----

----

| x                                                              | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE     |
|----------------------------------------------------------------|------------------------------------------------------------------------------|
|                                                           | ACT OF 1934                                                                  |
| For the fiscal year ended: December 31, 2008                   |
| or                                                             |
|                                                           |                                                                         |
| o                                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
|                                                           | ACT OF 1934                                                                  |
| For the transition period from: _____________ to _____________ |

| Delaware                          |   | 23-3067904          |
|-----------------------------------|--------|---------------------|
| (State or Other Jurisdiction      |   | (I.R.S. Employer    |
| of Incorporation or Organization) |   | Identification No.) |

| Securities registered pursuant to Section 12(b) of the Act: None |
|------------------------------------------------------------------|
|                                                             |   |   |
|                                                             |   |   |
|                                                             |   |   |
|                                                             |   |   |
| Securities registered pursuant to Section 12(g) of the Act:      |
|                                                             |   |   |
| Title of each class                                              |
| Common Stock, par value $.001 per share                          |
|                                                             |
|                                                             |   |   |

| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. |
|------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                         | o |  Yes | x |  No |
|                                                                                                                         |
| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. |
|                                                                                                                         | o |  Yes | x |  No |

----

| x |  Yes | o |  No |
|---|-----------|---|----------|

| Large accelerated filer | o |   | Accelerated filer         | x |
|-------------------------|---|--------|---------------------------|---|
| Non-accelerated filer   | o |   | Smaller reporting company | o |

| Yes | x |  No | o |
|-----|---|----------|---|

| Yes | o |  No | o |
|-----|---|----------|---|

----

----

----

----

|                                       INDEX |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                                                                                      |   |   |   |
|                                      PART I      |   |   |   |
|                                                                                                                                                                                                                                      |   |   |   |
| Item 1.      Business.                                                                                                                                                                                           |   |   | 1      |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 1A.   Risk Factors.                                                                                                                                                                                                   |   |   | 30     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 1B.   Unresolved Staff Comments.                                                                                                                                                                                      |   |   | 34     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 2.      Properties.                                                                                                                                                                                    |   |   | 34     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 3.      Legal Proceedings.                                                                                                                                                                             |   |   | 34     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 4.      Submission of Matters to a Vote of Security Holders.                                                                                                                                           |   |   | 34     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
|                                      PART II     |   |   |   |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 5.      Market for Registrant's Common Equity, Related Stockholder Matters and                                                                                                                         |   |   |   |   |
|                  Issuer Purchases of Equity Securities.                                                                                              |   |   | 35     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 6.      Selected Financial Data.                                                                                                                                                                       |   |   | 38     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 7.      Management's Discussion and Analysis of Financial Condition and Results of Operation.                                                                                                          |   |   | 40     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.                                                                                                                                                     |   |   | 48     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 8.      Financial Statements and Supplementary Data.                                                                                                                                                   |   |   | 48     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 9.      Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.                                                                                                               |   |   | 49     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 9A.   Controls and Procedures.                                                                                                                                                                                        |   |   | 49     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 9B.   Other Information.                                                                                                                                                                                              |   |   | 50     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
|                                     PART III          |   |   |   |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 10.    Directors, Executive Officers and Corporate Governance.                                                                                                                                                   |   |   | 51     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 11.    Executive Compensation.                                                                                                                                                                                        |   |   | 54     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 12.    Security Ownership of Certain Beneficial Owners and Management and                                                                                                                                             |   |   |   |   |
|                  Related Stockholder Matters.                                                                                                        |   |   | 61     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 13.    Certain Relationships and Related Transactions, and Director Independence.                                                                                                                                |   |   | 64     |   |
|                                                                                                                                                                                                                                 |   |   |   |   |
| Item 14.    Principal Accounting Fees and Services.                                                                                                                                                                        |   |   | 66     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
|                                      PART IV     |   |   |   |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| Item 15.    Exhibits, Financial Statement Schedules.                                                                                                                                                                       |   |   | 67     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |
| SIGNATURES                                                                                                                                                                                                                                |   |   | 68     |   |
|                                                                                                                                                                                                                                      |   |   |   |   |

----

| Item 1. | Business. |
|---------|-----------|

----

----

| ·   | Phosphate Projects: |
|--------------------|---------------------|

| §   | The Queensland Phosphates |
|--------------------|---------------------------|

| ·   | Diamond Projects: |
|--------------------|-------------------|

| §   | Glyde River, Northern Territory. |
|--------------------|----------------------------------|

| §   | Foelsche, Northern Territory |
|--------------------|------------------------------|

| §   | Abner Range, Northern Territory. |
|--------------------|----------------------------------|

| §   | Cox, Northern Territory. |
|--------------------|--------------------------|

| ·   | Base Metals |
|--------------------|-------------|

| §   | McArthur River, Northern Territory |
|--------------------|------------------------------------|

| §   | Selby Project, Northern Territory |
|--------------------|-----------------------------------|

----

| Lease         | Lease Status          | Project                  | Grant Date | Expiry Date | Area (Ha) | Anni. Date (2009) | Legend Interest | GST Inclusive |
|---------------|-----------------------|--------------------------|------------|-------------|-----------|-------------------|-----------------|---------------|
| Rent $ (2009) | Commit. $ (2009)      |
| EPM14753      | Granted               | D-Tree                   | 21/04/2008 | 20/04/2013  | 6,771     | 20/04/2009        | 80%             | $2,749        | $50,000 |
| EPM15763      | Granted               | D-Tree West              | 26/06/2008 | 25/06/2013  | 25,500    | 25/06/2009        | 80%             | $10,341       | $40,000 |
| EPM14905      | Granted               | Quita Creek              | 12/12/2006 | 11/12/2011  | 29,250    | 11/12/2009        | 0%*             | $12,043       | $70,000 |
| EPM14906      | Granted               | Highland Plains          | 24/08/2007 | 23/08/2012  | 32,484    | 23/08/2009        |  0%*       | $13,090       | $50,000 |
| EPM14912      | Granted               | Lily & Sherrin Creek | 30/01/2007 | 29/01/2012  | 32,118    | 29/01/2009        | 0%*             | $13,090       | $50,000 |
| EPM16942      | Application 9/10/2007 | Lady Annie               |       |        | 5,802     |              | 100%            |          |   |
| EPM17087      | Application 3/12/2007 | Drifter                  |       |        | 3,548     |              | 100%            |          |   |
| EPM17330      | Application 4/02/2008 | Lady Jane                |       |        | 1,291     |              | 100%            |          |   |
| EPM17333      | Application 5/02/2008 | Thorntonia               |       |        | 12,265    |              | 80%             |          |   |
| EPM17437      | Application 3/03/2008 | West Thornton Creek      |       |        | 645       |              | 80%             |          |   |
| EPM17441      | Application 3/03/2008 | Johnstones Creek         |       |        | 5,806     |              | 100%            |          |   |
| EPM17443      | Application 3/03/2008 | East Galah Creek         |       |        | 1,290     |              | 80%             |          |   |
| EPM17446      | Application 3/03/2008 | Epsom Creek              |       |        | 2,258     |              | 80%             |          |   |
| EPM17447      | Application 3/03/2008 | Lady Annie East          |       |        | 2,900     |              | 100%            |          |   |

----

----

----

----

| Deposit          | Classification                                                     | Estimated million tonnes | % P2O5     |
|------------------|--------------------------------------------------------------------|--------------------------|------------|
| Lady Annie       | Non-reserve mineralized material*                                  | 293                      | 16.61      |
| Lady Jane        | Non-reserve mineralized material*                                  | 193                      | 17.61      |
| D-TreeThorntonia | Non-reserve mineralized material*Non-reserve mineralized material* | 339216                   | 15.9118.11 |

| Drill Type | No. of Holes | Metres |
|------------|--------------|--------|
| RC         | 476          | 12,520 |
| Sonic      | 11           | 300    |
| Diamond    | 13           | 324    |

----

----

| Hole_ID          | From (m) | To (m) | Width (m) | P2O5 % | Fe2O3 % | Al2O3 % | *R2O3 % | MgO % | SiO2 % | CaO % | CaO:P2O5 Ratio |
|------------------|----------|--------|-----------|--------|---------|---------|---------|-------|--------|-------|----------------|
| DTRC0034         | 1        | 3      | 2         | 25.80  | 5.80    | 2.05    | 7.85    | 0.15  | 27.80  | 34.95 | 1.35           |
| DTRC0053         | 2        | 5      | 3         | 30.67  | 5.50    | 2.50    | 8.00    | 0.10  | 6.87   | 40.97 | 1.34           |
| DTRC0076         | 6        | 9      | 3         | 28.60  | 5.50    | 3.37    | 8.87    | -0.03 | 18.43  | 38.23 | 1.34           |
| DTRC0076         | 15       | 17     | 2         | 30.50  | 2.35    | 2.05    | 4.40    | 0.00  | 18.85  | 41.35 | 1.36           |
| DTRC0083         | 27       | 29     | 2         | 33.85  | 1.50    | 1.75    | 3.25    | 0.20  | 11.18  | 46.10 | 1.36           |
| DTRC0090         | 10       | 12     | 2         | 26.45  | 4.35    | 2.85    | 7.20    | 0.25  | 23.45  | 36.30 | 1.37           |
| DTRC0098         | 9        | 11     | 2         | 32.30  | 0.35    | 2.00    | 2.35    | 0.20  | 15.34  | 44.20 | 1.37           |
| DTRC0112         | 27       | 30     | 3         | 28.87  | 1.77    | 2.10    | 3.87    | 0.13  | 23.00  | 39.43 | 1.37           |
| DTRC0113         | 13       | 15     | 2         | 27.60  | 4.05    | 2.95    | 7.00    | 0.20  | 22.15  | 37.50 | 1.36           |
| DTRC0127         | 20       | 23     | 3         | 27.87  | 1.87    | 4.23    | 6.10    | 0.23  | 23.70  | 37.77 | 1.36           |
| DTRC0132         | 15       | 17     | 2         | 29.55  | 2.85    | 2.69    | 5.54    | 0.17  | 20.45  | 39.85 | 1.35           |
| DTRC0133         | 13       | 16     | 3         | 27.20  | 10.73   | 2.97    | 13.70   | 0.20  | 17.13  | 36.83 | 1.35           |
| DTRC0133         | 28       | 31     | 3         | 26.93  | 5.97    | 3.60    | 9.57    | 0.23  | 20.83  | 36.70 | 1.36           |
| DTRC0139         | 23       | 25     | 2         | 26.75  | 4.45    | 2.85    | 7.30    | 0.25  | 24.10  | 36.30 | 1.36           |
| DTRC0147         | 8        | 12     | 4         | 30.22  | 0.45    | 2.83    | 3.28    | 0.20  | 19.95  | 41.02 | 1.36           |
| DTRC0148         | 6        | 8      | 2         | 27.50  | 2.55    | 4.05    | 6.60    | 0.20  | 22.70  | 37.30 | 1.36           |
| DTRC0157         | 12       | 14     | 2         | 33.65  | 2.70    | 3.04    | 5.74    | 0.12  | 9.35   | 45.90 | 1.36           |
| DTRC0158         | 14       | 16     | 2         | 29.20  | 5.23    | 2.66    | 7.89    | 0.14  | 18.65  | 39.45 | 1.35           |
| DTRC0188         | 4        | 8      | 4         | 29.48  | 1.80    | 4.80    | 6.60    | 0.52  | 18.29  | 40.15 | 1.36           |
| DTRC0212         | 17       | 20     | 3         | 32.30  | 14.43   | 0.77    | 15.20   | 0.03  | 2.93   | 43.37 | 1.34           |
| DTRC0244         | 4        | 6      | 2         | 32.55  | 0.90    | 2.00    | 2.90    | 0.15  | 15.65  | 43.85 | 1.35           |
| DTRC0258         | 18       | 20     | 2         | 34.55  | 4.35    | 2.20    | 6.55    | 0.00  | 5.87   | 45.85 | 1.33           |
| DTRC0292         | 14       | 16     | 2         | 30.60  | 7.00    | 3.30    | 10.30   | 0.05  | 12.21  | 40.70 | 1.33           |
| DTRC0300         | 7        | 9      | 2         | 30.40  | 9.26    | 2.34    | 11.60   | 0.13  | 11.98  | 41.25 | 1.36           |
| DTRC0302         | 7        | 9      | 2         | 28.40  | 12.55   | 4.38    | 16.93   | 0.17  | 10.86  | 37.45 | 1.32           |
| DTRC0338         | 16       | 18     | 2         | 26.80  | 6.17    | 3.93    | 10.10   | 0.20  | 21.15  | 36.05 | 1.35           |
| DTRC0339         | 11       | 13     | 2         | 27.65  | 4.28    | 5.70    | 9.98    | 0.18  | 19.00  | 37.20 | 1.35           |
| DTRC0352         | 13       | 16     | 3         | 34.47  | 1.77    | 2.01    | 3.78    | 0.07  | 11.30  | 46.70 | 1.35           |
| DTRC0375         | 13       | 15     | 2         | 28.20  | 16.30   | 2.30    | 18.60   | 0.15  | 10.01  | 37.60 | 1.33           |
| DTRC0384         | 19       | 21     | 2         | 34.75  | 5.21    | 1.53    | 6.74    | 0.10  | 6.02   | 47.85 | 1.38           |
| DTRC0387         | 8        | 10     | 2         | 28.05  | 23.02   | 2.20    | 25.22   | 0.15  | 3.09   | 37.60 | 1.34           |
| DTRC0432         | 2        | 4      | 2         | 26.40  | 5.78    | 3.40    | 9.18    | 0.20  | 22.95  | 35.75 | 1.35           |
| DTRC0451         | 14       | 16     | 2         | 33.55  | 1.20    | 1.61    | 2.81    | 0.07  | 14.73  | 45.50 | 1.36           |
| DTRC0461         | 3        | 5      | 2         | 27.95  | 17.40   | 1.51    | 18.91   | 0.21  | 8.11   | 38.15 | 1.36           |
| DTRC0463         | 11       | 15     | 4         | 35.92  | 6.54    | 1.29    | 7.83    | 0.10  | 3.54   | 48.60 | 1.35           |
| DTRC0472         | 13       | 15     | 2         | 31.35  | 12.46   | 1.29    | 13.75   | 0.13  | 6.26   | 43.10 | 1.37           |
| Min              |     |   |      | 25.80  | 0.35    | 0.77    | 2.35    | -0.03 | 2.93   | 34.95 | 1.32           |
| Max              |     |   |      | 35.92  | 23.02   | 5.70    | 25.22   | 0.52  | 27.80  | 48.60 | 1.38           |
| Weighted Average |     |   |      | 30.02  | 5.95    | 2.51    | 8.75    | 0.15  | 16.90  | 39.36 | 1.35           |

----

----

----

|                 | Concentrate Sample |
|----------------------|--------------------|
|                 | YT-27              | YT-27(Fe) | YT-141 | YT-141(Fe) |
| Constituent          | Coarse             | Fine | Coarse | Fine | Coarse | Fine | Coarse | Fine |
| P2O5 %               | 32.13              | 34.10 | 33.66 | 33.65 | 38.61 | 36.04 | 38.95 | 36.09 |
| Fe2O3 %              | 0.84               | 0.40 | 0.53 | 0.37 | 0.24 | 0.58 | 1.61 | 4.96 |
| Acid Insol %         | 12.20              | 10.12 | 13.16 | 8.06 | 3.29 | 6.20 | 2.29 | 4.17 |
| Flotation Recovery % | 67.6               | 76.0 | 89.9 | 87.3 | 69.1 | 91.3 | 41.5 | 89.2 |

----

| ·   | Stage 1 - To focus on drilling near surface, high grade phosphate ore to delineate tonnage of direct shipping grade material that requires little or no  beneficiation  to export  phosphate rock from the D-Tree phosphate deposit by the 4th quarter of 2009. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Stage 2 - Ramp up export of phosphate rock to 5 million tonnes per annum by 2012 beginning at the end of 4th quarter 2009,  sourced from a combination  of either Lady  Annie, D-Tree, Lady Jane, Lily & Sherrin Creek or any other phosphate deposits of which Legend has an interest. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Stage 3 - Production of value added phosphate fertiliser products such as phosphoric acid, MAP, DAP and TSP. |
|--------------------|--------------------------------------------------------------------------------------------------------------|

----

----

| (i)   | On November 2, 2007, we entered into an agreement with Iron Duyfken Pty Ltd to acquire three (3) project areas in the Georgina Basin of Queensland, Australia. Each project hosts a known and well documented, substantial deposit of phosphate rock (Cook, P.J, 1989, Howard, P.F, 1986). These deposits were delineated by earlier work conducted by previous majorcompanies since 1967 and have been named the Lady Annie, Lady Jane and Thorntonia phosphate deposits. The deposits were defined in times when phosphate prices were low. Phosphate prices have risen considerably since those times due to increased world demand especially from China and India. Past feasibility studies on these deposits will be reassessed with a view to commercialization of the deposits, based on current prices. Legend agreed to pay A$500,000 and issue 500,000 shares of Common Stock as consideration. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | Effective November 7, 2007, we entered into an agreement with Ansett Resources & Industries Pty Ltd to acquire one (1) project area in the Georgina Basin of Queensland, Australia. The project hosts a known and well documented, substantial deposit of phosphate rock (Cook, P.J, 1989, Howard, P.F, 1986). The deposit was delineated by earlier work conductedby previous major companies since 1967 and have been named the D-Tree phosphate deposit. As set out above, the deposit was defined in times when phosphate prices were low. Phosphate prices have risen considerably since those times due to increased world demand especially from China and India. Past feasibility studies on this deposit will be reassessed with a view to commercialization of the deposit, based on current prices. Legend agreed to pay A$300,000 as consideration. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | We entered into a farm-in and joint venture heads of agreement with King Eagle Resources Pty Limited on December 7, 2007 pursuant to which Legend can earn an 80% interest in phosphate on three tenement blocks named Quita Creek, Highland Plains and Lily and Sherrin creek by spending $3 million on phosphate exploration over five years. Legend has no rightsto any other minerals on the three tenement blocks. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | Effective February 27, 2008, we entered into a Share Sale Agreement whereby the Company agreed to purchase all of the issued and outstanding shares of Teutonic Minerals Pty Ltd. As a result, Teutonic became a subsidiary of the Company from that date. Teutonic held an application for a mineral licence over phosphate in the Georgina Basin in the State ofQueensland, Australia which has subsequently been withdrawn, allowing Legend’s application to take priority. The consideration payable to the vendors was A$300,000, and the Company granted a 1% gross revenue royalty from production from the mineral licence. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v)   | On October 27, 2008, the Company entered into a Heads of agreement with Mt. Isa Metals Ltd. (“MET”) for the formation of a Joint Venture (“JV”) over each party’s respective interest in tenements overlying the D-Tree phosphate deposit. Under the JV, Legend will contribute tenements EPM 14753, EPMA’s 17333, 17437, 17443and 17446, and, MET will contribute tenement EPM 15763 (D-Tree West). Legend will manage and hold an 80% interest in the JV and MET will hold a 20% contributing interest in the JV. Significantly, the JV will also have access to plant and infrastructure at Legend’s 100% owned proposed Lady Annie phosphate development, which lies 9 miles to the east of D-Tree. The Heads of Agreement is to be replaced by a formal JV agreement, which is currently being negotiated. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (vi)   | On December 24, 2008, the Company entered into a Sale and Purchase Agreement with Elkedra Diamonds Pty Ltd and Uramet Minerals Limited to purchase a 100% interest in EPM 15014, EPM 15015 and application for EPM 17930 for a consideration of A$900,000. The purchase by Legend was subject to a number of pre-conditions including the receipt by the vendors ofany necessary consents and approvals required under the Mining Act and approval for the purchase under the Foreign Acquisition and Takeovers Act 1975 (Cth). These pre-conditions were satisfied in February 2009 and the purchase by Legend settled. As part of the purchase, all parties provided standard warranties for such a transaction to each other. The tenements covered by this purchase are located immediately north of the Queensland phosphate project and are prospective for phosphate and diamonds. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Lease        | LeaseStatus                      | Project  | GrantDate  | ExpiryDate | Area(Ha)                                                                            | Anni. Date(2009) | GST Inclusive |
|--------------|----------------------------------|----------|------------|------------|-------------------------------------------------------------------------------------|------------------|---------------|
| Rent $(2009) | Commit. $ (2009)                 |
| EL22244      | Granted                          | Foelsche | 7/03/2003  | 6/03/2009  |          143,948                       | 6/03/2009        | *1            | *1 |
| EL22245      | Granted                          | Foelsche | 7/03/2003  | 6/03/2009  |            42,261            | 6/03/2009        | *1            | *1 |
| EL22246      | Surrendered                      | Selby    | 5/02/2003  | 24/11/2008 |          103,425                       |             | -             | - |
| EL22247      | Surrendered                      | Selby    | 5/02/2003  | 24/11/2008 |          158,555                       |             | -             | - |
| EL22251      | Granted                          | Selby    | 24/04/2003 | 23/04/2009 |          164,044                       | 23/04/2009       | *1            | *1 |
| EL22252      | Surrendered                      | Selby    | 22/08/2002 | 12/08/2008 |            23,525            |             | -             | - |
| EL22294      | Application 9/12/1999            | Cox      |       |       |          107,842                       |             | -             | - |
| EL22295      | Surrendered                      | Cox      | 5/02/2003  | 24/11/2008 |            78,726            |             | -             | - |
| EL22296      | Surrendered                      | Cox      | 5/02/2003  | 24/11/2008 |            43,218            |             | -             | - |
| EL22297      | Granted                          | Cox      | 5/08/2003  | 4/08/2009  |            34,160            | 4/08/2009        | *1            | *1 |
| EL22298      | Surrendered                      | Cox      | 24/04/2002 | 23/04/2008 |            98,480            |             | -             | - |
| EL22299      | Application  9/12/1999 | Cox      |       |       |          120,630                       |             | -             | - |
| EL22300      | Surrendered                      | Cox      | 26/09/2002 | 24/01/2008 |            16,560            |             | -             | - |
| EL22302      | Surrendered                      | Cox      | 26/09/2002 | 24/01/2008 |            53,270            |             | -             | - |
| EL22351      | Surrendered                      | McArthur | 5/08/2003  | 1/12/2008  |            15,754            |             | -             | - |
| EL23116      | Surrendered                      | Abner    | 3/03/2003  | 1/12/2008  |              1,639 |             | -             | - |
| EL23117      | Granted                          | Abner    | 3/03/2003  | 2/03/2009  |              1,639 | 2/03/2009        | *1            | *1 |
| EL23118      | Granted                          | Abner    | 3/03/2003  | 2/03/2009  |            10,479            | 2/03/2009        | *1            | *1 |
| EL23119      | Granted                          | Foelsche | 3/03/2003  | 2/03/2009  |              4,909 | 2/03/2009        | *1            | *1 |
| EL23121      | Granted                          | Glyde    | 3/03/2003  | 2/03/2009  |              5,893 | 2/03/2009        | *1            | *1 |
| EL23126      | Surrendered                      | Cox      | 5/08/2003  | 1/12/2008  |              9,745 |             | -             | - |
| EL23127      | Application 10/04/2001           | Cox      |       |       |            35,872            |             | -             | - |

----

| EL23162 | Application 9/05/2001  | Cox         |       |       |            38,411                            |       | -      | -       |
|---------|------------------------|-------------|------------|------------|-----------------------------------------------------------------------------------------------------|------------|--------|---------|
| EL23510 | Granted                | Foelsche    | 3/03/2003  | 2/03/2009  |                 982 | 2/03/2009  | *1     | *1      |
| EL23511 | Granted                | Glyde South | 3/03/2003  | 2/03/2009  |              4,579                 | 2/03/2009  | *1     | *1      |
| EL23512 | Granted                | McArthur    | 3/03/2003  | 2/03/2009  |              7,210                 | 2/03/2009  | *1     | *1      |
| EL23513 | Granted                | Abner       | 3/03/2003  | 2/03/2009  |            22,602                            | 2/03/2009  | *1     | *1      |
| EL23514 | Granted                | Abner       | 3/03/2003  | 2/03/2009  |              2,947                 | 2/03/2009  | *1     | *1      |
| EL23515 | Granted                | McArthur    | 4/07/2003  | 3/07/2009  |            22,730                            | 3/07/2009  | *1     | *1      |
| EL25486 | Application 18/07/2006 | Cox         |       |       |            91,191                            |       | -      | -       |
| EL25491 | Granted                | Foelsche    | 12/03/2007 | 11/03/2013 |              2,619                 | 11/03/2009 | $176   | $40,000 |
| EL25612 | Application Withdrawn  | Cox         |       |       |            91,364                            |       | -      | -       |
| EL25613 | Application Withdrawn  | Cox         |       |       |            81,370                            |       | -      | -       |
| EL25614 | Application 20/09/2006 | Cox         |       |       |          102,752                                       |       | -      | -       |
| EL25615 | Application 20/09/2006 | Cox         |       |       |            28,586                            |       | -      | -       |
| EL25616 | Granted                | McArthur    | 23/08/2007 | 22/08/2013 |              6,113                 | 22/08/2009 | $418   | $10,000 |
| EL25617 | Surrendered            | McArthur    | 23/08/2007 | 1/12/2008  |            24,744                            |       | -      | -       |
| EL25629 | Application 25/09/2006 | Cox         |       |       |            17,118                            |       | -      |    |
| EL26175 | Surrendered            | McArthur    | 22/02/2008 | 1/12/2008  |                 125 |       | -      | -       |
| EL26176 | Surrendered            | McArthur    | 22/02/2008 | 1/12/2008  |                 588 |       | -      | -       |
| EL26177 | Surrendered            | McArthur    | 22/02/2008 | 1/12/2008  |                 280 |       | -      | -       |
| EL26360 | Granted                | Selby       | 25/03/2008 | 24/03/2014 |                 328 | 24/03/2009 | $11    | $10,000 |
| EL26406 | Granted                | McArthur    | 18/06/2008 | 17/06/2014 |              8,047                 | 17/06/2009 | $275   | $60,000 |
| EL26495 | Granted                | Foelsche    | 18/07/2008 | 17/06/2014 |              1,964                 | 17/07/2009 | $66    | $20,000 |
| EL26507 | Granted                | McArthur    | 18/07/2008 | 17/06/2014 |              7,208                 | 17/07/2009 | $242   | $25,000 |
| EL26509 | Granted                | Foelsche    | 18/07/2008 | 17/06/2014 |              2,621                 | 17/07/2009 | $88    | $20,000 |
| EL26514 | Granted                | Cox         | 18/07/2008 | 17/06/2014 |              4,989                 | 17/07/2009 | $176   | $30,000 |
| EL26515 | Granted                | Cox         | 18/07/2008 | 17/06/2014 |              3,620                 | 17/07/2009 | $121   | $30,000 |
| EL26528 | Granted                | McArthur    | 18/07/2008 | 17/06/2014 |            32,122                            | 17/07/2009 | $1,078 | $90,000 |

----

----

| Project               | Access                                                                                                                                        |
|-----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| Queensland Phosphates | Via the Barkly Highway from Mount Isa.                                                                                                        |
| Selby                 | Via the Carpentaria Highway, east from Daly Waters to Cape Crawford, Borroloola and from the south via Wollogorang.                           |
| McArthur              |
| Glyde                 |
| Abner Range           |
| Foelsche              |
| Cox                   | Via the Roper Highway and station roads to Hodgson River, Nutwood Downs and Cox River. Or, via the Carpentaria Highway towards Cape Crawford. |

----

----

----

----

----

----

----

----

| 2005-2006 |   |   | 2006-2007 |   |    | 2007-2008 |   |   | Total Last 3 Years |   |
|-----------|--------|--------|-----------|--------|---------|-----------|--------|--------|--------------------|--------|
| Committed |   |   | Expended  |   |    | Committed |   |   | Expended           |   |   | Committed |   |   | Expended |   |   | Committed |   |   | Expended |   |
| $         | 40,000 |   |      | $      | 15,306  |      |   | $      | 35,000             |   |   | $ | 532,681 |   |   | $ | 120,000 |   |   | $ | 85,055 |   |   | $ | 195,000 |   |   | $ | 633,042 |   |
| $         | 95,000 |   |      | $      | 92,391  |      |   | $      | 75,000             |   |   | $ | 470,839 |   |   | $ | 215,000 |   |   | $ | 840,128 |   |   | $ | 385,000 |   |   | $ | 1,403,358 |   |
| $         | 80,000 |   |      | $      | 428,294 |      |   | $      | 80,000             |   |   | $ | 699,739 |   |   | $ | 260,000 |   |   | $ | 150,272 |   |   | $ | 420,000 |   |   | $ | 1,278,305 |   |
| $         | 90,000 |   |      | $      | 31,650  |      |   | $      | 85,000             |   |   | $ | 61,111 |   |   | $ | 110,000 |   |   | $ | 6,840 |   |   | $ | 285,000 |   |   | $ | 99,601 |   |
| $         | 90,000 |   |      | $      | 193,025 |      |   | $      | 95,000             |   |   | $ | 399,651 |   |   | $ | 610,000 |   |   | $ | 1,456,419 |   |   | $ | 795,000 |   |   | $ | 2,049,095 |   |
| $         | 55,000 |   |      | $      | 17,570  |      |   | $      | 45,000             |   |   | $ | 25,732 |   |   | $ | 255,000 |   |   | $ | 628,772 |   |   | $ | 355,000 |   |   | $ | 672,074 |   |
|      |   |   |      |   |    |      |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      |   |   |      |   |    |      |   |   |               |   |   |   |   |   |   |   |   |   |   | TOTAL |   |   | $ | 2,435,000 |   |   | $ | 6,135,475 |   |

|                             |   | Expenditure 2008-2009 |      |
|----------------------------------|--------|-----------------------|-----------|
| Project                          |   | Committed             |      |   | Proposed |   |
|                             |   |                  |      |   |   |   |
| Glyde                            |   | $                     | 80,000    |   |   | $ | 386,000 |   |
| Abner                            |   | $                     | 180,000   |   |   | $ | 155,300 |   |
| Foelsche                         |   | $                     | 250,000   |   |   | $ | 271,000 |   |
| Cox                              |   | $                     | 95,000    |   |   | $ | 194,000 |   |
| Selby                            |   | $                     | 120,000   |   |   | $ | 143,800 |   |
| McArthur                         |   | $                     | 280,000   |   |   | $ | 251,900 |   |
|                             |   |                  |      |   |   |   |   |   |
| Mobile Camp – all projects |   |                  |      |   |   | $ | 100,000 |   |
| 10% Contingency on Exploration   |   |                  |      |   |   | $ | 140,280 |   |
| Tenement Rental (excl. GST)      |   |                  |      |   |   | $ | 311,580 |   |
|                             |   |                  |      |   |   |   |   |   |
| TOTAL                            |   | $                     | 1,005,000 |   |   | $ | 1,954,660 |   |

----

----

| Item 1A. | Risk Factors. |
|----------|---------------|

| -   | exploration and development of any mineral property we identify; |
|---------------|------------------------------------------------------------------|

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

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

----

----

----

----

| Item 1B. | Unresolved Staff Comments. |
|----------|----------------------------|

| Item 2. | Properties. |
|---------|-------------|

| Item 3. | Legal Proceedings. |
|---------|--------------------|

| Item 4. | Submission of Matters to a Vote of Security Holders. |
|---------|------------------------------------------------------|

|             | Votes For   |   | Votes Withheld                                  |
|------------------|-------------|--------|-------------------------------------------------|
| Joseph Gutnick   | 128,502,013 |   | 1,814,750                                       |
| David Tyrwhitt   | 128,504,013 |   | 1,812,750                                       |
| Dr. U.S. Awasthi | 128,506,263 |   | 1,810,500                                       |
| Manish Gupta     | 128,506,263 |   | 1,810,500                                       |
| Dr. Allan Trench | 130,313,513 |   |        3,250 |
| Henry Herzog     | 130,313,513 |   |        3,250 |

----

| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
|---------|---------------------------------------------------------------------------------------------------------------------|

| Calendar Period     | High Bid(1) | Low Bid(1) |
|-----------------------------------------|-------------|------------|
|                                    |        |       |
| 2007                                    |        |       |
| First Quarter                           | 1.80        | 0.90       |
| Second Quarter                          | 1.95        | 1.50       |
| Third Quarter                           | 1.45        | 1.25       |
| Fourth Quarter                          | 1.50        | 0.75       |
|                                    |        |       |
| 2008                                    |        |       |
| First Quarter                           | 2.15        | 0.09       |
| Second Quarter                          | 5.05        | 1.62       |
| Third Quarter                           | 4.42        | 0.62       |
| Fourth Quarter                          | 1.43        | 0.27       |
|                                    |        |       |

| (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. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (i)   | 300,000 options of which 1/3 vested on September 10, 2008, 1/3 will vest on September 10, 2009 and the balance will vest on September 10, 2010 and 50% of the options have an exercise price of US$0.444 per option and 50% have an exercise price of US$1.00 per option; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | 300,000 options of which 1/3 vested on December 19, 2008, 1/3 will vest on December 19, 2009 and the balance will vest on December 19, 2010 and 50% of the options have an exercise price of US$0.444 per option and 50% have an exercise price of US$1.00 per option; and |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | 4,787,500 options of which 1/3 vested on December 28, 2008, 1/3 will vest on December 28, 2009 and the balance will vest on December 28, 2010 and have an exercise price of US$1.00 per option. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| a.   | 5,000,000 options, at an exercise price of $2.50 per share and expiring 60 days from July 11, 2008; |
|----------------|-----------------------------------------------------------------------------------------------------|

| b.   | 8,000,000 options, at an exercise price of $3.00 per share and expiring 12 months from July 11, 2008; |
|----------------|-------------------------------------------------------------------------------------------------------|

| c.   | 8,000,000 options, at an exercise price of $3.50 per share and expiring 18 months from July 11, 2008; |
|----------------|-------------------------------------------------------------------------------------------------------|

| d.   | 9,000,000 options, at an exercise price of $4.00 per share and expiring 24 months from July 11, 2008. |
|----------------|-------------------------------------------------------------------------------------------------------|

| (i)   | 200,000 options which will vest 1/3 on July 7, 2009, 1/3 on July 7, 2010 and the balance on July 7, 2011 and have an exercise price of US$2.00 per option. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | 150,000 options which will vest 1/3 on July 21, 2009, 1/3 on July 21, 2010 and the balance on July 21, 2011 and have an exercise price of US$2.00 per option. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | 112,500 options which will vest 1/3 on August 8, 2009, 1/3 on August 8, 2010 and the balance on August 8, 2011 and have an exercise price of US$1.00 per option. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | 962,500 options which will vest 1/3 on December 4, 2009, 1/3 on December 4, 2010 and the balance on December 4, 2011 and have an exercise price of US$1.00 per option. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | 1,050,000 options which will vest 1/3 on December 4, 2009, 1/3 on December 4 10, 2010 and the balance on December 4, 2011 and have an exercise price of US$1.00 per option. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | 562,500 options which will vest 1/3 on December 4, 2009, 1/3 on December 4 10, 2010 and the balance on December 4, 2011 and have an exercise price of US$1.00 per option. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | 500,000 options which will vest 1/3 on December 4, 2009, 1/3 on December 4 10, 2010 and the balance on December 4, 2011 and have an exercise price of US$1.00 per option. For additional information concerning stock options, see Note 7 to the Company’s Financial Statements. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 6. | Selected Financial Data. |
|---------|--------------------------|

----

|                                                |   | Year ended December 31 |   |   |       |   |
|-----------------------------------------------------|--------|------------------------|--------|--------|------------|--------|
|                                                |   | 2006                   |   |   | 2007  |   |   | 2008  |   |   | 2008  Conv..Transll |   |
|                                                |   |                   | A$000s |   |       |   | A$000s |   |   |   | A$000s |   |   | US$000s  |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Revenues                                            |   |                   | -      |   |       |   | - |   |   |   | - |   |   |   | - |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Other income (loss)                                 |   |                   | 2      |   |       |   | 22 |   |   |   | 3,726 |   |   |   | 2,573 |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses                                  |   |                   | (4,537 | )      |       |   | (8,540 | ) |   |   | (23,337 | ) |   |   | (16,119 | ) |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                                |   |                   | (4,535 | )      |       |   | (8,518 | ) |   |   | (19,611 | ) |   |   | (13,545 | ) |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency gain (loss))                       |   |                   | (40    | )      |       |   | (120 | ) |   |   | 5,390 |   |   |   | 3,723 |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Profit (loss) before incometaxes                    |   |                   | (4,575 | )      |       |   | (8,638 | ) |   |   | (14,221 | ) |   |   | (9,822 | ) |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                          |   |                   | -      |   |       |   | - |   |   |   | - |   |   |   | - |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Net profit (loss)                                   |   |                   | (4,575 | )      |       |   | (8,638 | ) |   |   | (14,221 | ) |   |   | (9,822 | ) |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                   | A$     |   |       |   | A$ |   |   |   | A$ |   |   | $US  |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Net profit (loss) per shareon continuing operations |   |                   | (0.06  | )      |       |   | (0.06 | ) |   |   | (0.07 | ) |   |   | (0.05 | ) |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average numberof shares outstanding (000s) |   |                   | 75,230 |   |       |   | 146,740 |   |   |   | 204,501 |   |   |   | 204,501 |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data                                  |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                   |   |   |       |   | A$000s |   |   |   | A$000s |   |   | US$000s  |   |
| Total assets                                        |   |                   |   |   |       |   | 17,994 |   |   |   | 130,076 |   |   |   | 89,843 |   |
| Total liabilities                                   |   |                   |   |   |       |   | 1,035 |   |   |   | 3,317 |   |   |   | 2,291 |   |
|                                                |   |                   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                          |   |                   |   |   |       |   | 16,959 |   |   |   | 126,759 |   |   |   | 87,552 |   |

----

| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation. |
|---------|---------------------------------------------------------------------------------------------|

|   | Year ended                               |                                                                                                                                       |   |            |   |
|--------|------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|
|   | December 31                              |                                                                                                                                       |   |            |   |
|   |                                     |                                                                                                                                       |   |            |   |
|   | 2006                      | A$1.00                                                                                                                           | =      | US$0.7893       |   |
|   | 2007       | A$1.00                       | =      | US$0.8767  |   |
|   | 2008       | A$1.00                                                                                                                           | =      | US$0.6907       |   |

----

| (i)   | An increase in exploration expenditure written off from A$5,132,000 in 2007 to A$8,780,037 (US$6,064,372) in 2008. Our accounting policy is to expense all exploration costs (including costs associated with the acquisition of tenement interests) as incurred. During 2008, we conducted a significant drilling program at our phosphate project in Queensland anda detailed sampling program in the Northern Territory. On our Queensland phosphate project, we also commenced early stage investigations into a mining operation. The costs included drilling, assaying, camp costs, aerial surveying, geological/geophysical contractors, salaries and associated costs for contract field staff, travel, accommodation, meals and tenement holding costs. During 2008, we incurred A$3,729,592 in costs for exploration drilling on our tenements in the Northern Territory. The costs includeddrilling, helicopter support, geological/geophysical contractors, salaries and associated costs for contract field staff, travel, accommodation, meals and tenement holding costs. During 2007, we used drillers almost continuously on our exploration program. In December 2007, we entered into agreements to purchase exploration permits in Queensland. The purchase price of A$1,318,000 included cash of A$800,000, and shares with a value of A$518,000. The total cost has been expensed as part of exploration costs. Wehave spent A$84,408 since entering into the agreements on purchasing and reviewing data for the permits. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | An decrease in interest expense from A$62,196 in 2007 to A$32,715 (US$22,596) in 2008. During 2008, we incurred interest on the camp lease and motor vehicle finance leases. During 2007, we incurred A$25,235 for interest on the camp lease; A$1,807 motor vehicle finance lease; A$14,683 charged by AXIS on outstanding amounts owing under the Service Agreement,which was repaid in June 2007; A$16,774 charged by Astro on amounts owed for exploration expenditure incurred by Astro, which was repaid in March 2007, and A$3,697 for short term funds used to maintain the Company’s activities. AXIS provides management and geological services to us pursuant to a Service Agreement dated December 2004. AXIS and Astro charged interest at a rate of 10.10% during 2007. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | An increase in aircraft maintenance costs from A$nil in 2007 to A$278,826 (US$192,585) in 2008. The Company purchased a lear jet from AXIS in August 2008 to utilize in its field operations at a price of A$1,210,000 (A$1,100,000 which was based on an external valuation plus 10% GST with GST being refundable from the Australian Government subject to compliancewith tax laws) and has incurred operating costs for the jet since that time. There was no comparable cost in 2007. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | An increase in legal, professional and accounting from A$213,063 for 2007 to A$707,444 (US$488,632) for 2008.  During 2008, we incurred legal expenses of A$518,273 (US$357,971) for general legal work including stock transfer matters, regulatory filings, stock option plans, native title and environmental approvals, asset acquisitions, and FormS-1 Registration Statements; audit fees of A$176,198 (US$126,105) for professional services in relation to financial statements, the quarterly Form 10-Qs, Form 10-K, and Form S-1; and taxation fees of $11,492 (US$4,250). All fees have increased from 2007 as a result of increased activity by the Company as a consequence of the acquisition of mining tenements, capital raising activities and preparation of the Form SB-2 Registration Statement. During 2007, we incurred legal expenses of A$91,483 for general legalwork including stock transfer matters, regulatory filings, stock option plans and Form SB-2 Registration Statement; audit fees of A$62,049 for professional services in relation to financial statements, the quarterly Form 10-QSBs, Form 10-KSB, Form 10-K and Form SB-2; and A$59,531 for a stock transfer agent and regulatory filing fees. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (v)   | A net gain of A$70,874 (US$48,953) on revaluation of securities was incurred at December 2008 on certain trading securities purchased during 2008 being the difference between the costs price and market value at December 31, 2008. There were no trading securities held at December 31, 2007. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (vi)   | An increase in impairment of investment from A$nil in 2007 to A$326,526 (US$225,532) in 2008. On February 27, 2008, the Company entered into a Share Sale Agreement whereby the Company agreed to purchase all of the issued and outstanding shares of Teutonic Minerals Pty Ltd. As a result, Teutonic became a subsidiary of the Company from that date. Teutonicheld an application for a mineral licence over phosphate in the Georgina Basin in the State of Queensland, Australia. The consideration payable to the vendors was A$300,000, and the Company granted the vendors a 1% gross revenue royalty from production from the mineral licence and incurred legal costs of A$26,526.The mineral licence application held by Teutonic was withdrawn on March 17, 2008 and replaced by a mineral application lodged by the Company. Teutonic had no other assets or liabilities. As at December31, 2008 the net assets and liabilities acquired by the Company have no value. The consideration and legal costs of A$326,526 paid by the Company are included as impairment of investment in the Statement of Operations. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (vii)   | An increase in administrative costs from A$2,753,365 in 2007 to A$8,096,798 (US$5,592,457) in 2008. During 2008, the corporate management and service fees charged to us by AXIS was A$5,413,203 (US$3,738,899). AXIS charged us A$2,459,665 (US$1,698,891) for Directors’ fees, salaries  and salary related matters incurred in behalf of the Company,which relates to our share of salaries paid to the President & Chief Executive Officer, Chief Financial Officer and Secretary, Executive General Manager, General Manager Business, Project Manager and other staff of AXIS who provide services to the Company. The Company paid insurance premiums of A$66,586 (US$45,991) for 2008. The Company incurred A$856,703 (US$591,725) for travel by Directors and officers, contractors, and other AXIS staff who provide services to the Company on capital raising trips, tripsto the field, A$1,269,395 (US$876,771) for investor relations consultants and A$15,329 (US$10,588),in borrowing costs and bank fees; A$24,068 (US$16,624) for motor vehicles costs, A$100,976 (US$69,744) for public relations; A$91,672 (US$63,318) for stock transfer agent services; and A$5,893 for consumables. During 2008, the Company issued shares to certain shareholders for registration statement non-performance amounting to A$660,494 (US$456,032); paid A$213,758 (US$147,643) for rent of offices in Melbourne,Mt Isa and New York and an apartment; A$169,489 (US$117,066) for subscription to industry papers and services; A$45,231 (US$31,241) for telecommunications support;; A$78,927 (US$54,515) for depreciation of non-field assets and minor equipment purchases, A$60,487 (US$41,778) for franchise tax, general costs of A$170,507(US$117,769). AXIS charge A$98,528 (US$68,053) for asset usage of plant and equipment, an administration and service fee of A$1,661,723 (US$1,147,752). The overall increase in administration costsrelated to the increase in activity by the Company as a consequence of providing support to a field exploration program for a full financial year as the exploration projects develop, capital raising activities, preparation of regulatory filings and registration statements. During 2007, the corporate management and service fees charged to us by AXIS was A$410,416. AXIS charged us A$454,107 for Directors’ fees, salaries andsalary related matters incurred in behalf of the Company, which relates to our share of salaries paid to the President & Chief Executive Officer, Chief Financial Officer and Secretary, General Manager Development and Resources, General Manager Business and other staff of AXIS who provide services to the Company. One independent Director charged directly to the Company the amount of A$20,000 for 2007. The Company paid insurance premiums of A$35,100 for 2007, incurred A$282,648  for travel by Directorsand officers on capital raising trips, A$67,867 for travel of Directors, officers and support contractors to the field, A$534,268  for investor relations consultants and A$36,595 for tax matters, employee option valuation and exploration tenement maintenance; and A$13,443 for postage and freight charges. During 2007, the Company issued shares to certain shareholders for registration statement non-performance amounting to A$604,805; A$111,197 for New York rent; A$49,256 for subscription to industry papersand services; A$15,564 for telecommunications support; A$14,751 for website maintenance; A$15,601 for depreciation of non-field assets and minor equipment purchases, A$8,238 for franchise tax, general costs of A$10,791 and A$8,791 for printing and stationery. AXIS charge A$120,000 for asset usage of plant and equipment of which $60,000 was charged to costs in 2007 and there was no comparable amount for 2006. The overall increase in administration costs related to the increase in activity by the Company as a consequenceof providing support to a field exploration program from mid February 2007 to November 2007, capital raising activities, preparation of regulatory filings and Form SB-2 Registration Statement. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (viii)   | Stock based compensation has increased from A$375,740 for 2007 to A$5,185,743 (US$3,581,793) for 2008. The Company has issued options under the 2006 Incentive Option Plan in throughout 2006, 2007 and 2008. The increase is a result of additional options issued, amortization of certain options for a full 12 month period and includes an adjustment for forfeitedoptions. See note 7 for further details on the options issued. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| (i)   | An increase in exploration expenditure written off from A$3,811,385 in 2006 to A$5,132,000 in 2007. Our accounting policy is to expense all exploration costs (including costs associated with the acquisition of tenement interests) as incurred. During 2007, we incurred A$3,729,592 in costs for exploration drilling on our tenements inthe Northern Territory. The costs included drilling, helicopter support, geological/geophysical contractors, salaries and associated costs for contract field staff, travel, accommodation, meals and tenement holding costs. During 2007, we used drillers almost continuously on our exploration program. In December 2007, we entered into agreements to purchase exploration permits in Queensland. The purchase price of A$1,318,000 included cash of A$800,000, and shares with a value of A$518,000. The total cost has beenexpensed as part of exploration costs. We have spent A$84,408 since entering into the agreements on purchasing and reviewing data for the permits. In 2006, the Company acquired certain diamond mining tenements in Northern Australia for A$1,500,000, paid A$81,000 in stamp duty, A$921,131 of exploration expenditure incurred by Astro from February 1, 2006 to September 30, 2006 and A$1,309,244 of exploration expenditure incurred since acquisition by the Company. All costs incurred in connection with this acquisitionhave 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. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | An increase in interest expense from A$41,371 in 2006 to A$62,196 in 2007. During 2007, we incurred A$25,235 for interest on the camp lease; A$1,807 motor vehicle finance lease; A$14,683 charged by AXIS on outstanding amounts owing under the Service Agreement, which was repaid in June 2007; A$16,774 charged by Astro on amounts owedfor exploration expenditure incurred by Astro, which was repaid in March 2007, and A$3,697 for short term funds used to maintain the Company’s activities. AXIS provides management and geological services to us pursuant to a Service Agreement dated December 2004. AXIS and Astro charged interest at a rate of 10.10% during 2007. During 2006, we borrowed A$324,951 from Wilzed, a company in which our President and CEO is a Director and shareholder and in October 2006, the total debt of A$336,081 was repaid.Wilzed charged us A$3,588 in interest at a rate between 9.35% to 9.85% during 2006. AXIS charged us A$13,498 in interest for 2006 at a rate between 9.35% to 10.10% during 2006 on accounts owing under the Service Agreement. Astro charged us A$21,302 in interest on amounts owed for exploration expenditure incurred by Astro. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | An increase in legal, professional and accounting from A$89,351 for 2006 to A$213,063 for 2007. During 2007, we incurred legal expenses of A$91,483 for general legal work including stock transfer matters, regulatory filings, stock option plans and Form SB-2 Registration Statement; audit fees of A$62,049 for professional services inrelation to financial statements, the quarterly Form 10-QSBs, Form 10-KSB, Form 10-K and Form SB-2; and A$59,531 for a stock transfer agent and regulatory filing fees. All fees have increased from 2006 as a result of increased activity by the Company as a consequence of the acquisition of mining tenements, capital raising activities and preparation of the Form SB-2 Registration Statement. During 2006, we incurred legal expenses of A$28,295 in relation to general legal work including stock transfer matters, stockoption plans and regulatory filings; audit fees of A$35,062 for professional services in relation to financial statements, the quarterly Form 10-QSBs and Form 10-KSB; and A$25,993 for a stock transfer agent and regulatory filing fees. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (iv)   | An increase in administrative costs from A$479,093 in 2006 to A$2,756,935 in 2007. During 2007, the corporate management and service fees charged to us by AXIS was A$410,416. AXIS charged us A$454,107 for Directors’ fees, salaries  and salary related matters incurred in behalf of the Company, which relates to our shareof salaries paid to the President & Chief Executive Officer, Chief Financial Officer and Secretary, General Manager Development and Resources, General Manager Business and other staff of AXIS who provide services to the Company. One independent Director charged directly to the Company the amount of A$20,000 for 2007. The Company paid insurance premiums of A$35,100 for 2007 compared to the 2006 premium was only for five months. The Company incurred A$282,648 for travel by Directors and officers on capitalraising trips, A$67,867 for travel of Directors, officers and support contractors to the field, A$534,268 for investor relations consultants and A$36,595 for tax matters, employee option valuation and exploration tenement maintenance; and A$13,443 for postage and freight charges. There was no comparable amount in 2006 for A$604,805 for registration statement non-performance; A$111,197 for New York rent; A$49,256 for subscription to industry papers and services; A$15,564 for telecommunications support; A$14,751for website maintenance; A$15,601 for depreciation of non-field assets and minor equipment purchases, A$8,238 for franchise tax, general costs of A$10,791 and A$8,791 for printing and stationery. AXIS charge A$120,000 for asset usage of plant and equipment of which $60,000 was charged to costs in 2007 and there was no comparable amount for 2006. The overall increase in administration costs related to the increase in activity by the Company as a consequence of providing support to a field exploration program frommid February 2007 to November 2007, capital raising activities, preparation of regulatory filings and Form SB-2 Registration Statement. During 2006, the management fee charged by AXIS to us was $76,910. AXIS charged us A$75,410 for Director’s fees and salaries incurred on behalf of the Company. One independent Director charged directly to the Company the amount of A$35,000 for the period from the date of his appointment to December 31, 2006. The Company paid A$8,350 in insurance premiums for policies thatcommenced 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 postage and freight costs; A$11,351 for motor vehicle costs related to the motor vehicleproposals for the field program. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v)   | Stock based compensation has increased from A$115,307 for 2006 to A$375,740 for 2007. The Company has issued options under the 2006 Incentive Option Plan in September 2006, May 2007, September 2007 and December 2007. The increase is a result of additional options issued and includes an adjustment for forfeited options. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| a.   | 5,000,000 options, at an exercise price of US$2.50 per share and expiring 60 days from July 11, 2008; |
|----------------|-------------------------------------------------------------------------------------------------------|

| b.   | 8,000,000 options, at an exercise price of US$3.00 per share and expiring 12 months from July 11, 2008; |
|----------------|---------------------------------------------------------------------------------------------------------|

| c.   | 8,000,000 options, at an exercise price of US$3.50 per share and expiring 18 months from July 11, 2008; |
|----------------|---------------------------------------------------------------------------------------------------------|

| d.   | 9,000,000 options, at an exercise price of US$4.00 per share and expiring 24 months from July 11, 2008. |
|----------------|---------------------------------------------------------------------------------------------------------|

----

| Item 7A. |  Quantitative and Qualitative Disclosures About Market Risk. |
|----------|-------------------------------------------------------------------|

| Item 8. |  Financial Statements and Supplementary Data. |
|---------|----------------------------------------------------|

----

| Item 9. |  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
|---------|---------------------------------------------------------------------------------------------|

| Item 9A. |  Controls and Procedures. |
|----------|--------------------------------|

----

| New York, NY        |   | PKF                          |
|-------------------------------|--------|------------------------------|
| September 2, 2009   |   | Certified Public Accountants |
|                          |   | A Professional Corporation   |

| Item 9B. | Other Information. |
|----------|--------------------|

----

| Item 10. | Directors, Executive Officers and Corporate Governance. |
|----------|---------------------------------------------------------|

|                                               |                 |                                                                  |
|----------------------------------------------------|----------------------|-----------------------------------------------------------------------|
|                                               |                 |                                                                  |
| Joseph Gutnick       | 56    | Chairman of the BoardPresident, Chief Executive Officer and Director. |

| David Tyrwhitt      | 70     | Director |
|----------------------------------------------|----------------------------|----------|

| Dr U.S Awasthi      | 63  | Director |
|----------------------------------------------|----------|----------|

| Dr Allan Trench     | 41   | Director |
|-----------------------------------------|----------------|----------|

| Dr Allan Trench     | 45 | Director |
|-----------------------------------------|----|----------|

| Henry Herzog           | 67 | Director |
|--------------------------------------------------------------------------|----|----------|

| Peter Lee | 51 | Secretary, Chief Financial Officer and Principal Accounting Officer. |
|-----------|----|----------------------------------------------------------------------|

| Craig Michael | 31 | Executive General Manager |
|---------------|----|---------------------------|

| Edward Walker | 37 | Project Manager |
|---------------|----|-----------------|

----

----

----

| Item 11. | Executive Compensation. |
|----------|-------------------------|

----

|   | • | Adequately and fairly compensate executive officers in relation to their responsibilities, capabilities and contributions to the Company and in a manner that is commensurate with compensation paid by companies of comparable size and at a comparable stage of development within our industry; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Align the interests of the executive officers with those of the stockholders with respect to short-term operating goals and long-term increases in the value of our common stock; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Provide a strong emphasis on equity-based compensation and equity ownership, creating a direct link between stockholder and management interests. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | Elements of Post-Termination Compensation |
|--------|-------------------------------------------|

|   | Stock Ownership Guidelines |
|--------|----------------------------|

|   | Compensation Committee Report |
|--------|-------------------------------|

|   | Compensation Committee: |
|--------|-------------------------|
|   |                    |
|   | Dr. Allan Trench        |
|   | Dr. David Tyrwhitt      |
|   | Mr. Henry Herzog        |

----

|   | Summary Compensation Table |
|--------|----------------------------|

| Name and Principal Position                              | Year                       | Salary (A$)            | Bonus (A$) | Stock Awards (A$) | Option Awards (A$)       | Non-Equity Incentive Plan Compensation (A$) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (A$) | All Other Compensation (A$) | Total (A$)                   |
|----------------------------------------------------------|----------------------------|------------------------|------------|-------------------|--------------------------|---------------------------------------------|------------------------------------------------------------------------------|-----------------------------|------------------------------|
| Joseph Gutnick, Chairman of the Board, President and CEO | 20082007 2006    | 487,00082,132 -   | 100,000- - | -- -              | 1,323,16886,76428,892(i) | -- -                                        | -- -                                                                         | 118,28826,768-(ii) (iii)    | 2,028,456195,66428,892  |
| Peter Lee, CFO & Secretary                           | 20082007                   | 214,634115,400         | 80,000-    | --                | 480,49965,501(i)         | --                                          | --                                                                           | 58,33938,825(ii) ( iv)      | 833,471219,726               |
| Craig Michael, Executive General  Manager      | 20082007                   | 206,51848,988          | 80,000-    | --                | 699,45359,341(i)         | --                                          | --                                                                           | 19,36211,948(ii) (v)        | 1,005,333120,277             |

| (i)   | The amounts included in the table for option awards has been calculated in accordance with SFAS 123R. |
|-----------------|-------------------------------------------------------------------------------------------------------|

| (ii)   | Except as otherwise indicated, represents superannuation contributions made by AXIS applicable to salaries charged to the Company. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | Includes A$47,265 for 2008 and A$15,646 for 2007 of motor vehicle costs made by AXIS applicable to Mr Gutnick as charged to the Company. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | Includes A$27,037 for 2008 and A$20,854 for 2007 of motor vehicle costs made by AXIS applicable to Mr Lee as charged to the Company. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| (v)   | Includes A$7,976 for 2007 of rental assistance made by AXIS applicable to Mr Michael as charged to the Company |
|-----------------|----------------------------------------------------------------------------------------------------------------|

| Name           | Grant Date | All OtherOption Awards:Number ofSecuritiesUnderlyingStock Options(#) | Exercise orBase Price ofOption Awards(US$/Sh) | Closing Priceon OptionGrant Date(US$) | Grant Date FairValue of Stockand OptionAwards(A$) |
|----------------|------------|----------------------------------------------------------------------|-----------------------------------------------|---------------------------------------|---------------------------------------------------|
|           |       |                                                                 |                                          |                                  |                                              |
| Joseph Gutnick | 02/07/2008 | 5,000,000                                                            | 2.00                                          | 0.99                                  | 2,398,750                                         |

----

| Option Awards                                            | Stock Awards                                                        |
|----------------------------------------------------------|---------------------------------------------------------------------|
| Name                                                     | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Been Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| Joseph Gutnick, Chairman of the Board, President and CEO | --                                                                  | -- | 5,000,0002,250,000 | US$2.00US$1.00 | 2/07/189/19/16 |  - |  - |  - |  - |
| Peter Lee, CFO and Secretary                             | ---                                                                 | --- | 787,500787,5001,000,000 | US$0.444US$1.00US$1.00 | 9/19/169/19/1612/28/17 | --- | --- | --- | --- |
| Craig Michael, Executive General Manager                 | ---                                                                 | --- | 150,000150,0001,250,000 | US$0.444US$1.00US$1.00 | 9/10/179/10/1712/28/17 | --- | --- | --- | --- |
| Edward Walker, Project Manager                           | -                                                                   | - | 500,000 | US$1.00 | 04/12/18 | - | - | - | - |

----

----

|                                                       |   | Number of Securities to be issued upon exercise of outstanding options, warrants and rights |       |   | Weighted-average exercise price of outstanding options, warrants and rights |   |    | Number of securities remaining available future issuance under equity compensation(excluding securities reflected in Column One) |   |
|------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|------------|--------|-----------------------------------------------------------------------------|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity compensation plans approved by security holders     |   |                                                                                        | 22,775,000 |   |                                                                        | $      | A0.8820 |                                                                                                                             |   |   | 4,730,522 |   |
| Equity compensation plans not approved by security holders |   |                                                                                        | -          |   |                                                                        |   | -       |                                                                                                                             |   |   | - |   |

| Name            |   | Fees Earned orPaid in Cash(A$) |   |   | StockAwards ($) |   |   | OptionAwards ($) |   |   | Non-Equity Incentive Plan Compensation ($) |   |   | Change in Pension Value and Nonqualified Deferred Compensation Earnings |   |   | All Other Compensation ($) |   |   | Total (A$) |   |
|-----------------|--------|--------------------------------|--------|--------|-----------------|--------|--------|------------------|--------|--------|--------------------------------------------|--------|--------|-------------------------------------------------------------------------|--------|--------|----------------------------|--------|--------|------------|--------|
| David Tyrwhitt  |   |                           | 55,000 |   |            |   | -      |             |   |   | 559,901                                    |   |   |                                                                    | -      |   |                       |   | -      |       |   |   | - |   |   |   | 614,901 |   |
| Dr US Awasthi   |   |                           | 24,390 |   |            |   | -      |             |   |   | 3,843                                      |   |   |                                                                    | -      |   |                       |   | -      |       |   |   | - |   |   |   | 28,233 |   |
| Manish Gupta    |   |                           | 24,390 |   |            |   | -      |             |   |   | 3,843                                      |   |   |                                                                    | -      |   |                       |   | -      |       |   |   | - |   |   |   | 28,233 |   |
| Dr Allan Trench |   |                           | 24,390 |   |            |   | -      |             |   |   | 51,730                                     |   |   |                                                                    | -      |   |                       |   | -      |       |   |   | - |   |   |   | 76,120 |   |
| Henry Herzog    |   |                           | 24,390 |   |            |   | -      |             |   |   | 3,843                                      |   |   |                                                                    | -      |   |                       |   | -      |       |   |   | - |   |   |   | 28,233 |   |

| Item 12. |  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
|----------|-------------------------------------------------------------------------------------------------------|

| (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. |
|-------------------|-------------------------------------------------------|

| Title of Class         | Name                       | Number of Shares Owned | Percentage of Shares (1) |
|------------------------|----------------------------|------------------------|--------------------------|
| Shares of Common Stock | Joseph and Stera Gutnick * | 71,843,393             | (2)(3)(4)(5)             | 31.74 |
| Shares of Common Stock | David Tyrwhitt *           | -                      | (6)                      | - |
| Shares of Common Stock | U.S. Awasthi               | -                      | (7)                      | - |
| Shares of Common Stock | Manish Gupta               | -                      | (8)                      | - |
| Shares of Common Stock | Allan Trench               | -                      | (9)                      | - |
| Shares of Common Stock | Henry Herzog               | 884,940                | (10)(11)                 | ** |

----

| Shares of Common Stock                   | Peter Lee *                                                                                            | 1,383,333        | (12)       | **               |
|------------------------------------------|--------------------------------------------------------------------------------------------------------|------------------|------------|------------------|
| Shares of Common Stock                   | Craig Michael                                                                                          | 516,666          | (13)       | **               |
| Shares of Common Stock                   | Edward Walker                                                                                          | -                | (14)       | -                |
|                                     |                                                                                                   |             |       |             |
|                                     | All officers and DirectorsAs a Group                                                                   |  74,628,332 |       |  32.98      |
|                                     |                                                                                                   |             |       |             |
|  Shares of Common Stock             | Atticus European Fund Ltd.767 Fifth Avenue –12th Fl.New York, NY10153                            |  29,826,901 |  (15) |  13.18      |
|                                     |                                                                                                   |             |       |             |
|   Shares of Common Stock       | Green WayPortfolio D767 Fifth Avenue –12th Fl.New York, NY10153                                  |  1,143,099  |  (15) |   0.51 |
|                                     |                                                                                                   |             |       |             |
|    Shares of Common Stock | Kisan International Trading, FZEEmaar Business Park No.2,Office 562,Jebel AliDubai, UAEPost Box 261835 | 45,650,500       | (16)       | 20.17            |
|                                     |                                                                                                   |             |       |             |
|  Shares of Common Stock             | Soros Fund Management LLC888 Seventh AvenueNew York, NY  10106                               | 23,431,180       | (17)       | 10.35            |
|                                     |                                                                                                   |             |       |             |

| * | 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% |
|----|--------------|

| (1)   | Based on 226,315,392 shares outstanding as of December 31, 2008. |
|-----------------|------------------------------------------------------------------|

| (2)   | Includes 48,775,476 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 750,000 shares issuable to Mr Joseph Gutnick upon exercise of stock options of which vested on September 19, 2007, 750,000 options which vested on September 19, 2008 and 1,666,667 options which vested on February 7, 2009. Mr Gutnick holds a further 750,000 options which vest on September 19, 2009, 1,666,667 options which vest on February 7, 2010and 1,666,666 options which vest on February 7, 2011. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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 CommonStock owned by Chabad House. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Does not include 333,333 options which vest on July 21, 2009, 333,333 options which vest on July 21, 2010 and 333,334 options which vest on July 21, 2011. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (7)   | Does not include 116,667 options which vest on December 4, 2009, 116,667 options which vest on December 4, 2010 and 116,666 options which vest on December 4, 2011. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Does not include 116,667 options which vest on December 4, 2009, 116,667 options which vest on December 4, 2010 and 116,666 options which vest on December 4, 2011. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9)   | Does not include 116,667 options which vest on August 11, 2009, 116,667 options which vest on August 11, 2010 and 116,666 options which vest on August 11, 2011. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10)   | Includes 884,940 shares of Common Stock owned by Riccalo Pty. Ltd., of which Mr Henry Herzog and members of his family are officers, Directors and principal stockholders. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (11)   | Does not include 116,667 options which vest on December 4, 2009, 116,667 options which vest on December 4, 2010 and 116,666 options which vest on December 4, 2011. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12)   | Includes 525,000 shares issuable to Mr. Peter Lee upon exercise of stock options of which vested on September 19, 2007, 525,000 options which vested on September 19, 2008 and 333,333 options which vested on December 28, 2008. Mr Lee holds a further 333,333 options which vest on December 28, 2009, 525,000 options which vest on September 19, 2009 and 333,334,options which vest on December 28, 2010. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (13)   | Includes 100,000 shares issuable to Mr. Craig Michael upon exercise of stock options of which vested on September 10, 2008 and 416,666 options which vested on December 28, 2008. Mr Michael holds a further 100,000 options which vest on September 10, 2009, 416,667 options which vest on December 28, 2009, 100,000 options which vest on September 10, 2010 and416,667 options which vest on December 28, 2010. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (14)   | Does not include 166,667 options which vest on December 4, 2009, 166,667 options which vest on December 4, 2010 and 166,666 options which vest on December 4, 2011. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15)   | In accordance with a Form 3/A dated January 3, 2008, Atticus Capital L.P., Atticus Management Limited and Mr. Timothy Barakett may be deemed to be beneficial owners of the shares of Common Stock. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (16)   | Includes 20,650,500 shares of common stock owned by Kisan International Trading, FZE, a subsidiary of Indian Farmers Fertilizer Cooperative Limited (“IFFCO”). Also includes share issuable upon exercise of the following stock options: 8,000,000 options which were granted to IFFCO which are exercisable no later than July 14, 2009, 8,000,000 optionswhich are exercisable no later than January 14, 2010, and 9,000,000 options which are exercisable no later than July 14, 2010. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (17)   | Based upon a Schedule 13G/A filed with the SEC on February 17, 2009:  Represents Shares held for the account of Quantum Partners LDC, a Cayman Islands exempted limited duration company (“Quantum Partners”) Quantum EMEA Fund Ltd., a Cayman Islands exempted limited liability company (“Quantum EMEA”), and RS Capital PartnersLtd., a Cayman Islands exempted limited liability company (“RE Capital”).  Soros Fund Management LLC (“SFM LLC”) serves as principal investment manager to Quantum Partners, Quantum EMEA, and RS Capital.  As such, SFM LLC has been granted investment discretion over portfolio investments, including the Shares, held for the account of Quantum Partners, Quantum EMEA, and RS Capital.  George Soros serves as Chairman of SFM LLC, Robert Soros serves as Deputy Chairmanof SFM LLC, and Jonathan Soros serves as President and Deputy Chairman of SFM LLC. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
|----------|----------------------------------------------------------------------------|

----

----

| Item 14. | Principal Accounting Fees and Services. |
|----------|-----------------------------------------|

|               |   |   | 2008A$  |   |   |   | 2007A$ |   |
|--------------------|--------|--------|---------|--------|--------|--------|--------|--------|
|               |   |   |    |   |   |   |   |   |
| Audit fees         |   |   | 176,198 |   |   |   | 62,049 |   |
| Audit related fees |   |   | -       |   |   |   | -      |   |
| Tax fees           |   |   | 11,492  |   |   |   | 2,994  |   |
| Total              |   |   | 187,690 |   |   |   | 65,043 |   |

----

| Item 15. | Exhibits, Financial Statement Schedules. |
|----------|------------------------------------------|

| (1) | All Financial Statements |
|-----|--------------------------|

|                                                          |   | 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-6        |   |
|  Notes to Financial Statements                           |   |   | F-7 - F-33 |   |

| (2)    | Financial Statements Schedule                                                                                                                                                                  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                           |
|   | All other schedules have been omitted because they are not applicable or not required, or because the required information is shown in the consolidated financial statements or notes thereto. |
|   |                                                                                                                                                                                           |
| (3)    | Exhibits                                                                                                                                                                                       |
|   |                                                                                                                                                                                           |
|   | See Index to Exhibits at page 62 for a description of the exhibits filed as a part of this report.                                                                                             |

----

SIGNATURES

|   | LEGEND INTERNATIONAL HOLDINGS, INC. |
|--------|-------------------------------------|
|   |                                |   |
|   | (Registrant)                        |
|   |                                |   |
|   |                                |   |
|   |                                | /s/ Peter Lee |
|   | By:                                 |   |
|   |                                | Peter J Lee |
|   |                                | Chief Financial Officer and Secretary |
|   |                                | (Principal Financial and Accounting Officer) |

----

| Signature |               | Title  |                           | Date   |
|-----------|--------------------|--------|--------------------------------|--------|
|      |               |   |                           |   |   |
|      |               |   |                           |   |   |
|      |               |   |                           |   |   |
| 1.        | /s/ Joseph Gutnick |   | Chairman of the Board,         |   |   |
|      | Joseph Gutnick     |   | President and Chief Executive  |   |   |
|      |               |   | Officer (Principal Executive   |   |   |
|      |               |   | Officer) and Director          |   | September 2, 2009 |
|      |               |   |                           |   |   |
| 2.        | /s/ David Tyrwhitt |   | Director                       |   | September 2, 2009 |
|      | David Tyrwhitt     |   |                           |   |   |
|      |               |   |                           |   |   |
| 3.   | /s/ Peter Lee      |   | Chief Financial Officer and    |   |   |
|      | Peter Lee          |   | Secretary (Principal Financial |   |   |
|      |               |   | and Accounting Officer)        |   | September 2, 2009 |
|      |               |   |                           |   |   |
| 4.        |               |   | Director                       |   | September 2, 2009 |
|      | U S Awasthi        |   |                           |   |   |
|      |               |   |                           |   |   |
| 5.        |               |   | Director                       |   | September 2, 2009 |
|      | Manish Gupta       |   |                           |   |   |
|      |               |   |                           |   |   |
|      |               |   |                           |   |   |
| 6.        | /s/ Allan Trench   |   | Director                       |   | September 2, 2009 |
|      | Allan Trench       |   |                           |   |   |
|      |               |   |                           |   |   |
| 7.        | /s/ Henry Herzog   |   | Director                       |   | September 2, 2009 |
|      | Henry Herzog       |   |                           |   |   |

----

| 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 (6)                                                                                                         |
| 10.1        | 2006 Incentive Option Plan (3)                                                                                                                        |
| 10.2        | Contract for the Sale of Mining Tenements (4)                                                                                                         |
| 10.3        | Subscription Agreement dated as of December 12, 2007 (6)                                                                                              |
| 10.4        | Agreement with Iron Duketon Pty Limited dated November 2, 2007 (7)                                                                                    |
| 10.5        | Agreement with Ansett Resources & Industries Pty Ltd. dated November 7, 2007 (7)                                                                  |
| 10.6        | Agreement with King Eagle Resources Pty Limited dated December 7, 2007 (8)                                                                            |
| 10.7        | Form of Subscription Agreement for BMO Offering (9)                                                                                                   |
| 10.8        | Agency Agreement dated as of June 3, 2008 (9)                                                                                                         |
| 10.9        | Registration Rights Agreement dated as of June 3, 2008 (9)                                                                                            |
| 10.10       | Form of Broker Warrant (9)                                                                                                                            |
| 10.11       | Share Options agreement dated July 14, 2008 with Indian Farmers Fertilizer Cooperative Limited (IFFCO)(10)                                            |
| 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 (5)    |
| 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 (5)      |
| 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 (5) |
| 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 (5)         |

| 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                                                                                                                                                          |

----

| (6)  | Incorporated herein by reference to the Company’s Form 10-K filed on March 17, 2008                             |
|------|-----------------------------------------------------------------------------------------------------------------------|
| (7)  | Incorporated herein by reference to the Company’s Current Report on Form 8-K filed on December 28, 2007.        |
| (8)  | Incorporated herein by reference to the Company’s Current Report on Form 8-K filed on December 28, 2007.        |
| (9)  | Incorporated herein by reference to the Company’s Registration Statement on Form S-1 (SEC File No. 333-145082). |
| (10) | Incorporated herein by reference to the Company’s current Report on Form 8-K filed on July 16, 2008.            |

----

----

|                                                    |   | 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-6              |   |
| Notes to Financial Statements                           |   |   | F-7– F- 34 |   |

----

| New York, NY      | PKF                          |
|-------------------|------------------------------|
| September 2, 2009 | Certified Public Accountants |
|              | A Professional Corporation   |

----

|                                                         |   |   | 2008A$      |   |   |   | 2007A$      |   |   | Convenience Translation2008US$ |        |
|--------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------------------------------|-------------|
| ASSETS                                                       |   |   |        |   |   |   |        |   |   |                           |        |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |
| Current Assets:                                              |   |   |        |   |   |   |        |   |   |                           |        |
| Cash                                                         |   |   | 119,277,536 |   |   |   | 17,088,190  |   |   |                           | 82,384,994  |   |
| Receivables (note 12)                                        |   |   | 2,843,331   |   |   |   | 507,264     |   |   |                           | 1,963,889   |   |
| Prepayments                                                  |   |   | 371,499     |   |   |   | 110,840     |   |   |                           | 256,595     |   |
| Inventories                                                  |   |   | 92,194      |   |   |   | -           |   |   |                           | 63,678      |   |
| Trading Securities (note 11)                                 |   |   | 780,946     |   |   |   | -           |   |   |                           | 539,399     |   |
| Total Current Assets                                         |   |   | 123,365,506 |   |   |   | 17,706,294  |   |   |                           | 85,208,555  |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Non-Current Assets:                                          |   |   |        |   |   |   |        |   |   |                           |        |   |
| Property and Equipment, net (note 3)                         |   |   | 5,320,625   |   |   |   | 158,177     |   |   |                           | 3,674,955   |   |
| Deposits (note 5)                                            |   |   | 793,712     |   |   |   | 130,000     |   |   |                           | 548,217     |   |
| Receivables (note 12)                                        |   |   | 555,668     |   |   |   | -           |   |   |                           | 383,800     |   |
| Prepayments                                                  |   |   | 40,194      |   |   |   | -           |   |   |                           | 27,762      |   |
| Total Non-Current Assets                                     |   |   | 6,710,199   |   |   |   | 288,177     |   |   |                           | 4,634,734   |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Total Assets                                                 |   |   | 130,075,705 |   |   |   | 17,994,471  |   |   |                           | 89,843,289  |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| LIABILITIES                                                  |   |   |        |   |   |   |        |   |   |                           |        |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Current Liabilities:                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Accounts payable and accrued expenses                        |   |   | 2,386,575   |   |   |   | 671,384     |   |   |                           | 1,648,407   |   |
| Lease liability (note 10)                                    |   |   | 186,785     |   |   |   | 273,740     |   |   |                           | 129,013     |   |
| Total Current Liabilities                                    |   |   | 2,573,360   |   |   |   | 945,124     |   |   |                           | 1,777,420   |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Non Current Liabilities:                                     |   |   |        |   |   |   |        |   |   |                           |        |   |
| Reclamation and Remediation Provision (note 9)               |   |   | 206,192     |   |   |   | 90,000      |   |   |                           | 142,417     |   |
| Lease liability (note 10)                                    |   |   | 537,008     |   |   |   | -           |   |   |                           | 370,911     |   |
| Total Non Current Liabilities                                |   |   | 743,200     |   |   |   | 90,000      |   |   |                           | 513,328     |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Total Liabilities                                            |   |   | 3,316,560   |   |   |   | 1,035,124   |   |   |                           | 2,290,748   |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Commitments and Contingencies (Notes 8, 9 and 14)            |   |   |        |   |   |   |        |   |   |                           |        |   |
| Stockholders’ Equity                                   |   |   |        |   |   |   |        |   |   |                           |        |   |
| Common stock: US$.001 par value300,000,000 shares authorised |   |   |        |   |   |   |        |   |   |                           |        |   |
| 226,315,392 and 176,868,825 shares issued and outstanding    |   |   | 275,076     |   |   |   | 222,787     |   |   |                           | 189,995     |   |
| Additional Paid-in-Capital                                   |   |   | 154,661,002 |   |   |   | 30,691,933  |   |   |                           | 106,824,354 |   |
| Other Comprehensive Gain                                     |   |   | 38,490      |   |   |   | 38,490      |   |   |                           | 26,585      |   |
| Retained Deficit during development period                   |   |   | (839,463    | )      |   |   | (839,463    | )      |   |                           | (579,817    | ) |
| Retained Deficit during exploration period                   |   |   | (27,375,960 | )      |   |   | (13,154,400 | )      |   |                           | (18,908,576 | ) |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Total Stockholders’ Equity                             |   |   | 126,759,145 |   |   |   | 16,959,347  |   |   |                           | 87,552,541  |   |
|                                                         |   |   |        |   |   |   |        |   |   |                           |        |   |
| Total Liabilities and Stockholders’ Equity             |   |   | 130,075,705 |   |   |   | 17,994,471  |   |   |                           | 89,843,289  |   |

----

|                                                                   |   | For the years Ended December 31 |       |   | ConvenienceTranslation |   |        | January 5, 2001 (Inception) to December 31, |   |
|------------------------------------------------------------------------|--------|---------------------------------|------------|--------|------------------------|--------|-------------|---------------------------------------------|--------|
|                                                                   |   |                            | 2006A$     |   |                   |   | 2007A$      |                                        |   |   | 2008A$ |   |   | 2008US$ |   |   | $ | 2008A |   |
| Revenues:                                                              |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Sales                                                                  |   |                            | -          |   |                   |   | -           |                                        |   |   | - |   |   |   | - |   |   |   | 6,353 |   |
| less cost of sales                                                     |   |                            | -          |   |                   |   | -           |                                        |   |   | - |   |   |   | - |   |   |   | (1,362 | ) |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                                           |   |                            | -          |   |                   |   | -           |                                        |   |   | - |   |   |   | - |   |   |   | 4,991 |   |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income                                                           |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income – related entity                                 |   |                            | -          |   |                   |   | -           |                                        |   |   | 49,931 |   |   |   | 34,487 |   |   |   | 49,931 |   |
| Interest income – other                                          |   |                            | 1,930      |   |                   |   | 22,183      |                                        |   |   | 3,669,440 |   |   |   | 2,534,482 |   |   |   | 3,695,498 |   |
| Other                                                                  |   |                            | -          |   |                   |   | -           |                                        |   |   | 6,534 |   |   |   | 4,513 |   |   |   | 6,534 |   |
|                                                                   |   |                            | 1,930      |   |                   |   | 22,183      |                                        |   |   | 3,725,905 |   |   |   | 2,573,482 |   |   |   | 3,751,963 |   |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                                    |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Legal, professional and accounting                                     |   |                            | 89,351     |   |                   |   | 213,063     |                                        |   |   | 707,444 |   |   |   | 488,632 |   |   |   | 1,055,904 |   |
| Exploration expenditure                                                |   |                            | 3,811,385  |   |                   |   | 5,132,000   |                                        |   |   | 8,780,037 |   |   |   | 6,064,372 |   |   |   | 17,723,422 |   |
| Aircraft maintenance                                                   |   |                            | -          |   |                   |   | -           |                                        |   |   | 278,826 |   |   |   | 192,585 |   |   |   | 278,826 |   |
| Stock based compensation                                               |   |                            | 115,307    |   |                   |   | 375,740     |                                        |   |   | 5,185,743 |   |   |   | 3,581,793 |   |   |   | 6,332,640 |   |
| Interest expense                                                       |   |                            | 41,371     |   |                   |   | 62,196      |                                        |   |   | 32,715 |   |   |   | 22,596 |   |   |   | 144,846 |   |
| Impairment of investment                                               |   |                            | -          |   |                   |   | -           |                                        |   |   | 326,526 |   |   |   | 225,532 |   |   |   | 326,526 |   |
| Net gain on revaluation of trading securities                          |   |                            | -          |   |                   |   | -           |                                        |   |   | (70,874 | ) |   |   | (48,953 | ) |   |   | (70,874 | ) |
| Administration expenses                                                |   |                            | 479,093    |   |                   |   | 2,756,935   |                                        |   |   | 8,096,798 |   |   |   | 5,592,457 |   |   |   | 11,410,442 |   |
| Total expenses                                                         |   |                            | (4,536,507 | )      |                   |   | (8,539,934  | )                                           |   |   | (23,337,215 | ) |   |   | (16,119,014 | ) |   |   | (37,201,732 | ) |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) from operations                                                 |   |                            | (4,534,577 | )      |                   |   | (8,517,751  | )                                           |   |   | (19,611,310 | ) |   |   | (13,545,532 | ) |   |   | (33,444,778 | ) |
| Foreign currency exchange gain/(loss)                                  |   |                            | (40,017    | )      |                   |   | (120,378    | )                                           |   |   | 5,389,750 |   |   |   | 3,722,700 |   |   |   | 5,229,355 |   |
| (Loss) before income taxes                                             |   |                            | (4,574,594 | )      |                   |   | (8,638,129  | )                                           |   |   | (14,221,560 | ) |   |   | (9,822,832 | ) |   |   | (28,215,423 | ) |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                             |   |                            | -          |   |                   |   | -           |                                        |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss)                                                             |   |                            | (4,574,594 | )      |                   |   | (8,638,129  | )                                           |   |   | (14,221,560 | ) |   |   | (9,822,832 | ) |   |   | (28,215,423 | ) |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted loss per common shares                               |   |                            | (0.06      | )      |                   |   | (0.06       | )                                           |   |   | (0.07 | ) |   |   | (0.05 | ) |   |   | (0.44 | ) |
|                                                                   |   |                            |       |   |                   |   |        |                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of commonshares used in per share calculations |   |                            | 75,229,664 |   |                   |   | 146,739,872 |                                        |   |   | 204,500,520 |   |   |   | 204,500,520 |   |   |   | 64,491,851 |   |

----

|                                                                              |   | Common Stock |             |   |       |   |         |                       |   |   |                                              |   |   |                                              |       |   |                      |   |
|-----------------------------------------------------------------------------------|--------|--------------|------------------|--------|------------|--------|--------------|----------------------------|--------|--------|---------------------------------------------------|--------|--------|---------------------------------------------------|------------|--------|---------------------------|--------|
|                                                                              |   | Shares       |             |   | ParValueA$ |   |         | AdditionalPaid-InCapitalA$ |   |   | Retained(Deficit) During the Exploration PeriodA$ |   |   | Retained (Deficit) During the DevelopmentPeriodA$ |       |   | Other ComprehensiveGainA$ |   |   | Stockholders’Equity(Deficit)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                                                                          |   |         | -                |   |       |   | -            |                       |   |   | -                                                 |   |   |                                              | -          |   |                      |   | (131,421 | ) |   |   | - |   |   |   | (131,421 | ) |
| Balance, December 31, 2001                                                        |   |         | 5,060,250        |   |       |   | 6,535        |                       |   |   | 139,998                                           |   |   |                                              | -          |   |                      |   | (131,421 | ) |   |   | - |   |   |   | 15,112 |   |
|                                                                              |   |         |             |   |       |   |         |                       |   |   |                                              |   |   |                                              |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| 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                                           |   |   |                                              | -          |   |                      |   | (314,056 | ) |   |   | - |   |   |   | 1,881 |   |
|                                                                              |   |         |             |   |       |   |         |                       |   |   |                                              |   |   |                                              |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Shares Issued for services rendered at US$0.022 per share                         |   |         | 5,026,500        |   |       |   | 6,491        |                       |   |   | 139,065                                           |   |   |                                              | -          |   |                      |   | - |   |   |   | - |   |   |   | 145,556 |   |
|                                                                              |   |         |             |   |       |   |         |                       |   |   |                                              |   |   |                                              |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                                                          |   |         | -                |   |       |   | -            |                       |   |   | -                                                 |   |   |                                              | -          |   |                      |   | (156,965 | ) |   |   | - |   |   |   | (156,965 | ) |
| Balance, December 31, 2003                                                        |   |         | 21,561,750       |   |       |   | 27,846       |                       |   |   | 433,647                                           |   |   |                                              | -          |   |                      |   | (471,021 | ) |   |   | - |   |   |   | (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                                                                          |   |         | -                |   |       |   | -            |                       |   |   | -                                                 |   |   |                                              | -          |   |                      |   | (234,611 | ) |   |   | - |   |   |   | (234,611 | ) |
| Balance, December 31, 2004                                                        |   |         | 23,566,500       |   |       |   | 30,435       |                       |   |   | 661,927                                           |   |   |                                              | -          |   |                      |   | (705,632 | ) |   |   | - |   |   |   | (13,270 | ) |
| 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       |   |       |   | 16,524       |                       |   |   | 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 | ) |

----

|                                                                                                   |   | Common Stock |        |   |       |   |    |                       |   |   |                                             |   |   |                                               |        |   |                      |   |
|--------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|------------|--------|---------|----------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------------|-------------|--------|---------------------------|--------|
|                                                                                                   |   | Shares       |        |   | ParValueA$ |   |    | AdditionalPaid-InCapitalA$ |   |   | Retained(Deficit) Duringthe Exploration PeriodA$ |   |   | Retained (Deficit) During the Development PeriodA$ |        |   | Other ComprehensiveGainA$ |   |   | Stockholders’Equity(Deficit)A$ |   |
| Shares issued for cash                                                                                 |   |         | 47,686,624  |   |       |   | 56,438  |                       |   |   | 25,684,666                                       |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 25,741,104 |   |
| Cost of share issues                                                                                   |   |         | -           |   |       |   | -       |                       |   |   | (1,675,111                                       | )      |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | (1,675,111 | ) |
| Shares issued for consulting fees                                                                      |   |         | 2,604,200   |   |       |   | 2,984   |                       |   |   | 1,001,122                                        |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 1,004,106 |   |
| Shares issued on cashless exercise of options                                                          |   |         | 75,000      |   |       |   | 85      |                       |   |   | (85                                              | )      |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Shares issued as a result of delay in lodgement of registration statement                              |   |         | 200,000     |   |       |   | 230     |                       |   |   | 364,575                                          |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 364,805 |   |
| Shares issued for part-settlement of the acquisition of rights to exploration licences under agreement |   |         | 500,000     |   |       |   | 545     |                       |   |   | 517,455                                          |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 518,000 |   |
| Amortization of options under stock option plan                                                        |   |         | -           |   |       |   | -       |                       |   |   | 375,740                                          |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 375,740 |   |
| Net Loss                                                                                               |   |         | -           |   |       |   | -       |                       |   |   | -                                                |   |   |                                               | (8,638,129  | )      |                      |   | - |   |   |   | - |   |   |   | (8,638,129 | ) |
| Balance, December 31, 2007                                                                             |   |         | 176,868,825 |   |       |   | 222,787 |                       |   |   | 30,691,933                                       |   |   |                                               | (13,154,400 | )      |                      |   | (839,463 | ) |   |   | 38,490 |   |   |   | 16,959,347 |   |
| Shares issued for cash                                                                                 |   |         | 42,000,000  |   |       |   | 44,011  |                       |   |   | 109,984,282                                      |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 110,028,293 |   |
| Cost of share issues                                                                                   |   |         |        |   |       |   | -       |                       |   |   | (5,964,346                                       | )      |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | (5,964,346 | ) |
| Shares issued on cashless exercise of options                                                          |   |         | 1,522,358   |   |       |   | 1,701   |                       |   |   | (1,701                                           | )      |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Shares issued on exercise of options                                                                   |   |         | 5,435,600   |   |       |   | 5,999   |                       |   |   | 13,717,586                                       |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 13,723,585 |   |
| Shares issued for consulting fees                                                                      |   |         | 30,800      |   |       |   | 33      |                       |   |   | 147,555                                          |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 147,588 |   |
| Shares issued under registration rights agreement                                                      |   |         | 457,809     |   |       |   | 545     |                       |   |   | 899,950                                          |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 900,495 |   |
| Amortization of options under stock option plan                                                        |   |         | -           |   |       |   | -       |                       |   |   | 5,185,743                                        |   |   |                                               | -           |   |                      |   | - |   |   |   | - |   |   |   | 5,185,743 |   |
| Net Loss                                                                                               |   |         | -           |   |       |   | -       |                       |   |   | -                                                |   |   |                                               | (14,221,560 | )      |                      |   | - |   |   |   | - |   |   |   | (14,221,560 | ) |
| Balance, December 31, 2008                                                                             |   |         | 226,315,392 |   |       |   | 275,076 |                       |   |   | 154,661,002                                      |   |   |                                               | (27,375,960 | )      |                      |   | (839,463 | ) |   |   | 38,490 |   |   |   | 126,759,145 |   |

----

|                                                                          |   | For the years Ended December 31 |       |   | ConvenienceTranslation |   |       | January 5, 2001 (Inception) toDecember 31, |   |
|-------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|------------------------|--------|------------|--------------------------------------------|--------|
|                                                                          |   |                            | 2006A$     |   |                   |   | 2007A$     |                                       |   |   | 2008A$ |   |   | 2008US$ |   |   |   | 2008A$ |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                         |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                                                      |   |                            | (4,574,594 | )      |                   |   | (8,638,129 | )                                          |   |   | (14,221,560 | ) |   |   | (9,822,831 | ) |   |   | (28,215,423 | ) |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustments to reconcile net loss to net cash (used) by operating activities: |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign exchange                                                              |   |                            | 40,017     |   |                   |   | 120,378    |                                       |   |   | (5,389,750 | ) |   |   | (3,722,700 | ) |   |   | (5,230,698 | ) |
| Gain in revaluation of trading securities                                     |   |                            |       |   |                   |   | -          |                                       |   |   | (70,874 | ) |   |   | (48,953 | ) |   |   | (70,874 | ) |
| Shares and Options issued for Stock Based Compensation                        |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| - Employees                                                                   |   |                            | 115,307    |   |                   |   | 375,740    |                                       |   |   | 5,185,743 |   |   |   | 3,581,793 |   |   |   | 6,332,641 |   |
| - Consultants                                                                 |   |                            | -          |   |                   |   | 383,833    |                                       |   |   | 147,588 |   |   |   | 101,939 |   |   |   | 531,421 |   |
| - Exploration Agreement                                                       |   |                            | -          |   |                   |   | 518,000    |                                       |   |   | 326,526 |   |   |   | 225,531 |   |   |   | 844,526 |   |
| - Registration Payment Arrangements                                           |   |                            | -          |   |                   |   | 364,805    |                                       |   |   | 900,494 |   |   |   | 621,971 |   |   |   | 1,265,299 |   |
| Provision for rehabilitation                                                  |   |                            | -          |   |                   |   | 90,000     |                                       |   |   | 116,192 |   |   |   | 80,254 |   |   |   | 206,192 |   |
| Depreciation                                                                  |   |                            | 1,021      |   |                   |   | 19,949     |                                       |   |   | 202,943 |   |   |   | 140,173 |   |   |   | 223,913 |   |
| Interest receivable                                                           |   |                            | 34,800     |   |                   |   | -          |                                       |   |   | (49,931 | ) |   |   | (34,488 | ) |   |   | (49,931 | ) |
| Accrued interest added to principal                                           |   |                            |       |   |                   |   | -          |                                       |   |   | - |   |   |   | - |   |   |   | 37,282 |   |
| Net Change in:                                                                |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Receivables                                                                   |   |                            | (169,271   | )      |                   |   | (388,634   | )                                          |   |   | (2,891,735 | ) |   |   | (1,997,321 | ) |   |   | (3,449,640 | ) |
| Prepayments and deposits                                                      |   |                            | (104,559   | )      |                   |   | (136,281   | )                                          |   |   | (964,563 | ) |   |   | (666,224 | ) |   |   | (1,205,403 | ) |
| Inventories                                                                   |   |                            | -          |   |                   |   | -          |                                       |   |   | (92,194 | ) |   |   | (63,679 | ) |   |   | (92,194 | ) |
| Accounts Payable and Accrued Expenses                                         |   |                            | 532,144    |   |                   |   | 245,171    |                                       |   |   | 1,441,270 |   |   |   | 995,485 |   |   |   | 2,251,253 |   |
| Net Cash (Used) In Operating Activities                                       |   |                            | (4,125,135 | )      |                   |   | (7,045,168 | )                                          |   |   | (15,359,851 | ) |   |   | (10,608,050 | ) |   |   | (26,621,636 | ) |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                         |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment in Trading Securities                                              |   |                            | -          |   |                   |   | -          |                                       |   |   | (710,072 | ) |   |   | (490,446 | ) |   |   | (710,072 | ) |
| Acquisition of Subsidiary                                                     |   |                            | -          |   |                   |   | -          |                                       |   |   | (326,526 | ) |   |   | (225,531 | ) |   |   | (326,526 | ) |
| Purchase of Property, Equipment and Motor Vehicles                            |   |                            | (12,273    | )      |                   |   | (142,292   | )                                          |   |   | (4,640,717 | ) |   |   | (3,205,343 | ) |   |   | (4,795,282 | ) |
| Net Cash (Used) In Investing Activities                                       |   |                            | (12,273    | )      |                   |   | (142,292   | )                                          |   |   | (5,677,315 | ) |   |   | (3,921,320 | ) |   |   | (5,831,880 | ) |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                         |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Advances Payable - Affiliates                                                 |   |                            | 1,245,345  |   |                   |   | (1,271,501 | )                                          |   |   | - |   |   |   | - |   |   |   | (26,156 | ) |
| Repayment of Convertible Debenture                                            |   |                            | -          |   |                   |   | -          |                                       |   |   | - |   |   |   | - |   |   |   | (130,310 | ) |
| Repayment of Shareholder Advance                                              |   |                            | -          |   |                   |   | -          |                                       |   |   | - |   |   |   | - |   |   |   | (641 | ) |
| Proceeds from Convertible Debenture Payable                                   |   |                            | -          |   |                   |   | -          |                                       |   |   | - |   |   |   | - |   |   |   | 130,310 |   |
| Shareholder Advance                                                           |   |                            | -          |   |                   |   | -          |                                       |   |   | - |   |   |   | - |   |   |   | 6,621 |   |
| Proceeds from Issuance of Stock                                               |   |                            | 3,871,367  |   |                   |   | 25,741,103 |                                       |   |   | 123,751,878 |   |   |   | 85,475,422 |   |   |   | 153,388,716 |   |
| Cost of share issues                                                          |   |                            | (128,376   | )      |                   |   | (1,033,749 | )                                          |   |   | (5,964,347 | ) |   |   | (4,119,575 | ) |   |   | (7,126,472 | ) |
| Net Borrowing/Repayments from Affiliates                                      |   |                            | (11,131    | )      |                   |   | -          |                                       |   |   | - |   |   |   | - |   |   |   | 50,003 |   |
| Net Cash Provided by financing activities                                     |   |                            | 4,977,205  |   |                   |   | 23,435,853 |                                       |   |   | 117,787,531 |   |   |   | 81,355,847 |   |   |   | 146,292,071 |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of Exchange Rate changes on Cash                                       |   |                            | -          |   |                   |   | -          |                                       |   |   | 5,438,981 |   |   |   | 3,756,704 |   |   |   | 5,438,981 |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Increase in Cash                                                          |   |                            | 839,797    |   |                   |   | 16,248,393 |                                       |   |   | 102,189,346 |   |   |   | 70,582,181 |   |   |   | 119,277,536 |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash at Beginning of Period                                                   |   |                            | -          |   |                   |   | 839,797    |                                       |   |   | 17,088,190 |   |   |   | 11,802,813 |   |   |   | - |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash at End of Period                                                         |   |                            | 839,797    |   |                   |   | 17,088,190 |                                       |   |   | 119,277,536 |   |   |   | 82,384,994 |   |   |   | 119,277,536 |   |
|                                                                          |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Disclosures:                                                     |   |                            |       |   |                   |   |       |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash paid for interest                                                        |   |                            | -          |   |                   |   | 62,196     |                                       |   |   | 32,715 |   |   |   | 22,596 |   |   |   | 94,911 |   |
| Cash paid for income taxes                                                    |   |                            | -          |   |                   |   | -          |                                       |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock  and options issued for services                              |   |                            | 150,723    |   |                   |   | 641,361    |                                       |   |   | 147,588 |   |   |   | 101,939 |   |   |   | 1,595,523 |   |
| Accrued interest and stockholder advances charged to paid in capital          |   |                            | -          |   |                   |   | 12,744     |                                       |   |   | - |   |   |   | - |   |   |   | 12,744 |   |
| Stock issued for exploration agreement                                        |   |                            | -          |   |                   |   | 518,000    |                                       |   |   | - |   |   |   | - |   |   |   | 518,000 |   |
| Stock issued for registration payment arrangement                             |   |                            | -          |   |                   |   | 364,805    |                                       |   |   | 900,494 |   |   |   | 621,971 |   |   |   | 1,265,299 |   |
| Equipment obtained through a capital lease                                    |   |                            | -          |   |                   |   | 24,581     |                                       |   |   | 705,841 |   |   |   | 487,524 |   |   |   | 730,422 |   |
| Capital lease obligation for exploration costs                                |   |                            | -          |   |                   |   | 362,462    |                                       |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest in relation to capital lease for exploration costs                   |   |                            | -          |   |                   |   | 42,313     |                                       |   |   | - |   |   |   | - |   |   |   | 42,313 |   |
| Fair value of warrants in connection with issuance of capital stock           |   |                            | -          |   |                   |   | -          |                                       |   |   | 1,330,852 |   |   |   | 919,219 |   |   |   | 1,300,852 |   |

----

|   | · | Stage 1 - To focus on drilling near surface, high grade phosphate ore to delineate tonnage of direct shipping grade material that requires little or no  beneficiation  to export  phosphate rock from the D-Tree phosphate deposit by the 4th quarter of 2009. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Stage 2 - Ramp up export of phosphate rock to 5 million tonnes per annum by 2012 beginning at the end of 4th quarter 2009,  sourced from a combination  of either Lady  Annie, D-Tree, Lady Jane, Lily & Sherrin Creek or any other phosphate deposits of which Legend has an interest. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Stage 3 - Production of value added phosphate fertiliser products such as phosphoric acid, MAP, DAP and TSP. |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                     |   |                       |   |   | At December 31, 2008 |      |      | At December 31, 2007       |   |
|--------------------------|--------|----------------------------|--------|--------|----------------------|-----------|-----------|----------------------------|--------|
|                     |   | Depreciable Life(in years) |   |   | CostA$               |      |      | Accumulated DepreciationA$ |   |   | Net Book ValueA$ |   |   | CostA$ |   |   | Accumulated DepreciationA$ |   |   | Net Book ValueA$ |   |
| Land                     |   |                       |   |   |                 | 1,101,358 |      |                       |   | - |   |   |   | 1,101,358 |   |   |   |   |   |   |   |   |   |   |
| Buildings                |   |                       | 40     |   |                 |      | 1,435,249 |                       |   |   | (3,828 | ) |   |   | 1,431,421 |   |   |   |   |   |   |   |   |   |   |
| Leasehold Improvements   |   |                       | 1-2    |   |                 |      | 178,944   |                       |   |   | (6,385 | ) |   |   | 172,559 |   |   |   | 16,732 |   |   |   | (105 | ) |   |   | 16,627 |   |
| Motor Vehicles           |   |                       | 5      |   |                 |      | 897,482   |                       |   |   | (64,970 | ) |   |   | 832,512 |   |   |   | 104,782 |   |   |   | (13,114 | ) |   |   | 91,668 |   |
| Equipment                |   |                       | 1-10   |   |                 |      | 435,340   |                       |   |   | (50,559 | ) |   |   | 384,781 |   |   |   | 57,633 |   |   |   | (7,751 | ) |   |   | 49,882 |   |
| Lear Jet                 |   |                       | 5      |   |                 |      | 1,270,869 |                       |   |   | (98,171 | ) |   |   | 1,172,698 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction in Progress |   |                       |   |   |                 |      | 225,296   |                       |   |   | - |   |   |   | 225,296 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                     |   |                       |   |   |                 |      | 5,544,538 |                       |   |   | (223,913 | ) |   |   | 5,320,625 |   |   |   | 179,147 |   |   |   | (20,970 | ) |   |   | 158,177 |   |

----

----

|                                                                                                                                           |   |   | 2008A$  |   |   |   | 2007A$  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                                                                           |   |   |    |   |   |   |    |   |
| Term Deposit as security for a Banker’s Undertaking                                                                                      |   |   | 642,109 |   |   |   | -       |   |
| Other                                                                                                                                          |   |   | 1,603   |   |   |   | -       |   |
|                                                                                                                                           |   |   |    |   |   |   |    |   |
| Cash deposits provided to Government Departments for the purpose of guaranteeing the Company’s performance in accordance with mining law |   |   | 150,000 |   |   |   | 130,000 |   |
|                                                                                                                                           |   |   | 793,712 |   |   |   | 130,000 |   |

----

----

----

|   | a. | 5,000,000 options, at an exercise price of US$2.50 per share and expiring 60 days from July 11, 2008; |
|--------|----|-------------------------------------------------------------------------------------------------------|

|   | b. | 8,000,000 options, at an exercise price of US$3.00 per share and expiring 12 months from July 11, 2008; |
|--------|----|---------------------------------------------------------------------------------------------------------|

|   | c. | 8,000,000 options, at an exercise price of US$3.50 per share and expiring 18 months from July 11, 2008; |
|--------|----|---------------------------------------------------------------------------------------------------------|

|   | d. | 9,000,000 options, at an exercise price of US$4.00 per share and expiring 24 months from July 11, 2008. |
|--------|----|---------------------------------------------------------------------------------------------------------|

----

| (i) | Effective September 19, 2006, the Company issued 8,100,000 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 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 Officerand one other participant; 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. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Sept 19, 2006 | Sept 19, 2006 | Sept 19, 2006 | Sept 19, 2006 | Sept 19, 2006 | Sept 19, 2006 |
|------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
| Grant date share price | US$0.222      | US$0.222      | US$0.222      | US$0.222      | US$0.222      | US$0.222      |
| Vesting date           | Sept 19, 2007 | Sept 19, 2007 | Sept 19, 2008 | Sept 19, 2008 | Sept 19, 2009 | Sept 19, 2009 |
| Expected life in years | 5.50          | 5.50          | 6.00          | 6.00          | 6.50          | 6.50          |
| 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       |

----

|                                     |   | Options |       |   | Option Price Per ShareUS$ |   |       | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|------------|--------|---------------------------|--------|------------|------------------------------------|--------|
| Outstanding at January 1, 2006           |   |    | -          |   |                      |   | -          |                               |   |   | - |   |
| Granted                                  |   |    | 8,100,000  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Forfeited                                |   |    | -          |   |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2006         |   |    | 8,100,000  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Granted                                  |   |    | -          |   |                      |   | -          |                               |   |   | - |   |
| Forfeited                                |   |    | (1,575,000 | )      |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2007         |   |    | 6,525,000  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Granted                                  |   |    | -          |   |                      |   | -          |                               |   |   | - |   |
| Forfeited                                |   |    | (337,500   | )      |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 6,187,500  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Options exercisable at December 31, 2008 |   |    | 4,124,988  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |

| (ii) | Effective May 16, 2007, the Company issued 862,500 options over shares of Common Stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest 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$0.444 for 50% of the options and US$1.00 for the balance of 50% of the options. Thelatest exercise date for the options is May 16, 2017. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | May 16, 2007 | May 16, 2007 | May 16, 2007 | May 16, 2007 | May 16, 2007 | May 16, 2007 |
|------------------------|--------------|--------------|--------------|--------------|--------------|--------------|
| Grant date share price | US$0.25      | US$0.25      | US$0.25      | US$0.25      | US$0.25      | US$0.25      |
| Vesting date           | May 16, 2008 | May 16, 2008 | May 16, 2009 | May 16, 2009 | May 16, 2010 | May 16, 2010 |
| Expected life in years | 5.50         | 5.50         | 6.00         | 6.00         | 6.50         | 6.50         |
| Risk-free rate         | 4.92%        | 4.92%        | 4.92%        | 4.92%        | 4.92%        | 4.92%        |
| 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$0.1111    | US$0.064     | US$0.117     | US$0.072     | US$0.124     | US$0.079     |

|                                     |   | Options |     |   | Option Price Per ShareUS$ |   |       | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|----------|--------|---------------------------|--------|------------|------------------------------------|--------|
| Outstanding at January 1, 2007           |   |    | -        |   |                      |   | -          |                               |   |   | - |   |
| Granted                                  |   |    | 862,500  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Forfeited                                |   |    | (187,500 | )      |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2007         |   |    | 675,000  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Granted                                  |   |    | -        |   |                      |   | -          |                               |   |   | - |   |
| Forfeited                                |   |    | (300,000 | )      |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 375,000  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Options exercisable at December 31, 2008 |   |    | 125,000  |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |

----

| (iii) | Effective September 10, 2007, the Company issued 300,000 options over shares of Common Stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest 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$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 10, 2017. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Sept 10, 2007 | Sept 10, 2007 | Sept 10, 2007 | Sept 10, 2007 | Sept 10, 2007 | Sept 10, 2007 |
|------------------------|---------------|---------------|---------------|---------------|---------------|---------------|
| Grant date share price | US$1.25       | US$1.25       | US$1.25       | US$1.25       | US$1.25       | US$1.25       |
| Vesting date           | Sept 10, 2008 | Sept 10, 2008 | Sept 10, 2009 | Sept 10, 2009 | Sept 10, 2010 | Sept 10, 2010 |
| Expected life in years | 5.50          | 5.50          | 6.00          | 6.00          | 6.50          | 6.50          |
| Risk-free rate         | 4.637%        | 4.637%        | 4.637%        | 4.637%        | 4.637%        | 4.637%        |
| 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$0.98       | US$0.79       | US$1.00       | US$0.81       | US$1.01       | US$0.83       |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |       | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|------------|------------------------------------|--------|
| Outstanding at January 1, 2007           |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Granted                                  |   |    | 300,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Forfeited                                |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2007         |   |    | 300,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Granted                                  |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Forfeited                                |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 300,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Options exercisable at December 31, 2008 |   |    | 100,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |

| (iv) | Effective December 19, 2007, the Company issued 300,000 options over shares of Common Stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest 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$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 December 19, 2017. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Grant date             | Dec 19, 2007 | Dec 19, 2007 | Dec 19, 2007 | Dec 19, 2007 | Dec 19, 2007 | Dec 19, 2007 |
|------------------------|--------------|--------------|--------------|--------------|--------------|--------------|
| Grant date share price | US$0.95      | US$0.95      | US$0.95      | US$0.95      | US$0.95      | US$0.95      |
| Vesting date           | Dec 19, 2008 | Dec 19, 2008 | Dec 19, 2009 | Dec 19, 2009 | Dec 19, 2010 | Dec 19, 2010 |
| Expected life in years | 5.50         | 5.50         | 6.00         | 6.00         | 6.50         | 6.50         |
| Risk-free rate         | 4.441%       | 4.441%       | 4.441%       | 4.441%       | 4.441%       | 4.441%       |
| 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$0.70      | US$0.54      | US$0.71      | US$0.56      | US$0.72      | US$0.58      |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |       | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|------------|------------------------------------|--------|
| Outstanding at January 1, 2007           |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Granted                                  |   |    | 300,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Forfeited                                |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2007         |   |    | 300,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Granted                                  |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Forfeited                                |   |    | -       |   |                      |   | -          |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 300,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |
| Options exercisable at December 31, 2008 |   |    | 100,000 |   |                      |   | 0.444-1.00 |                               |   |   | 0.69 |   |

| (v) | Effective December 28, 2007, the Company issued 4,787,500 options over shares of Common Stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest 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. The latest exercise date for the options is December 28, 2017. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Dec 28, 2007 | Dec 28, 2007 | Dec 28, 2007 |
|------------------------|--------------|--------------|--------------|
| Grant date share price | US$1.09      | US$1.09      | US$1.09      |
| Vesting date           | Dec 28, 2008 | Dec 28, 2009 | Dec 28, 2010 |
| Expected life in years | 5.50         | 6.00         | 6.50         |
| Risk-free rate         | 4.488%       | 4.488%       | 4.488%       |
| Volatility             | 60%          | 60%          | 60%          |
| Exercise price         | US$1.00      | US$1.00      | US$1.00      |
| Call option value      | US$0.65      | US$0.67      | US$0.69      |

|                                     |   | Options |      |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|-----------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2007           |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 4,787,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2007         |   |    | 4,787,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Granted                                  |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Forfeited                                |   |    | (225,000  | )      |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 4,562,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | 1,520,833 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |

----

| (vi) | Effective February 7, 2008, the Company issued 5,000,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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$2.00. The latest exercise date for the options is February 7, 2018. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Feb 7, 2008 | Feb 7, 2008 | Feb 7, 2008 |
|------------------------|-------------|-------------|-------------|
| Grant date share price | US$0.99     | US$0.99     | US$0.99     |
| Vesting date           | Feb 7, 2009 | Feb 7, 2010 | Feb 7, 2011 |
| Expected life in years | 5.50        | 6.00        | 6.50        |
| Risk-free rate         | 4.387%      | 4.387%      | 4.387%      |
| Volatility             | 60%         | 60%         | 60%         |
| Exercise price         | US$2.00     | US$2.00     | US$2.00     |
| Call option value      | US$0.40     | US$0.43     | US$0.46     |

|                                     |   | Options |      |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|-----------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 5,000,000 |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Forfeited                                |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 5,000,000 |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Options exercisable at December 31, 2008 |   |    | -         |   |                      |   | -      |                               |   |   | - |   |

| (vii) | Effective February 19, 2008, the Company issued 400,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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. The latest exercise date for the options is February 19, 2018. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Grant date             | Feb 19, 2008 | Feb 19, 2008 | Feb 19, 2008 |
|------------------------|--------------|--------------|--------------|
| Grant date share price | US$1.04      | US$1.04      | US$1.04      |
| Vesting date           | Feb 19, 2009 | Feb 19, 2010 | Feb 19, 2011 |
| Expected life in years | 5.50         | 6.00         | 6.50         |
| Risk-free rate         | 4.422%       | 4.422%       | 4.422%       |
| Volatility             | 60%          | 60%          | 60%          |
| Exercise price         | US$1.00      | US$1.00      | US$1.00      |
| Call option value      | US$0.61      | US$0.63      | US$0.65      |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 400,000 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 400,000 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | -       |   |                      |   | -      |                               |   |   | - |   |

| (viii) | Effective May 29, 2008, the Company issued 362,500 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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. The latest exercise date for the options is May 29, 2018. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | May 29, 2008 | May 29, 2008 | May 29, 2008 |
|------------------------|--------------|--------------|--------------|
| Grant date share price | US$3.31      | US$3.31      | US$3.31      |
| Vesting date           | May 29, 2009 | May 29, 2010 | May 29, 2011 |
| Expected life in years | 5.50         | 6.00         | 6.50         |
| Risk-free rate         | 4.077%       | 4.077%       | 4.077%       |
| Volatility             | 60%          | 60%          | 60%          |
| Exercise price         | US$1.00      | US$1.00      | US$1.00      |
| Call option value      | US$2.67      | US$2.70      | US$2.72      |

|                                     |   | Options |     |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|----------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -        |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 362,500  |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | (112,500 | )      |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 250,000  |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | -        |   |                      |   | -      |                               |   |   | - |   |

----

| (ix) | Effective July 7, 2008, the Company issued 200,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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$2.00. The latest exercise date for the options is July 7, 2018. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | July 7, 2008 | July 7, 2008 | July 7, 2008 |
|------------------------|--------------|--------------|--------------|
| Grant date share price | US$3.83      | US$3.83      | US$3.83      |
| Vesting date           | July 7, 2009 | July 7, 2010 | July 7, 2011 |
| Expected life in years | 5.50         | 6.00         | 6.50         |
| Risk-free rate         | 3.901%       | 3.901%       | 3.901%       |
| Volatility             | 60%          | 60%          | 60%          |
| Exercise price         | US$2.00      | US$2.00      | US$2.00      |
| Call option value      | US$2.72      | US$2.77      | US$2.82      |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 200,000 |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Forfeited                                |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 200,000 |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Options exercisable at December 31, 2008 |   |    | -       |   |                      |   | -      |                               |   |   | - |   |

| (x) | Effective July 11, 2008, the Company issued 1,000,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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$3.48. The latest exercise date for the options is July 11, 2018. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | July 11, 2008 | July 11, 2008 | July 11, 2008 |
|------------------------|---------------|---------------|---------------|
| Grant date share price | US$3.26       | US$3.26       | US$3.26       |
| Vesting date           | July 11, 2009 | July 11, 2010 | July 11, 2011 |
| Expected life in years | 5.50          | 6.00          | 6.50          |
| Risk-free rate         | 3.960%        | 3.960%        | 3.960%        |
| Volatility             | 60%           | 60%           | 60%           |
| Exercise price         | US$3.48       | US$3.48       | US$3.48       |
| Call option value      | US$1.81       | US$1.88       | US$1.95       |

----

|                                     |   | Options |      |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|-----------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 1,000,000 |   |                      |   | 3.48   |                               |   |   | 3.48 |   |
| Forfeited                                |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 1,000,000 |   |                      |   | 3.48   |                               |   |   | 3.48 |   |
| Options exercisable at December 31, 2008 |   |    | -         |   |                      |   | -      |                               |   |   | - |   |

| (xi) | Effective July 21, 2008, the Company issued 150,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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$2.00. The latest exercise date for the options is July 21, 2018. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | July 21, 2008 | July 21, 2008 | July 21, 2008 |
|------------------------|---------------|---------------|---------------|
| Grant date share price | US$3.08       | US$3.08       | US$3.08       |
| Vesting date           | July 21, 2009 | July 21, 2010 | July 21, 2011 |
| Expected life in years | 5.50          | 6.00          | 6.50          |
| Risk-free rate         | 4.044%        | 4.044%        | 4.044%        |
| Volatility             | 60%           | 60%           | 60%           |
| Exercise price         | US$2.00       | US$2.00       | US$2.00       |
| Call option value      | US$2.06       | US$2.11       | US$2.15       |

|                                     |   | Options |     |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|----------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -        |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 150,000  |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Forfeited                                |   |    | (150,000 | )      |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | -        |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Options exercisable at December 31, 2008 |   |    | -        |   |                      |   | -      |                               |   |   | - |   |

| (xii) | Effective August 8, 2008, the Company issued 112,500 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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. The latest exercise date for the options is August 8, 2018. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Grant date             | Aug 8, 2008 | Aug 8, 2008 | Aug 8, 2008 |
|------------------------|-------------|-------------|-------------|
| Grant date share price | US$2.08     | US$2.08     | US$2.08     |
| Vesting date           | Aug 8, 2009 | Aug 8, 2010 | Aug 8, 2011 |
| Expected life in years | 5.50        | 6.00        | 6.50        |
| Risk-free rate         | 3.915%      | 3.915%      | 3.915%      |
| Volatility             | 60%         | 60%         | 60%         |
| Exercise price         | US$1.00     | US$1.00     | US$1.00     |
| Call option value      | US$1.51     | US$1.54     | US$1.56     |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 112,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 112,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | -       |   |                      |   | -      |                               |   |   | - |   |

| (xiii) | Effective August 11, 2008, the Company issued 700,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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$2.00. The latest exercise date for the options is August 8, 2018. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Aug 11, 2008 | Aug 11, 2008 | Aug 11, 2008 |
|------------------------|--------------|--------------|--------------|
| Grant date share price | US$1.93      | US$1.93      | US$1.93      |
| Vesting date           | Aug 11, 2009 | Aug 11, 2010 | Aug 11, 2011 |
| Expected life in years | 5.50         | 6.00         | 6.50         |
| Risk-free rate         | 3.982%       | 3.982%       | 3.982%       |
| Volatility             | 60%          | 60%          | 60%          |
| Exercise price         | US$2.00      | US$2.00      | US$2.00      |
| Call option value      | US$1.08      | US$1.12      | US$1.16      |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 700,000 |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Forfeited                                |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 700,000 |   |                      |   | 2.00   |                               |   |   | 2.00 |   |
| Options exercisable at December 31, 2008 |   |    | -       |   |                      |   | -      |                               |   |   | - |   |

----

| (xiv) | Effective December 4, 2008, the Company issued 962,500 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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. The latest exercise date for the options is December 4, 2018. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Dec 4, 2008 | Dec 4, 2008 | Dec 4, 2008 |
|------------------------|-------------|-------------|-------------|
| Grant date share price | US$0.37     | US$0.37     | US$0.37     |
| Vesting date           | Dec 4, 2009 | Dec 4, 2010 | Dec 4, 2011 |
| Expected life in years | 5.50        | 6.00        | 6.50        |
| Risk-free rate         | 2.55%       | 2.55%       | 2.55%       |
| Volatility             | 70%         | 70%         | 70%         |
| Exercise price         | US$1.00     | US$1.00     | US$1.00     |
| Call option value      | US$0.15     | US$0.16     | US$0.17     |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 962,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 962,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | -       |   |                      |   | -      |                               |   |   | - |   |

| (xv) | Effective December 4, 2008, the Company issued 1,050,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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. The latest exercise date for the options is December 4, 2018. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Dec 4, 2008 | Dec 4, 2008 | Dec 4, 2008 |
|------------------------|-------------|-------------|-------------|
| Grant date share price | US$0.37     | US$0.37     | US$0.37     |
| Vesting date           | Dec 4, 2009 | Dec 4, 2010 | Dec 4, 2011 |
| Expected life in years | 5.50        | 6.00        | 6.50        |
| Risk-free rate         | 2.55%       | 2.55%       | 2.55%       |
| Volatility             | 70%         | 70%         | 70%         |
| Exercise price         | US$1.00     | US$1.00     | US$1.00     |
| Call option value      | US$0.15     | US$0.16     | US$0.17     |

----

|                                     |   | Options |      |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|-----------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 1,050,000 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | -         |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 1,050,000 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | -         |   |                      |   | -      |                               |   |   | - |   |

| (xvi) | Effective December 4, 2008, the Company issued 562,500 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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. The latest exercise date for the options is December 4, 2018. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grant date             | Dec 4, 2008 | Dec 4, 2008 | Dec 4, 2008 |
|------------------------|-------------|-------------|-------------|
| Grant date share price | US$0.37     | US$0.37     | US$0.37     |
| Vesting date           | Dec 4, 2009 | Dec 4, 2010 | Dec 4, 2011 |
| Expected life in years | 5.50        | 6.00        | 6.50        |
| Risk-free rate         | 2.55%       | 2.55%       | 2.55%       |
| Volatility             | 70%         | 70%         | 70%         |
| Exercise price         | US$1.00     | US$1.00     | US$1.00     |
| Call option value      | US$0.15     | US$0.16     | US$0.17     |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 562,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 562,500 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | -       |   |                      |   | -      |                               |   |   | - |   |

| (xvii) | Effective December 4, 2008, the Company issued 500,000 options over shares of common stock to employees under the 2006 Equity Incentive Plan that has been adopted by the Directors of the Company. The options will vest: 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. The latest exercise date for the options is December 4, 2018. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Grant date             | Dec 4, 2008 | Dec 4, 2008 | Dec 4, 2008 |
|------------------------|-------------|-------------|-------------|
| Grant date share price | US$0.37     | US$0.37     | US$0.37     |
| Vesting date           | Dec 4, 2009 | Dec 4, 2010 | Dec 4, 2011 |
| Expected life in years | 5.50        | 6.00        | 6.50        |
| Risk-free rate         | 2.55%       | 2.55%       | 2.55%       |
| Volatility             | 60%         | 60%         | 60%         |
| Exercise price         | US$1.00     | US$1.00     | US$1.00     |
| Call option value      | US$0.15     | US$0.16     | US$0.17     |

|                                     |   | Options |    |   | Option Price Per ShareUS$ |   |   | Weighted Average Exercise PriceUS$ |   |
|------------------------------------------|--------|---------|---------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding at January 1, 2008           |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Granted                                  |   |    | 500,000 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Forfeited                                |   |    | -       |   |                      |   | -      |                               |   |   | - |   |
| Outstanding at December 31, 2008         |   |    | 500,000 |   |                      |   | 1.00   |                               |   |   | 1.00 |   |
| Options exercisable at December 31, 2008 |   |    | -       |   |                      |   | -      |                               |   |   | - |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | December31, 2008A$ |    |   | December31, 2007A$ |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|--------------------|--------|
| The Company’s exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations so as to protect the environment and believes its operationsare in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements. |   |               | 206,192 |   |               |   | 90,000 |   |

|                                                                                                                                                                                                                                                                                                                                  |   |   | A$      |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| The Company entered into capital finance lease agreements for motor vehicles . The leases are non-cancellable and require total monthly repayments of A$21,016 (2007 A$20,954) and expire at various dates from 2008 to 2012.Future minimum payments due for the remaining term of the leases as of December 31, 2008 are as follows: |   |   |    |   |
|                                                                                                                                                                                                                                                                                                                                  |   |   |    |   |
| 2009                                                                                                                                                                                                                                                                                                                                  |   |   | 247,019 |   |
| 2010                                                                                                                                                                                                                                                                                                                                  |   |   | 247,710 |   |
| 2011                                                                                                                                                                                                                                                                                                                                  |   |   | 305,836 |   |
| 2012                                                                                                                                                                                                                                                                                                                                  |   |   | 23,655  |   |
|                                                                                                                                                                                                                                                                                                                                  |   |   | 824,220 |   |
| Less amounts representing interest                                                                                                                                                                                                                                                                                                    |   |   | 100,427 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |   | 723,793 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |   |    |   |
| Current liability                                                                                                                                                                                                                                                                                                                     |   |   | 186,785 |   |
| Non-current liability                                                                                                                                                                                                                                                                                                                 |   |   | 537,008 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |   | 723,793 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |   |    |   |
| At December 31, 2008  the net book value of the motor vehicles under capital leases amounts to:                                                                                                                                                                                                                             |   |   | 677,125 |   |

----

|   | Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                        |
|   | Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and                     |
|   |                                                                                                                                        |
|   | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |

| Fair ValueHierarchy |   | Fair Value at December 31, 2008 |    |
|---------------------|--------|---------------------------------|---------|
|  Level 1       |   | $                               | 780,946 |   |

----

----

|                             |   | USA2008A$ |       |   | Australia2008A$ |   |       | Total2008A$ |   |
|----------------------------------|--------|-----------|------------|--------|-----------------|--------|------------|-------------|--------|
| Deferred tax assets              |   |      |       |   |            |   |       |        |   |
|                             |   |      |       |   |            |   |       |        |   |
| Net operating loss carry-forward |   |      | 5,336,889  |   |            |   | 5,748,076  |        |   |   | 11,084,965 |   |
| Less valuation allowance         |   |      | (5,336,889 | )      |            |   | (5,748,076 | )           |   |   | (11,084,965 | ) |
| Net deferred taxes               |   |      | -          |   |            |   | -          |        |   |   | - |   |

|                             |   | USA2007A$ |       |   | Australia2007A$ |   |       | Total2007A$ |   |
|----------------------------------|--------|-----------|------------|--------|-----------------|--------|------------|-------------|--------|
| Deferred tax assets              |   |      |       |   |            |   |       |        |   |
|                             |   |      |       |   |            |   |       |        |   |
| Net operating loss carry-forward |   |      | 2,661,999  |   |            |   | 2,460,476  |        |   |   | 5,122,475 |   |
| Less valuation allowance         |   |      | (2,661,999 | )      |            |   | (2,460,476 | )           |   |   | (5,122,475 | ) |
| Net deferred taxes               |   |      | -          |   |            |   | -          |        |   |   | - |   |

----

|                                                                                                                                         |   |   | A$      |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Future minimum lease payments under the Company’s non-cancellable operating leases which expire between 2008 and 2010 are as follows:. |   |   |    |   |
|                                                                                                                                         |   |   |    |   |
| 2009                                                                                                                                         |   |   | 202,378 |   |
| 2010                                                                                                                                         |   |   | 75,118  |   |
|                                                                                                                                         |   |   | 277,496 |   |

|                                                      |   |   | 2008A$    |   |   |   | 2007A$    |   |
|-----------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|
| Not later than one year                                   |   |   | 748,755   |   |   |   | 1,795,000 |   |
| Later than one year but not later than five years         |   |   | 2,801,013 |   |   |   | 3,085,000 |   |
| Later than five years but not later than twenty one years |   |   | 317,912   |   |   |   | 115,000   |   |
|                                                      |   |   | 3,867,680 |   |   |   | 4,995,000 |   |

----

----

| ACTINOLITE         | A bright to gray-green member of the amphibole mineral family.  In addition to silica, it contains calcium, magnesium, and iron.                                                                     |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| AG                 | Chemical symbol for silver.                                                                                                                                                                                    |
| AIR PHOTO ANALYSIS | Use of aerial photography to determine or estimate geological features.                                                                                                                                        |
| Al2O3              | Chemical symbol for Aluminum Oxide                                                                                                                                                                             |
| ALKALI FELDSPAR    | Those feldspar minerals composed of mixtures of potassium feldspar (KalSi3O8) and sodium feldspar (NaAlSi3O8) with little or no calcium feldspar (CaAl2Si2O8).                                                 |
| ALTERATION ZONE    | An area where bedrock has undergone mineralogical changes as a result of the action of hydrothermal fluids.                                                                                                    |
| AMPHIBOLE          | A family of silicate minerals forming prism or needlelike crystals.  Amphibole minerals generally contain iron, magnesium, calcium and aluminum in varying amounts, along with water.                |
| AMPHIBOLITE        | A rock made up mostly amphibole and plagioclase feldspar.                                                                                                                                                      |
| ANDESITE           | Fine-grained, generally dark colored, igneous volcanic rock with more silica than basalt.  Commonly with visible crystals of plagioclase feldspar.                                                   |
| ANOMALY            | Pertaining to the data set resulting from geochemical or geophysical surveys; a deviation from uniformity or regularity.                                                                                       |
| ANTICLINE          | An upward-curving (convex) fold in rock that resembles an arch.  The central part contains the oldest section of rock.                                                                               |
| AQUA REGIA    | A very corrosive, fuming yellow liquid made by mixing nitric and hydrochloric acids, usually in the proportion of one part by volume of pure nitric acid with three parts by volume of pure hydrochloric acid. |
| ARCHEAN            | The time interval between 3800-2500 million years ago.  The Archean is one of the Precambrian time intervals.                                                                                        |
| ARSENOPYRITE       | A tin-white or silver-white to steel-grey mineral (FeAsS).                                                                                                                                                     |
| AS                 | Chemical symbol for arsenic.                                                                                                                                                                                   |
| ASSAY              | To analyze the proportions of metals in a specimen of rock or other geological material. Results of a test of the proportions of metals in a specimen of rock or other geological material.                    |
| AU                 | Chemical symbol for gold.                                                                                                                                                                                      |
| B HORIZON          | A general term for the near surface part of the soil profile which is commonly enriched in iron and other metals, often resulting in a brownish colour.                                                        |

----

| BACKGROUND           | As pertains to geochemical data; the variation in natural abundance of a particular metal or other constituent within a specific geological setting.                                                                                                                                                                              |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| BEDDING              | The arrangement of a sedimentary or metamorphic rock in beds or layers of varying thickness and character.                                                                                                                                                                                                                        |
| BEDDING PLANE FAULT  | A fault, the fault surface of which is parallel to the bedding plane of the host rocks.                                                                                                                                                                                                                                           |
| BEDROCK              | A general term for the rock, usually solid, that underlies soil or other unconsolidated superficial material.                                                                                                                                                                                                                     |
| BENEFICIATION        | The process of sorting material by size most commonly used to remove waste materials from ores.                                                                                                                                                                                                                                   |
| BIOTITE              | A dark brown to dark green or black mica mineral.                                                                                                                                                                                                                                                                                 |
| BRECCIA              | A rock that is composed of larger than sand size angular fragments that are cemented together by a finer grained matrix; in this sense the fragmentation is usually a result of movement on nearby or adjoining fault or fracture zones.                                                                                          |
| CaO                  | Chemical Symbol for Calcium Oxide                                                                                                                                                                                                                                                                                                 |
| CHALCOPYRITE         | Copper iron sulfide mineral (CuFeS2).  Color is brassy yellow.                                                                                                                                                                                                                                                          |
| CHANNEL SAMPLE       | A sample composed of pieces of vein or mineral deposit that have been cut out of a small trench or channel, usually about one inch deep and 4 inches wide.                                                                                                                                                                        |
| CHIP SAMPLE          | A sample of a vein or other mineralized structure that is collected by way of small pieces of rock taken at regular and frequent intervals on a transect across the structure; intended to be a relatively accurate representation of the tenor of mineralization.                                                                |
| CHLORITE             | A group of platy, micaceous, usually greenish iron-magnesium alumino-silicates that occur in metamorphic rocks and as alteration products of ferromagnesium minerals in volcanic and igneous rocks.                                                                                                                               |
| CLAIM POST           | In Yukon Territory, a 4 inch square, four foot long wooden post that establishes the legal location of a mineral claim. Two posts, an Initial Post and a Final Post are required.                                                                                                                                                 |
| CLAIM TAG            | In Yukon Territory, a set of small metal tags are issued by the government, each pair with a unique grant number assigned for the claim after the location is recorded. The tags are legally required to be permanently affixed to the Initial and Final claim posts at the first reasonable opportunity after issue of the tags. |
| COLLAR               | The start or beginning of a drill hole or the mouth of an underground working entrance.                                                                                                                                                                                                                                           |
| COMMINUTION          | Particle size distribution into a range of finer particle sizes.                                                                                                                                                                                                                                                                  |
| CRATON               | The relatively stable nucleus of a continent.  Cratons are made up of a shield-like core of Precambrian Rock and a buried extension of the shield.                                                                                                                                                                      |
| CU                   | Chemical symbol for copper.                                                                                                                                                                                                                                                                                                       |
| DELETERIOUS ELEMENTS | Elements that are not considered economic that occur in ores.                                                                                                                                                                                                                                                                     |

----

| DIKE                 | A sheet-like or tabular-shaped igneous intrusion that cuts across the sedimentary laering, metamorphic foliation, or other texture of a pre-existing rock.                                                                                                                                                                                                                                                                                                                                                               |
|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| DISSEMINATED         | Fine grain particles of minerals that occur within the rock                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| DYKE                 | A tabular igneous intrusion that cuts across the bedding or foliation of the country rock.                                                                                                                                                                                                                                                                                                                                                                                                                               |
| EM                   | Electromagnetic geophysical survey                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| FACIES               | A term applied to sedimentary units and the rocks that belong to them                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| FAULT                | A fracture or fracture zone in rock along which there has been displacement of the two sides relative to each other and parallel to the fracture plane.                                                                                                                                                                                                                                                                                                                                                                  |
| FE/Fe2O3             | Chemical symbol for iron.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| FLOATATION           | The process of using chemicals to move fine grain particles in a solution, one process used in beneficiation                                                                                                                                                                                                                                                                                                                                                                                                             |
| FOLIATED             | A general term for a planar arrangement of mineralogical, textural or structural features in a rock.                                                                                                                                                                                                                                                                                                                                                                                                                     |
| FOLIATION            | Aligned layers of minerals characteristic of some metamorphic rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| FRACTURE             | A general term for any break in a rock, whether or not it causes displacement.                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| GABBRO               | A dark, coarse-grained intrusive igeneous rock.  Gabbro is made of calcium-rich plagioclase, with amphibole and/or pyroxene, and is chemically equivalent to basalt.                                                                                                                                                                                                                                                                                                                                           |
| GEOCHEMICAL SAMPLING | The collection of soil, silt, vegetation or rock samples for analysis as a guide to the presence of areas of anomalous mineral of metal content in bedrock.                                                                                                                                                                                                                                                                                                                                                              |
| GEOLOGICAL MAPPING   | In mineral exploration, the collection of geological data such as the description and orientation of various types of bedrock.                                                                                                                                                                                                                                                                                                                                                                                           |
| GEOPHYSICAL SURVEY   | In mineral exploration, the collection of seismic, gravitational, electrical, radiometric, density or magnetic data to aid in the evaluation of the mineral potential of a particular area.                                                                                                                                                                                                                                                                                                                              |
| GLACIAL TILL         | Dominantly unsorted and unstratified and generally unconsolidated material deposited directly by and underneath a glacier without subsequent reworking by water, and consisting of a heterogeneous mixture of clay, silt, sand, gravel, and boulders ranging widely in size and shape.                                                                                                                                                                                                                                   |
| GRAB SAMPLE          | A specimen of mineralized bedrock or float, usually about fist-sized, that may be collected as a representation of the mineralized zone as a whole. Because of bias, either unintended or otherwise, and because of the generally high natural variability typical of gold-silver vein mineralization, grades of grab samples should not be consideredas a reliable estimation of a mineralized zone as a whole but they nonetheless serve to establish the presence of mineralization with grades of economic interest. |

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| GRANITE         | A coarse grained intrusive igneous rock with at least 65% silica.  Quartz, plagioclase feldspar and potassium feldspar make up most of the rock and give it a fairly light color.  Granite has more potassium feldspar than plagioclase feldspar.                                                                                                                                                                                                                   |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| GRANODIORITE    | A coarse grained igneous plutonic rock intermediate in composition between quartz diorite and quartz monzonite; containing quartz, plagioclase, and potassium feldspar, with biotite and hornblende as the dominant mafic components.                                                                                                                                                                                                                                                   |
| GRAPHITIC       | Containing graphite.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| GRAVITY SURVEY  | Geophysical survey used to study the variations in gravity                                                                                                                                                                                                                                                                                                                                                                                                                              |
| GREENSTONE      | A metamorphic rock derived from basalt or chemically equivalent rock such as gabbro.  Greenstones contain sodium-rich plagioclase feldspar, chlorite, and epidote, as well as quartz.                                                                                                                                                                                                                                                                                         |
| GPT             | Abbreviation for gram per tonne; equivalent to one part per million (ppm).                                                                                                                                                                                                                                                                                                                                                                                                              |
| HAND TRENCHING  | A method of exposing bedrock by hand excavation.                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| HYDROTHERMAL    | Of or pertaining to hot water, to the action of hot water, or to the products of this action, such as a mineral deposit precipitated from a hot aqueous solution, with or without demonstrable association with igneous processes.                                                                                                                                                                                                                                                      |
| IGNEOUS         | Said of a rock or mineral that solidified from molten or partly molten material; also applied to processes leading to, or resulting from the formation of such rocks.                                                                                                                                                                                                                                                                                                                   |
| IGNEOUS         | petrology The occurrence, structure, composition and character of an igneous rock.                                                                                                                                                                                                                                                                                                                                                                                                      |
| ICP-AES         | Abbreviation for Inductively Coupled Plasma Emission Spectroscopy - Atomic Emission Spectroscopy; an analytical technique in which a sample solution is introduced into an argon plasma at very high temperature where individual elements emit light at specific wavelengths. The light is collected by the spectrometer and the wavelength is analyzedto yield individual elemental concentrations by comparison against standard solutions with calibrated elemental concentrations. |
| INTRUSION       | Emplacement of magma (molten rock) into pre-existing rock.  Dikes, sills and batholiths are intrusions.                                                                                                                                                                                                                                                                                                                                                                       |
| IP              | A type of geophysical survey method called Induced Polarisation.                                                                                                                                                                                                                                                                                                                                                                                                                        |
| IRON FORMATION  | A chemical sedimentary rock containing at least 15% iron and commonly containing chert.  The iron may be present as oxide, silicate, carbonate, or sulfide.                                                                                                                                                                                                                                                                                                                   |
| KARST           | Topography formed by weathered limestone                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| KOMATIITE       | An igneous suite of basaltic and ultramafic lavas.                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| LITHOLOGY  | The character of a rock described in terms of its structure, colour, mineral composition, grain size and arrangement of its component parts.                                                                                                                                                                                                                                                                                                                                            |
| MAFIC           | Pertaining to or composed dominantly of the ferromagnesian rock forming silicates; said of some igneous rocks and their constituent minerals.                                                                                                                                                                                                                                                                                                                                           |

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| MAGNETITE          | Iron oxide mineral (Fe3O4).  Usually tiny black, metallic crystals.  Magnetite will attract a magnet.                                                                                                                                         |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| MASSIVE            | Said of a stratified rock that occurs in very thick, homogenous beds.                                                                                                                                                                                             |
| METADIORITE        | A general term for a metamorphosed diorite; also greenstone.                                                                                                                                                                                                      |
| METAGABBRO         | A general term for a metamorphosed gabbro; also greenstone.                                                                                                                                                                                                       |
| METALLIC           | A mineral chiefly composed of, or containing, one or more metals as a primary constituent.                                                                                                                                                                        |
| METALLURGICAL TEST | A general term for a number of mechanical or chemical processes that are employed to test the amenability of separating metals from their ores.                                                                                                                   |
| METAMORPHOSED      | Rock or mineral that has undergone mineralogical and/or structural change in response to elevated pressures, temperatures or changes in chemical conditions.                                                                                                      |
| MgO/Mg             | Chemical symbol for Magnesium oxide/Magnesium                                                                                                                                                                                                                     |
| MICROSPHORITE      | Very fine grained phosphorite (phosphate rich rock)                                                                                                                                                                                                               |
| MINERALIZATION     | The process or processes by which a mineral or minerals are introduced into a rock, resulting in an enriched deposit; or the result of these processes.                                                                                                           |
| MINERALIZED        | Rock that has undergone the process of mineralization.                                                                                                                                                                                                            |
| Mo                 | Chemical symbol for Molybdenum                                                                                                                                                                                                                                    |
| MMI                | Mobile Metal Ion, sampling technique used to detect extremely low levels of certain elements in soil samples                                                                                                                                                      |
| NET SMELTER        |                                                                                                                                                                                                                                                              |
| RETURN ROYALTY     | A general term for a residual benefit that is a percentage of the value for which a smelter will reimburse the provider of ore to the smelter, after deduction for various smelting fees and penalties and, often after cost of transportation has been deducted. |
| Ni                 | Chemical symbol for Nickel                                                                                                                                                                                                                                        |
| ORE                | The naturally occurring material from which a mineral or minerals of economic value can be extracted profitably or to satisfy social or political objectives.                                                                                                     |
| ORE SHOOT          | an elongate pipelike, ribbonlike, or chimneylike mass of ore within a deposit (usually a vein), representing the more valuable part of the deposit.                                                                                                               |
| ORTHOCLASE         | A member of the feldspar group of minerals (KAlSi3O8).                                                                                                                                                                                                            |
| OUTCROP            | The part of a rock formation that appears at the surface of the ground.                                                                                                                                                                                           |
| OXIDATION          | The conversion of sulphide mineral (especially metallic mineral) species to oxide, sulphate or hydoxide minerals, typically by the processes of near surface weathering.                                                                                          |

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| OXIDE MINERAL           | A mineral formed by the union of an element with oxygen.                                                                                                                                                                                                            |
|-------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| OVERBURDEN              | Loose soil, sand, gravel, broken rock, etc. that lies above the bedrock.                                                                                                                                                                                            |
| OZ/TON                  | Abbreviation for troy ounce per ton.                                                                                                                                                                                                                                |
| P2O5                    | Chemical symbol for Phosphate                                                                                                                                                                                                                                       |
| PATHFINDER              | In geochemical exploration, a relatively mobile element or gas that occurs in association with an element or commodity being sought, but can be more easily found because it forms a broader halo or because it can be detected more readily by analytical methods. |
| Pb                      | Chemical symbol for lead                                                                                                                                                                                                                                            |
| PERMAFROST              | A permanently frozen layer of soil or subsoil, or even bedrock, which occurs to variable depths below the Earth's surface in arctic or subarctic regions.                                                                                                           |
| PETROLOGY               | See igneous petrology.                                                                                                                                                                                                                                              |
| PHOSPHORITE             | Phosphate rock, or a rock with high concentrations of phosphate.                                                                                                                                                                                                    |
| PLAGIOCLASE             | A member of the feldspar group of minerals ((Na,Ca)Al(Si,Al)2O6).                                                                                                                                                                                                   |
| PLUTON                  | A body of medium to coarse grained igneous rock that formed beneath the Earth's surface by crystallization of a magma.                                                                                                                                              |
| PLUTONIC SUITE          | A group of igneous bodies that are linked by virtue of similarities in age, petrology, etc.                                                                                                                                                                         |
| PLUTONISM               | A general term for the phenomena associated with the formation of plutons.                                                                                                                                                                                          |
| POTASSIUM FELDSPAR      | See orthoclase.                                                                                                                                                                                                                                                     |
| PPB                     | Abbreviation for part per billion.                                                                                                                                                                                                                                  |
| PPM                     | Abbreviation for part per million.                                                                                                                                                                                                                                  |
| PRECAMBRIAN             | A period of geologic time earlier than 544 million years before present.                                                                                                                                                                                            |
| PROSPECTING             | Pertaining to the search for outcrops or surface exposures of mineral deposits, primarily by nonmechanical methods.                                                                                                                                                 |
| PROXIMAL MINERALIZATION | Refers to the relative distance of mineralization from a pluton thought to be related to or responsible for the deposit. Proximal deposits form near to the mineralizing pluton.                                                                                    |
| PYRITE                  | Iron sulfide mineral (FeS).  Forms silvery to brassy metallic cubes or masses.                                                                                                                                                                            |
| QUARTZ                  | A glassy silicate and common rock forming mineral (SiO2).                                                                                                                                                                                                           |
| QUARTZ DIORITE          | A group of plutonic rocks having the composition of diorite but with appreciable quartz and feldspar, i.e. between 5 and 20%.                                                                                                                                       |
| QUARTZ GABBRO           | A group of plutonic rocks having the composition of gabbro but with appreciable quartz.                                                                                                                                                                             |

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| QUARTZ MONZONITE   | A medium to coarse grained plutonic rock containing major plagioclase, orthoclase and quartz with minor biotite and hornblende.                                                                                                                                          |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| QUARTZITE          | A metamorphosed sandstone or rock composed of quartz grains so completely cemented with secondary silica that the rock breaks across or through the grains rather than around them.                                                                                      |
| RADIOMETRIC SURVEY | Geophyisical survey looking at the emission of radiation from rocks at very low levels. Used as an exploration tool.                                                                                                                                                     |
| RC DRILLING        | Reverse Circulation (RC). Drilling technique used which has a double tube to pass the air down between the inner tube and outer tube, with the sample returned up the inner tube.                                                                                        |
| REPLACEMENT        | Pertaining to a type of mineral deposit that forms by partial or complete replacement of bedrock constituents by new minerals, generally by the action of hydrothermal fluids.                                                                                           |
| RESERVE            | An estimate within specified accuracy limits of the valuable metal or mineral content of known deposit that may be produced under current economic conditions and with present technology.                                                                               |
| RESOURCE           | Pertaining to the quantity or bulk of mineralized material without reference to the economic viability of its extraction (see reserve).                                                                                                                                  |
| SEDIMENT           | Fragmental material that originates from weathering of rocks and that is transported by air, water, ice or other natural agents, and that forms in layers on the Earth's surface at ordinary temperatures in a loose, unconsolidated form; e.g. silt, sand, gravel, etc. |
| SEDIMENTARY ROCK   | A rock resulting from the consolidation of loose sediment.                                                                                                                                                                                                               |
| SELECTED SAMPLE    | A specimen of a mineralized zone that is not intended to be representative of the deposit as a whole.                                                                                                                                                                    |
| SCHIST             | A strongly foliated rock, formed by dynamic metamorphism, that can be split into thin flakes or slabs due to well developed parallelism of more than 50% of the minerals.                                                                                                |
| SHEARED            | A descriptive term for rock that is deformed as a result of stresses that cause or tend to cause parts of a body to slide relative to each other along their plane of contact.                                                                                           |
| SILICA/SiO2        | A generic term for silicon dioxide (SiO2), the most common form of which is quartz.                                                                                                                                                                                      |
| SILL               | A concordant sheet of igneous rock lying parallel, or nearly so, to bedding or other planar fabric in the country rock.                                                                                                                                                  |
| SOIL SAMPLING      | (see geochemical sampling).                                                                                                                                                                                                                                              |
| SPLIT              | A portion of a rock or soil sample that is separated from the bulk of the original before the analytical process so as to provide material for re-analysis as a check of the accuracy of the original procedure should it be required.                                   |
| STAIN              | as in scorodite stain; a thin film of a mineral deposited as part of the weathering process.                                                                                                                                                                             |
| STOCK              | An igneous intrusion with less than 40 sq. mi. (100 sq. km.) in surface exposure, usually but not always discordant with respect to country rock.                                                                                                                        |

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| STOCKWORK          | An intersecting three-dimensional network of veins or veinlets.                                                                                                                                               |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| SPHALERITE         | A varicoloured sulphide mineral (ZnS), the most important source of zinc.                                                                                                                                     |
| STRATA             | Beds or layers of rock.                                                                                                                                                                                       |
| STRIKE             | The course or bearing of the outcrop of an inclined bed, vein or fault plane on a level surface; the direction of a horizontal line perpendicular to the dip.                                                 |
| STRINGER           | A mineral veinlet or veinlets that occur in a discontinuous subparallel pattern in the host rock.                                                                                                             |
| STRUCTURAL MAPPING | Geological mapping that focusses in collection of data pertaining to the orientation of beds, faults and fractures as well as other structures that modify the distribution of bedrock and mineralized zones. |
| SULPHIDE MINERAL   | A mineral compound characterized by the linkage of sulphur with a metal or semimetal.                                                                                                                         |
| SURFICIAL GEOLOGY  | The study or geological mapping of surficial, unconsolidated materials.                                                                                                                                       |
| TALUS              | Rock fragments of any size or shape (usually coarse and angular), derived from a steep rocky slope chiefly by gravitational falling, rolling or sliding.                                                      |
| THRESHOLD          | The level, whether determined statistically or arbitrarily, at which a separation is made between anomalous and background geochemical values for a particular data set.                                      |
| THRUST FAULT       | A fault with a dip of 45 degrees or less over much of its extent, on which the hanging wall appears to have moved upward relative to the footwall.                                                            |
| TRACE              | Pertaining to assay values; as used in this report, this term refers to gold grades of less than 0.01 oz/ton (0.3 g/t).                                                                                       |
| TRANSVERSE FAULT   | A fault that strikes obliquely or perpendicular to the general structural trend of the region.                                                                                                                |
| TRANSVERSE VEIN    | A vein that strikes obliquely or perpendicular to the general structural trend of the region.                                                                                                                 |
| TRUEWIDTH          | The width of a vein or other structure measured orthogonal to its strike and dip.                                                                                                                        |
| ULTRAMAFIC         | Igneous rocks made mostly of the mafic minerals hypersthene, augite, and/or olivine.                                                                                                                          |
| UPPER PROTEROZOIC  | The period of geologic time between about 1000 and 544 million years before present.                                                                                                                          |
| VEIN               | An epigenetic mineral filling of a fault or other fracture in a host rock, in tabular or sheetlike form, often as a precipitate from a hydrothermal fluid.                                                    |
| VEIN               | A term used in the [Keno Hill] mining camp to describe quartz vein material and associated fault gouge that are contained within a fault zone.                                                                |

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| VEINLET          | A small vein.                                                                                                                        |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------|
| VITREOUS         | As pertains to minerals, a glassy luster.                                                                                            |
| VLF-EM           | An abbreviation for the Very Low Frequency-Electromagnetic geophysical survey technique.                                             |
| WALL ROCK        | The rock adjacent to, enclosing, or including a vein, layer or dissemination of ore minerals.                                        |
| WEIGHTED AVERAGE | Value calculated from a number of samples, each of which has been “weighted” by a factor of the individual sample width. |
| WORKING          | A general term for any type of excavation carried out during the course of mining or mining exploration.                             |
| XRF              | X-Ray Fluorescence, analysis technique used to test for mineral concentrations in rocks and other compounds.                         |
| ZN               | The chemical symbol for zinc.                                                                                                        |