently reached
US$100/lb. Phosphate prices are also substantially higher than at the time of
this historical exploration.


                                       9
<PAGE>

Listing of Tenements


Tenement
Identification
Number                         Project

EL23116                        Abner Range
EL23117                        Abner Range
EL23118                        Abner Range
EL23513                        Abner Range
EL23514                        Abner Range
EL23121                        Glyde
EL22295                        Cox
EL22296                        Cox
EL22297                        Cox
EL22298                        Cox
EL22300                        Cox
EL22302                        Cox
EL23126                        Cox
EL22244                        Foelsche
EL22245                        Foelsche
EL22351                        Foelsche
EL23119                        Foelsche
EL23510                        Foelsche
EL23511                        Foelsche
EL23512                        Foelsche
EL23515                        Foelsche
EL22246                        Selby
EL22247                        Selby
EL22251                        Selby
EL22252                        Selby

Access

         Access to the project areas is by commercial airline to Darwin, the
capital of the Northern Territory. From Darwin, access can be road, a distance
of approximately 950 kilometres or by air charter, approximately 2 hours flying
time. The nearest major town is Borroloola which has limited accommodation and
other facilities. Legend is currently setting up a base at Borroloola. Access
from Borroloola to the drilling sites is normally via helicopter given the
terrain. During the dry season (approximately April to November), access can be
by four wheel drive vehicles over dirt roads however this is time consuming.
Distances from Borroloola to field sites range between 90 and 150 kilometres.

Mineralisation

         No known mineral reserves are known on our land. Our previous and
proposed programs are exploratory in nature.


Government Regulations

         The Company's exploration operations are subject to federal and state
laws and regulations governing the method of acquisition and ownership of mining
rights, exploration, development, mining, production, taxes, labour standards,
occupational health, mine safety, toxic substances other matters. Federal and
state legislation also governs environmental management and native title issues.
We are committed to complying and, to our knowledge, are in compliance with all
governmental legislation and regulations.


                                       10
<PAGE>

Government Requirements for Maintenance of Licences

         To ensure that licences are kept in good standing the Company is
required to pay the annual rent amount for each licence on its respective
anniversary date. The amount due is dependent upon the size and age of the
licence. The Company is also required to work the licences and meet the annual
expenditure commitments. Annual exploration reports are also required for each
licence. Failure to comply would place the licences at risk of cancellation and
therefore forfeit the right to explore on that ground.

Native Title

         The rights and obligations of the Company with respect to native title
obligations differ between licences depending upon the underlying ownership of
the land. Crown land, namely pastoral lease land, falls under the Native Title
Act while Aboriginal freehold land falls under the Aboriginal Land Rights Act
(Northern Territory). All the granted licences held by the Company are on
pastoral lease land. The Company is currently in negotiations with the local
native title council working towards the grant of several more applications that
are situated on aboriginal freehold land. Heritage surveys are contracted where
necessary to ensure the protection of local registered and unregistered
aboriginal heritage sites.

Employees

         The services of our Chief Executive Officer and Chief Financial Officer
as well as clerical employees are provided to us on a part-time basis pursuant
to a Service Agreement effective December 1, 2004 (the "Service Agreement") by
and between AXIS Consultants Pty Limited and ourselves. AXIS also provides
office facilities, equipment, administration and clerical services to the
Company pursuant to the Service Agreement. The Service Agreement may be
terminated by written notice from the parties thereto.

         Further detail relating to additional terms of the Service Agreement is
included in "Item 2- Properties", "Item 12- Certain Relationships and Related
Transactions" and "Item 10- Executive Compensation".

Risk Factors

Risks of Our Business

We Lack an Operating History And Have Losses Which We Expect To Continue Into
the Future.

         To date we have had no material source of revenue. We have no operating
history as a mineral exploration or mining company upon which an evaluation of
our future success or failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon:

     -    exploration and development of any mineral property we identify;

     -    our  ability to locate  economically  viable  mineral  reserves in any
          mineral property we identify;

     -    our ability to raise the capital necessary to conduct  exploration and
          preserve  our  interest in mineral  claims,  increase  our interest in
          mineral claims and continue as an exploration and mining company; and

     -    our ability to generate revenues and profitably  operate a mine on any
          mineral property we identify.


                                       11
<PAGE>

We Have No Diamond Or Other Mineral Reserves And We Cannot Assure You That We
Will Find Such Reserves. If We Develop A Diamond Or Other Mineral Reserve, There
Is No Guarantee That Production Will Be Profitable.

         We cannot guarantee we will ever find any or that we will be successful
in locating commercial mine reserves on any exploration properties that we may
obtain. Even if we find a diamond or other commercial minerals reserve, there is
no assurance that we will be able to mine them. Even if we develop a mine, there
is no assurance that we will make a profit. If we do not find diamonds or other
commercial minerals you could lose part or all of your investment.

We Will Need Financing To Determine If There Is Diamonds Or Other Commercial
Minerals And To Maintain The Mineral Claims.

         Our success will depend on our ability to raise capital. We will
require substantial additional funds to conduct mineral exploration and
development activities on our tenements. There is no assurance whatsoever that
funds will be available from any source or, if available, that they can be
obtained on terms acceptable to us to make investments. If funds are not
available in the amounts required to achieve our business strategy, we would be
unable to reach our objective. This could cause the loss of all or part of your
investment.

The Report Of Our Independent  Registered Public Accounting Firm Contain An
Explanatory  Paragraph  Questioning Our Ability To Continue As A Going Concern.

         The report of our independent registered public accounting firm on our
financial statements as of December 31, 2006 and for the years ended December
31, 2006 and 2005 includes an explanatory paragraph questioning our ability to
continue as a going concern. This paragraph indicates that we have not yet
commenced revenue producing operations and have a retained deficit at December
31, 2006 of A$5,355,734 which conditions raise substantial doubt about our
ability to continue as a going concern. Our financial statements do not include
any adjustment that might result from the outcome of this uncertainty.

We Are A Small Operation And Do Not Have Significant Capital.

         Because we will have limited working capital, we must limit our
exploration. If we are unable to raise the capital required to undertake
adequate exploration, we may not find diamonds or other commercial minerals even
though properties that we may acquire may contain diamonds or other commercial
minerals. If we do not find diamonds or other commercial minerals we may be
forced to cease operations and you may lose your entire investment.

We Could Encounter Delays Due To Regulatory And Permitting Delays.

         We could face delays in obtaining mining permits and environmental
permits. Such delays, could jeopardize financing, if any, in which case we would
have to delay or abandon work on the properties. There Are Uncertainties
Inherent In The Estimation Of Diamonds Or Other Mineral Reserves.

         Reserve estimates, including the economic recovery of diamond ore, will
require us to make assumptions about recovery costs and diamond market prices.
Reserve estimation is, by its nature, an imprecise and subjective process and
the accuracy of such estimates is a function of the quality of available data
and of engineering and geological interpretation, judgment and experience. The
economic feasibility of properties will be based upon our estimates of the size
and grade of ore reserves, metallurgical recoveries, production rates, capital
and operating costs, and the future price of diamonds. If such estimates are
incorrect or vary substantially it could affect our ability to develop an
economical mine and would reduce the value of your investment.


                                       12
<PAGE>

If We Define An Economic Ore Reserve And Achieve Production, It Will Decline In
The Future. An Ore Reserve Is A Wasting Asset.

         Our future ore reserve and production, if any, will decline as a result
of the exhaustion of reserves and possible closure of any mine that might be
developed. Eventually, at some unknown time in the future, all of the
economically extractable ore will be removed from the properties, and there will
be no ore remaining unless this Company is successful in near mine site
exploration to extend the life of the mining operation. This is called depletion
of reserves. Ultimately, we must acquire or operate other properties in order to
continue as an on going business. Our success in continuing to develop reserves,
if any, will affect the value of your investment.

There Are Significant Risks Associated With Mining Activities.

         The mining business is generally subject to risks and hazards,
including quantity of production, quality of the ore, environmental hazards,
industrial accidents, the encountering of unusual or unexpected geological
formations, cave-ins, flooding, earthquakes and periodic interruptions due to
inclement or hazardous weather conditions. These occurrences could result in
damage to, or destruction of, our mineral properties or production facilities,
personal injury or death, environmental damage, reduced production and delays in
mining, asset write-downs, monetary losses and possible legal liability. We
could incur significant costs that could adversely affect our results of
operation. Insurance fully covering many environmental risks (including
potential liability for pollution or other hazards as a result of disposal of
waste products occurring from exploration and production) is not generally
available to us or to other companies in the industry. What liability insurance
we carry may not be adequate to cover any claim.

We May Subject To Significant  Environmental And Other Governmental  Regulations
That Can Require Substantial Capital Expenditure,  And Can Be Time-Consuming.

         We may be required to comply with various laws and regulations
pertaining to exploration, development and the discharge of materials into the
environment or otherwise relating to the protection of the environment in the
countries that we operate, all of which can increase the costs and time required
to attain operations. We may have to obtain exploration, development and
environmental permits, licenses or approvals that may be required for our
operations. There can be no assurance that we will be successful in obtaining,
if required, a permit to commence exploration, development and operation, or
that such permit can be obtained in a timely basis. If we are unsuccessful in
obtaining the required permits it may adversely affect our ability to carry on
business and cause you to lose part or all of your investment.

Mining Accidents Or Other Adverse Events At Our Property Could Reduce Our
Production Levels.

         If and when we reach production it may fall below estimated levels as a
result of mining accidents, cave-ins or flooding on the properties. In addition,
production may be unexpectedly reduced if, during the course of mining,
unfavorable ground conditions or seismic activity are encountered, ore grades
are lower than expected, or the physical or metallurgical characteristics of the
ore are less amenable to mining or processing than expected. The happening of
these types of events would reduce our profitably or could cause us to cease
operations which would cause you to lose part or all of your investment.

         The acquisition of diamond mineral properties is subject to substantial
competition. If we must pursue alternative properties, companies with greater
financial resources, larger staffs, more experience, and more equipment for
exploration and development may be in a better position than us to compete for
properties. We may have to undertake greater risks than more established
companies in order to compete which could affect the value of your investment.


                                       13
<PAGE>

We May Lose Our Claims If We Do No Maintain A Minimum Level of Work On The
Claims

         We will be required to carry out a minimum level of work on each claim
to maintain of our claims in good standing. If we cannot afford to carry out the
work or pay the fees we could lose our interest in claims. The loss of some or
all of our mineral claims would adversely affect the value of your investment.

We are substantially dependent upon AXIS Consultants To Carry Out Our Activities

         We are substantially dependent upon AXIS for our senior management,
financial and accounting, corporate legal and other corporate headquarters
functions. For example, each of our officers is employed by AXIS and, as such,
is required by AXIS to devote substantial amounts of time to the business and
affairs of the other shareholders of AXIS.

         Pursuant to a services agreement, AXIS provides us with office
facilities, administrative personnel and services, management and geological
staff and services. No fixed fee is set in the agreement and we are required to
reimburse AXIS for any direct costs incurred by AXIS for us. In addition, we pay
a proportion of AXIS indirect costs based on a measure of our utilization of the
facilities and activities of AXIS plus a service fee of not more than 15% of the
direct and indirect costs. To date, AXIS has not charged us a service fee but
there can be no assurance that AXIS will not charge a fee in the future. This
service agreement may be terminated by us or AXIS on 60 days' notice. See
"Certain Relationships and Related Party Transactions."

         We are one of five affiliated companies of which three are Australian
public companies listed on Australian Stock Exchange. Each of the companies has
some common Directors, officers and shareholders. In addition, each of the
companies is substantially dependent upon AXIS for its senior management and
certain mining and exploration staff. A number of arrangements and transactions
have been entered into from time to time between such companies. Currently,
there are no material arrangements or planned transactions between the Company
and any of the other affiliated companies other than AXIS. However, it is
possible we may enter into such transactions in the future which could present
conflicts of interest.

Future Sales of Common Stock Could Depress The Price Of Our Common Stock

         Future sales of substantial amounts of common stock pursuant to Rule
144 under the Securities Act of 1933 or otherwise by certain stockholders could
have a material adverse impact on the market price for the common stock at the
time. There are presently approximately 122,739,308 outstanding shares of our
common stock held by our stockholders which are deemed "restricted securities"
as defined by Rule 144 under the Securities Act. Under certain circumstances,
there shares may be sold without registration pursuant to the provisions of Rule
144. In general, under rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one-year holding period may, under certain
circumstances, sell within any three-month period a number of restricted
securities which does not exceed the greater of one (1%) percent of the shares
outstanding or the average weekly trading volume during the four calendar weeks
preceding the notice of sale required by Rule 144. In addition, Rule 144
permits, under certain circumstances, the sale of restricted securities without
any quantity limitations by a person who is not an affiliate of ours and has
satisfied a two-year holding period. Any sales of shares by stockholders
pursuant to Rule 144 may have a depressive effect on the price of our common
stock.

Our Common Stock Is Traded Over the Counter, Which May Deprive Stockholders Of
The Full Value Of Their Shares

         Our common stock is quoted via the Over The Counter Bulletin Board
(OTCBB). As such, our common stock may have fewer market makers, lower trading
volumes and larger spreads between bid and asked prices than securities listed
on an exchange such as the New York Stock Exchange or the NASDAQ. These factors
may result in higher price volatility and less market liquidity for the common
stock.


                                       14
<PAGE>

A Low Market Price May Severely Limit The Potential Market For Our Common Stock

         Our common stock is currently trading at a price substantially below
$5.00 per share, subjecting trading in the stock to certain SEC rules requiring
additional disclosures by broker-dealers. These rules generally apply to any
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions (a "penny stock"). Such rules require the delivery, prior to
any penny stock transaction, of a disclosure schedule explaining the penny stock
market and the risks associated therewith and impose various sales practice
requirements on broker-dealers who sell penny stocks to persons other than
established customers and institutional or wealthy investors. For these types of
transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser's written consent to the
transaction prior to the sale. The broker-dealer also must disclose the
commissions payable to the broker-dealer, current bid and offer quotations for
the penny stock and, if the broker-dealer is the sole market maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Such information must be provided to the customer orally or in
writing before or with the written confirmation of trade sent to the customer.
Monthly statements must be sent disclosing recent price information for the
penny stock held in the account and information on the limited market in penny
stock. The additional burdens imposed upon broker-dealers by such requirements
could discourage broker-dealers from effecting transactions in our common stock.

The Market Price Of Your Shares Will Be Volatile.

         The stock market price of gold mining exploration companies like us has
been volatile. Securities markets may experience price and volume volatility.
The market price of our stock may experience wide fluctuations that could be
unrelated to our financial and operating results. Such volatility or
fluctuations could adversely affect your ability to sell your shares and the
value you might receive for those shares.

Item 2            Properties

         Legend has exploration properties as discussed in "Item 1 - Description
of Business". Legend occupies certain executive and office facilities in
Melbourne, Victoria Australia which are provided to it pursuant to the Service
Agreement with AXIS. See "Item 1 - Business - Employees" and "Item 12 - Certain
Relationships and Related Transactions". Legend believes that its administrative
space is adequate for its current needs.

Item 3            Legal Proceedings

         There are no pending legal proceedings to which the Company is a party,
or to which any of its property is the subject, which the Company considers
material.

Item 4            Submission of Matters to a Vote of Security Holders

         At the Company's Annual Meeting of Stockholders held on November 17,
2006, stockholders voted to approve all of management's proposals as follows:

         1. To elect the following directors to serve a one-year term and until
their successors are elected and qualified:

                              Votes For                   Votes Withheld
                              ---------                   --------------

Joseph Gutnick                102,845,876                           -
David Tyrwhitt                102,845,876                           -

         2. To approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of common stock from
100 million to 200 million:

             Votes For               Votes Against              Abstained
             ---------               -------------              ---------

            102,845,876                    -                        -


                                       15
<PAGE>


3. To approve the Company 2006 Incentive Option Plan:

             Votes For               Votes Against               Abstained
             ---------               -------------               ---------

            102,845,876                    -                         -





                                       16
<PAGE>

                                     PART II


Item 5            Market for Common Equity and Related Stockholder Matters

Market Information

         Legend's common stock is traded on the NASD Over-the-Counter Bulletin
Board ("OTCBB") under the ticker symbol "LGDI" and CUSIP# 52467C 10 0. The
Company's common stock was initially cleared for trading on the OTC-BB on
September 26, 2003.

         The following table sets out the high and low bid information for the
Common Stock as reported by the National Quotation Service Bureau for each
period/quarter indicated in US$:

Calendar Period                     High Bid (1)              Low Bid (1)
---------------                     ---------                 --------


2004
First Quarter                         1.00                      0.05
Second Quarter                        0.25                      0.04
Third Quarter                         0.06                      0.02
Fourth Quarter                        0.25                      0.05

2005
First Quarter                         0.30                      0.13
Second Quarter                        0.32                      0.20
Third Quarter                         0.25                      0.15
Fourth Quarter                        3.25                      0.15

2006
First Quarter                         3.75                      2.50
Second Quarter                        3.90                      2.50
Third Quarter                         2.55                      0.85
Fourth Quarter                        2.10                      1.00

(1)      The quotations set out herein reflect inter-dealer prices without
         retail mark-up, mark-down or commission and may not necessarily reflect
         actual transactions.

         As of March 29, 2007, there are 133,765,625 shares of common stock
outstanding.

         To date we have not paid dividends on our common stock and we do not
expect to declare or pay any dividends on our common stock in the foreseeable
future. Payment of any dividends will depend upon our future earnings, if any,
our financial condition, and other factors deemed relevant by the Board of
Directors.

Shareholders

         As of March 23, 2007, there were approximately 97 record holders of the
Company's common stock. Within the holders of record of the Company's common
stock are depositories such as Cede & Co., a nominee for The Depository Trust
Company (or DTC), that hold shares of stock for brokerage firms which, in turn,
hold shares of stock for one or more beneficial owners. Accordingly, the Company
believes there are many more beneficial owners of its common stock whose shares
are held in "street name", not in the name of the individual shareholder.

Options

         Effective as of December 12, 2005, the Board of Directors of Company
approved the distribution to stockholders for no consideration of an aggregate
of 36,135,500 non-transferable options, each of which is exercisable to purchase
one share of common stock of the Company at an exercise price of US$0.25 per


                                       17
<PAGE>

share with a latest exercise date of December 31, 2012 and otherwise on the
terms and conditions set out in Appendix A to the Form 8-K dated December 12,
2005. The options were issued on a pro-rata basis to all stockholders of record
on December 31, 2005 on the basis of two (2) options for every one (1) share of
common stock owned by a stockholder on the record date. The options may not be
exercised until the shares underlying the options are registered under federal
and state securities laws. On June 26, 2006, the Board of Directors amended the
terms and conditions of the options and included a cashless exercise clause for
the options in the terms and conditions. On July 21, 2006, Renika Pty Ltd
exercised 34,778,220 options using the cashless exercise feature and were issued
71,730,079 shares of common stock. In December 2006, the Company issued 700,000
shares with attaching options on the basis of one option for every two shares at
no exercise price. The options were exercised in December 2006. On December 27,
2006, a further optionholder exercised 19,000 options using the cashless
exercise feature and were issued 24,750 shares of common stock.

         On September 19, 2006, the Company issued 7,425,000 options pursuant to
the 2006 Equity Incentive Plan. Of the total 7,425,000 options issued, 2,475,000
vest on September 19, 2007, 2,475,000 vest on September 19, 2008 and 2,475,000
vest on September 19, 2009. The exercise price of the options is US$1.00 for the
President and Chief Executive Officer and for all other participants, US$0.444
for 50% of the options and US$1.00 for the balance of 50% of the options. The
options expire on September 19, 2016. The Company has accounted for all options
issued in 2006 based upon their fair market value using the Binomial pricing
model. There were no employee stock options issued by the Company prior to 2006.
An external consultant has calculated the fair value of the options using the
Binomial valuation method using a share price of US$0.50, strike price as set
out above, maturity period of 5.5 to 6.5 years depending on the vesting date,
risk free interest rate of 4.69% and volatility of 60%. This equates to values
ranging from US$0.116 to US$0.233 per option depending on the exercise price and
vesting date. The total value of the options equates to A$683,628 (US$574,635).

Dividend Policy

         The Company has not previously paid any cash dividends on common stock
and does not anticipate or contemplate paying dividends on common stock in the
foreseeable future. It is the present intention of management to utilize all
available funds for the development of the Company's business. The only
restrictions that limit the ability to pay dividends on common equity or that
are likely to do so in the future, are those restrictions imposed by law. Under
Delaware corporate law, no dividends or other distributions may be made which
would render the Company insolvent or reduce assets to less than the sum of its
liabilities plus the amount needed to satisfy any outstanding liquidation
preferences.

         Effective November 17, 2006, the Company's Board of Directors declared
a 1-for-2 share bonus issue in the form of a dividend that was payable in
December 2006 to stockholders of record as of November 17, 2006. An aggregate of
27,599,722 shares of common stock were issued in connection with this dividend.

         In November 2006, the Company's Board of Directors declared a second
1-for-2 share bonus issue in the form of a dividend that was payable in January
2007 to stockholders of record as of December 31, 2006. An aggregate of
41,934,337 shares of common stock were issued in connection with this dividend.

Transfer Agent

         The transfer agent and registrar for the Company's common stock is
Holladay Stock Transfer, Inc. of 2939 N. 67th Place, Scottsdale, Arizona 85251.

Recent Sales of Unregistered Securities

         We have issued no unregistered securities within the period covered by
this report which have not been previously reported on Form 10-QSB or Form 8-K.


                                       18
<PAGE>

Item 6            Management's Discussion and Analysis of Financial Condition
                  or Plan of Operation

General

         The following discussion and analysis of our financial condition and
plan of operation should be read in conjunction with the Financial Statements
and accompanying notes and the other financial information appearing elsewhere
in this report. This report contains numerous forward-looking statements
relating to our business. Such forward-looking statements are identified by the
use of words such a s believes, intends, expects, hopes, may, should, plan,
projected, contemplates, anticipates or similar words. Actual operating
schedules, results of operations, ore grades and mineral deposit estimates and
other projections and estimates could differ materially form those projected in
the forward-looking statements.

         We are an exploration stage mining company. Our principal exploration
target is for diamonds. We are in the initial stages of our exploration program
and we have not yet identified any ore reserves. We have not generated any
material revenues from operations.

Selected Financial Data

         Our selected financial data presented below for each of the years in
the two-year period ended December 31, 2006, and the balance sheet data at
December 31, 2006 has been derived from financial statements, which have been
audited by PKF, Certified Public Accountants, a Professional Corporation. The
selected financial data should be read in conjunction with our financial
statements for each of the years in the two year period ended December 31, 2006
and Notes thereto, which are included elsewhere in this Annual Report.

Statement of Operations Data


                             Year ended December 31

                                                                        Conv.
                                             2005          2006       Transl.
                                               A$            A$           US$

Revenues - interest                             -         1,930         1,523
                                ---------------------------------------------

Costs and expenses                         76,851     4,536,507     3,580,665
                                ---------------------------------------------

Loss from operations                      (76,851)   (4,534,577)   (3,579,142)

Other income (loss)                         1,343       (40,017)      (31,585)
                                ---------------------------------------------

Profit (loss) before income
taxes                                     (75,508)   (4,574,594)   (3,610,727)

Provision for income taxes                      -             -             -
                                ---------------------------------------------

Net profit (loss)                         (75,508)   (4,574,594)   (3,610,727)
                                ---------------------------------------------

                                               A$            A$           US$
Net profit (loss) per share
on continuing operations                    (0.00)        (0.06)        (0.05)

Weighted average number
of shares outstanding                  28,668,876    75,229,664    75,229,664
                                ---------------------------------------------

Balance Sheet Data

                                               A$            A$           US$
Total assets                                    -     1,149,461       907,269
Total liabilities                          88,778     1,880,629     1,484,380
                                           ----------------------------------

Stockholders' equity (deficit)            (88,778)     (731,168)     (577,111)
                                          -----------------------------------


                                       19
<PAGE>

Foreign Currency Translation

         The majority of our administrative operations are in Australia and, as
a result, our accounts are reported in Australian dollars. The income and
expenses of its foreign operations are translated into Australian dollars at the
average exchange rate prevailing during the period. Assets and liabilities of
the foreign operations are translated into Australian dollars at the period-end
exchange rate. The following table shows the period-end rates of exchange of the
Australian and US dollar compared with the US dollar during the periods
indicated.

                      Year ended
                     December 31

                           2005             A$1.00           =     US$0.7674
                           2006             A$1.00           =     US$0.7893

         The exchange rate between the A$ and US$ has moved by 2.85% between
December 31, 2005 and 2006. Accordingly, a direct comparison of costs between
fiscal 2005 and 2006 may not necessarily be a true comparison.

Plan of Operation

         We have A$839,797 in cash at December 31, 2006. Subsequent to December
31, 2007, we have issued a further 7,962,624 shares of common stock, raising
approximately A$2,522,052 (US$1,990,656). See "Liquidity and Capital Resources"
for a discussion of how the Company intends to finance its plan of operations.

         We commenced exploration activities on the tenements we acquired in
July 2006 and since that time and up to December 31, 2006, have spent
A$3,811,385 on exploration activities. We plan to continue our exploration
program throughout 2007 and anticipate spending A$2,400,000 on exploration.
However, if exploration results are positive, we believe that we will be able to
raise additional equity capital in order to progress our exploration program at
a faster rate.

         As set out in Item 1 "Employees" the services of our Chief Executive
Officer, Chief Financial Officer and geologists as well as certain clerical
employees are provided by AXIS. At the current time, we have no plans to change
these arrangements or employ any further persons.

Results of Operations

Year ended December 31, 2006 versus Year ended December 31, 2005

         Effective November 17, 2006, Legend issued one (1) new bonus share of
common stock for every two (2) shares of common stock outstanding on the record
at that date. The issue of the new bonus shares of common stock were on a
pro-rate basis to all shareholders. As a result, the Company issued 27,599,722
shares of its common stock. Effective December 31, 2006, Legend issued one (1)
new bonus share of common stock for every two (2) shares of common stock
outstanding on the record at that date. The issue of the new bonus shares of
common stock were on a pro-rata basis to all shareholders. As a result, the
Company issued 41,934,337 shares of its common stock.

         The Company has accounted for these bonus issues as a stock split and
accordingly, all share and per share data has been retroactively restated.

         As an exploration company, we do not have an ongoing source of revenue.
Our revenue stream is normally from ad-hoc tenement disposals and interest
received on cash in bank. During the year ended December 31, 2006, we received
A$1,930 in interest on funds in the bank (2005:A$nil).

         Costs and expenses increased during the year from A$76,851 for the year
ended December 31, 2005 to A$4,536,507 (US$3,580,665) for the year ended
December 31, 2006.


                                       20
<PAGE>

         The main components of costs and expenses are as follows:-

(i)  An increase  in  exploration  expenditure  written off from A$nil in fiscal
     2005 to  A$3,811,385  (US$3,088,326)  in fiscal 2006.  In fiscal 2006,  the
     Company acquired certain diamond mining tenements in Northern Australia for
     A$1,500,000  (US$1,183,950),  paid  A$81,010  (US$63,941)  in  stamp  duty,
     A$921,131  (US$727,049) of exploration  expenditure  incurred by Astro from
     February 1, 2006 to September 30, 2006 and  A$1,309,244  (US$1,033,386)  of
     exploration  expenditure  incurred since  acquisition  by the Company.  All
     costs incurred in connection  with this  acquisition  have been expensed as
     part of exploration  costs. The Company commenced a drilling program on the
     tenement  interests  in the  Northern  Territory  of  Australia  as soon as
     settlement  of  the  acquisition  of  the  tenements  was  completed.   The
     exploration  costs  included  drilling,  salaries for contract field staff,
     travel costs, accommodation, meals and tenement holding costs.

(ii) An  increase in interest  expense  from  A$2,482 in fiscal 2005 to A$41,371
     (US$32,655)  in fiscal  2006.  During  fiscal 2006,  we borrowed  A$324,951
     (US$254,116)  from  Wilzed,  a  company  which our  President  and CEO is a
     Director and  shareholder  and in October 2006, the total debt of A$336,081
     (US$265,268) was repaid.  Wilzed charged us A$3,588  (US$2,832) in interest
     at a rate  between  9.35%  to  9.85%  during  fiscal  2006.  AXIS  provides
     management  and geological  services to us pursuant to a Service  Agreement
     dated December 2004.  AXIS charged us A$13,498  (US$10,654) in interest for
     fiscal 2006. AXIS charged interest at a rate between 9.35% to 10.10% during
     fiscal 2006 on accounts owing under the Service Agreement. Astro charged us
     A$21,302   (US$16,814)   in  interest  on  amounts  owed  for   exploration
     expenditure  incurred by Astro.  During March,  2007,  the Company paid the
     amount  outstanding  including  interest  accrued.  During  fiscal 2005, we
     borrowed A$7,361  (US$5,565) from Wilzed.  Wilzed charged us A$181 (US$131)
     in  interest.  Wilzed  charged  interest at a rate of 9.35% for 2005.  AXIS
     charged us interest  of A$2,357 on amounts  owing to AXIS under the Service
     Agreement. AXIS charged interest at a rate of 9.35% for 2005.

(iii) An increase in legal, professional and accounting from A$28,305 for fiscal
     2005 to A$89,351  (US$70,524)  for fiscal  2006.  During  fiscal  2006,  we
     incurred  legal  expenses  of A$28,295  (US$22,234)  in relation to general
     legal  work  including  stock  transfer  matters,  stock  option  plans and
     regulatory  filings;  audit fees of A$35,062  (US$27,674) for  professional
     services in relation to financial  statements,  the quarterly  Form 10-QSBs
     and Form 10-KSB;  and A$25,993  (US$20,516)  for a stock transfer agent and
     regulatory  filing fees.  During fiscal 2005, we incurred  legal expense of
     A$9,105 for general  legal work;  audit fees of A$13,513  for  professional
     services in relation to financial  statements,  the quarterly  Form 10-QSBs
     and Form  10-KSB;  and A$5,687 for a stock  transfer  agent and  regulatory
     filing fees.  All fees have  increased in 2006, as a result of the increase
     in activity by the Company as a consequence  of the  acquisition  of mining
     tenements and capital raising.

(iv) An  increase  in  administrative  costs  from  A$46,064  in fiscal  2005 to
     A$479,093  (US$378,148) in fiscal 2006.  During fiscal 2006, the management
     fee charged by AXIS to us was $76,910 (US$60,705). AXIS charged us A$75,410
     (US$59,521)  for  Director's  fees and  salaries  incurred on behalf of the
     Company which  relates to fees paid to the  President  and Chief  Executive
     Officer, Chief Financial Officer and Secretary, and other staff of AXIS who
     provide services to the Company.  One independent Director charged directly
     to the Company the amount of A$35,000  (US$27,625)  for the period from the
     date of his  appointment  to  December  31,  2006,  for which  there was no
     comparable  amount on fiscal 2005.  The Company paid A$8,350  (US$6,591) in
     insurance  premiums,  and there was no comparable  amount in fiscal 2005 as
     the  insurance  policies  were only taken out when  exploration  operations
     commenced  in August  2006.  The  Company  incurred  A$66,477 in travel and
     accommodation  costs,  A$61,878  in  relation  to travel by  Directors  and
     officers  on  capital  raising  trips and  A$4,598  for  travel of  support
     contractors to the field; A$193,513 for consultants, A$179,464 for investor
     relations consultants and A$14,049 for lodging annual tax returns, employee
     share option valuation and exploration  tenement  maintenance;  A$8,350 for


                                       21
<PAGE>

     postage and freight costs;  A$11,351 for motor vehicle costs related to the
     motor vehicle proposals for the field program, and there were no comparable
     amounts for 2005. In fiscal 2005,  the management fee charged by AXIS to us
     was  A$26,236  (US$20,203)  and AXIS  charged us A$14,636  (US$12,171)  for
     salaries  incurred in relation to AXIS staff that  provided  administration
     services to the Company.

(v)  Stock  based  compensation  has  increased  from A$nil for  fiscal  2005 to
     A$115,307  (US$91,012)  for fiscal 2006. On September 19, 2006, the Company
     issued 7,425,000 options pursuant to the 2006 Equity Incentive Plan. Of the
     total  7,425,000  options  issued,  2,475,000  vest on September  19, 2007,
     2,475,000  vest on September 19, 2008 and  2,475,000  vest on September 19,
     2009.  The exercise  price of the options is US$1.00 for the  President and
     Chief Executive Officer and for all other participants, US$0.444 for 50% of
     the options and US$1.00 for the balance of 50% of the options.  The options
     expire on September  19, 2016.  The Company has  accounted  for all options
     issued in 2006  based  upon  their fair  market  value  using the  Binomial
     pricing  model.  There were no employee stock options issued by the Company
     prior to 2006. An external  consultant has calculated the fair value of the
     options using the Binomial  valuation method using a fair value share price
     of US$0.50,  strike price as set out above,  maturity  period of 5.5 to 6.5
     years  depending on the vesting date,  risk free interest rate of 4.69% and
     volatility of 60%.  This equates to values  ranging from US$0.05 to US$0.10
     per option  depending on the  exercise  price and vesting  date.  The total
     value of the  options  equates to  A$683,628  (US$574,635).  The gross fair
     value is amortised  into  operations  over the vesting  period.  For fiscal
     2006, the amortization amounted to A$115,307 (US$91,012).

         Accordingly, the loss from operations increased from A$76,851 for the
year ended December 31, 2005 to A$4,534,577 (US$3,579,142) for the year ended
December 31, 2006.

         The net loss amounted to A$4,574,594 (US$3,610,727) for the year ended
December 31, 2006, compared to a net loss of A$75,508 for the year ended
December 31, 2005.

         The net loss per common equivalent share in 2006 was A$0.06 (US$0.05)
compared with a net loss with a common equivalent share price of A$0.00 in the
prior year.

         There was no provision for tax in either the prior year or the current
year.

Liquidity and Capital Resources

         As of December 31, 2006, the Company has cash of A$839,797
(US$662,852).

         During fiscal 2006, net cash used in operating activities was
A$4,125,135 (US$3,255,969), as compared to A$61,134 in 2005, reflecting the
commencement of the Company's diamond exploration activities in 2006.

         During fiscal 2006, net cash provided by financing activities was
A$4,977,205 (US$3,928,508) which represented the proceeds of a private placement
offering of shares of common stock and short term financing facilities, as
compared to A$61,134 in 2005.

         We commenced exploration activities on the tenements we acquired in
July 2006 and since that time and up to December 31, 2006, have spent
A$3,811,385 on exploration activities which includes the amounts paid in
connection with our Astro acquisition. We plan to continue our exploration
program throughout 2007 and anticipate spending A$2,400,000 on exploration.
However, if exploration results are positive, we believe that we will be able to
raise additional equity capital in order to progress our exploration program at
a faster rate. In addition, we expect that we will need to spend $800,000 on
legal, professional, accounting and administration expenses. The Company will
need to raise funds in cash to fund its business plan. The Company plans to
satisfy its cash requirements by additional equity financing or loans. This will
be in the form of private placements of restricted common stock, preferred stock
or debentures. The Company may not be able to operate if it does not obtain the
additional capital or financing it requires. There can be no assurance that the
Company will be successful in raising such capital or financing and thus, be
able to satisfy its cash requirements.


                                       22
<PAGE>

         The Company is considered to be an exploration stage company, with no
significant revenue, and is dependent upon the raising of capital through
placement of its common stock, preferred stock or debentures. In the event the
Company is unsuccessful in raising such capital, it may never commence active
operations.

Cautionary "Safe Harbour" Statement under the United States Private Securities
Litigation Reform Act of 1995.

         Certain information contained in this Form 10-KSB are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 ("the Act"), which became law in December 1995. In order to obtain the
benefits of the "safe harbor" provisions of the Act for any such forward-looking
statements, we wish to caution investors and prospective investors about
significant factors which, among others, have in some cases affected our actual
results and are in the future likely to affect our actual results and cause them
to differ materially from those expressed in any such forward-looking
statements. This Form 10-KSB contains forward-looking statements relating to
future financial results. Actual results may differ as a result of factors over
which we have no control, including, without limitation, the risks of
exploration and development stage projects, political risks of development in
foreign countries, risks associated with environmental and other regulatory
matters, mining risks and competitors, the volatility of gold prices and
movements in foreign exchange rates.

Impact of Australian Tax Law

         Australian resident corporations are subject to Australian income tax
on their non-exempt worldwide assessable income (which includes capital gains),
less allowable deductions, at the rate of 30%. Foreign tax credits are allowed
where tax has been paid on foreign source income, provided the tax credit does
not exceed 30% of the foreign source income.

         Under the U.S./Australia tax treaty, a U.S. resident corporation such
as us is subject to Australian income tax on net profits attributable to the
carrying on of a business in Australia through a "permanent establishment" in
Australia. A "permanent establishment" is a fixed place of business through
which the business of an enterprise is carried on. The treaty limits the
Australian tax on interest and royalties paid by an Australian business to a
U.S. resident to 10% of the gross interest or royalty income unless it relates
to a permanent establishment. Although we consider that we do not have a
permanent establishment in Australia, it may be deemed to have such an
establishment due to the location of its administrative offices in Melbourne. In
addition we may receive interest or dividends from time to time.

Impact of Australian Governmental, Economic, Monetary or Fiscal Policies

         Although Australian taxpayers are subject to substantial regulation, we
believe that our operations are not materially impacted by such regulations nor
is it subject to any broader regulations or governmental policies than most
Australian taxpayers.

Impact of Recent Accounting Pronouncements

         For a discussion of the impact of recent accounting pronouncements on
the Company's financial statements, see Note 2 to the Company's Financial
Statements which are attached hereto.

Quantitative and Qualitative Disclosures about Market Risk

         The Company is exposed to interest rate risk primarily through its loan
facilities. The Company utilizes these borrowings to meet its working capital
needs.

         At December 31, 2006, the Company had no outstanding borrowings under
its Loan Facilities.


                                       23
<PAGE>

Item 7.           Financial Statements

                  See F Pages

Item 8.           Changes in and Disagreements with Accountants on Accounting
                  and Financial Statement Disclosure

None.

Item 8A  Controls and Procedures

(a)      Evaluation of disclosure controls and procedures.

         Our principal executive officer and our principal financial officer
         evaluated the effectiveness of our disclosure controls and procedures
         (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange
         Act of 1934 as amended) as of the end of the period covered by this
         report. Such disclosure controls and procedures are designed to ensure
         that information required to be disclosed by the Company is accumulated
         and communicated to the appropriate management, including the principal
         executive and financial officers, on a basis that permits timely
         decisions regarding timely disclosure. Based on that evaluation, such
         principal executive officer and principal financial officer concluded
         that, the Company's disclosure control and procedures as of the end of
         the period covered by this report have been designed and are
         functioning effectively to provide reasonable assurance that the
         information required to be disclosed by the Company in reports filed
         under the Securities Exchange Act of 1934 is recorded, processed,
         summarized and reported within the time periods specified in the SEC's
         rules and forms.

(b)      Change in Internal Control over Financial Reporting.

         No change in our internal control over financial reporting occurred
         during our most recent fiscal quarter that has materially affected, or
         is reasonably likely to materially affect our internal control over
         financial reporting.

(c)      We believe that a controls system, no matter how well designed and
         operated, can not provide absolute assurance that the objectives of the
         controls system, no matter how well designed and operated, can not
         provide absolute assurance that the objectives of the controls system
         are met, and no evaluation of controls can provide absolute assurance
         that all control issues and instances of fraud, if any, within a
         company have been detected.

         In preparation for the annual report of management regarding our
         evaluation of our internal controls that is required to be included in
         our annual report for the year ended December 31, 2007 by Section 404
         of the Sarbanes-Oxley Act of 2002, we will need to assess the adequacy
         of our internal control, remediate any weaknesses that may be
         identified, validate that controls are functioning as documented and
         implement a continuous reporting and improvement process for internal
         controls. We may discover deficiencies that require us to improve our
         procedures, processes and systems in order to ensure that our internal
         controls are adequate and effective and that we are in compliance with
         the requirements of Section 404 of the Sarbanes-Oxley Act. If the
         deficiencies are not adequately addressed, or if we are unable to
         complete all of our testing and any remediation in time for compliance
         with the requirements of Section 404 of the Sarbanes-Oxley Act and the
         SEC rules under it, we would be unable to conclude that our internal
         controls over financial reporting are designed and operating
         effectively, which could adversely affect our investor confidence in
         our internal controls over financial reporting.

         Item 8B  Other Information

                  Not applicable.


                                       24
<PAGE>

                                    PART III

Item 9.  Directors and Executive Officers of the Registrant

The following table sets out certain information concerning the Company's
officers and directors.


Name                   Age      Position(s) Held

Joseph Gutnick         55       Chairman of the Board
                                President, Chief Executive Officer and Director.

David Tyrwhitt         68       Director.

Peter Lee              49       Secretary, Chief Financial Officer and Principal
                                Accounting Officer.

Joseph Gutnick
Mr Gutnick has been Chairman of the Board, President and Chief Executive Officer
since November 2004 and has been Chairman of the Board, President and Chief
Executive Officer of Golden River Resources Corp, a Delaware corporation
(GORV.OB) since March 1988. He has been a Director of numerous public listed
companies in Australia specialising in the mining sector since 1980 and is
currently a Director of Astro Diamond Mines N.L., Great Gold Mines N.L., and
Quantum Resources Limited. Mr. Gutnick was previously Executive Chairman of
Tahera Corporation, a company that is listed on Toronto Stock Exchange from May
2000 to October 2003 and has previously been a Director of the World Gold
Council. He is a Fellow of the Australasian Institute of Mining & Metallurgy and
the Australian Institute of Management and a Member of the Australian Institute
of Company Directors.

David Tyrwhitt
Dr Tyrwhitt was appointed a Director in March 2005. He is a geologist, holding a
Bachelor of Science and PhD degrees and has 40 years experience in mineral
exploration and management development and operation of gold mines in Australia.
Dr Tyrwhitt has been a Director of numerous public listed companies in Australia
in the mining industry and is currently a Director of Astro Diamond Mines N.L.,
Great Gold Mines N.L., and Quantum Resources Limited and has also been a
Director of Golden River Resources Corp, a Delaware corporation (GORV.OB) since
1996.

Peter Lee
Mr Lee has been Chief Financial Officer since March 2005 and Secretary since
November 2004. He is a Director, Chief Financial Officer and Secretary of Golden
River Resources Corp, a Delaware corporation (GORV.OB). Mr Lee is a Member of
the Institute of Chartered Accountants in Australia, a Fellow of Chartered
Secretaries Australia Ltd., a Member of the Australian Institute of Company
Directors and holds a Bachelor of Business (Accounting) from Royal Melbourne
Institute of Technology. He has over 25 years commercial experience and is
currently General Manager Corporate and Company Secretary of several listed
public companies in Australia.

Involvement on Certain Material Legal Proceedings During the Last Five Years

No director, officer, significant employee or consultant has been convicted in a
criminal proceeding, exclusive of traffic violations. No director, officer,
significant employee or consultant has been permanently or temporarily enjoined,
barred, suspended or otherwise limited from involvement in any type of business,
securities or banking activities. No director, officer or significant employee
has been convicted of violating a federal or state securities or commodities
law.


                                       25
<PAGE>

Board of Directors

Our Certificate of Incorporation provides that there must be at least one
Director of the Company. Our Board of Directors currently consists of two
directors.

Directors need not be stockholders of the Company or residents of the State of
Delaware. Directors are elected for an annual term and generally hold office
until the next Directors have been duly elected and qualified. Directors may
receive compensation for their services as determined by the Board of Directors.
A vacancy on the Board may be filled by the remaining Directors even though less
than a quorum remains. A Director appointed to fill a vacancy remains a Director
until his successor is elected by the Stockholders at the next annual meeting of
Shareholder or until a special meeting is called to elect Directors.

The executive officers of the Company are appointed by the Board of Directors.
There are no family relationships between any Directors or executive officers of
the Company.

Our Board of Directors consists of two members, of whom one has been, and
continues to be, independent under applicable regulations. During fiscal 2006,
our Board of Directors met two times. The Board of Directors also uses
resolutions in writing to deal with certain matters and during fiscal 2006, one
resolution in writing were signed by all Directors.

The Company encourages all Directors to attend the Annual Meeting of
stockholders, either in person or by telephone and all of the Directors attended
the 2006 Annual Meeting.

Nominating Committee

We do not have a nominating committee. Historically our entire Board has
selected nominees for election as directors. The Board believes this process has
worked well thus far particularly since it has been the Board's practice to
require unanimity of Board members with respect to the selection of director
nominees. In determining whether to elect a director or to nominate any person
for election by our stockholders, the Board assesses the appropriate size of the
Board of Directors, consistent with our bylaws, and whether any vacancies on the
Board are expected due to retirement or otherwise. If vacancies are anticipated,
or otherwise arise, the Board will consider various potential candidates to fill
each vacancy. Candidates may come to the attention of the Board through a
variety of sources, including from current members of the Board, stockholders,
or other persons. The Board of Directors has not yet had the occasion to, but
will, consider properly submitted proposed nominations by stockholders who are
not directors, officers, or employees of Legend on the same basis as candidates
proposed by any other person.

Audit and Compensation Committees

We do not have an Audit Committee or a Compensation Committee as we only have
two Directors, only one of whom (Dr. Tyrwhitt) may be deemed to be independent.
However, Dr Tyrwhitt, liaises directly with the auditors on matters normally
dealt with by an Audit Committee. It is the opinion of the Board of Directors
that Mr. Tyrwhitt is an independent director as defined in Rule 10A-3 of the
Securities Exchange Act of 1934. In addition, the Board believes that Mr.
Tyrwhitt would meet the director independence requirements of the Nasdaq Stock
Market if we were listed on such Market. Our Board does not include a "financial
expert" as defined in Item 401(e) of Regulation S-B. The Company only has one
independent Director and this Director does not have a finance background.

Executive and Director compensation matters are determined by the entire Board
of Directors.

Code of Ethics

We have adopted a Code of Conduct and Ethics and it applies to all Directors,
Officers and employees. A copy of the Code of Conduct and Ethics will be posted
on our website and we will provide a copy to any person without charge. If you
require a copy, you will be able to download it from our website at www.lgdi.net
or alternatively, contact us by facsimile or email and we will send you a copy.


                                       26
<PAGE>

Stockholder Communications with the Board

Stockholders who wish to communicate with the Board of Directors should send
their communications to the Chairman of the Board at the address listed below.
The Chairman of the Board is responsible for forwarding communications to the
appropriate Board members.

Mr. Joseph Gutnick
Legend International Holdings, Inc.
PO Box 6315 St Kilda Road
Central Melbourne, Victoria 8008 Australia

Section 16(a) Beneficial Ownership Reporting Compliance

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our Directors,
executive officers and beneficial owners of more than 10% of the outstanding
Common Stock are required to file reports with the Securities and Exchange
Commission concerning their ownership of and transactions in our Common Stock
and are also required to provide to us copies of such reports. Based solely on
such reports and related information furnished to us, we believe that in fiscal
2006 all such filing requirements were complied with in a timely manner by all
Directors and executive officers and 10% stockholders, except that Mr. Gutnick
and Renika Pty Ltd. filed three Form 4's in connection with the sale of stock
and Mr. Gutnick filed one Form 4 with respect to the receipt of options, after
the respective due dates of such forms.

Item 10. Executive Compensation.

The following table sets forth the annual salary, bonuses and all other
compensation awards and pay outs on account of our Chief Executive Officer for
services rendered to us during the fiscal year ended December 31, 2006. No other
executive officer received more than US$100,000 per annum during this period.

Summary Compensation Table

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Name and           Year   Salary  Bonus    Stock    Option   Non-Equity     Change in      All Other       Total
Principal                 (US$)   (US$)    Awards   Awards   Incentive      Pension        Compensation    (US$)
Position                                   (US$)    (US$)    Plan           Value and      (US$)
                                                             Compensation   Nonqualified
                                                             (US$)          Deferred
                                                                            Compensation
                                                                            Earnings
                                                                            (US$)
------------------------------------------------------------------------------------------------------------------
<S>                <C>                               <C>                                                    <C>
Joseph Gutnick,    2006        -        -        -   21,750              -              -               -   21,750
Chairman of the
Board, President
and CEO
------------------------------------------------------------------------------------------------------------------
</TABLE>

2006 Equity Incentive Plan

         The 2006 Plan provides for the granting of options. The maximum number
of shares available for awards is 10% of the issued and outstanding shares of
common stock on issue at any time. If an option expires or is cancelled without
having been fully exercised or vested, the remaining shares will generally be
available for grants of other awards.

         The 2006 Plan is administered by the Board comprised solely of
directors who are not employees or consultants to Legend or any of its
affiliated entities.

         Any employee, director, officer, consultant of or to Legend or an
affiliated entity (including a company that becomes an affiliated entity after
the adoption of the 2006 Plan) is eligible to participate in the 2006 Plan if
the Committee, in its sole discretion, determines that such person has
contributed significantly or can be expected to contribute significantly to the
success of Legend or an affiliated entity. During any one year period, no
participant is eligible to be granted options to purchase more than 5% shares of
our issued and outstanding common stock or if they provide investor relations
activities, or are a consultant to the Company, 2% of the issued and outstanding
shares of common stock in any 12 month period.


                                       27
<PAGE>

         Options granted under the 2006 Plan are to purchase Legend common
stock. The term of each option will be fixed by the Board, but no option will be
exercisable more than 10 years after the date of grant. The option exercise
price is fixed by the Board at the time the option is granted. The exercise
price must be paid in cash. Options granted to participants vest and have a term
of 10 years.

Outstanding Equity Awards at Fiscal Year-End

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Option Awards                                                                                      Stock Awards
---------------------------------------------------------------------------------------------------------------------
Name          Number of    Number of      Equity        Option    Option     Number    Market   Equity     Equity
              Securities   Securities     Incentive     Exercise  Expiration of        Value    Incentive  Incentive
              Underlying   Underlying     Plan          Price     Date       Shares    of       Plan       Plan
              Unexercised  Unexercised    Awards:       ($)                  or        Shares   Awards:    Awards:
              Options      Options (#)    Number of                          Units     or       Number     Market
              (#)          Unexercisable  Securities                         of        Units    of         or
              Exercisable                 Underlying                         Stock     of       Unearned   Payout
                                          Unexercised                        That      Stock    Shares,    Value of
                                          Unearned                           Have      That     Units or   Unearned
                                          Options (#)                        Not       Have     Other      Shares,
                                                                             Vested    Not      Rights     Units or
                                                                             (#)       Vested   That       Other
                                                                                       ($)      Have Not   Rights
                                                                                                Been       That
                                                                                                Vested     Have Not
                                                                                                (#)        Vested
                                                                                                           ($)
---------------------------------------------------------------------------------------------------------------------
<S>                                       <C>             <C>     <C>  <C>
Joseph        -            -              2,250,000     US$1.00   9/19/16    -         -
Gutnick,
Chairman  of
the   Board,
President
and CEO
---------------------------------------------------------------------------------------------------------------------
</TABLE>

         On September 19, 2006, the Company issued 7,425,000 options pursuant to
the 2006 Equity Incentive Plan. Of the total 7,425,000 options issued, 2,475,000
vest on September 19, 2007, 2,475,000 vest on September 19, 2008 and 2,475,000
vest on September 19, 2009. The exercise price of the options is US$1.00 for the
President and Chief Executive Officer and for all other participants, US$0.444
for 50% of the options and US$1.00 for the balance of 50% of the options. The
options expire on September 19, 2016. The Company has accounted for all options
issued in 2006 based upon their fair market value using the Binomial pricing
model. There were no employee stock options issued by the Company prior to 2006.
An external consultant has calculated the fair value of the options using the
Binomial valuation method using a share price of US$0.50, strike price as set
out above, maturity period of 5.5 to 6.5 years depending on the vesting date,
risk free interest rate of 4.69% and volatility of 60%. This equates to values
ranging from US$0.05 to US$0.10 per option depending on the exercise price and
vesting date. The total value of the options equates to A$683,628 (US$574,635).
The gross fair value is amortised into operations over the vesting period.

         No award is transferable, or assignable by the participant except upon
his or her death.

         The Board may amend the 2006 Plan, except that no amendment may
adversely affect the rights of a participant without the participant's consent
or be made without stockholder approval if such approval is necessary to qualify
for or comply with any applicable law, rule or regulation the Board deems
necessary or desirable to qualify for or comply with.

         Subject to earlier termination by the Board, the 2006 Plan has an
indefinite term except that no ISO may be granted following the tenth
anniversary of the date the 2006 Plan is approved by stockholders.


                                       28
<PAGE>

         None of the recipients have received any stock options or other equity
based forms of compensation from us for at least the last three years other than
J.I. Gutnick who is a Director and shareholder of Renika. Renika received
options in 2004.

         Other than the issue of these Options,  there are no other current
plans or  arrangements  to grant any options under the 2006 Plan.

Compensation Pursuant to Plans

         The Company does not have any pension or profit sharing plans. The
Company does not have any employees and therefore has no superannuation
obligations.

Equity Compensation Plan Information

<TABLE>
<CAPTION>
                                                                                Number of securities
                                                                                remaining available future
                            Number of Securities to   Weighted-average          issuance under equity
                            be issued upon exercise   exercise price of         compensation (excluding
                            of outstanding options,   outstanding options,      securities reflected in
                            warrants and rights       warrants and rights       Column One)
                            -------------------       -------------------       --------------------------

<S>                                <C>                         <C>                      <C>
Equity compensation plans          7,425,000                   $0.693                   21,561,300
approved by security
holders

Equity compensation plans              0                         0                            0
not approved by security
holders
</TABLE>



Director Compensation

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Name          Fees Earned  Stock       Option      Non-Equity    Change in      All Other      Total
              or Paid in   Awards ($)  Awards ($)  Incentive     Pension Value  Compensation   (US$)
              Cash (US$)                           Plan          and            ($)
                                                   Compensation  Nonqualified
                                                   ($)           Deferred
                                                                 Compensation
                                                                 Earnings
--------------------------------------------------------------------------------------------------------
<S>           <C>                                                                              <C>
David         15,600                                                                           15,600
Tyrwhitt
--------------------------------------------------------------------------------------------------------
</TABLE>

         It is our policy to reimburse Directors for reasonable travel and
lodging expenses incurred in attending Board of Directors meetings. Commencing
January 2005, non-management Directors are paid Directors fees of A$20,000
(US$15,600) per annum.




                                       29
<PAGE>

Item 11.          Security Ownership of Certain Beneficial Owners and
                  Management and Related Stockholder Matters.

         The following table sets out, to the best of our knowledge, the numbers
of shares in us beneficially owned as at December 31, 2006 by:

(i)      each of our present Executive Officers and Directors,

(ii)     each person (including any "group" as that term is defined in Section
         13(d)(3) of the Securities Exchange Act) who beneficially owns more
         than 5% of our Common Stock, and

(iii)    all of our present Directors and officers as a group.

<TABLE>
<CAPTION>
Title of Class        Name                            Number of Shares Owned         Percentage of
                                                                                     Shares (1)
<S>                                                <C>          <C>   <C>            <C>
Shares of Common      Joseph     and    Stera      104,676,726  (2)(3)(4)(5)         81.74
Stock                 Gutnick *

Shares of Common      David Tyrwhitt *                       -                       -
Stock

Shares of Common      Peter Lee *                    1,575,000           (6)         1.24
Stock
                                              ------------------------------------------------------

                      All officers and
                      Directors                    106,251,726                       82.98
                      As a Group
                                              ------------------------------------------------------
</TABLE>

*    unless  otherwise  indicated,  the  address  for each  person is C/- Legend
     International  Holdings,  Inc.,  Level  8, 580 St  Kilda  Road,  Melbourne,
     Victoria 3004, Australia.

**   less than 1%

Notes relating to Item 11:

(1)  Based on 125,803,001 shares outstanding as of December 31, 2006.

(2)  Includes  72,525,476  shares of Common Stock owned by Renika Pty.  Ltd., of
     both of which Mr Joseph  Gutnick,  Stera M.  Gutnick  and  members of their
     family are officers, Directors and principal stockholders.

(3)  Includes  2,250,000  shares  issuable to Mr Joseph Gutnick upon exercise of
     stock options of which none have vested at December 31, 2006.

(4)  Joseph Gutnick and Stera Gutnick are husband and wife.

(5)  Includes  19,901,250  shares  of  common  stock  owned by  Chabad  House of
     Caulfield Pty Ltd.  ("Chabad  House"),  a private  corporation  that is the
     trustee  of the  Heichal  Menachem  Community  Centre  Fund,  a  charitable
     organization.  Joseph  Gutnick and Stera  Gutnick are  directors  of Chabad
     House but  disclaim any  beneficial  interest in the shares of common stock
     owned by Chabad House.

(6)  Includes  1,575,000  shares issuable to Mr Peter Lee upon exercise of stock
     options of which none have vested at December 31, 2006.

Item 12. Certain Relationships and Related Transactions

         In December 2004, the Company entered into an agreement with AXIS
Consultants Pty Ltd to provide geological, management and administration
services to the Company. AXIS is affiliated through common management. We are
one of five affiliated companies of which three are Australian public companies
listed on Australian Stock Exchange. Each of the companies has some common
Directors, officers and shareholders. In addition, each of the companies is
substantially dependent upon AXIS for its senior management and certain mining


                                       30
<PAGE>

and exploration staff. A number of arrangements and transactions have been
entered into from time to time between such companies. It has been the intention
of the affiliated companies and respective Boards of Directors that each of such
arrangements or transactions should accommodate the respective interest of the
relevant affiliated companies in a manner which is fair to all parties and
equitable to the shareholders of each. Currently, there are no material
arrangements or planned transactions between the Company and any of the other
affiliated companies other than AXIS.

         AXIS is paid by each company for the costs incurred by it in carrying
out the administration function for each such company. Pursuant to the Service
Agreement, AXIS performs such functions as payroll, maintaining employee records
required by law and by usual accounting procedures, providing insurance, legal,
human resources, company secretarial, land management, certain exploration and
mining support, financial, accounting advice and services. AXIS procures items
of equipment necessary in the conduct of the business of the Company. AXIS also
provides for the Company various services, including but not limited to the
making available of office supplies, office facilities and any other services as
may be required from time to time by the Company as and when requested by the
Company.

         We are required to reimburse AXIS for any direct costs incurred by AXIS
for the Company. In addition, we are required to pay a proportion of AXIS's
overhead cost based on AXIS's management estimate of our utilisation of the
facilities and activities of AXIS plus a service fee of not more than 15% of the
direct and overhead costs. AXIS has not charged the 15% service fee to us.
Amounts invoiced by AXIS are required to be paid by us. We are also not
permitted to obtain from sources other than AXIS, and we are not permitted to
perform or provide ourselves, the services contemplated by the Service
Agreement, unless we first requests AXIS to provide the service and AXIS fails
to provide the service within one month.

         The Service Agreement may be terminated by AXIS or us upon 60 days
prior notice. If the Service Agreement is terminated by AXIS, we would be
required to independently provide, or to seek an alternative source of
providing, the services currently provided by AXIS. There can be no assurance
that we could independently provide or find a third party to provide these
services on a cost-effective basis or that any transition from receiving
services under the Service Agreement will not have a material adverse effect on
us. Our inability to provide such services or to find a third party to provide
such services may have a material adverse effect on our operations.

         In accordance with the Service Agreement AXIS provides the Company with
the services of our Chief Executive Officer, Chief Financial Officer, geologists
and clerical employees, as well as office facilities, equipment, administrative
and clerical services. We pay AXIS for the actual costs of such facilities plus
a maximum service fee of 15%.

         During fiscal 2005, AXIS charged the Company A$28,600 in management
fees, A$26,954 for salaries incurred in relation to AXIS staff that provided
services to the Company and charged interest of A$2,357 on the outstanding
balance. AXIS charged interest at a rate of 9.35% for 2005. The amount owed to
AXIS at December 31, 2005 was A$57,911. During fiscal 2006, AXIS charged the
company A$170,800 in management fees, A$122,393 for salaries incurred in
relation to AXIS staff that provided services to the Company, A$123,151 for
exploration services provided to the Company, AXIS charged interest of A$13,498,
loaned us A$4,500 and we repaid A$180,000. AXIS charged interest at a rate of
between 9.35% and 10.10% for fiscal 2006. The amount owed to AXIS at December
31, 2006 was A$312,253.

         On December 14, 2004, the Company issued 20,250,000 options to Renika
Pty Ltd ("Renika") as consideration for services to be rendered by the new
President and Chief Executive Officer of the Company. The 20,250,000 options
convert to 20,250,000 shares of common stock at an exercise price of $0.022 and
a latest exercise date of December 2009. The Company undertook a Black Scholes
valuation of the options using a $0.022 exercise price, $0.022 market price, 5
year life, risk free interest rate of 5.155% and a volatility of 16.7% which
equated to a value of $123,300. The $0.022 market price was based on the price
of the Company's shares of common stock at the time. In the absence of any
independent directors on the Company's Board, the Company's sole director, Mr.
Gutnick, appointed Dr. David Tyrwhitt to approve the terms of the options on
behalf of the Company. In September 2005, Renika exercised the 20,250,000
options using the cashless exercise feature and were issued 17,085,937 shares of
common stock.


                                       31
<PAGE>

         Wilzed Pty Ltd, a company associated with President and CEO of the
Company, Joseph Gutnick, has paid expenses on behalf of the Company and has
provided loan funds to enable the Company to meet its liabilities. During fiscal
2005, Wilzed loaned the Company A$7,361 and charged interest of A$181 on the
outstanding balance. At December 31, 2005, the Company owed Wilzed A$7,542.
During the 2006 fiscal year, Wilzed loaned A$324,951 and charged A$3,588 in
interest, and we repaid $336,081. The amount owing at December 31, 2006 is
A$nil. Wilzed charged interest at a rate of 9.35% for fiscal 2005 and between
9.35% and 9.85% for fiscal 2006.

         Mr Joseph Gutnick, the President of the Company advanced the Company
the initial deposit on opening a US Dollar bank account. In March, 2007, the
balance of A$831, owing of the initial advance of A$1,303 (US$1,000) less
expenses incurred of A$472, was repaid.

         Effective as of March 3, 2006, Legend entered into a Contract for the
Sale of Mining Tenements ("Contract") with Astro Diamond Mines N.L. ("Astro") an
Australian company pursuant to which the Company acquired certain diamond mining
tenements in Northern Australia from Astro. The consideration payable by Legend
to Astro was A$1.5 million and Legend was also required to pay to Astro any
costs incurred on the tenements after February 1, 2006. Astro provided
commercial warranties which are usual for a transaction of this nature in favour
of Legend. Under Australian law, Astro was required to provide an independent
experts report to shareholders for this transaction. In order to prepare the
independent experts report, a mineral valuation was prepared on behalf of Astro
which indicated that the preferred value for the tenements that are the subject
of the transaction was A$1.5 million. This formed the basis of the consideration
agreed by the parties. The President and Chief Executive Officer of the Company,
Mr. J. I. Gutnick, is Chairman and Managing Director of Astro and Dr DS
Tyrwhitt, an independent Director of the Company is also a Director of Astro.
The tenements are located in the Northern Territory of Australia and are
prospective for diamonds. Astro incurred costs on the mining tenements from
February 1, 2006 which at settlement Legend was required to pay. However, Astro
had not quantified the amount at the date of settlement. At December 31, 2006,
the Company owed Astro A$942,433 including interest of A$21,302. During fiscal
2007, the amount was repaid in full including interest charge for fiscal 2007 of
A$16,774. Astro charged interest at a rate between 9.85% and 10.10%.

Transactions with Management.

         We have a policy that we will not enter into any transaction with an
Officer, Director or affiliate of us or any member of their families unless the
transaction is approved by a majority of our disinterested non-employee
Directors and the disinterested majority determines that the terms of the
transaction are no less favourable to us than the terms available from
non-affiliated third parties or are otherwise deemed to be fair to us at the
time authorised.




                                       32
<PAGE>

                                     PART IV

Item 13. Exhibits


(a)      Exhibits

         The Exhibits to this Annual Report on Form 10-KSB are listed in the
         Exhibit Index at page 35 of this Annual Report.


Item 14. Principal Accounting Fees and Services

The following table shows the audit fees incurred for fiscal 2006 and 2005.

                                           2006                   2005
                                           ----                   ----
                                             A$                     A$
                                           ----                   ----

Audit fees                               35,062                 13,513
Audit related fees                            -                      -
Tax fees                                  4,280                      -
                                   ------------           ------------
                                   ------------           ------------

Total                                    39,342                 13,513
                                   ============           ============

         Audit fees were for the audit of our annual financial statements,
review of financial statements included in our 10-QSB/10-Q quarterly reports,
and services that are normally provided by independent auditors in connection
with our other filings with the SEC. This category also includes advice on
accounting matters that arose during, or as a result of, the audit or review of
our interim financial statements.

         As part of its duties, our Board of Directors pre-approves audit and
non-audit services performed by our independent auditors in order to assure that
the provision of such services does not impair the auditors' independence. Our
Board of Directors does not delegate to management its responsibilities to
pre-approve services performed by our independent auditors.




                                       33
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorised.


                                     LEGEND INTERNATIONAL HOLDINGS, INC.

                                     (Registrant)

                                           /s/ Peter J Lee
                                     By:   .....................................
                                           Peter J Lee
                                           Chief Financial Officer and Secretary


Dated: March 29, 2007




                                       34
<PAGE>

                           FORM 10-KSB Signature Page


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons in the capacities and on the
dates indicated.


Signature                           Title                               Date



     /s/Joseph Gutnick
1.   .........................  Chairman of the Board,
     Joseph Gutnick             President and Chief Executive
                                Officer (Principal Executive
                                Officer) and Director             March 29, 2007


     /s/David Tyrwhitt
2.   .........................  Director                          March 29, 2007
     David Tyrwhitt


     /s/Peter Lee
3.   .......................... Chief Financial Officer and
     Peter Lee                  Secretary (Principal Financial
                                and Accounting Officer)           March 29, 2007




                                       35
<PAGE>

EXHIBIT INDEX

Incorporated by
Reference to:


Exhibit No.         Exhibit

1.1                 Subscription Agreement (1)

3.1                 Certificate of Incorporation (1)

3.2                 Amended Certificate of Incorporation (2)

3.3                 Bylaws (1)

3.4                 Specimen Stock Certificate (1)

3.5                 Amendment to Certificate of Incorporation (5)

10.1                2006 Incentive Option Plan (3)

10.3                Contract for the Sale of Mining Tenements (4)

21.1                Subsidiaries of the Registrant (5)

31.1                Certification Pursuant to 18 U.S.C. Section 1350, as
                    Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002 by Joseph Isaac Gutnick (6)

31.2                Certification of Pursuant to 18 U.S.C. Section 1350, as
                    Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002 by Peter James Lee (6)

32.1                Certification of Pursuant to 18 U.S.C. Section 1350, as
                    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002 by Joseph Isaac Gutnick (6)

32.2                Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
                    Peter James Lee (6)

Footnotes:

(1)  Incorporated herein by reference to the Company's Registration Statement on
     Form  SB-2,  filed  on  February  2,  2001,  File  No.  333-55116,  and the
     amendments thereto.

(2)  Incorporated  herein by reference to the Company's  current  report on Form
     8-K filed on March 21, 2003.

(3)  Incorporated  herein by reference to the  Appendix to the  Company's  Proxy
     Statement filed on October 19,, 2006.

(4)  Incorporated by reference to the Company's current report on Form 8-K filed
     on March 10, 2006.

(5)  Filed herewith

         Financial Statements for the years ended December 31, 2005 and 2006.

         Legend International Holdings, Inc.
         Audited Financial Statements for the Company for the years ended
         December 31, 2006 and 2005.




                                       36
<PAGE>





                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)


                              Financial Statements

                           December 31, 2006 and 2005

         (with Report of Independent Registered Public Accounting Firm)






<PAGE>

CONTENTS


                                                                       Page


Report of Independent Registered Public Accounting Firm                 F-1
Balance Sheet                                                           F-2
Statements of Operations                                                F-3
Statements of Stockholders' Equity (Deficit)                            F-4
Statements of Cash Flows                                                F-5
Notes to Consolidated Financial Statements                       F-6 - F-17




<PAGE>

             Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
Legend International Holdings, Inc

We have audited the accompanying balance sheet of Legend International Holdings,
Inc (An Exploration Stage Company) as of December 31, 2006, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
years ended December 31, 2006 and 2005 and the cumulative amounts from
inception, January 5, 2001 through December 31, 2006. 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 audit. The related
statements of operations, stockholders' equity (deficit), and cash flows from
inception of the development stage on January 5, 2001 through December 31, 2003,
were audited by other auditors whose reports dated March 20, 2004 and April 7,
2003 expressed an unqualified opinion, with an explanatory paragraph discussing
the company's ability to continue as a going concern. Our opinion on the
statements of operations, stockholders' equity (deficit) and cash flows from
inception of the development stage through December 31, 2006, insofar as it
relates to amounts for prior periods through December 31, 2003, is solely based
on the reports of other auditors.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the 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. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Legend International Holdings,
Inc. at December 31, 2006, and the results of its operations and its cash flows
for the periods indicated above in conformity with accounting principles
generally accepted in the United States of America.

As discussed in note 3, during 2006, the Company changed its functional and
reporting currency from the US dollar to the Australian dollar.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As described in note 1, at December 31, 2006
the Company had not yet commenced revenue producing operations and had a working
capital deficit of A$845,234 and a retained deficit of A$5,355,734. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty. Management's
plans in regard to these matters are also discussed in note 1.







New York, NY                                       PKF
March 29, 2007                                     Certified Public Accountants
                                                   A Professional Corporation




                                      F-1
<PAGE>
<TABLE>
<CAPTION>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                                  Balance Sheet
                                December 31, 2006

<S>                                                                                  <C>              <C>
ASSETS
                                                                                                  Convenience
                                                                                                  -----------
                                                                                                  Translation
                                                                                                  -----------
                                                                                                          US$
                                                                                                          ---
                                                                                          A$             2006
                                                                                          --             ----
Current Assets:
Cash                                                                                 839,797          662,852
Receivables                                                                          169,271          133,606
Prepayments                                                                           14,559           11,490
                                                                           ------------------ ----------------
Total Current Assets                                                               1,023,627          807,948
                                                                           ------------------ ----------------

Non-Current Assets:
Property and Equipment, net                                                           35,834           28,284
Deposits (note 9)                                                                     90,000           71,037
                                                                           ------------------ ----------------
Total Non-Current Assets                                                             125,834           99,321
                                                                           ------------------ ----------------

Total Assets                                                                       1,149,461          907,269
                                                                           ================== ================

LIABILITIES

Current Liabilities:
Accounts payable and accrued expenses                                                601,654          474,886
Lease liability                                                                       11,690            9,227
Short-Term Advance - Affiliate                                                     1,255,517          990,979
                                                                           ------------------ ----------------
Total Current Liabilities                                                          1,868,861        1,475,092
                                                                           ------------------ ----------------

Non Current Liabilities:
Lease liability                                                                       11,768            9,288
                                                                           ------------------ ----------------
Total Non Current Liabilities                                                         11,768            9,288
                                                                           ------------------ ----------------

Total Liabilities                                                                  1,880,629        1,484,380
                                                                           ------------------ ----------------

Commitments and Contingencies (Notes 7 and 9)
Stockholders' Equity
Common stock: US$.001 par value
200,000,000 shares authorised
125,803,001 shares issued                                                            162,505          128,265
Additional Paid-in-Capital                                                         4,423,571        3,491,525
Other Comprehensive Gain                                                              38,490           30,380
Retained Deficit during development period                                          (839,463)        (662,588)
Retained Deficit during exploration period                                        (4,516,271)      (3,564,693)
                                                                           ------------------ ----------------

Total Stockholders' Equity (Deficit)                                                (731,168)        (577,111)
                                                                           ------------------ ----------------

Total Liabilities and Stockholders' Equity (Deficit)                               1,149,461          907,269
                                                                           ================== ================
</TABLE>

The accompanying notes are integral part of the financial statements.


                                      F-2
<PAGE>

<TABLE>
<CAPTION>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          (A Development Stage Company)
                            Statements of Operations

                                                                                                             January 5,
                                                                                                                   2001
                                                                                                             (Inception)
                                                                         For the years Ended    Convenience  to December
                                                                              December 31       Translation          31,
                                                                           2005        2006            2006         2006
                                                                            A$          A$              US$           A$
Revenues:

<S>                                                                                                               <C>
Sales                                                                            -           -           -        6,353
less cost of sales                                                               -           -           -       (1,362)
                                                                        ----------- ----------- ----------- ------------

Gross profit                                                                     -           -           -        4,991

Other income
Interest income - related entity                                                 -           -           -            -
Interest income - other                                                          -       1,930       1,523        3,875
                                                                        ----------- ----------- ----------- ------------
                                                                                 -       1,930       1,523        8,866
                                                                        ----------- ----------- ----------- ------------

Costs and expenses:
Legal, professional and accounting                                          28,305      89,351      70,524      135,397
Exploration expenditure                                                          -   3,811,385   3,088,326    3,811,385
Stock based compensation                                                         -     115,307      91,012      771,157
Interest expense                                                             2,482      41,371      32,655       49,935
Administration expenses                                                     46,064     479,093     378,148      556,709
                                                                        ----------- ----------- ----------- ------------
Total expenses                                                             (76,851) (4,536,507) (3,580,665)  (5,324,583)
                                                                        ----------- ----------- ----------- ------------

(Loss) from operations                                                     (76,851) (4,534,577) (3,579,142)  (5,315,717)
Foreign currency exchange gain/(loss)                                        1,343     (40,017)    (31,585)     (40,017)
                                                                        ----------- ----------- ----------- ------------
(Loss) before income taxes                                                 (75,508) (4,574,594) (3,610,727)  (5,355,734)

Provision for income taxes                                                       -           -           -            -
                                                                        ----------- ----------- ----------- ------------

Net (loss)                                                                 (75,508) (4,574,594) (3,610,727)  (5,355,734)
                                                                        =========== =========== =========== ============

Basic and diluted loss per common shares                                     (0.00)      (0.06)      (0.05)       (0.20)
                                                                        ----------- ----------- ----------- ------------

Weighted average number of common
shares used in per share calculations                                   28,668,876  75,229,664  75,229,664   27,298,540
                                                                        =========== =========== =========== ============

</TABLE>


The accompanying notes are integral part of the financial statements.


                                      F-3
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Deficit)
                     for the period ended December 31, 2006

<TABLE>
<CAPTION>
<S>               <C> <C>        <C>          <C>      <C>         <C>            <C>              <C>         <C>

                                     Common Stock
                                                                   Retained     Retained
                                                                   (Deficit)    (Deficit)
                                                       Additional  During the   During the      Other      Stockholders'
                                                Par     Paid-In    Exploration  Development  Comprehensive    Equity
                                                Value    Capital     Period       Period         Gain        (Deficit)
                                    Shares       A$        A$          A$           A$            A$            A$
                                 ---------------------------------------------------------------------------------------
Balance, January 5, 2001                   -        -          -            -            -              -             -

Shares issued to founder for
 organisation cost and services
 at US$0.05 per shares             4,297,500    5,550    118,896            -            -              -       124,446
Shares Issued for services
 rendered at US$0.05 per share       146,250      189      4,046            -            -              -         4,235
Shares Issued for Cash               616,500      796     17,056            -            -              -        17,852

Net Loss                                   -        -          -            -     (131,420)             -      (131,420)
                                 ---------------------------------------------------------------------------------------
Balance, December 31, 2001         5,060,250    6,535    139,998            -     (131,420)             -        15,113

Shares Issued for Cash               225,000      291      6,225            -            -              -         6,516
Shares Issued for Officer's
 Compensation                     11,250,000   14,529    148,359            -            -              -       162,888

Net Loss                                   -        -          -            -     (182,635)             -      (182,635)
                                 ---------------------------------------------------------------------------------------
Balance, December 31, 2002        16,535,250   21,355    294,582            -     (314,055)             -         1,882

Shares Issued for services
 rendered at US$0.022 per share    5,026,500    6,491    139,065            -            -              -       145,556

Net Loss                                   -        -          -            -     (156,966)             -      (156,966)
                                 ---------------------------------------------------------------------------------------
Balance, December 31, 2003        21,561,750   27,846    433,647            -     (471,022)             -        (9,528)

Shares Issued for services
 rendered at US$0.022 per share    2,004,750    2,589     55,464            -            -              -        58,053
Options Issued for services                -        -    160,672            -            -              -       160,672
Loan forgiveness-former major
 shareholder                               -        -     12,144            -            -              -        12,144

Net Loss                                   -        -          -            -     (234,610)             -      (234,610)
                                 ---------------------------------------------------------------------------------------
Balance, December 31, 2004        23,566,500   30,435    661,927            -     (705,632)             -       (13,269)
Shares issued on cashless
 exercise of options              17,085,938   22,066    (22,066)           -            -              -             -
Net Loss                                   -        -          -            -      (75,508)             -       (75,508)
                                 ---------------------------------------------------------------------------------------
Balance, December 31, 2005        40,652,438   52,501    639,861            -     (781,140)             -       (88,778)
Share issued on cashless exercise
 of options                       72,281,329   93,336    (93,336)           -            -              -             -
Shares and options issued under
 settlement agreement                112,500      144     35,272            -            -              -        35,416
Shares issued for cash            12,756,734   16,254  3,854,843            -            -              -     3,871,367
Cost of share issues                       -        -   (128,376)           -            -              -      (128,376)
Amortisation of Options under
 stock option plan                         -        -    115,307            -            -              -       115,307
Net unrealized gain on foreign
 exchange translation                      -        -          -            -            -         38,490        38,490
Net Loss                                   -        -          -   (4,516,271)     (58,323)             -    (4,574,594)
                                 ---------------------------------------------------------------------------------------
Balance, December 31, 2006       125,803,001  162,505  4,423,571   (4,516,271)    (839,463)        38,490      (731,168)
                                 =======================================================================================

</TABLE>


The accompanying notes are integral part of the financial statements.

                                      F-4
<PAGE>



                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                             Statement of Cash Flows


<TABLE>
<CAPTION>
<S>                                                                       <C>      <C>          <C>          <C>
                                                                                      For the                January 5,
                                                                                        years                      2001
                                                                                        Ended                (Inception)
                                                                                     December  Convenience   to December
                                                                                            31  Translation          31,
                                                                              2005        2006         2006         2006
                                                                                A$          A$          US$           A$
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss                                                                  (75,508) (4,574,594)  (3,610,727)  (5,355,734)
                                                                          ----------------------------------------------

Adjustments to reconcile net loss to net cash provided (used) by operating
 activities:
Foreign exchange                                                           (1,344)     40,017       31,585       38,674
Shares and Options issued for Stock Based Compensation                          -     115,307       91,012      771,158
Depreciation                                                                    -       1,021          806        1,021
Accrued interest added to principal                                         2,482      34,800       27,468       37,282
Net Change in:
Receivables                                                                     -    (169,271)    (133,606)    (169,271)
Prepayments and deposits                                                        -    (104,559)     (82,529)    (104,559)
Accounts Payable and Accrued Expenses                                      13,236     532,144      420,022      564,812
                                                                          ----------------------------------------------
Net Cash (Used) In Operating Activities                                   (61,134) (4,125,135)  (3,255,969)  (4,216,617)
                                                                          ----------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of Property and Equipment                                              -     (12,273)      (9,687)     (12,273)
                                                                          ----------------------------------------------
Net Cash (Used) In Investing Activities                                         -     (12,273)      (9,687)     (12,273)
                                                                          ----------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

Accounts Payable - Affiliates                                                   -   1,245,345      982,951    1,245,345
Repayment of Convertible Debenture                                              -           -            -     (130,310)
Repayment of Shareholder Advance                                                -           -            -         (641)
Proceeds from Convertible Debenture                                             -           -            -      130,310
Shareholder Advance                                                             -           -            -        6,621
Proceeds from Issuance of Stock                                                 -   3,871,367    3,055,670    3,895,735
Cost of share issues                                                            -    (128,376)    (101,327)    (128,376)
                                                                          ----------------------------------------------
Net Borrowing/Repayments from Affiliates                                   61,134     (11,131)      (8,786)      50,003
                                                                          ----------------------------------------------
Net Cash Provided for financing activities                                 61,134   4,977,205    3,928,508    5,068,687
                                                                          ----------------------------------------------

Net Increase in Cash                                                            -     839,797      662,852      839,797

Cash at Beginning of Period                                                     -           -            -            -
                                                                          ----------------------------------------------

Cash at End of Period                                                           -     839,797      662,852      839,797
                                                                          ----------------------------------------------

Supplemental Disclosures:
Cash paid for interest                                                          -           -            -            -
Cash paid for income taxes                                                      -           -            -            -
Stock and options issued for services                                           -     150,723      118,966      806,574
Accrued interest and stockholder advances charged to paid in capital            -           -            -       12,144
</TABLE>


The accompanying notes are integral part of the financial statements.



                                      F-5
<PAGE>
                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

1. ORGANISATION AND BUSINESS

         Legend  International  Holdings,  Inc., formerly Sundew  International,
Inc. ("the Company"),  was incorporated  under the laws of the State of Delaware
on January 5, 2001.

         The Company has never generated any significant revenues from
operations and is still considered an exploration stage company. The Company was
initially formed to engage in the business of selling compatible inkjet
cartridges and refill kits on the Internet for the consumer printer market. In
March 2003, management of the Company decided to engage in the business of
building and acquiring controlling or other interests in one or more companies
engaged in the contract sales and distribution of specialty medical products,
and raise additional capital for this purpose. Neither business was successful
and operations of both were eventually discontinued. During fiscal 2004,
management of the Company developed a plan of operations to acquire
income-producing real property. The Company did not acquire any properties
pursuant to such plan.

         Following a change of management in November 2004, the Company
developed a new plan of operations for fiscal 2006, which is to engage in
mineral exploration and development activities. The Company's current business
plan calls for the identification of mineral properties, in South America and
other parts of the world, where it can obtain secure title to exploration,
development and mining interests. The Company's preference is to identify large
gold deposits with low operating costs. The Company is prepared to consider the
exploration, development and mining of profitable base metal interests. At the
beginning of 2006, the Company expanded its areas of interest to include diamond
exploration activities and in July 2006, the Company completed the acquisition
of certain diamond mining tenements in Northern Australia (see note 6).

         The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has incurred net losses since its inception and
has experienced liquidity problems that raise substantial doubt about its
ability to continue as a going concern. The stockholders/officers and or
directors have committed to advancing funds to cover operating costs of the
Company to insure that the Company has enough operating capital over the next
twelve months.

Exploration Stage Enterprise

         The Company is a exploration stage enterprise. The Company is devoting
all of its present efforts in securing and establishing a new business, and its
planned principal operations have not commenced, and, accordingly, no revenue
has been derived during the organizational period.

2. RECENT ACCOUNTING PRONOUNCEMENTS

         In December 2004, the FASB issued a revision to SFAS No. 123
"Accounting for Stock Based Compensation" ("FASB 123R"). This statement
established standard for the accounting for transactions in which an entity
exchanges its equity instruments for goods or services and addresses
transactions in which an entity incurs liabilities in exchange for goods or
services that are based on the fair value of the entity's equity instruments or
that may be settled by the issuance of those equity instruments. The Company's
policy has been to account for options using the fair value method under FASB
123. Accordingly, the adoption of FASB 123R did not have a material impact on
the consistent financial reporting of the Company.

         In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements which provides enhanced guidance for using fair value to measure
assets and liabilities. SFAS No. 157 provides a common definition of fair value
and establishes a framework to make the measurement of fair value in generally
aceepted accounting principles more consistent and comparable. SFAS No. 157 also
requires expanded disclosures to provide information about the extent to which
fair value is used to measure assets and liabilities, the methods and
assumptions used to measure fair


                                      F-6
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

2. RECENT ACCOUNTING PRONOUNCEMENTS (Cont'd)

value, and the effect of fair value measures on earnings. SFAS No. 157 is
effective for financial statements issued in fiscal years beginning after
November 15, 2007 and for interim periods within those fiscal years. The Company
is currently in the process of evaluating the effect, if any, the adoption of
SFAS No 157 will have on the results of operations, financial position, or cash
flows.

         In June 2006, the FASB issued FIN 48, "Accounting for Uncertainty in
Income Taxes - an interpretation of FASB Statement No. 109." Which seeks to
reduce the diversity in practice associated with the accounting and reporting
for uncertainty in income tax positions. The Interpretation prescribes a
comprehensive model for the fionancial statement recognition, measurement,
presentation and disclosure of uncertain tax positions taken or expected to be
taken in an income tax return. FIN 48 presents a two-step process for evaluating
a tax position. The first step is to determine whether rit is
more-likely-than-not that a tax position will be sustained upon examination,
based on the technical merits of the position. The second step is to measure the
benefit to be recorded from tax positions that meet the more-likely-than-not
recognition threshold, by determining the largest amount of tax benefit that ios
greater than 50 percent likely of being realized upon ultimate settlement, and
recognizing that amount in the financial statements. Fin 48 is effective for
fiscal years beginning after December 15, 2006. The Company is currently in the
process of evaluating the effect, if any, the adoption of FIN 48 will have on
its results of operations, financial position, or cash flows.

         In September 2006, the Securities and Exchange Commisssion issued Staff
Accounting Bulletin ("SAB") No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements". SAB No 108 was issued in order to eliminate the diversity in
practice surrounding how public companies quantify financial statement
misstatements. SAB No 108 requires that registrants quantify errors using both a
balance sheet (iron curtain) approach and an income statement (rollover)
approach then evaluate whether either approach results in a misstatement amount
that, when all relevant quanitative and qualitative factors are considered, is
material. SAB No 108 is effective for the fiscal year ending after November 15,
2006, and is not expected to materially impact our financial position or results
of operations.

3. ACCOUNTING POLICIES

Exploration Expenditure

         Exploration expenditure consisting of acquisition cost and related
expenditure, prospecting and exploration costs are written off into operations
as incurred.

Functional and Reporting Currency

         Prior to July 31, 2006, the Company's functional currency was the US
dollar. However, as a result of the purchase of diamond mining tenements in
Northern Australia in July 2006, the Company's 2006 revenue and expenses will be
primarily denominated in Australian dollars (A$). Statement of Financial
Accounting Standards ("SFAS") No. 52, Foreign Currency Translation, states that
the functional currency of an entity is the currency of the primary economic
environment in which the entity operates. Accordingly the Company determined
that from August 1, 2006 the functional currency of the Company is the
Australian dollar. Assets, liabilities and equity were translated at the rate of
exchange at July 31, 2006. Revenue and expenses were translated at actual rates.
Translation gains and losses were included as part of accumulated other
comprehensive gain.

         Restatement of comparative numbers was made for the change in
functional and reporting currency. The change was adopted prospectively
beginning July 31, 2006 in accordance with SFAS No. 52.


                                      F-7
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

3.       ACCOUNTING POLICIES (Cont'd)

Stock Options

         For the issuances of stock options, the Company follows the fair value
provisions of Financial Accounting Standards No. 123(R) "Share Based Payments".
SFAS 123(R) requires the company to measure the cost of employee services
received in exchange for an award of equity instruments based on grant date fair
value. The cost will be recognised over the period during which an employee is
required to provide service in exchange for the award - usually the vesting
period. In the case where there is no required service period, the fair value of
the equity instruments is expensed immediately.

Loss per Common Share

         Basic loss per share is computed on the basis of the weighted average
number of common shares outstanding during each year. Diluted loss per share is
not presented as the effect of common stock equivalents would be anti dilutive.

Comprehensive Income

         Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The translation gains and losses from the change to
functional currency of the Company from August 1, 2006 are included as part of
the accumulated other comprehensive loss. Comprehensive loss for the years ended
December 31, 2006 and 2005 amounted to A$4,536,104 and A$75,508 respectively.

Property and Equipment

         Property and equipment is stated at cost. Depreciation is computed over
a period covering the estimated useful life of the applicable property and
equipment. Accumulated depreciation and depreciation expense as of and for the
year ended December 31, 2006 amounted to A$1,021 (US$859). The Company had no
fixed assets at December 31, 2005.

Cash Equivalents

         Legend considers all highly liquid investments with an original
maturity of three months or less at the time of purchase to be cash equivalents.
For the periods presented, there were no cash equivalents.

Federal Income Tax

         The Company has adopted the provisions of Financial Accounting
Standards Board Statement No. 109, Accounting for Income Taxes. The Company
accounts for income taxes pursuant to the provisions of the Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes", which requires
an asset and liability approach to calculating deferred income taxes. The asset
and liability approach requires the recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of assets and liabilities. For the period
presented, there was no taxable income. There are no deferred income taxes
resulting from temporary differences in reporting certain income and expense
items for income tax and financial accounting purposes. Legend, at this time, is
not aware of any net operating losses which are expected to be realised.


                                      F-8
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

3.       ACCOUNTING POLICIES (Cont'd)

Foreign Currency Translation

         The Company's functional and reporting currency is the Australian
dollar. Expenses incurred in a currency other than the reporting currency,
Australian dollars are translated at the date invoiced. Assets and liabilities
are re-valued at the period end exchange rate where appropriate. Foreign
currency exchange gain in 2006 amounted to A$40,017 (US$31,585). The Company is
actively capital raising, and costs incurred are in US dollars and are
translated to A$ at invoice date.

Goods and Services Tax ("GST")

         Revenues, expenses and assets generated in Australia are subject to
Australian GST which requires the supplier to add a 10% GST to predominately all
expenses and the cost of assets and for the Company to include a 10% GST to the
selling price of a product. Revenues, expenses and assets are recognized net of
the amount of GST except where the GST incurred on a purchase of goods and
services is not recoverable from the taxation authority, in which case the GST
is recognized as part of the cost of acquisition of the assets or as part of the
expense item as applicable, and receivables and payables are stated with the
amount of GST included. The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables or payables in the
balance sheet. Cash flows are included in the cash flow statement on a gross
basis and the GST component of cash flows arising from investing and financing
activities which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows. Commitments and contingencies are disclosed
net of the amount of GST recoverable from, or payable to, the taxation authority

Financial Instruments

         The Company's cash, receivables, payables, short and long term
borrowings represent financial instruments whose carrying amounts reasonably
approximate their fair value.

Concentrations of credit risk

         The Company monitors its position with, and the credit quality of, the
financial institution it invests with. As of the balance sheet date, and
periodically throughout the year, the Company has maintained balances in various
operating accounts in excess of federally insured limits.

Convenience Translation to US$

         The consolidated financial statements as of and for the year ended
December 31, 2006 have been translated into United States dollars using the rate
of exchange of the United States dollar at December 31, 2006 (A$1.00=US$0.7893).
The translation was made solely for the convenience of readers in the United
States.

Use of Estimates

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

Comparative Figures

         Where necessary, comparative figures have been restated to be
consistent with current year presentation.

         Prior to July 31, 2006, the Company's functional currency was the US
dollar. However, as a result of the purchase of diamond mining tenements in
Northern Australia in July 2006, the

                                      F-9
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

3.       ACCOUNTING POLICIES (Cont'd)

Company's 2006 revenue and expenses are primarily denominated in Australian
dollars (A$). Statement of Financial Accounting Standards ("SFAS") No. 52,
Foreign Currency Translation, states that the functional currency of an entity
is the currency of the primary economic environment in which the entity
operates. Accordingly the Company determined that from August 1, 2006 the
functional currency of the Company is the Australian dollar. Assets, liabilities
and equity were translated at the rate of exchange at July 31, 2006. Revenue and
expenses were translated at actual rates. Translation gains and losses were
included as part of accumulated other comprehensive gain.

         Restatement of comparative numbers was made for the change in
functional and reporting currency. The change was adopted prospectively
beginning July 31, 2006 in accordance with SFAS No. 52.

4. STOCKHOLDERS EQUITY

Common Stock

         In January 2001, 4,297,500 common shares were issued to the Company's
founder for organization cost valued at A$124,446 (US$95,500), and 146,250
common shares were issued to a related party in exchange for consulting fee
valued at A$4,235 (US$3,250).

         In March 2002, 11,250,000 common shares were issued to the Company's
founder in exchange for present and future services valued at A$162,888
(US$125,000).

         In April 2002, the Company closed its offering under its registration
statement filed with the United States Securities and Exchange Commission to
sell up to 4,500,000 shares of its common stock at US$0.022 per share, which
became effective on April 11, 2001. The Company sold 841,500 shares (616,500
shares in 2001 and a further 225,000 shares in 2002) of its common stock under
the offering.

         In 2003, a total of 5,026,500 common shares were issued to the
Company's sole officer and director for services valued at A$145,556
(US$111,700) or A$0.029 (US$0.022) per share.

         In 2004, a total of 2,004,750 common shares were issued to the
Company's former sole officer and director for services valued at A$58,053
(US$44,550) or A$0.029 (US$0.022) per share.

         In December 2004, the Company issued to Renika Pty Limited ("Renika"),
a company associated with Mr J I Gutnick, 20,250,000 options to be converted
into 20,250,000 shares of common stock, at an exercise price of US$0.022 and a
latest exercise date of December 2009 for services to be rendered to the
Company. The Company undertook a Black Scholes valuation of these options using
a A$0.029 (US$0.022) exercise price, US$0.022 market price, 5 year life, risk
free interest rate of 5.155% and a volatility of 16.7%. The 20,250,000 options
were valued at A$160,672 (US$123,300) or A$0.008 (US$0.006) each. The stock
options were issued for services rendered, to be rendered and for agreeing to
provide financial assistance to the Company (not the actual provision of
financial assistance). The issue of the stock options was not contingent upon
any further services or events. The stock options are not forfeitable if the
services or financial assistance are not provided. Accordingly, the value of the
stock options were expensed during 2004.

         In September 2005, Renika exercised the 20,250,000 options using the
cashless exercise feature and were issued 17,085,937 shares of common stock.

         Effective as of December 12, 2005, the Board of Directors of Company
approved the distribution to all stockholders for no consideration of an
aggregate of 36,135,500 non-transferable options, each of which is exercisable
to purchase one share of common stock of the Company at an exercise price of
US$0.25 cents per share with a latest exercise date of December 31, 2012. The
options were issued on a pro-rata basis to all stockholders of record on
December 31, 2005 on

                                      F-10
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

4.       STOCKHOLDERS EQUITY (Cont'd)

the basis of two (2) options for every one (1) share of common stock owned by a
stockholder on the record date. The options may not be exercised until the
shares underlying the options are registered under federal and state securities
laws.

         At December 31, 2005 the Company had outstanding 36,135,500 options and
as at December 31, 2006, the Company had outstanding 1,388,280 options, each of
which is exercisable to purchase one share of common stock at US$0.25 per share.
The options cannot be exercised, other than using the cashless exercise feature,
until the Company registers the shares of common stock to be issued upon
exercise of the options in accordance with the Securities Act of 1933, as
amended and any applicable state securities laws. The only exception is in the
case of a cashless exercise.

         Effective July 21, 2006, Legend issued 71,730,079 shares of common
stock to Renika Pty Ltd ("Renika"), a company associated with Mr. J I Gutnick,
President of Legend, following the cashless exercise of 34,778,220 options. The
shares of common stock issued are restricted shares.

         Effective September 19, 2006, Legend issued 5,349,728 shares of common
stock at a placement price of US$0.22 per share raising A$1,530,291
(US$1,188,828). The securities were issued pursuant to a private placement and
are issued in reliance upon an exemption from the registration requirements of
the Securities Act of 1933, as amended ("The Act") under Section 4(2) of the
Act.

         Effective October 6, 2006, Legend issued a further 2,250,000 shares of
common stock at a placement price of US$0.22 per share raising A$670,413
(US$500,000). The securities were issued pursuant to a private placement and are
issued in reliance upon an exemption from the registration requirements of the
Securities Act of 1933, as amended ("The Act") under Section 4(2) of the Act.

         Effective November 17, 2006, Legend issued a further 4,104,000 shares
of common stock at a placement price of US$0.22 raising A$1,184,005
(US$912,000). The securities were issued pursuant to a private placement and are
issued in reliance upon an exemption from the registration requirements of the
Securities Act of 1933, as amended ("the Act") under Section 4 (2) of the Act.

         Effective November 30, 2006, Legend issued a further 112,500 shares of
common stock and 50,000 options with an exercise price of A$0.25 per option and
a latest exercise date of December 12, 2012 for no consideration to settle
outstanding matters with an external party.

         Effective December 31, 2006, Legend issued a further 1,053,000 shares
of common stock at a placement price of US$0.33 raising A$445,705 (US$351,000).
The securities were issued pursuant to a private placement and are issued in
reliance upon an exemption from the registration requirements of the Securities
Act of 1933, as amended ("the Act") under Section 4 (2) of the Act.

         In December  2006,  19,000  options  issued with no exercise price were
exercised and the Company issued 24,750 shares of common stock.

         In December 2006, 351,000 options were exercised using the cashless
exercise feature and the Company issued 526,500 shares of common stock.

Share Bonus Issue

         Effective November 17, 2006, Legend issued one (1) new bonus share of
common stock for every two (2) shares of common stock outstanding on the record
at that date. The issue of the new bonus shares of common stock were on a
pro-rate basis to all shareholders. As a result, the Company issued 27,599,722
shares of its common stock.


                                      F-11
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

4.       STOCKHOLDERS EQUITY (Cont'd)

         Effective December 31, 2006, Legend issued one (1) new bonus share of
common stock for every two (2) shares of common stock outstanding on the record
at that date. The issue of the new bonus shares of common stock were on a
pro-rata basis to all shareholders. As a result, the Company issued 41,934,337
shares of its common stock.

         The Company has accounted for these two bonus issues as a stock split
and accordingly, all share and per share data has been retroactively restated.

Issue of Options under Equity Incentive Plan

         Effective September 19, 2006, the Company issued 7,425,000 options over
shares of common stock to Directors, Executives and Consultants under the 2006
Equity Incentive Plan that has been adopted by the Directors of the Company. The
options will vest as follows: 1/3 after 12 months, 1/3 after 24 months and the
balance of 1/3 after 36 months. The exercise price of the options is US$1.00 for
the President and Chief Executive Officer; and for all other participants,
US$0.444 for 50% of the options and US$1.00 for the balance of 50% of the
options. The latest exercise date for the options is September 19, 2016.

         The Company has accounted for all options issued based upon their fair
market value using the Binomial pricing model.

         An external consultant has calculated the fair value of the 7,425,000
options using the Binomial valuation method using the following inputs
<TABLE>
<CAPTION>

----------------- --------------- -------------- --------------- --------------- --------------- --------------
Grant date         Sept 19, 2006  Sept 19, 2006   Sept 19, 2006   Sept 19, 2006   Sept 19, 2006  Sept 19, 2006
----------------- --------------- -------------- --------------- --------------- --------------- --------------
<S>                    <C>             <C>            <C>             <C>             <C>             <C>
Grant date share     US$0.222        US$0.222       US$0.222        US$0.222        US$0.222        US$0.222
price
----------------- --------------- -------------- --------------- --------------- --------------- --------------
Vesting date       Sept 19, 2007  Sept 19, 2007   Sept 19, 2008   Sept 19, 2008   Sept 19, 2009  Sept 19, 2009
----------------- --------------- -------------- --------------- --------------- --------------- --------------
Expected life in       5.50            5.50           6.00            6.00            6.50            6.50
years
----------------- --------------- -------------- --------------- --------------- --------------- --------------
Risk-free rate         4.69%          4.69%           4.69%           4.69%           4.69%          4.69%
----------------- --------------- -------------- --------------- --------------- --------------- --------------
Volatility              60%            60%             60%             60%             60%            60%
----------------- --------------- -------------- --------------- --------------- --------------- --------------
Exercise price       US$0.444        US$1.00        US$0.444         US$1.00        US$0.444        US$1.00
----------------- --------------- -------------- --------------- --------------- --------------- --------------
Call option value     US$0.09        US$0.05         US$0.10         US$0.06         US$0.10        US$0.06
----------------- --------------- -------------- --------------- --------------- --------------- --------------
</TABLE>

         The total value of the options equates to A$683,628 (US$574,635) and is
being amortised over the vesting periods.

         For the year ended December 31, 2006, the amortization amounted to
A$115,307 (US$91,012).

         The Company adopted revised SFAS No.123, Share-Based payment, which
addresses the accounting for share-based payment transactions in which a company
receives employee services in exchange for (a) equity instruments of that
company or (b) liabilities that are based on the fair value of the company's
equity instruments or that may be settled by the issuance of such equity
instruments.
<TABLE>
<CAPTION>
<S>                                                 <C>                <C>   <C>                <C>

                                                      Options    Option Price Per   Weighted Average
                                                                            Share     Exercise Price
                                                                              US$                US$
                                                                              ---                ---
Outstanding at January 1, 2006                              -                   -                  -
Granted                                             7,425,000          0.444-1.00               0.69
Forfeited                                                   -                   -                  -
                                            ------------------ ------------------- ------------------
Outstanding at December 31, 2006                    7,425,000          0.444-1.00               0.69
                                            ------------------ ------------------- ------------------
</TABLE>

                                      F-12
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

4.       STOCKHOLDERS EQUITY (Cont'd)

         The range of exercise price is US$0.444 to US$1.00 per option. The
weighted average per option fair value of options granted during 2006 was
US$0.07 and the weighted average remaining contractual life of those options is
9 1/2 years. No options are currently exercisable.

5. SHORT-TERM ADVANCE - AFFILIATE
<TABLE>
<CAPTION>
<S>          <C>                                                                          <C>

                                                                                             2006
                                                                                             ----
                                                                                               A$
                                                                                               --
Amount owing to Astro Diamond Mines N.L. Interest accrued at 9.85% to 10.10%
from October 1, 2006 being the "reference rate" of the ANZ Banking Group Ltd              942,433

Amount owing to AXIS Consultants, a corporation affiliated with the
President of the Company.  Interest accrued at the rate of 9.35% to 10.10%
per annum being the "Reference Rate" of the ANZ Banking Group Ltd.                        312,253

Amount owing to Joseph Gutnick, President of Legend International Holdings,
Inc. No interest accrued.                                                                     831
                                                                               --------------------
                                                                                        1,255,517
                                                                               ====================
</TABLE>

         The amount owing to Astro represents the amount for costs incurred on
the mining tenements since February 1, 2006. At settlement, Legend was also
required to pay any costs incurred on the tenements after February 1, 2006.
However, Astro had not quantified the amount at the date of settlement.

         At December 31, 2006, the Company owed Astro A$942,433 (US$743,862)
including interest of A$21,302 (US$16,813). During fiscal 2007, this amount was
repaid in full including interest charge for fiscal 2007 of A$16,774
(US$13,240).

6. AFFILIATE TRANSACTIONS

         In December 2004, the Company issued to Renika, a company associated
with Mr J I Gutnick, 20,250,000 options to be converted into 20,250,000 shares
of common stock, at an exercise price of 5 cents and a latest exercise date of
December 2009 for services to be rendered to the Company. The Company undertook
a Black and Scholes valuation of these options using a 2.22 cent exercise price,
2.22 cent market price, 5 year life, risk free interest rate of 5.155% and a
volatility of 16.7%. The Company valued the 20,250,000 options at A$160,672
(US$123,300) or A$0.0178 (US$0.0137) each. In September 2005, Renika exercised
the 20,250,000 options using the cashless exercise feature and were issued
17,085,937 shares of common stock.

         In December 2004, the Company entered into an agreement with AXIS
Consultants Pty Ltd to provide geological, management and administration
services to the Company. AXIS is affiliated through common management. The
Company is one of five affiliated companies of which three are Australian public
companies listed on Australian Stock Exchange. Each of the companies has some
common Directors, officers and shareholders. In addition, each of the companies
is substantially dependent upon AXIS for its senior management and certain
mining and exploration staff. A number of arrangements and transactions have
been entered into from time to time between such companies. It has been the
intention of the affiliated companies and respective Boards of Directors that
each of such arrangements or transactions should accommodate the respective
interest of the relevant affiliated companies in a manner which is fair to all
parties and equitable to the shareholders of each. Currently, there are no
material arrangements or planned transactions between the Company and any of the
other affiliated companies other than AXIS.

                                      F-13
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

6.       AFFILIATE TRANSACTIONS (Cont'd)

         AXIS is paid by each company for the costs incurred by it in carrying
out the administration function for each such company. Pursuant to the Service
Agreement, AXIS performs such functions as payroll, maintaining employee records
required by law and by usual accounting procedures, providing insurance, legal,
human resources, company secretarial, land management, certain exploration and
mining support, financial, accounting advice and services. AXIS procures items
of equipment necessary in the conduct of the business of the Company. AXIS also
provides for the Company various services, including but not limited to the
making available of office supplies, office facilities and any other services as
may be required from time to time by the Company as and when requested by the
Company.

         The Company is required to reimburse AXIS for any direct costs incurred
by AXIS for the Company. In addition, the Company is required to pay a
proportion of AXIS's overhead cost based on AXIS's management estimate of our
utilisation of the facilities and activities of AXIS plus a service fee of not
more than 15% of the direct and overhead costs. AXIS has not charged the 15%
service fee to us. Amounts invoiced by AXIS are required to be paid by us. The
Company is also not permitted to obtain from sources other than AXIS, and we are
not permitted to perform or provide ourselves, the services contemplated by the
Service Agreement, unless we first requests AXIS to provide the service and AXIS
fails to provide the service within one month.

         The Service Agreement may be terminated by AXIS or us upon 60 days
prior notice. If the Service Agreement is terminated by AXIS, the Company would
be required to independently provide, or to seek an alternative source of
providing, the services currently provided by AXIS. There can be no assurance
that the Company could independently provide or find a third party to provide
these services on a cost-effective basis or that any transition from receiving
services under the Service Agreement will not have a material adverse effect on
us. The Company's inability to provide such services or to find a third party to
provide such services may have a material adverse effect on our operations.

         In accordance with the Service Agreement AXIS provides the Company with
the services of the Company's Chief Executive Officer, Chief Financial Officer,
geologists and clerical employees, as well as office facilities, equipment,
administrative and clerical services. We pay AXIS for the actual costs of such
facilities plus a maximum service fee of 15%.

         During fiscal 2005, AXIS charged the Company A$28,600 in management
fees, A$26,954 for salaries incurred in relation to AXIS staff that provided
services to the Company and charged interest of A$2,357 on the outstanding
balance. AXIS charged interest at a rate of 9.35% for 2005. The amount owed to
AXIS at December 31, 2005 was A$57,911. During fiscal 2006, AXIS charged the
Company A$82,771 in management fees, A$120,893 for salaries and corporate costs
incurred in relation to AXIS staff that provided services to the Company,
A$212,679 for exploration services provided to the Company, charged interest of
A$13,498 on the outstanding balance, loaned us $4,500 and the Company repaid
A$180,000. AXIS charged interest at a rate of between 9.35% and 10.10% for
fiscal 2006. The amount owed to AXIS at December 31, 2006 was A$312,253.

         Wilzed Pty Ltd, a company associated with President and CEO of the
Company, Joseph Gutnick, has paid expenses on behalf of the Company and has
provided loan funds to enable the Company to meet its liabilities. During fiscal
2005, Wilzed loaned the Company A$7,361 and charged interest of A$181 on the
outstanding balance. At December 31, 2005, the Company owed Wilzed A$7,542.
During the 2006 fiscal year, Wilzed loaned A$324,951 and charged A$3,588 in
interest, and we repaid $336,081. The amount owing at December 31, 2006 is
A$nil. Wilzed charged interest at a rate of 9.35% for fiscal 2005 and between
9.35% and 9.85% for fiscal 2006.

         Mr Joseph Gutnick, the President of the Company advanced the Company
the initial deposit on opening a US Dollar bank account. In March, 2007, the
balance of A$831, owing of the initial advance of A$1,303 (US$1,000) less
expenses incurred of A$472, was repaid.

                                      F-14
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

6.       AFFILIATE TRANSACTIONS (Cont'd)

         Effective as of March 3, 2006, Legend entered into a Contract for the
Sale of Mining Tenements ("Contract") with Astro Diamond Mines N.L. ("Astro") an
Australian company pursuant to which the Company acquired certain diamond mining
tenements in Northern Australia from Astro. The consideration payable by Legend
to Astro was A$1.5 million and Legend was also required to pay to Astro any
costs incurred on the tenements after February 1, 2006. Astro provided
commercial warranties which are usual for a transaction of this nature in favour
of Legend. Under Australian law, Astro was required to provide an independent
experts report to shareholders for this transaction. In order to prepare the
independent experts report, a mineral valuation was prepared on behalf of Astro
which indicated that the preferred value for the tenements that are the subject
of the transaction was A$1.5 million. This formed the basis of the consideration
agreed by the parties. The President and Chief Executive Officer of the Company,
Mr. J. I. Gutnick, is Chairman and Managing Director of Astro and Dr DS
Tyrwhitt, an independent Director of the Company is also a Director of Astro.
The tenements are located in the Northern Territory of Australia and are
prospective for diamonds. Astro incurred costs on the mining tenements from
February 1, 2006 which at settlement Legend was required to pay. However, Astro
had not quantified the amount at the date of settlement and it was only finally
quantified in November 2006. At December 31, 2006, the Company owed Astro
A$942,433 for these costs including interest of A$21,302. During fiscal 2007,
the amount was repaid in full including interest charge for fiscal 2007 of
A$16,774. Astro charged interest at a rate between 9.85% and 10.10%.

         The consideration and all related acquisition costs, costs incurred by
Astro since February 1, 2006 and exploration expenditure incurred by the Company
is shown in the Statement of Operations as Exploration Expenditure.

7. INCOME TAXES

         The Company has adopted the provisions of SFAS No. 109 "Accounting for
Income Taxes". SFAS 109 requires recognition of deferred tax liabilities and
assets for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method, deferred
tax liabilities and assets are determined based on the differences between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.

         The Company has operations in both the USA and Australia and the
Company is subject to taxation in both jurisdictions on the operations in each
respective jurisdiction

         At December 31, 2006 and 2005 deferred taxes consisted of the
following:
<TABLE>
<CAPTION>
<S>                                                              <C>               <C>               <C>

                                                                       USA         Australia             Total
                                                                      2006              2006              2006
                                                                        A$                A$                A$
Deferred tax assets

Net operating loss carry-forward                                 1,304,322         1,218,600         2,522,922
Less valuation allowance                                        (1,304,322)       (1,218,600)       (2,522,922)
                                                         ------------------------------------------------------
Net deferred taxes                                                       -                 -                 -
                                                         ======================================================

                                                                       USA         Australia             Total
                                                                      2005              2005              2005
                                                                        A$                A$                A$
Deferred tax assets

Net operating loss carry-forward                                 1,286,342                 -                 -
Less valuation allowance                                        (1,286,342)                -                 -
                                                         ------------------------------------------------------
Net deferred taxes                                                       -                 -                 -
                                                         ======================================================
</TABLE>

                                      F-15
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

7.       INCOME TAXES (Cont'd)

         The valuation allowance offsets the net deferred tax asset for which
there is no assurance of recovery. The valuation allowance will be evaluated at
the end of each year, considering positive and negative evidence about whether
the deferred tax asset will be realized.

         At that time, the allowance will either be increased or reduced;
reduction could result in the complete elimination of the allowance if positive
evidence indicates that the value of the deferred tax assets is no longer
impaired and the allowance is no longer required.

         As a result of the ownership change that occurred in November 2004 (see
note 1), Internal Revenue Code Section 382 limits the use of available operating
loss carryforwards for losses incurred prior to the ownership change. In
addition, the Company will need to file a tax return for 2006 to establish the
tax benefits of the net operating loss carry forwards. Future net operating
losses will be fully available to offset future taxable income. Total available
net operating loss carryforwards, which are subject to limitations, amount to
approximately A$7,898,243 at December 31, 2006 and expire in years 2022 through
2026.

8.       COMMITMENTS

         During December 2006, the Company entered into an operating lease
agreement for a motor vehicle which expires in 2008. The lease agreement has a
monthly repayment amount of A$1,021. The future minimum lease repayments under a
non-cancellable lease at December 31, 2006 are A$11,690 (US$9,227) for 2007 and
A$11,768 (US$9,288) for 2008.

Exploration

         The Company has to perform minimum exploration work and expend minimum
amounts of money on its tenements. The overall expenditure requirement tends to
be limited in the normal course of the Company's tenement portfolio management
through expenditure exemption approvals, and expenditure reductions through
relinquishment of parts or the whole of tenements deemed non prospective. Should
the company wish to preserve interests in its current tenements the amount which
may be required to be expended is as follows:

                                                                  2006
                                                                    A$

Not later than one year                                        860,000

Later than one year but not later than five years              875,000
                                                      -----------------

                                                             1,735,000
                                                      =================

9.       CONTINGENCIES

                                                                            2006
Deposits                                                                      A$

Cash deposits have been provided to the Department of Business, Industry and
Resource Development of Northern Territory for the purpose of guaranteeing the
Company's performance in accordance with Northern Territory mining law.

The performance relates to the requirement that the Company adheres to the terms
and conditions of its exploration licences, which inter alia requires site
restoration. However, the Directors do not anticipate the Department of
Business, Industry and Resource Development of Northern Territory will exercise
these guarantees as the Company adheres to all conditions of its
exploration licences.                                                     90,000
                                                                     -----------

                                      F-16
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                         (An Exploration Stage Company)
                          Notes to Financial Statements

10. EVENTS SUBSEQUENT TO BALANCE SHEET DATE

         The Company has received applications for a further 7,962,624 shares of
common stock at a placement price of US$0.25 per share raising an estimated
A$2,522,052 (US$1,990,656). The securities will be issued pursuant to a private
placement and will be issued in reliance upon an exemption from the registration
requirements of the Securities Act of 1933, as amended ("The Act") under Section
4(2) of the Act.



                                      F-17
<PAGE>

                            CERTIFICATE OF AMENDMENT
                                       OF
                         CERTIFICATE OF INCORPORATION OF
                       LEGEND INTERNATIONAL HOLDINGS, INC.
               (Under section 242 of the General Corporation Law)

         Legend  International  Holdings,  Inc.,  a  corporation  organized  and
existing  under  the  General  Corporations  Law of the State of  Delaware  (the
"Corporation"), does hereby certify that:

         FIRST:  The name of the Corporation is Legend  International  Holdings,
Inc.

         SECOND:  The Certificate of Incorporation is hereby amended by striking
out Article  "FOURTH"  thereof and by  substituting  in lieu of said Article the
following provisions:

                           "FOURTH: The total number of shares of stock which
                           the Corporation is authorized to issue is
                           220,000,000, consisting of 200,000,000 shares of
                           Common Stock having a par value of $.001 per shares
                           and 20,000,000 shares of Preferred Stock having a par
                           value of $.001 per share and to be issued in such
                           series and to have such rights, preferences, and
                           designation as determined by the Board of Directors
                           of the Corporation."

         THIRD: The Amendment to the Certificate of Incorporation herein
certified has been duly adopted in accordance with the provision of Section 211
and 242 of the General Corporations Law of the State of Delaware.

         IN WITNESS WHEREOF, the undersigned has executed this certificate this
29th day of November, 2006.



                                                     /s/ Peter J. Lee
                                                     ---------------------------
                                                     Peter J. Lee, Secretary

                                      F-18