UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 ———————
 FORM
10-K
 ———————
 
 x
                                  ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGEACT
      OF 1934For
      the fiscal year ended: December 31, 2008oro
                                  TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGEACT
      OF 1934For
      the transition period from: _____________ to
  _____________
 
 Commission File
Number   000-32551
 
 LEGEND
INTERNATIONAL HOLDINGS, INC.
 (Exact
name of registrant as specified in its charter)
 
 ———————
 
 Delaware
                        
                        23-3067904(State
      or Other Jurisdiction
                        
                        (I.R.S.
      Employerof
      Incorporation or Organization)
                        
                        Identification
      No.)
 
  Level
8, 580 St Kilda Road Melbourne, Victoria, 3004, Australia
 (Address
of Principal Executive Office) (Zip Code)
  011
(613) 8532 2866
 (Registrant’s
telephone number, including area code)
  N/A
 (Former
name or former address, if changed since last report)
 ———————
 Securities
      registered pursuant to Section 12(b) of the Act: NoneSecurities
      registered pursuant to Section 12(g) of the Act:Title
      of each classCommon
      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
                            NoIndicate
      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
  
  the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
 x
                                  Yes
                                  o
                                  No
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
  o
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
  Large
      accelerated filer
                        o
                        
                        Accelerated
      filer
                        xNon-accelerated
      filer
                        o
                        
                        Smaller
      reporting company
                        o
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of  the Act).
  Yes
                            x
                            No
                            o
  State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.
 
 The
aggregate market value based on the average bid and asked price on the
over-the-counter market of the Registrant’s common stock, (“Common Stock”) held
by non-affiliates of the Company was US$659,251,076 as at June 30,
2008.
 
 There were
226,315,392 outstanding shares of Common Stock as of March 04,
2009
  APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
 PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
 
 Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.
  Yes
                      o
                      No
                      o
  DOCUMENTS
INCORPORATED BY REFERENCE
 
 Not
Applicable
 
 EXPLANATORY
NOTE
 
 The
Registrant was formerly a “small business issuer” that qualified as a “smaller
reporting company” until December 31, 2008, at which time the Registrant met the
definition of an “accelerated filer.”  In accordance with SEC Release
No. 33-8876, the Registrant has elected to follow the disclosure requirements
applicable to a smaller reporting company in this Form 10-K.
 INDEXPARTIItem 1.
                                                                                          Business.
                                                                                          1Item 1A.
                                                                                          Risk Factors.
                                                                                          30Item 1B.
                                                                                          Unresolved Staff Comments.
                                                                                          34Item 2.
                                                                                          Properties.
                                                                                          34Item
      3.
                                                                                          Legal Proceedings.
                                                                                          34Item 4.
                                                                                          Submission of Matters to a Vote of Security
      Holders.
                                                                                          34PART IIItem5.
                                                                                          Market for Registrant’s Common Equity, Related Stockholder
      Matters andIssuer Purchases of Equity
      Securities.
                                                                                          35Item 6.
                                                                                          Selected Financial
      Data.
                                                                                          38Item 7.
                                                                                          Management’s Discussion and Analysis of
      Financial Condition and Results of Operation.
                                                                                          40Item 7A.
                                                                                          Quantitative and Qualitative Disclosures About Market
      Risk.
                                                                                          45Item 8.
                                                                                          Financial Statements and Supplementary
      Data.
                                                                                          45Item 9.
                                                                                          Changes in and Disagreements With Accountants on
      Accounting and Financial
    Disclosure.
                                                                                          45Item 9A.
                                                                                          Controls and Procedures.
                                                                                          45Item 9B.
                                                                                          Other
      Information.
                                                                                          46PART
      IIIItem 10.
                                                                                          Directors, Executive Officers and Corporate
      Governance.
                                                                                          47Item 11.
                                                                                          Executive Compensation.
                                                                                          50Item 12.
                                                                                          Security Ownership of Certain Beneficial Owners
      and Management and Related
      Stockholder
Matters.
                                                                                          53Item 13.
                                                                                          Certain Relationships and Related
      Transactions, and Director Independence.
                                                                                          56Item 14.
                                                                                          Principal Accounting Fees and
      Services.
                                                                                          58PART
      IV
                                                                                          59Item 15.
                                                                                          Exhibits, Financial Statement
    Schedules.
                                                                                          60SIGNATURES
  i
 PART
I
  Item 1.
                      Business.
 
 General
 
 The
terms “Legend,” “Company,” “we,” “our,” and “us” refer to Legend International
Holdings, Inc. unless the context suggests otherwise.
 
 This
report and other reports, as well as other written and oral statements made or
released by us, may contain forward looking statements. Forward looking
statements are statements that describe, or that are based on, our current
expectations, estimates, projections and beliefs. Forward looking statements are
based on assumptions made by us, and on information currently available to us.
Forward-looking statements describe our expectations today of what we believe is
most likely to occur or may be reasonably achievable in the future, but such
statements do not predict or assure any future occurrence and may turn out to be
wrong. You can identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. The words "believe,"
"anticipate," "intend," "expect," "estimate," "project", "predict", "hope",
"should", "may", and "will", other words and expressions that have similar
meanings, and variations of such words and expressions, among others, usually
are intended to help identify forward-looking statements.
 
 Forward-looking
statements are subject to both known and unknown risks and uncertainties and can
be affected by inaccurate assumptions we might make.  Risks,
uncertainties and inaccurate assumptions could cause actual results to differ
materially from historical results or those currently
anticipated.  Consequently, no forward-looking statement can be
guaranteed.  The potential risks and uncertainties that could affect
forward looking statements include, but are not limited to the risks of mineral
exploration and development stage projects, political risks of development in
foreign countries, risks associated with environmental and other regulatory
matters, mining risks and competitors, the volatility of phosphate, diamond and
other mineral prices and movements in foreign exchange rates, increased
competition, governmental regulation, performance of information systems, and
the ability of the Company to hire, train and retain qualified
employees.  In addition, other risks, uncertainties, assumptions, and
factors that could affect the Company's results and prospects are described in
this report, including under the heading “Risk Factors” and elsewhere and may
further be described in the Company's prior and future filings with the
Securities and Exchange Commission and other written and oral statements made or
released by the Company.
 
 We caution
you not to place undue reliance on any forward-looking statements, which speak
only as of the date of this document.  The information contained in
this report is current only as of its date, and we assume no obligation to
update any forward-looking statements.
 
 Effective
November 17, 2006, Legend issued one (1) new bonus share of Common Stock for
every two (2) shares of Common Stock outstanding on the record at that date. The
issue of the new bonus shares of Common Stock were on a pro-rate basis to all
shareholders. As a result, the Company issued 27,599,722 shares of its Common
Stock. Effective December 31, 2006, Legend issued one (1) new bonus share of
Common Stock for every two (2) shares of Common Stock outstanding on the record
at that date. The issue of the new bonus shares of Common Stock were on a
pro-rata basis to all shareholders. As a result, the Company issued 41,934,337
shares of its Common Stock.
 
 The
Company has accounted for these bonus issues as a stock split and accordingly,
all share and per share data has been retroactively restated.
 
 
  Currency
 
 We use the
Australian dollar as our reporting currency, since we are headquartered in
Australia and our administrative expenses are incurred in Australian dollars.
References to dollars are to Australian dollars (A$) unless otherwise indicated
as being United States dollars (US$). For the convenience of the reader, the
Australian Dollar figures for the year ended December 31, 2008 have been
translated into United States Dollars (“US$”) using the rate of exchange at
December 31, 2008 of A$1.00=US$0.6907.  Prior to July 31, 2006, the
Company’s functional currency was the US dollar. However, as a result of the
purchase of diamond mining tenements in Northern Australia in July 2006, the
Company’s 2006 revenue and expenses were primarily denominated in Australian
dollars (A$). Statement of Financial Accounting Standards (‘‘SFAS’’) No. 52,
Foreign Currency Translation, states that the functional currency of an entity
is the currency of the primary economic environment in which the entity
operates. Accordingly the Company determined that from August 1, 2006 the
functional currency of the Company is the Australian dollar. Assets, liabilities
and equity were translated at the rate of exchange at July 31,
2006.  Revenue and expenses were translated at actual rates.
Translation gains and losses were included as part of accumulated other
comprehensive gain.
 
 History
 
 Legend was
incorporated in the State of Delaware on January 5, 2001 under the name Sundew
International, Inc., to engage in the business of selling compatible inkjet
cartridges and refill kits on the Internet.
 
 On March
13, 2003, Legend filed for an Amendment to its Certificate of Incorporation (the
"Amendment") pursuant to which the name of Sundew International, Inc. was
changed to "Legend International Holdings, Inc."
 
 In
November 2004, Renika Pty Ltd, an Australian corporation (“Renika”) acquired an
88% interest in Legend from William and Michael Tay (the “Tays”), the Tays
resigned as Directors and Officers of Legend, Joseph Gutnick was appointed
President, Chief Executive Officer and a Director and Peter Lee was appointed
Secretary.  The Tays also granted Renika an option to acquire an
additional 578,240 shares of Common Stock that Renika exercised in 2005.
Commencing in fiscal 2005, Legend has decided to focus its business on mineral
exploration activities.
 
 Effective
as of March 3, 2006, the Company entered into a Contract for the Sale of Mining
Tenements (“Contract”) with Astro Diamond Mines N.L. (“Astro”) an Australian
company pursuant to which the Company shall acquire certain diamond mining
tenements in Northern Australia from Astro, which is described
above.
 
 In
November 2007, Legend acquired a number of phosphate exploration interests in
the State of Queensland in Australia
 
 Legend is
an exploration stage company.  Legend has not been involved in any
bankruptcy, receivership or similar proceeding.  Legend has not been
involved in any material reclassification, merger consolidation, or purchase or
sale of a significant amount of assets not in the ordinary course of
business.
 
 SEC
Reports
 
 We file
annual, quarterly, current and other reports and information with the
SEC.  These filings can be viewed and downloaded from the Internet at
the SEC’s website at www.sec.gov.  In addition, these SEC filings are
available at no cost as soon as reasonably practicable after the filing thereof
on our website at www.lgdi.net. These
reports are also available to be read and copied at the SEC’s public reference
room located at Judiciary Plaza, 100 F Street, N.E., Washington, D.C.
20549.  The public may obtain information on the operation of the
public reference room by calling the SEC at 1-800-SEC-0330.
  2
 
 Description
of Business
 
 Business
 
 The
Company has never generated any significant revenues from operations and is
still considered an exploration stage company.  The Company was
initially formed to engage in the business of selling compatible inkjet
cartridges and refill kits on the Internet for the consumer printer
market.  In March 2003, management of the Company decided to engage in
the business of building and acquiring controlling or other interests in one or
more companies engaged in the contract sales and distribution of specialty
medical products, and raise additional capital for this
purpose.  Neither business was successful and operations of both were
eventually discontinued.  During fiscal 2004, management of the
Company developed a plan of operations to acquire income-producing real
property.  The Company did not acquire any properties pursuant to such
plan.
 
 Following
the change of management in November 2004, the Company developed a new plan of
operations, which was to engage in mineral exploration and development
activities.  Legend's business plan calls for the identification of
mineral properties where it can obtain secure title to exploration, development
and mining interests.
 
 Legend’s
Land Holdings and Projects
 
 The Legend
landholdings, prospective for phosphate, diamonds and base metals cover 40,525
acres in Queensland, Australia and 4.7 million acres in the Northern Territory,
Australia. In Queensland, Legend’s holdings are historical phosphate deposits
located in the Mt. Isa district, along the margin of the Georgina Basin which is
host to major base metal and phosphate deposits.
 
 Legend’s
mining tenements are divided into the following project areas:
 
 ·
                      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
 
 3
 Queensland
Projects
 
 Tenement
Status, Details & Commitments (Projected) Queensland, Australia
 
 Lease
                          Lease
      Status
                          Project
                          Grant
      Date
                          Expiry
      Date
                          Area
      (Ha)
                          Anni.
      Date (2009)
                          Legend
      Interest
                          GST
      InclusiveRent
      $ (2009)
                          Commit.
      $ (2009)EPM14753
                          Granted
                          D-Tree
                          21/04/2008
                          20/04/2013
                          6,771
                          20/04/2009
                          80%
                          $2,749
                          $50,000EPM15763
                          Granted
                          D-Tree
      West
                          26/06/2008
                          25/06/2013
                          25,500
                          25/06/2009
                          80%
                          $10,341
                          $40,000EPM14905
                          Granted
                          Quita
      Creek
                          12/12/2006
                          11/12/2011
                          29,250
                          11/12/2009
                          0%*
                          $12,043
                          $70,000EPM14906
                          Granted
                          Highland
      Plains
                          24/08/2007
                          23/08/2012
                          32,484
                          23/08/2009
                          0%*
                          $13,090
                          $50,000EPM14912
                          Granted
                          Lily
      & Sherrin Creek
                          30/01/2007
                          29/01/2012
                          32,118
                          29/01/2009
                          0%*
                          $13,090
                          $50,000EPM16942
                          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%
 
 *earning 80%
interest
 
 Landholdings
 
 Some of
Legend’s landholdings (tenements) are held under licence from the Queensland
Government in Australia. Tenements are granted as either exploration permits,
mineral development licences or mining leases.
 
 Exploration
permits can only be applied for over available ground.  Applications
consist of a prescribed application form, proposed exploration programme with
estimated expenditure and the prescribed application fee.  An
exploration permit number is assigned when the application is
received.  The Department then assesses the application to determine
whether a company is a suitable candidate and proposes to spend sufficient funds
on exploration on the licence.  If the Department considers a company
to be a suitable candidate, the Department then assesses the environmental
impact of the proposed exploration programme and also commences the native title
process.  The native title process involves advertising the
application for the purpose of determining whether there are any objections to
the licence being granted. If there are no objections, the permit is granted.
EPM’s 16942, 17330, 17333, 17441, 17446 and 17447 were all advertised as part of
the native title process on January 14, 2009. Applications EPM17087, 17437 and
17443 have not yet been advertised by the Department.
 
 The
exploration permit is granted for five years provided the company continues to
comply with the licences conditions.  There is a statutory requirement
to reduce the area of the exploration licence by fifty percent before the end of
years three, four and five.
 
 Rent is
required to be paid each year in advance.
   4
 An annual
expenditure report is due each year, as a statement of the amount that has been
spent on the ground.  An annual technical report is also due each
year, as a statement of the exploration work that has been undertaken on the
ground and what work is proposed to be undertaken for the coming
year.
 
 The
exploration permit is due to expire at the end of year five but a renewal
application can be lodged prior to the expiry to, if granted, extend the permit
for up to another five years.  A summary of work completed on the
ground together with a detailed explanation of the work proposed for the ground
is required to accompany the renewal application.
 
 If the
company proposes to mine a measured resource it will need to apply for a Mining
Lease.  As the Exploration Permit holder it has automatic priority to
the ground to be the subject of the mining Lease.  Applications
consist of a prescribed application form, details of the proposed development,
the financial resources to fund the proposal and the prescribed application
fee.  A mining lease number is assigned when the application is
received.  The Department then assesses the application to determine
the suitability of the proposal.  The application will then pass
through the environmental and native title process.  An agreement will
need to be negotiated with the native title holders/claimants as part of the
native title process.
 
 A mineral
lease may be granted for such term as the Minister thinks fit.  The
company is required to state the term of the lease required at the time of
application.  The term required is stated on the application
form.
 
 Rent is
required to be paid each year in advance.
 
 An annual
expenditure report is due each year, as a statement of what has been spent on
the ground.  An annual technical report is also due each year, as a
statement of what work has been done on the ground and what work is proposed for
the coming year.
 
 Geological
History of the Georgina Basin of Queensland.
 
 The
Georgina Basin hosts a number of phosporite deposits near Mt Isa. In particular,
the Beetle Creek Formation and Thorntonia Limestone contain three key phosporite
ore-types: pelletal, microsphorite and replacement-types. The Lady Annie, Lady
Jane, D-Tree & Thorntonia phosphate deposits lie within the Beetle Creek
Formation and its lateral facies equivalents. (Howard, 1986)
 
 The Inca
Formation is the youngest unit, composed of laminated siltstones and shales and
conformably overlies Thorntonia Limestone. The Thorntonia Limestone is a
dolomitic limestone with increasing chert bands toward top. It is the lateral
facies equivalent to the Beetle Creek Formation, with which it intertongues. The
Beetle Creek Formation hosts the phosphate deposits, composed predominately of
interbedded coarse to fine grained phosphorites, siltstone, claystone, chert and
some descrete carbonate lenses. Locally, karst-like surfaces are filled with
chalky high-grade phosphate that appear to replace the underlying limestone.
This unit conformably and gradationally overlies Mt Hendry Formation which is a
discontinuous conglomerate and sandstone. (Cook & Elgueta,
1986)
 
 All the
deposits formed under coastal, shallow marine conditions. These Cambrian
sediments are covered by up to 71 metres of Mesozoic claystone and sandstone and
Cainozoic alluvium and eluvium. Coarse to medium grained skeletal-ovulitic
grainstone and packstone phosphorites are thought to have formed through
reworking, transport and accumulation grains.  Phosphatic
microsphorite are thought to have formed from the suspension of very fine
grained detrital material or precipitation from the water column in very shallow
supratidal areas. (Cook & Elgueta, 1986) The replacement phosphates are
thought to have occurred due to post-depositional phosphate replacement of
carbonate, such as found at D-Tree.
 5










Exploration
History and Forward Work Program
 
 The Lady
Annie, Lady Jane, D-Tree & Thorntonia phosphate deposits are located
approximately 130km north west of Mt Isa in the Georgina Basin. The historically
published deposits lie within the same geological rock unit and their size and
tonnages are as follows:
 
 Deposit
                Classification
                Estimated
      million tonnes
                %
      P2O5Lady
      Annie
                Non-reserve
      mineralized material*
                293
                16.61Lady
      Jane
                Non-reserve
      mineralized material*
                193
                17.61D-Tree
                  Thorntonia
                Non-reserve
      mineralized material*
                  Non-reserve
      mineralized material*
                3392
                  16
                15.91
                  18.11
 
 * Such
non-reserve mineralized material would not qualify as a reserve until a
comprehensive evaluation based upon unit cost, grade, recoveries and other
material factors concludes being both legal and economic
feasibility
 
 1Source of
Information
 Historically
published resources & reserves in Queensland Minerals Mines & Projects,
4th Edition. From:1 1990 Freeman, M.J., Shergold, J.H., Morris, D.G., &
Walter, M.R. Late Proterozoic And Palaeozoic Basins of Central and Northern
Australia- Regional Geology And Mineralisation. 21996 Draper, J.J Phosphate-
Queensland Mineral Commodity Report, Queensland Government Mining Journal, 97
(1131) 14-25.
 
 2Legend
has an 80% interest in these deposits.
 
 Past
feasibility studies by BH South Ltd (Rogers J.K, 1988) occurred in 1974 on a
phosphate rock beneficiation plant and slurry pipeline to the Queensland coast.
Beneficiation test shafts and mining scale trenches were dug. A pilot plant
built in 1973 produced 34% P205 concentrate at Lady Annie from 17% P205 rock
(Cook, P.J. 1989). Feasiblity was concluded at that time at a production rate of
4-5 million tonnes per year (Cook, P.J. 1989).
 
 A thorough
Open File Historical data review has commenced. Past exploration and reserve
estimation data is being acquired and compiled into a global database for use in
re-validating the past surveys, drilling and sampling. Appropriate Heritage,
Environmental and Proposals for Works approvals are being sought. A detailed
field sampling and drilling program is being developed in full awareness of
quality control and compliance procedures to verify past data and re-establish
the volumes and percentage of phosphate in these deposits. Fieldwork commenced
during 2008.
 
 Current
Work
 
 A drilling
program at the D-Tree deposit commenced in September 2008. Up to 3 drill rigs
were used on the drill program to complete stage one. All three types of
drilling have been summarized below.
 
 Drill
      Type
                No.
      of Holes
                MetresRC
                476
                12,520Sonic
                11
                300Diamond
                13
                324
 
 8




Drilling
and Sampling Methodology
 
 The
phosphate drilling program was drilled on a nominal 300 metre by 300 metre grid
pattern. Some areas, such as the Galah Creek area were drilled on a 100 metre by
100 metre spacing to better define the areas of higher grade.
 
 Three
types of drilling have been conducted in the deposit to date. Reverse
circulation (RC) drilling is used as the base for all results reported in this
document and is the most extensive type of drilling. The second type is Diamond
drilling, which mainly consists of holes to twin current RC drilling for quality
control purposes. A third type, Sonic drilling was also used to obtain larger
samples which are appropriate for metallurgical sampling and testing. Sonic
drilling uses an ultra-high frequency oscillating drill bit to cut through the
rock giving full sample recovery as there is no high pressure air or water
required in the process.
 
 All RC
samples were collected using a 3-tier riffle splitter over 1 meter intervals,
yielding a 2-3 kilogram (“kg”) sample for subsequent assaying. A second split
has also been collected from some high grade intervals to use in quality
assurance of the sampling process. Assay results from all such field duplicate
samples received so far show very good correlation between assays from original
and duplicate samples.
 
 The RC
holes drilled have been completed using either a 4.5” (114.3mm) or 5” (127mm)
drill bit. All Diamond core has been drilled at HQ triple tube size and Sonic
core was drilled at 6” (152mm) drill bit. Sample recoveries for the diamond
drilling have been logged and recorded.
 
 All
phosphate samples have been submitted to either one of two commercial
laboratories located in either Mt Isa or Brisbane. The analytical technique used
was fused bead XRF, but some samples were also tested using a fused bead ICP
method for comparison. All samples were analyzed for P2O5, Al2O3, Fe2O3, MgO, CaO
and SiO2.
 
 A series
of pulp duplicates were taken at the preparation stage to test for laboratory
accuracy and precision with all results showing good correlation and within
acceptable limits. A series of matrix matched phosphate reference standards have
also been submitted with the samples to ensure accuracy and precision of
assaying. The results of these standards came back within acceptable
limits.
 
 Results
 
 Legend has
received results for 470 of the 476 RC holes drilled. A total of 12,520 metres
of drilling is complete with results received so far totalling approximately
12,100 assays.
 
 For all RC
drilling a total of more than 250 holes have an intercept of greater than 8%
P2O5. As some
holes have up to 3 separate intercepts at this grade there is a total of 332
intervals representing three main identified zones within the Project area (see
Figure 2). All intercept results were calculated with an 8% minimum P2O5 cut,
minimum 2 metre intercept and maximum of 2 metres contiguous internal dilution
and are listed in Appendix A.
 
 Table 3
shows all significant intercepts of greater than 25% P2O5. All
drilling has been done with vertical holes which, as the deposit is nominally
flat lying gives a true width for each mineralized zone. These zones were
calculated using a minimum width of two metres and a maximum internal dilution
of two contiguous metres. See Appendix A for collar coordinates of these holes.
This table represents the drill intercepts that have the greatest potential for
delivering high grade direct shipping ore or material that requires little dry
beneficiation through crushing, screening or magnetic separation. These high
grade zones are clustered in two main areas, North D-Tree and Galah Creek as
depicted in figure 2.
 
 Two
east-west cross sections through the deposit are also shown in figure 3. The
section lines chosen are depicted on figure 2. The sections show the
mineralization continuity over east-west widths of 2-3 kilometres and figure 2
shows the continuity in the north-south direction of well over 10 km. These
diagrams clearly show the massive extent of the D-Tree mineralization and
therefore the approximate magnitude of an exploration target that may exist
within any given part of the overall




9




phosphate
deposit area. The deposit is known from historical drilling to extend in north,
south and west directions into other landholdings granted or under application
by Legend which combine to form the D-Tree project. The D-Tree project currently
has a Heads of Agreement in place to form a Joint Venture with Mt Isa Metals Ltd
whereby Legend will hold an 80% interest.
 
 Hole_ID
                                                                                          From
      (m)
                                                                                          To
      (m)
                                                                                          Width
      (m)
                                                                                          P2O5
      %
                                                                                          Fe2O3
      %
                                                                                          Al2O3
      %
                                                                                          *R2O3
      %
                                                                                          MgO
      %
                                                                                          SiO2
      %
                                                                                          CaO
      %
                                                                                          CaO:P2O5
      RatioDTRC0034
                                                                                          1
                                                                                          3
                                                                                          2
                                                                                          25.80
                                                                                          5.80
                                                                                          2.05
                                                                                          7.85
                                                                                          0.15
                                                                                          27.80
                                                                                          34.95
                                                                                          1.35DTRC0053
                                                                                          2
                                                                                          5
                                                                                          3
                                                                                          30.67
                                                                                          5.50
                                                                                          2.50
                                                                                          8.00
                                                                                          0.10
                                                                                          6.87
                                                                                          40.97
                                                                                          1.34DTRC0076
                                                                                          6
                                                                                          9
                                                                                          3
                                                                                          28.60
                                                                                          5.50
                                                                                          3.37
                                                                                          8.87
                                                                                          -0.03
                                                                                          18.43
                                                                                          38.23
                                                                                          1.34DTRC0076
                                                                                          15
                                                                                          17
                                                                                          2
                                                                                          30.50
                                                                                          2.35
                                                                                          2.05
                                                                                          4.40
                                                                                          0.00
                                                                                          18.85
                                                                                          41.35
                                                                                          1.36DTRC0083
                                                                                          27
                                                                                          29
                                                                                          2
                                                                                          33.85
                                                                                          1.50
                                                                                          1.75
                                                                                          3.25
                                                                                          0.20
                                                                                          11.18
                                                                                          46.10
                                                                                          1.36DTRC0090
                                                                                          10
                                                                                          12
                                                                                          2
                                                                                          26.45
                                                                                          4.35
                                                                                          2.85
                                                                                          7.20
                                                                                          0.25
                                                                                          23.45
                                                                                          36.30
                                                                                          1.37DTRC0098
                                                                                          9
                                                                                          11
                                                                                          2
                                                                                          32.30
                                                                                          0.35
                                                                                          2.00
                                                                                          2.35
                                                                                          0.20
                                                                                          15.34
                                                                                          44.20
                                                                                          1.37DTRC0112
                                                                                          27
                                                                                          30
                                                                                          3
                                                                                          28.87
                                                                                          1.77
                                                                                          2.10
                                                                                          3.87
                                                                                          0.13
                                                                                          23.00
                                                                                          39.43
                                                                                          1.37DTRC0113
                                                                                          13
                                                                                          15
                                                                                          2
                                                                                          27.60
                                                                                          4.05
                                                                                          2.95
                                                                                          7.00
                                                                                          0.20
                                                                                          22.15
                                                                                          37.50
                                                                                          1.36DTRC0127
                                                                                          20
                                                                                          23
                                                                                          3
                                                                                          27.87
                                                                                          1.87
                                                                                          4.23
                                                                                          6.10
                                                                                          0.23
                                                                                          23.70
                                                                                          37.77
                                                                                          1.36DTRC0132
                                                                                          15
                                                                                          17
                                                                                          2
                                                                                          29.55
                                                                                          2.85
                                                                                          2.69
                                                                                          5.54
                                                                                          0.17
                                                                                          20.45
                                                                                          39.85
                                                                                          1.35DTRC0133
                                                                                          13
                                                                                          16
                                                                                          3
                                                                                          27.20
                                                                                          10.73
                                                                                          2.97
                                                                                          13.70
                                                                                          0.20
                                                                                          17.13
                                                                                          36.83
                                                                                          1.35DTRC0133
                                                                                          28
                                                                                          31
                                                                                          3
                                                                                          26.93
                                                                                          5.97
                                                                                          3.60
                                                                                          9.57
                                                                                          0.23
                                                                                          20.83
                                                                                          36.70
                                                                                          1.36DTRC0139
                                                                                          23
                                                                                          25
                                                                                          2
                                                                                          26.75
                                                                                          4.45
                                                                                          2.85
                                                                                          7.30
                                                                                          0.25
                                                                                          24.10
                                                                                          36.30
                                                                                          1.36DTRC0147
                                                                                          8
                                                                                          12
                                                                                          4
                                                                                          30.22
                                                                                          0.45
                                                                                          2.83
                                                                                          3.28
                                                                                          0.20
                                                                                          19.95
                                                                                          41.02
                                                                                          1.36DTRC0148
                                                                                          6
                                                                                          8
                                                                                          2
                                                                                          27.50
                                                                                          2.55
                                                                                          4.05
                                                                                          6.60
                                                                                          0.20
                                                                                          22.70
                                                                                          37.30
                                                                                          1.36DTRC0157
                                                                                          12
                                                                                          14
                                                                                          2
                                                                                          33.65
                                                                                          2.70
                                                                                          3.04
                                                                                          5.74
                                                                                          0.12
                                                                                          9.35
                                                                                          45.90
                                                                                          1.36DTRC0158
                                                                                          14
                                                                                          16
                                                                                          2
                                                                                          29.20
                                                                                          5.23
                                                                                          2.66
                                                                                          7.89
                                                                                          0.14
                                                                                          18.65
                                                                                          39.45
                                                                                          1.35DTRC0188
                                                                                          4
                                                                                          8
                                                                                          4
                                                                                          29.48
                                                                                          1.80
                                                                                          4.80
                                                                                          6.60
                                                                                          0.52
                                                                                          18.29
                                                                                          40.15
                                                                                          1.36DTRC0212
                                                                                          17
                                                                                          20
                                                                                          3
                                                                                          32.30
                                                                                          14.43
                                                                                          0.77
                                                                                          15.20
                                                                                          0.03
                                                                                          2.93
                                                                                          43.37
                                                                                          1.34DTRC0244
                                                                                          4
                                                                                          6
                                                                                          2
                                                                                          32.55
                                                                                          0.90
                                                                                          2.00
                                                                                          2.90
                                                                                          0.15
                                                                                          15.65
                                                                                          43.85
                                                                                          1.35DTRC0258
                                                                                          18
                                                                                          20
                                                                                          2
                                                                                          34.55
                                                                                          4.35
                                                                                          2.20
                                                                                          6.55
                                                                                          0.00
                                                                                          5.87
                                                                                          45.85
                                                                                          1.33DTRC0292
                                                                                          14
                                                                                          16
                                                                                          2
                                                                                          30.60
                                                                                          7.00
                                                                                          3.30
                                                                                          10.30
                                                                                          0.05
                                                                                          12.21
                                                                                          40.70
                                                                                          1.33DTRC0300
                                                                                          7
                                                                                          9
                                                                                          2
                                                                                          30.40
                                                                                          9.26
                                                                                          2.34
                                                                                          11.60
                                                                                          0.13
                                                                                          11.98
                                                                                          41.25
                                                                                          1.36DTRC0302
                                                                                          7
                                                                                          9
                                                                                          2
                                                                                          28.40
                                                                                          12.55
                                                                                          4.38
                                                                                          16.93
                                                                                          0.17
                                                                                          10.86
                                                                                          37.45
                                                                                          1.32DTRC0338
                                                                                          16
                                                                                          18
                                                                                          2
                                                                                          26.80
                                                                                          6.17
                                                                                          3.93
                                                                                          10.10
                                                                                          0.20
                                                                                          21.15
                                                                                          36.05
                                                                                          1.35DTRC0339
                                                                                          11
                                                                                          13
                                                                                          2
                                                                                          27.65
                                                                                          4.28
                                                                                          5.70
                                                                                          9.98
                                                                                          0.18
                                                                                          19.00
                                                                                          37.20
                                                                                          1.35DTRC0352
                                                                                          13
                                                                                          16
                                                                                          3
                                                                                          34.47
                                                                                          1.77
                                                                                          2.01
                                                                                          3.78
                                                                                          0.07
                                                                                          11.30
                                                                                          46.70
                                                                                          1.35DTRC0375
                                                                                          13
                                                                                          15
                                                                                          2
                                                                                          28.20
                                                                                          16.30
                                                                                          2.30
                                                                                          18.60
                                                                                          0.15
                                                                                          10.01
                                                                                          37.60
                                                                                          1.33DTRC0384
                                                                                          19
                                                                                          21
                                                                                          2
                                                                                          34.75
                                                                                          5.21
                                                                                          1.53
                                                                                          6.74
                                                                                          0.10
                                                                                          6.02
                                                                                          47.85
                                                                                          1.38DTRC0387
                                                                                          8
                                                                                          10
                                                                                          2
                                                                                          28.05
                                                                                          23.02
                                                                                          2.20
                                                                                          25.22
                                                                                          0.15
                                                                                          3.09
                                                                                          37.60
                                                                                          1.34DTRC0432
                                                                                          2
                                                                                          4
                                                                                          2
                                                                                          26.40
                                                                                          5.78
                                                                                          3.40
                                                                                          9.18
                                                                                          0.20
                                                                                          22.95
                                                                                          35.75
                                                                                          1.35DTRC0451
                                                                                          14
                                                                                          16
                                                                                          2
                                                                                          33.55
                                                                                          1.20
                                                                                          1.61
                                                                                          2.81
                                                                                          0.07
                                                                                          14.73
                                                                                          45.50
                                                                                          1.36DTRC0461
                                                                                          3
                                                                                          5
                                                                                          2
                                                                                          27.95
                                                                                          17.40
                                                                                          1.51
                                                                                          18.91
                                                                                          0.21
                                                                                          8.11
                                                                                          38.15
                                                                                          1.36DTRC0463
                                                                                          11
                                                                                          15
                                                                                          4
                                                                                          35.92
                                                                                          6.54
                                                                                          1.29
                                                                                          7.83
                                                                                          0.10
                                                                                          3.54
                                                                                          48.60
                                                                                          1.35DTRC0472
                                                                                          13
                                                                                          15
                                                                                          2
                                                                                          31.35
                                                                                          12.46
                                                                                          1.29
                                                                                          13.75
                                                                                          0.13
                                                                                          6.26
                                                                                          43.10
                                                                                          1.37Min
                                                                                          
                                                                                          
                                                                                          
                                                                                          25.80
                                                                                          0.35
                                                                                          0.77
                                                                                          2.35
                                                                                          -0.03
                                                                                          2.93
                                                                                          34.95
                                                                                          1.32Max
                                                                                          
                                                                                          
                                                                                          
                                                                                          35.92
                                                                                          23.02
                                                                                          5.70
                                                                                          25.22
                                                                                          0.52
                                                                                          27.80
                                                                                          48.60
                                                                                          1.38Weighted
      Average
                                                                                          
                                                                                          
                                                                                          
                                                                                          30.02
                                                                                          5.95
                                                                                          2.51
                                                                                          8.75
                                                                                          0.15
                                                                                          16.90
                                                                                          39.36
                                                                                          1.35
 Table 3:
Significant intercepts >25% P2O5,
calculated using 25% P2O5 cut,
minimum width of 2 metres and maximum contiguous dilution of 2 metres. *R2O5 = Fe2O3 + Al2O3
   10









11










Metallurgy





Five large
samples of phosphate rock were collected at D-Tree from two historic trenches
and one small pit, YT-27, YT-141 and Galah Pit 3; these sites can be seen on
figure 2. These trenches and pits were excavated in the 1970’s by IMC
Development Corporation for beneficiation testwork. The Legend samples were
collected using hand tools (jack hammer and picks) and weighed around 400kg each
when shipped.





These five
samples are from 3 localised areas within the D-Tree deposit as shown on figure
2 and are not necessarily representative of the entire deposit.





Phosphate
rock beneficiation tests on YT27 and YT141 samples have been completed at bench
scale using standard comminution and flotation techniques. The beneficiation
process consisted of crushing, grinding, scrubbing to remove the -20 micron
fraction and flotation.  A coarse fraction consisting of particle size
-1.18mm to +150 micron and a fine fraction of -150 micron to +20 micron were
floated separately giving excellent concentrate grades.  Results are
tabulated below.





Concentrate
      SampleYT-27
                                  YT-27(Fe)
                                  YT-141
                                  YT-141(Fe)Constituent
                                  Coarse
                                  Fine
                                  Coarse
                                  Fine
                                  Coarse
                                  Fine
                                  Coarse
                                  FineP2O5
      %
                                  32.13
                                  34.10
                                  33.66
                                  33.65
                                  38.61
                                  36.04
                                  38.95
                                  36.09Fe2O3
      %
                                  0.84
                                  0.40
                                  0.53
                                  0.37
                                  0.24
                                  0.58
                                  1.61
                                  4.96Acid
      Insol %
                                  12.20
                                  10.12
                                  13.16
                                  8.06
                                  3.29
                                  6.20
                                  2.29
                                  4.17Flotation
      Recovery %
                                  67.6
                                  76.0
                                  89.9
                                  87.3
                                  69.1
                                  91.3
                                  41.5
                                  89.2


Table 2:
Results from metallurgical test-work





Legend is
currently assessing methods of recovering the ultrafine particle fraction (minus
20 micron) using flotation, so that the entire range of particle sizes may be
considered as feed to the processing plant. Further test-work is planned using
specialised ultrafine particle flotation techniques to increase the phosphate
grade and recovery to the concentrate, while optimising iron
rejection.





The sample
from Galah Creek (Galah Pit 3 on figure 2 below) is an example of potential
direct shipping ore.  The sample required no beneficiation and when
assayed gave results of 38.7% P2O5and 1.4%
combined Fe2O3 and
Al2O3.





In partial
areas of the D-Tree deposit the elements of iron (Fe2O3) and
aluminium (Al2O3) have been
identified (in consultation with Legend’s customer and partner IFFCO (Indian
Farmers Fertiliser Cooperative)) as possible deleterious elements which may
affect the phosphoric acid manufacturing process. The levels of these elements
need to be within a certain range and the maximum and minimum limits will be
identified in future phosphoric acid tests. Control of these contaminants will
be addressed through either selective mining such as areas in part of North
D-Tree, which have been identified as having lower levels of these elements, or
by using common dry beneficiation techniques such as crushing, screening, ore
sorting or magnetic separation. Each phosphate rock deposit around the world is
unique and will have its own limits on the levels of deleterious elements which
can be acceptable in the phosphoric acid manufacturing process. Individual
phosphoric acid plants will also have their own unique specifications. Legend
has an advantage in this regard as it has formed a clear expectation as to which
plant will be taking its phosphate rock which will be IFFCO’s Paradeep Unit in
India. This means testwork on the rock in the near term will be aimed at meeting
the Paradeep plants individual requirements.





Trace
elements and other impurities such as (but not limited to) cadmium, uranium,
lead, fluorine, sodium and magnesium have been tested throughout the deposit and
found to exist in quantities that are insignificant to both Legend’s customer
and partner IFFCO and in general when compared to other phosphate rock from
around the world.





13




Future
Work





Legend
will use these results to develop an estimate of the non-reserve mineralized
deposit, that is compliant with Australian JORC 2004 and United States SME 2005
guidelines. This estimate will form part of the preliminary work that will be
used to inform any future estimates of Probable or Proven Mineral Reserves for
the D-Tree Project in conjunction with appropriate mining, metallurgical,
economic, marketing, legal, environmental, social and governmental modifying
factors. Other work will include further drilling around some of the higher
grade areas to test for possible direct shipping ore (DSO) or material that
requires little dry beneficiation such as crushing, screening or magnetic
separation.





Access





Access to
the Queensland project areas is by commercial airline to Mount Isa, a mining
district in Queensland. From Mount Isa it is approximately 96 kilometres by road
via the Barkly Highway, however helicopter is often used due to rugged terrain.
Mount Isa has substantial infrastructure, accommodation and other facilities.
Between April to November, in the dry season, four wheel drive vehicles can be
used on dirt roads.





Government
Regulations, Declarations & Conditions





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





Mineralization





No known
mineral reserves are known on our land in Queensland, however phosphate
mineralized material deposits are recorded.  Our proposed program will
be developed with a view to verify existing data and prove the extent of
mineralization. Currently Legend is working towards using the recent drilling
results to estimate tones and grade of the non-reserve mineralization. These
estimates will be used to inform any future estimates of probable or proven
reserves in conjunction with the appropriate modifying factors.





Currently
Legend is working towards generating a reserve base at D-Tree following the
resource drilling which was completed in December 2008. It is planned to have
this reserve finalised before the end of the 2nd Quarter 2009.





Project
Strategy





The
Company has revised its project strategy for its phosphate project due to the
current financial and economic climate. The strategy aims to deliver positive
operational cash flow as soon as possible with a reduced capital outlay and the
ability to pay for any required infrastructure from this cash flow. To achieve
this aim a three stage approach has been adopted:





·
            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.




14




Previously
Legend was conducting a study with GHD to investigate the option of using a
slurry pipeline to transport beneficiated product to the Port of Karumba. This
option has now been abandoned due to high cost and port logistics. The transport
option now considered feasible is via rail from Mt.Isa to the Port of
Townsville.





Legend is
now conducting its own studies closely with the Indian Farmers Fertiliser
Cooperative (IFFCO) and various external consultants on all aspects of the
project including studies into metallurgy, geology, environment, mining,
transport and infrastructure. These studies will form the basis of a final
feasibility study.





Worley
Parsons is also working in association with Legend on various aspects of the
project. Worley Parsons is a major international group with extensive experience
offering technical, project and operational support in the resources and energy
sector.





Government
Requirements for Maintenance of Licences





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





License
Conditions





The
Company is required to meet certain standard conditions and obligations as
specified by the Queensland Mineral Resources Act, Exploration Permits. These
include conducting activities in a way which minimise environmental damage,
rehabilitation, avoiding interference with registered native title sites or
areas and ensuring compliance with any other relevant legislation. Programmes of
Work are to be submitted at the time of application for any ground disturbance
or exploration works, the conditions of which are clearly specified and adhered
to. Security bonds are payable on the grant of the permits and additional
conditions can be imposed by the government State Minister.





Native
Title





The rights
and obligations of the Company with respect to native title obligations differ
depending upon the permit’s proposed impact on the land.  All the
exploration permit applications held by the company will need to comply with the
Native Title Act.  The overwhelming majority on permit applications
will be advertised under the expedited procedure and require advertising to
determine whether there are any objections.  If they are no
objections, the Queensland Government can grant the permit and will impose the
Native Title Protection Conditions on the permit before grant.  These
conditions ensure that any native title claimants are aware of the proposed
exploration work and gives them an opportunity to identify any culturally
sensitive areas.  If there are objections, the company will need to
negotiate an agreement with the native title claimants.  Following
lodgement of this agreement with the Queensland government the permit will be
granted.





Environment





The rights
and obligations of the Company with respect to environmental management and
rehabilitation are based upon the principles of disturbance minimisation,
including such things as preservation of mature trees, preventing the spread of
noxious weeds, avoiding the disturbance of waterways and waste
management.  Rehabilitation is a condition of the Security bond and
requires such things as sealing of collars, plugging of casings and replacement
of topsoils.





15




Royalties





The
royalty rate for phosphate rock is the higher of the following: (a) 80 cents for
each tonne of phosphate rock; or (b) the rate, rounded down to 2 decimal places,
for each tonne of phosphate rock worked out using the following formula
–












where
R is the royalty rate,
G is the average P2O5 content of
the phosphate rock for the return period, and Pcurr
is the average price for the return period, converted to Australian dollars at
the average hedge settlement rate for the return period, of Moroccan phosphate
rock with 32.3% P2O5
content.





The
royalty is payable to the State of Queensland.





Contractual
Agreements in relation to Queensland Phosphate Interests





(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 major
      companies 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 conducted by 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 rights to 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 of Queensland,
      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, 17443 and 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.




16




(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 of any 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.





Northern
Territory Exploration Interests





Tenement
Status, Details & Commitments (Projected) Northern Territory,
Australia





Lease
                Lease
                  Status
                Project
                Grant
                  Date
                Expiry
                  Date
                Area
                  (Ha)
                Anni.
      Date
                  (2009)
                GST
      InclusiveRent
      $
                  (2009)
                Commit.
      $ (2009)EL22244
                Granted
                Foelsche
                7/03/2003
                6/03/2009
                143,948
                6/03/2009
                *1
                *1EL22245
                Granted
                Foelsche
                7/03/2003
                6/03/2009
                42,261
                6/03/2009
                *1
                *1EL22246
                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
                *1EL22252
                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
                *1EL22298
                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
                *1EL23118
                Granted
                Abner
                3/03/2003
                2/03/2009
                10,479
                2/03/2009
                *1
                *1EL23119
                Granted
                Foelsche
                3/03/2003
                2/03/2009
                4,909
                2/03/2009
                *1
                *1EL23121
                Granted
                Glyde
                3/03/2003
                2/03/2009
                5,893
                2/03/2009
                *1
                *1EL23126
                Surrendered
                Cox
                5/08/2003
                1/12/2008
                9,745
                
                -
                -EL23127
                Application
      10/04/2001
                Cox
                
                
                35,872
                
                -
                -
  17
  EL23162
                  Application
      9/05/2001
                  Cox
                  
                  
                  38,411
                  
                  -
                  -EL23510
                  Granted
                  Foelsche
                  3/03/2003
                  2/03/2009
                  982
                  2/03/2009
                  *1
                  *1EL23511
                  Granted
                  Glyde
      South
                  3/03/2003
                  2/03/2009
                  4,579
                  2/03/2009
                  *1
                  *1EL23512
                  Granted
                  McArthur
                  3/03/2003
                  2/03/2009
                  7,210
                  2/03/2009
                  *1
                  *1EL23513
                  Granted
                  Abner
                  3/03/2003
                  2/03/2009
                  22,602
                  2/03/2009
                  *1
                  *1EL23514
                  Granted
                  Abner
                  3/03/2003
                  2/03/2009
                  2,947
                  2/03/2009
                  *1
                  *1EL23515
                  Granted
                  McArthur
                  4/07/2003
                  3/07/2009
                  22,730
                  3/07/2009
                  *1
                  *1EL25486
                  Application
      18/07/2006
                  Cox
                  
                  
                  91,191
                  
                  -
                  -EL25491
                  Granted
                  Foelsche
                  12/03/2007
                  11/03/2013
                  2,619
                  11/03/2009
                  $176
                  $40,000EL25612
                  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
                  $10,000EL25617
                  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
                  $10,000EL26406
                  Granted
                  McArthur
                  18/06/2008
                  17/06/2014
                  8,047
                  17/06/2009
                  $275
                  $60,000EL26495
                  Granted
                  Foelsche
                  18/07/2008
                  17/06/2014
                  1,964
                  17/07/2009
                  $66
                  $20,000EL26507
                  Granted
                  McArthur
                  18/07/2008
                  17/06/2014
                  7,208
                  17/07/2009
                  $242
                  $25,000EL26509
                  Granted
                  Foelsche
                  18/07/2008
                  17/06/2014
                  2,621
                  17/07/2009
                  $88
                  $20,000EL26514
                  Granted
                  Cox
                  18/07/2008
                  17/06/2014
                  4,989
                  17/07/2009
                  $176
                  $30,000EL26515
                  Granted
                  Cox
                  18/07/2008
                  17/06/2014
                  3,620
                  17/07/2009
                  $121
                  $30,000EL26528
                  Granted
                  McArthur
                  18/07/2008
                  17/06/2014
                  32,122
                  17/07/2009
                  $1,078
                  $90,000


*1 Please
note that some Legend Tenements in the Northern Territory are in the last year
of the original tenure. It is possible to extend this after a detailed
geological and economic review. However the extension can only be granted by the
Department of Mines and Energy (DME), therefore an estimate cannot be given
without knowing whether the DME were to grant the extension.





Landholdings





All of
Legend’s exploration landholdings (tenements) are held under licence from the
Northern Territory Government in Australia. Tenements are granted as either
exploration licences or mining leases.





Exploration
licences can only be applied for over available ground.  Applications
consist of a prescribed application form, proposed exploration programme with
estimated expenditure and the prescribed application fee.  An
exploration licence number is assigned when the application is
received.  The Department then assesses the application to determine
whether a company is a suitable candidate and proposes to spend sufficient funds
on exploration on the licence.  If the Department considers a company
to be a suitable candidate, the Department then commences the native title
process which involves advertising for the purpose of determining whether there
are any objections to the licence being granted. If there are no objections, the
licence is granted.





18




The
exploration licence is granted for six years provided the company continues to
comply with the licences conditions.  There is a statutory requirement
to reduce the area of the exploration licence by fifty percent before the end of
years two, three, four and five.  An application to waive the
reduction can be made at the time the reduction is due.





Rent is
required to be paid each year in advance.  The cost per block is
increased by 100% each year after year two.





An annual
expenditure report is due each year, as a statement of the amount that has been
spent on the ground.  An annual technical report is also due each
year, as a statement of the exploration work that has been undertaken on the
ground and what work is proposed to be undertaken for the coming
year.





The
exploration licence is due to expire at the end of year six but a renewal
application can be lodged prior to the expiry to, if granted, extend the licence
for another two years.  A summary of work completed on the ground
together with a detailed explanation of the work proposed for the ground is
required to accompany the renewal application.  The rent of the two
year period is also required with the renewal application.





If the
company proposes to mine a measured resource it will need to apply for a Mineral
Lease.  As the Exploration Licence holder it has automatic priority to
the ground to be the subject of the Mineral Lease.  Applications
consist of a prescribed application form, details of the proposed development,
the financial resources to fund the proposal and the prescribed application
fee.  A mineral lease number is assigned when the application is
received.  The Department then assesses the application to determine
the suitability of the proposal.  The application will then pass
through the native title process.  An agreement will need to be
negotiated with the native title holders/claimants as part of the native title
process.  The mineral leases must be surveyed before it is
granted.





A mineral
lease may be granted for such term as the Minister thinks fit.  The
company is required to state the term of the lease required at the time of
application.  The term required is stated on the application
form.





Rent is
required to be paid each year in advance.





An annual
expenditure report is due each year, as a statement of what has been spent on
the ground.  An annual technical report is also due each year, as a
statement of what work has been done on the ground and what work is proposed for
the coming year.





Geological
History and Kimberlite Occurrence in the McArthur River Basin.





The North
Australian Craton is one of two principal tectonic domains in the Northern
Territory. The dominant tectonic episode for formation of the Craton, reworking
the Archaean (or Palaeo-Proterozoic) basement, was the Barramundi Orogeny at
1865-1850Ma. Outcrops of these older deformed and metamorphosed rocks are now
surrounded by younger basins.





The
McArthur Group is the principal element of cover over the North Australian
Craton, composed of mildly deformed and unmetamorphosed Meso-proterozoic
(1800-570Ma) dolomitic carbonate, evaporates and sediments. The McArthur River
Basin extends over 180,000 square kilometers and its sediments host a number of
base metal occurrences including the McArthur Lead-Zinc-Silver shale-hosted
deposit; strata-bound, disseminated Lead-Zinc deposits; the Redbank Copper
deposits and Cobalt, Uranium and Iron.





The
McArthur River Basin is covered by approximately 100 meters of Cambrian Bukalara
sandstone and flood basalts in the south. Widespread, young Cretaceous
sedimentation covered the region but much has been removed through erosion. One
remnant of Cretaceous sediment is host to the Merlin field which represents the
youngest volcanic event in the region.





The major
structural feature in the McArthur Basin is the north to north-west trending
Batten Trough or Batten Fault Zone approximately 70 kilometres wide, to which
Legend’s holdings lie to the east. The Trough is bound on the west by the Emu
Fault which transects Legend’s holdings in the McArthur River Project. The
associated Mallapunyah and Calvert faults are approximately 50 kilometres apart
and also trend north-west.





19




The
presence of microdiamonds across the North Australian Craton defies geological
boundaries, extending right across its heart. This wide distribution may be due
to recycling of the microdiamonds through the younger Cretaceous by fluvial
processes. However, an element of high-level fracture control is now evidenced
by the Merlin deposits. Since the discovery of the Merlin field, diamond
exploration approaches have shifted from Proterozoic mobile belts with little
consideration of regional geology, to incorporate the range of fracture zones in
the North Australian Craton. The North Australian Craton is extensively
underlain by Archaean basement and deep lithospheric, cratonic rocks may be
tapped by younger kimberlites as they intrude into these fractures. The Merlin
kimberlites are certainly younger than their Cambrian sandstone host, yet older
than their Cretaceous cover.





Access





Access to
the Northern Territory project areas is by commercial airline to Darwin, the
capital of the Northern Territory. From Darwin it is approximately 950
kilometres by road approximately 2 hours flying time by air. The nearest major
town is Borroloola which has limited accommodation and other facilities, where
Legend has a base. Access from Borroloola to the drilling sites is normally via
helicopter as terrain is rugged. Between April to November, in the dry season,
four wheel drive vehicles can be used on dirt roads however, distances from
Borroloola to field sites range between 90 and 150 kilometres.





Access to
the Queensland project areas is by commercial airline to Mount Isa, a mining
district in Queensland. From Mount Isa it is approximately 96 kilometres by road
however, helicopter is often used due to rugged terrain. Mount Isa has
substantial infrastructure, accommodation and other facilities. Between April to
November, in the dry season, four wheel drive vehicles can be used on dirt
roads





Project
                      AccessQueensland
      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.McArthurGlydeAbner
      RangeFoelscheCox
                      Via
      the Roper Highway and station roads to Hodgson River, Nutwood Downs and
      Cox River. Or, via the Carpentaria Highway towards Cape
      Crawford.  Exploration
History and Forward Work Program





Selby
Project





The Selby
project is located 100km SW of the coast of the Gulf of Carpentaria in the
McArthur Basin, adjacent to the Georgina Basin which hosts Legend’s Queensland
phosphates. Historically recorded phosphate rock outcrops at surface in
recurrent lenses over a 60 kilometre strike. Uranium, which is a common
by-product of marine phosphate deposits, accounting for a significant proportion
of the world’s Uranium production, is also present.





An
historical Open File review of the Selby region has also identified base metal
results from stream sampling adjacent to the Karns Dolomite and regional fault
systems. Historical data also reveals that the region remains prospective for
diamonds. A multi-facetted approach to exploration of the Selby phosphate was
established in 2007.





20




Work
completed in 2008 consisted of open file review, project generation, geological
mapping, rock chip, stream and loam sampling, diamond and RC drilling. The 2008
exploration programs downgraded the potential of the project to host
significantly economic phosphate deposits. However, a recent in-house review
of  the company’s tenements and ranking them accordingly has
identified EL22251 as still being highly prospective for uranium-copper, base
metals and diamonds.





The
proposed exploration program for 2009 will involve project generation, ground
reconnaissance and geological mapping, stream sediment heavy mineral, rock chip
and mobile metal ion (MMI) sampling. If the results from these
work  are positive, an EM and radiometric survey is also planned. For
this period, Legend will also progress the 100% surrender of ELs 22246 and
22247, including about 25% surrender of EL 22251 due to the Pungalina and Seven
Emu conservation issues.




21









McArthur
River
 
 Legend’s
base metal project is situated approximately 20 kilometres south west of
Borroloola. The Emu fault zone which runs through Legend’s tenements is a
mineralised geological feature hosting the HYC Pyritic Shale base metal prospect
and a number of known base metal deposits accounting for 8% of world base metal
(lead-zinc-silver) production.
 
 Work
completed in 2008 consisted of open file review, project generation, geological
mapping, rock chip, soil and MMI sampling, including RC drilling. During this
period, some significant results were returned including the identification of
two MMI Zinc anomalies at Area A in EL23515. These two discrete Zn anomalies
range from 250-400 metres in width, and






22




connected
by a diffused anomaly train along a 900m east-west corridor. Also present are
adjacent Pb and Mg MMI anomalies.
 
 This Zn
anomaly is interpreted to be contained within the Barney Creek Formation, which
is the host unit for base metals in the HYC McArthur River Mine. The McArthur
River mine is located ENE of Area A in EL 23515. The Barney Creek Formation at
this position of  Area A in EL 23515 is indicated as being under
recent alluvial and colluvial cover.
 
 The
proposed exploration program for 2009 will involve project generation, ground
reconnaissance and geological mapping, rock chip, soil and MMI sampling. A
ground gravity survey plus a regional geophysical compilation are also planned.
For this period and as part of the rationalization of the Northern Territory
tenements, Legend will also progress the 100% surrender of ELs 25617,
26175,  26176, 26177 and 22351.
 
 Abner
Range
 
 The Abner
Range Plateau is approximately 300 kilometers south of Borroloola, west of The
Gulf of Carpentaria in the Northern Territory. It is host to the diamondiferous
Abner Range Kimberlite part of the Merlin diamondiferous intrusive field, only
seven kilometres north of Legend’s holdings. Past indicator mineral sampling by
Ashton and Rio Tinto has recovered macrodiamonds, microdiamonds and chromite
indicator minerals with no primary source yet determined.
 
 Work
completed in 2008 consisted of open file review, project generation, geological
mapping, rock chip, stream sediment heavy mineral and MMI sampling, including
diamond drilling. During this period,  coincident Cu, Mo, Mg, Ni and
Zn MMI and gravity low anomalies were identified  in the north east
corner of EL 23514. These anomalies are interpreted to relate to small
ultramafic rock units of possible kimberlitic affinity, and intruded into
basement structural features. These  anomalies have been proposed for
possible RAB drilling to validate their significance.
 
 The
proposed exploration program for 2009 will involve open file review, project
generation, ground reconnaissance and geological mapping, stream sediment heavy
mineral, rock chip and MMI sampling. A regional geophysical compilation for the
project is also planned. For this period and as part of the rationalization of
the Northern Territory tenements, Legend will also progress the 100% surrenderof EL 23116.
 
 Glyde
Project
 
 The Glyde
River is in the Batten Trough and hosts 40 kilometres of alluvial gravels
sourced from numerous diamond bearing catchments including the entire Merlin
diamond field. The pipes in the Merlin field are located on the eastern shoulder
of the Battern Trough only six kilometres east of the Emu Fault. They have
intruded the Cambrian Bukalara sandstone and were emplaced around the time of
the Alice Springs Orogeny.
 
 The Legend
tenement is north of the HYC Pyritic Shale base metal prospect and this
geological unit has been intersected in several drill holes. CRAE has explored
the tenement area for kimberlite. Ashton collected two bulk samples from
separate drainages and had diamond responses. Helicopter magnetics and EM
covered the northern part of the tenement as part of Rio Tinto’s exploration
around the Merlin pipe field.
 
 Airborne
Electro-Magnetic (“EM”), magnetic and gravity surveys flown in late 2006 have
identified numerous EM, gravity & magnetic anomalies and grid-based loam
samples were taken as follow up to this result and of other
targets.
 
 Work
completed in 2008 consisted of open file review, project generation, geological
mapping, stream sediment heavy mineral and MMI sampling. During this period,
several areas prospective for kimberlitic pipes were identified along the Merlin
- Glyde North (EL 23121) - Tintagel - Glyde South (EL 23511) structural
corridor, and from possible NNE-SSW cross faults.






23




The
proposed exploration program for 2009 will involve open file review, project
generation, ground reconnaissance and geological mapping, lag, stream sediment
heavy mineral,  and MMI sampling. An airborne EM and gravity survey
and a regional geophysical compilation for the project are also
planned.
 
 Foelsche
Project
 
 Legend’s
Foelsche Project tenements lie east of the Glyde Project and Merlin diamond
field. They are bound by regional scale faults which act as fluid conduits for
mineralisation and have uplifted basement rocks up to lie against younger
sandstones. The area contains historical trains of kimberlite indicator minerals
in streams draining the area.
 
 In 2005,
airborne EM/magnetics were flown by Astro which identified priority geophysical
anomalies. These were investigated with ground gravity surveys and RC/diamond
drill holes in 2006. The source of the geophysical anomalies was attributed to
depressions in the Proterozoic sandstone bedrock which were infilled by younger
Cretaceous/Tertiary sediment. Similar infill sequences are known to typically
occur over kimberlites in the region.
 
 Work
completed in 2008 consisted of open file review, project generation, geological
mapping, soil, lag, rock chip, stream sediment heavy mineral and MMI sampling.
Diamond drilling and a geophysical data review were also completed during this
period. At EL 23510, an MMI survey identified Cu-Mg-Zn and Co-Ni anomalies
spread along certain parts of a northwest trending uplifted fault block. These
anomalies are interpreted to represent contrasting chemistries between possible
kimberlitic intrusives and the host Proterozoic sedimentary rocks
 
 The
proposed exploration program for 2009 will involve open file review, project
generation, ground reconnaissance and geological mapping, soil, rock chip and
MMI sampling. An airborne EM and gravity survey and a regional geophysical
compilation for the project are also planned.


24







Cox
Project
 
 The Cox
Project is located about 150km west of the  Merlin diamond field.
Historical Open File Research has indicated that there are two key areas of
concentration of diamonds and indicator minerals, one within EL 22297. Previous
work by Ashton involved bulk sampling and grid loaming in order to locate a
source. The grid sampling was carried out at 500m spacing in some areas, and 1km
in others. Chromites and micro diamonds are distributed along a parallel north
trending structures in the northern areas of the tenements
 
 Exploration
carried out over the Cox Project has included site investigations to verify
historical sampling results, a compilation and analysis of historic exploration
data from open-






25




file
reports and multi-client airborne magnetic data with a view to developing an
appropriate exploration strategy.
 
 Work
completed in 2008 essentially involved the follow-up of the 2006 targets that
were identified through an open file review. Other work included project
generation, geological mapping, GIS compilation and soil sampling.
 
 The
proposed exploration program for 2009 will involve project generation, ground
reconnaissance and geological mapping, stream sediment heavy mineral, soil, rock
chip and MMI sampling. The recognition of non-kimberlitic chromites in EL 22295
and EL 22296 was significant. It appears that these chromites have come from the
weathering of the Cox Formation, which overlies the Bukalara Sandstone. This
observation alone is enough to suggest that the source of these indicators is
the Cambrian volcanic rocks not a later kimberlite.
 
 The above
interpretation has allowed the process of surrendering further ELs 22295, 22296
and 23126. ELAs 22294, 23127, 25612 and 25613 were also surrendered as part of
the  rationalization process. This exercise will allow the exploration
program to focus in more prospective ELs in the Cox Project, particularly to
those ELs surrounding the Gravity Diamonds tenement, which contain
kimberlites.






26









Tenement
Commitment & Expenditure Figures (Past & Projected) Northern Territory,
Australia.
 
 Table 1
shows Legend's NT Exploration 3-year committed and expended expenditures from
2005 to 2008. Table 2 shows Legend's NT Exploration Project Expenditure -
Committed Vs Proposed






27




Table
1. Legend NT Exploration 3-Year Project Expenditure – Committed and
Expended
 
 
 2005-2006
                                                          
                                                          
                                                          2006-2007
                                                          
                                                          
                                                          2007-2008
                                                          
                                                          
                                                          Total
      Last 3 YearsCommitted
                                                          
                                                          
                                                          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
                                                          
                                                          
                                                          $
                                                          672,074TOTAL
                                                          
                                                          
                                                          $
                                                          2,435,000
                                                          
                                                          
                                                          $
                                                          6,135,475
 
 
 Table
2. Legend Project 3-Year Project Expenditure – Committed and
Expended
 
 
 Expenditure
      2008-2009Project
                                  
                                  Committed
                                  
                                  
                                  ProposedGlyde
                                  
                                  $
                                  80,000
                                  
                                  
                                  $
                                  386,000Abner
                                  
                                  $
                                  180,000
                                  
                                  
                                  $
                                  155,300Foelsche
                                  
                                  $
                                  250,000
                                  
                                  
                                  $
                                  271,000Cox
                                  
                                  $
                                  95,000
                                  
                                  
                                  $
                                  194,000Selby
                                  
                                  $
                                  120,000
                                  
                                  
                                  $
                                  143,800McArthur
                                  
                                  $
                                  280,000
                                  
                                  
                                  $
                                  251,900Mobile
      Camp – all projects
                                  
                                  
                                  
                                  
                                  
                                  $
                                  100,00010%
      Contingency on Exploration
                                  
                                  
                                  
                                  
                                  
                                  $
                                  140,280Tenement
      Rental (excl. GST)
                                  
                                  
                                  
                                  
                                  
                                  $
                                  311,580TOTAL
                                  
                                  $
                                  1,005,000
                                  
                                  
                                  $
                                  1,954,660
  
 28




Government
Regulations, Declarations & Conditions
 
 The
Company’s exploration operations are subject to federal and state laws and
regulations governing the method of acquisition and ownership of mining rights,
exploration, development, mining, production, taxes, labour standards,
occupational health, mine safety, toxic substances other
matters.  Federal and State legislation also governs environmental
management and native title issues. We are committed to and, to our knowledge,
are in compliance with all governmental legislation and
regulations.
 
 Mineralisation
 
 No known
mineral reserves are known on our land in the Northern Territory. Our previous
and proposed programs are exploratory in nature.
 
 Government
Requirements for Maintenance of Licences
 
 To ensure
that licences are kept in good standing the Company is required to pay the
annual rent amount for each licence on its respective anniversary
date.  The amount due is dependent upon the size and age of the
licence.  The Company is also required to work the licences and meet
the annual expenditure commitments.  Annual reporting is required,
specifying details of the exploration programme which has occurred and which is
anticipated for the following year. Failure to comply would place the licences
at risk of cancellation and therefore forfeit the right to explore on that
ground.
 
 Licence
Conditions
 
 The
Company is required to meet certain standard conditions and obilgations as
specified by the Northern Territory Of Australia Mining Act, Exploration
Licence. These include conducting activities in a way which minimise
environmental damage, rehabilitiation, avoiding interference with registered
native title sites or areas and ensuring compliance with any other relevant
legislation. Mine Management Plans are to be submitted for any ground
disturbance or exploration works, the conditions of which are to be clearly
specified for approval and adhered to. Security bonds are payable on Mine
Management plans and additional conditions can be imposed by the government
State or Territory Minister.
 
 Native
Title
 
 The rights
and obligations of the Company with respect to native title obligations differ
between licences depending upon the underlying ownership of the
land.  Crown land, namely pastoral lease land, falls under the Native
Title Act while Aboriginal freehold land falls under the Aboriginal Land Rights
Act (Northern Territory). All the granted licences held by the Company are on
pastoral lease land.  The Company is currently in negotiations with
the local native title council working towards the grant of several more
applications that are situated on aboriginal freehold land. Heritage surveys are
contracted where necessary to ensure the protection of local registered and
unregistered aboriginal heritage sites.
 
 Environment
 
 The rights
and obligations of the Company with respect to environmental management and
rehabilitation are based upon the principles of disturbance minimisation,
including such things as preservation of mature trees, preventing the spread of
noxious weeds, avoiding the disturbance of waterways and waste management.
Rehabilitation is a condition of the Security bond and requires such things as
sealing of collars, plugging of casings and replacement of
topsoils.
 
 Royalties
 
 Certain of
the tenements have a 1% gross revenue royalty payable to an external party from
all mineral production derived on the tenements.


29




Acquisition
of Northern Territory Tenements
 
 Effective
as of March 3, 2006, Legend entered into a Contract for the Sale of Mining
Tenements (“Contract”) with Astro Diamond Mines N.L. (“Astro”) an Australian
company  pursuant to which the Company acquired certain diamond mining
tenements in Northern Australia from Astro. The consideration payable by Legend
to Astro was Australian dollars $1.5 million and Legend was also required to pay
to Astro any costs incurred on the tenements after February 1,
2006.  Astro provided commercial warranties which are usual for a
transaction of this nature in favour of Legend. Under Australian law, Astro was
required to provide an independent experts report to shareholders for this
transaction. In order to prepare the independent experts report, a mineral
valuation was prepared on behalf of Astro which indicated that the preferred
value for the tenements that are the subject of the transaction was A$1.5
million. This formed the basis of the consideration agreed by the parties. The
President and Chief Executive Officer of the Company, Mr. J. I. Gutnick was
Chairman and Managing Director of Astro at the time of entering into the
Contract and Dr DS Tyrwhitt, an independent Director of the Company, who is also
a Director of Astro and was a Director of Astro at the time of entering into the
Contract. The tenements are located in the Northern Territory of Australia and
are prospective for diamonds.
 
 Employees
 
 The
services of our Chief Executive Officer, Chief Financial Officer &
Secretary, Executive General Manager  and Project Manager as well as
geological, finance and clerical employees are provided to us pursuant to a
Service Agreement effective December 1, 2004 (the “Service Agreement”) by and
between AXIS Consultants Pty Limited and ourselves.  AXIS also
provides office facilities, equipment, administration and clerical services to
the Company pursuant to the Service Agreement. The Service Agreement may be
terminated by written notice from the parties thereto.
 
 Further
detail relating to additional terms of the Service Agreement is included in
“Item 2- Properties”, “Item 12- Certain Relationships and Related Transactions”
and “Item 10- Executive Compensation”.
 
 Item 1A.
              Risk
      Factors.
 
 We
Lack an Operating History And Have Losses Which We Expect To Continue Into the
Future.
 
 To date we
have had no material source of revenue. We have no operating history as a
mineral exploration or mining company upon which an evaluation of our future
success or failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon:
 
 -
              exploration
      and development of any mineral property we
  identify;
  -
              our
      ability to locate economically viable mineral reserves in any mineral
      property we identify; and
  -
              our
      ability to generate revenues and profitably operate a mine on any mineral
      property we identify.
 
 We
Have No Mineral Reserves And We Cannot Assure You That We Will Find Such
Reserves. If We Develop A Mineral Reserve, There Is No Guarantee That Production
Will Be Profitable.
 
 We cannot
guarantee we will ever find any or that we will be successful in locating
commercial mineral reserves on any exploration properties that we may
obtain.  Even if we find a commercial mineral reserve, there is no
assurance that we will be able to mine them. Even if we develop a mine, there is
no assurance that we will make a profit. If we do not find commercial minerals
you could lose part or all of your investment.
 30
  We
May Need Further Financing To Determine If There Is Commercial Minerals, Develop
Any Minerals We Identify And To Maintain The Mineral Claims.
 
 Our
success may depend on our ability to raise further capital. We may require
further substantial additional funds to conduct mineral exploration and
development activities on all of our tenements. There is no assurance whatsoever
that funds will be available from any source or, if available, that they can be
obtained on terms acceptable to us to make investments. If funds are not
available in the amounts required to achieve our business strategy, we would be
unable to reach our objective. This could cause the loss of all or part of your
investment.
 
 World
Economic Conditions Could Adversely Affect Our Results of Operations and
Financial Condition
 
 In 2008
and 2009, world economic conditions have experienced a downturn due to the
sequential effects of the subprime lending crisis, general credit market crisis,
the general unavailability of financing, collateral effects on the finance and
banking industries, volatile energy and commodity costs, concerns about
inflation, slower economic activity, decreased consumer confidence, reduced
corporate profits and capital spending, adverse business conditions, increased
unemployment and liquidity concerns. These adverse conditions may make it harder
for the Company to raise additional funds to finance the continued development
of its business and may reduce the demand for phosphate, which, at least in the
short term, could reduce the value of the Company's mineral exploration
properties. Continued adverse economic  conditions could adversely
affect our liquidity, results of operations and financial
condition.
 
 We
Could Encounter Delays Due To Regulatory And Permitting Delays.
 
 We could
face delays in obtaining mining permits and environmental permits. Such delays,
could jeopardize financing, if any, in which case we would have to delay or
abandon work on the properties.
 
 There
Are Uncertainties Inherent In The Estimation Of Mineral Reserves.
 
 Reserve
estimates, including the economic recovery of ore, will require us to make
assumptions about recovery costs and market prices. Reserve estimation is, by
its nature, an imprecise and subjective process and the accuracy of such
estimates is a function of the quality of available data and of engineering and
geological interpretation, judgment and experience. The economic feasibility of
properties will be based upon our estimates of the size and grade of ore
reserves, metallurgical recoveries, production rates, capital and operating
costs, and the future price of diamonds. If such estimates are incorrect or vary
substantially it could affect our ability to develop an economical mine and
would reduce the value of your investment.
 
 If
We Define An Economic Ore Reserve And Achieve Production, It Will Decline In The
Future. An Ore Reserve Is A Wasting Asset.
 
 Our future
ore reserve and production, if any, will decline as a result of the exhaustion
of reserves and possible closure of any mine that might be
developed.  Eventually, at some unknown time in the future, all of the
economically extractable ore will be removed from the properties, and there will
be no ore remaining unless this Company is successful in near mine site
exploration to extend the life of the mining operation. This is called depletion
of reserves. Ultimately, we must acquire or operate other properties in order to
continue as an on going business. Our success in continuing to develop reserves,
if any, will affect the value of your investment.
 
 There
Are Significant Risks Associated With Mining Activities.
 
 The mining
business is generally subject to risks and hazards, including quantity of
production, quality of the ore, environmental hazards, industrial accidents, the
encountering of unusual or unexpected geological formations, cave-ins, flooding,
earthquakes and periodic interruptions due to inclement or hazardous weather
conditions. These occurrences could result in damage to, or destruction of, our
mineral properties or production facilities, personal injury or death,
environmental damage, reduced production and delays in mining, asset
write-downs, monetary losses and possible legal liability. We could incur
significant costs that could adversely affect our results of
operation.  Insurance fully covering many environmental risks
(including potential liability for pollution or other hazards as a result of
disposal of waste products occurring from exploration and production) is not
generally available to us or to other companies in the industry. What liability
insurance we carry may not be adequate to cover any claim.
 
 31
  We
May Subject To Significant Environmental And Other Governmental Regulations That
Can Require Substantial Capital Expenditure, And Can Be
Time-Consuming.
 
 We may be
required to comply with various laws and regulations pertaining to exploration,
development and the discharge of materials into the environment or otherwise
relating to the protection of the environment in the countries that we operate,
all of which can increase the costs and time required to attain operations. We
may have to obtain exploration, development and environmental permits, licenses
or approvals that may be required for our operations. There can be no assurance
that we will be successful in obtaining, if required, a permit to commence
exploration, development and operation, or that such permit can be obtained in a
timely basis. If we are unsuccessful in obtaining the required permits it may
adversely affect our ability to carry on business and cause you to lose part or
all of your investment.
 
 Mining
Accidents Or Other Adverse Events At Our Property Could Reduce Our Production
Levels.
 
 If and
when we reach production it may fall below estimated levels as a result of
mining accidents, cave-ins or flooding on the properties. In addition,
production may be unexpectedly reduced if, during the course of mining,
unfavourable ground conditions or seismic activity are encountered, ore grades
are lower than expected, or the physical or metallurgical characteristics of the
ore are less amenable to mining or processing than expected. The happening of
these types of events would reduce our profitably or could cause us to cease
operations which would cause you to lose part or all of your
investment.
 
 The
acquisition of mineral properties is subject to substantial competition. If we
must pursue alternative properties, companies with greater financial resources,
larger staffs, more experience, and more equipment for exploration and
development may be in a better position than us to compete for properties. We
may have to undertake greater risks than more established companies in order to
compete which could affect the value of your investment.
 
 We
May Lose Our Claims If We Do No Maintain A Minimum Level of Work On The
Claims
 
 We will be
required to carry out a minimum level of work on each claim to maintain of our
claims in good standing. If we cannot afford to carry out the work or pay the
fees we could lose our interest in claims. The loss of some or all of our
mineral claims would adversely affect the value of your investment.
 
 We
are substantially dependent upon AXIS Consultants To Carry Out Our
Activities
 
 We are
substantially dependent upon AXIS for our senior management, financial and
accounting, corporate legal and other corporate headquarters
functions.  For example, each of our officers is employed by AXIS and,
as such, is required by AXIS to devote substantial amounts of time to the
business and affairs of the other shareholders of AXIS.
 
 Pursuant
to a services agreement, AXIS provides us with office facilities, administrative
personnel and services, management and geological staff and
services.  No fixed fee is set in the agreement and we are required to
reimburse AXIS for any direct costs incurred by AXIS for us. In addition, we pay
a proportion of AXIS indirect costs based on a measure of our utilization of the
facilities and activities of AXIS plus a service fee of not more than 15% of the
direct and indirect costs. This service agreement may be terminated by us or
AXIS on 60 days’ notice. See “Certain Relationships and Related Party
Transactions.”
 
 32
  We are one
of eight affiliated companies. Each of the companies has some common Directors,
officers and shareholders. In addition, each of the companies is substantially
dependent upon AXIS for its senior management and certain mining and exploration
staff.  A number of arrangements and transactions have been entered
into from time to time between such companies. Currently, there are no material
arrangements or planned transactions between the Company and any of the other
affiliated companies other than AXIS.  However, it is possible we may
enter into such transactions in the future which could present conflicts of
interest.
 
 Future
Sales of Common Stock Could Depress The Price Of Our Common Stock
 
 Future
sales of substantial amounts of Common Stock by certain stockholders could have
a material adverse impact on the market price for the Common Stock at the time.
As of the date of this annual report, there are 226,315,392 shares of Common
Stock outstanding, of which 5,000,000 shares of Common Stock are restricted
securities. Restricted securities will be available for sale pursuant to Rule
144 under the Securities Act. In general, under rule 144, a person (or persons
whose shares are aggregated) who has satisfied a six-month holding period and
who is not an affiliate of the Company may sell restricted securities without
limitation as long as the Company is current in its SEC reports. A person who is
an affiliate of the Company may sell within any three-month period a number of
restricted securities which does not exceed the greater of one (1%) percent of
the shares outstanding or the average weekly trading volume during the four
calendar weeks preceding the notice of sale required by Rule 144.  In
addition, Rule 144 permits, under certain circumstances, the sale of restricted
securities by a non-affiliate without any limitations after a one-year holding
period.  Any sales of shares by stockholders pursuant to Rule 144 may
have a depressive effect on the price of our Common Stock.
 
 Our
Common Stock Is Traded Over the Counter, Which May Deprive Stockholders Of The
Full Value Of Their Shares
 
 Our Common
Stock is quoted via the Over The Counter Bulletin Board (OTCBB).  As
such, our Common Stock may have fewer market makers, lower trading volumes and
larger spreads between bid and asked prices than securities listed on an
exchange such as the New York Stock Exchange or the NASDAQ Stock Market. These
factors may result in higher price volatility and less market liquidity for the
Common Stock.
 
 A
Low Market Price May Severely Limit The Potential Market For Our Common
Stock
 
 Our Common
Stock is currently trading at a price substantially below $5.00 per share,
subjecting trading in the stock to certain SEC rules requiring additional
disclosures by broker-dealers.  These rules generally apply to any
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions (a “penny stock”).  Such rules require the
delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith and impose
various sales practice requirements on broker-dealers who sell penny stocks to
persons other than established customers and institutional or wealthy
investors.  For these types of transactions, the broker-dealer must
make a special suitability determination for the purchaser and have received the
purchaser’s written consent to the transaction prior to the sale.  The
broker-dealer also must disclose the commissions payable to the broker-dealer,
current bid and offer quotations for the penny stock and, if the broker-dealer
is the sole market maker, the broker-dealer must disclose this fact and the
broker-dealer’s presumed control over the market.  Such information
must be provided to the customer orally or in writing before or with the written
confirmation of trade sent to the customer. Monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stock.  The additional
burdens imposed upon broker-dealers by such requirements could discourage
broker-dealers from effecting transactions in our Common Stock.
 
 The
Market Price Of Your Shares Will Be Volatile.
 
 The stock
market price of mineral exploration companies like us has been volatile.
Securities markets may experience price and volume volatility. The market price
of our stock may experience wide fluctuations that could be unrelated to our
financial and operating results. Such volatility or fluctuations could adversely
affect your ability to sell your shares and the value you might receive for
those shares.
  33
  
 Item 1B.
              Unresolved
      Staff Comments.
 
 As of
December 31, 2008, we do not have any Securities and Exchange Commission
staff comments that have been unresolved for more than 180 days.
  
 Item 2.
              Properties.
 
 Legend has
exploration properties as discussed in “Item 1 – Description of
Business”.  Legend occupies certain executive and office facilities in
New York and in Melbourne, Victoria, Australia which are provided to it pursuant
to the Service Agreement with AXIS.  See “Item 1 – Business -
Employees” and “Item 12 – Certain Relationships and Related Transactions”.
Legend believes that its administrative space is adequate for its current
needs.
  
 Item 3.
              Legal
      Proceedings.
 
 There are
no pending legal proceedings to which the Company is a party, or to which any of
its property is the subject, which the Company considers material.
  
 Item 4.
              Submission
      of Matters to a Vote of Security
Holders.
 
 At the
Company’s Annual Meeting of Stockholders held on November 27, 2008, stockholders
voted to approve all of management’s proposals as follows:
 
 1.           To
elect the following directors to serve a one-year term and until their
successors are elected and qualified:
 
 Votes For
                      
                      Votes WithheldJoseph
      Gutnick
                      128,502,013
                      
                      1,814,750David
      Tyrwhitt
                      128,504,013
                      
                      1,812,750Dr.
      U.S. Awasthi
                      128,506,263
                      
                      1,810,500Manish
      Gupta
                      128,506,263
                      
                      1,810,500Dr.
      Allan Trench
                      130,313,513
                      
                      3,250Henry
      Herzog
                      130,313,513
                      
                      3,250
 
  34
  PART
II
  Item 5.
              Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.
 
 Market
Information
 
 Legend's
Common Stock is quoted on the NASD Over-the-Counter Bulletin Board ("OTCBB")
under the ticker symbol "LGDI" and CUSIP# 52467C 10 0. The Company's Common
Stock was initially cleared for trading on the OTC-BB on September 26,
2003.
 
 The
following table sets out the high and low bid information for the Common Stock
as reported by the National Quotation Service Bureau for each period/quarter
indicated in US$:
 
 
 Calendar
      Period
                  High
      Bid(1)
                  Low
      Bid(1)2007First
      Quarter
                  1.80
                  0.90Second
      Quarter
                  1.95
                  1.50Third
      Quarter
                  1.45
                  1.25Fourth
      Quarter
                  1.50
                  0.752008First
      Quarter
                  2.15
                  0.09Second
      Quarter
                  5.05
                  1.62Third
      Quarter
                  4.42
                  0.62Fourth
      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.
 
 As of
March 11, 2009, there are 226,315,392 shares of Common Stock
outstanding.
 
 To date we
have not paid dividends on our Common Stock and we do not expect to declare or
pay any dividends on our Common Stock in the foreseeable future. Payment of any
dividends will depend upon our future earnings, if any, our financial condition,
and other factors deemed relevant by the Board of Directors.
 
 Shareholders
  As of
January 31, 2009, there were approximately 1,273 record holders of the Company's
Common Stock. Within the holders of record of the Company's Common Stock are
depositories such as Cede & Co., a nominee for The Depository Trust Company
(or DTC), that hold shares of stock for brokerage firms which, in turn, hold
shares of stock for one or more beneficial owners. Accordingly, the Company
believes there are many more beneficial owners of its Common Stock whose shares
are held in "street name", not in the name of the individual
shareholder.
 
 Options
  Effective
as of December 12, 2005, the Board of Directors of Company approved the
distribution to stockholders for no consideration of an aggregate of 36,135,500
non-transferable options, each of which is exercisable to purchase one share of
Common Stock of the Company at an exercise price of US$0.25 ($0.111, as
adjusted) per share with a latest exercise date of December 31, 2012 and
otherwise on the terms and conditions set out in Appendix A to the Form 8-K
dated December 12, 2005.  The options were issued on a pro-rata basis
to all stockholders of record on December 31, 2005 on the basis of two (2)
options for every one (1) share of Common Stock owned by a stockholder on the
record date. The options may not be exercised until the shares underlying the
options are registered under federal and state securities laws. On June 26,
2006, the Board of Directors amended the terms and conditions of the options and
included a cashless exercise clause for the options in the terms and conditions.
On July 21, 2006, Renika exercised 34,778,220 options using the cashless
exercise feature and were issued 71,730,079 shares of Common Stock. In December
2006, the Company issued 700,000 shares with attaching options on the basis of
one option for every two shares at no exercise price. The options were exercised
in December 2006. On December 27, 2006, a further option holder exercised 19,000
options using the cashless exercise feature and were issued 24,750 shares of
Common Stock.  3,123,630 of these options remained outstanding as of
the date of this Report.
 
 35
  On
September 19, 2006, the Company issued 8,100,000 options (as adjusted for the
Stock Split) pursuant to the 2006 Equity Incentive Plan. Of the total 8,100,000
options issued, 2,700,000 vested on September 19, 2007, 2,700,000 vested on
September 19, 2008 and 2,700,000 will vest on September 19, 2009. The exercise
price of the options is US$1.00 for the President and Chief Executive Officer
and for all other participants, US$0.444 for 50% of the options and US$1.00 for
the balance of 50% of the options. The options expire on September 19,
2016.
 
 In
November 2006, the Company issued options to purchase 112,500 shares of Common
Stock with an exercise price of US$0.111 per share in connection with the
settlement of a dispute.
 
 On May 16,
2007, the Company issued 862,500 options pursuant to the 2006 Equity Incentive
Plan. Of the total 862,500 options issued, 287,500 vested on May 16, 2008,
287,500 will vest on May 16, 2009 and 287,500 will vest on May 16, 2010. 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 options expire on May 16,
2017.
 
 On
December 28, 2007, the Board of Directors of the Company agreed to issue/ratify
the issue of 5,387,500 options under the 2006 Incentive Option Plan to officers,
employees and consultants as follows:
 
 (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.
 
 On
February 7, 2008 the Board of Directors of the Company agreed to issue 5,000,000
options to officers, employees and consultants under the 2006 Incentive Option
Plan of which 1/3 vested on February 7, 2009, 1/3 will vest on February 7, 2010
and the balance on February 7, 2011 and have an exercise price of US$2.00 per
option.
 
 On
February 18, 2008 the Board of Directors of the Company agreed to issue 400,000
options to officers, employees and consultants under the 2006 Incentive Option
Plan of which 1/3 vested on February 18, 2009, 1/3 will vest on February 18,
2010 and the balance on February 18, 2011 and have an exercise price of US$1.00
per option.
 
 On May 29,
2008 the Board of Directors of the Company agreed to issue 362,500 options to
officers, employees and consultants under the 2006 Incentive Option Plan of
which 1/3 will vest on May 29, 2009, 1/3 will vest on May 29, 2010 and the
balance on May 29, 2011 and have an exercise price of US$1.00 per
option.
 
 On July
11, 2008, the Company issued Dr. D.S. Tyrwhitt 1,000,000 options under the 2006
Incentive Option Plan with an exercise price of US$3.48, a latest exercise date
of July 11, 2018, no issue price and to vest 1/3 in 12 months, 1/3 in 24 months
and 1/3 in 36 months. An external consultant has calculated the fair value of
the options using the Binomial valuation method using a share price of US$3.26,
strike price as set out above, maturity period of 5.5 to 6.5 years depending on
the vesting date, risk free interest rate of 3.960% and volatility of 60%. This
equates to values ranging from US$1.81 to US$1.95 per option depending on the
exercise price and vesting date.  The total value of the options
equates to A$1,959,558.
 
 36
  On July
14, 2008, the Company issued options to the Indian Farmers Fertilizer
Cooperative Limited, pursuant to a Share Options Agreement, to purchase
30,000,000 shares of Common Stock on the following terms:
 
 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.
 
 On August
11, 2008, the Board of Directors of the Company agreed to issue/ratify the issue
of 462,500 options under the 2006 Incentive Option Plan to officers, employees
and consultants as follows:
 
 (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.
 
 On August
11, 2008 the Company issued two non executive directors 700,000 options under
the 2006 Incentive Option Plan with an exercise price of US$2.00, a latest
exercise date of August 11, 2018, no issue price and to vest 1/3 in 12 months,
1/3 in 24 months and 1/3 in 36 months.
 
 On
December 4, 2008, the Board of Directors of the Company agreed to issue/ratify
the issue of 3,275,000 options under the 2006 Incentive Option Plan to officers,
employees and consultants as follows:
 
 (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.
  37
  Dividend
Policy
  The
Company has not previously paid any cash dividends on Common Stock and does not
anticipate or contemplate paying dividends on Common Stock in the foreseeable
future. It is the present intention of management to utilize all available funds
for the development of the Company's business. The only restrictions that limit
the ability to pay dividends on common equity or that are likely to do so in the
future, are those restrictions imposed by law. Under Delaware corporate law, no
dividends or other distributions may be made which would render the Company
insolvent or reduce assets to less than the sum of its liabilities plus the
amount needed to satisfy any outstanding liquidation preferences.
 
 Effective
November 17, 2006, the Company’s Board of Directors declared a 1-for-2 share
bonus issue in the form of a dividend that was payable in December 2006 to
stockholders of record as of November 17, 2006.  An aggregate of
27,599,722 shares of Common Stock were issued in connection with this
dividend.
 
 In
November 2006, the Company’s Board of Directors declared a second 1-for-2 share
bonus issue in the form of a dividend that was payable in January 2007 to
stockholders of record as of December 31, 2006.  An aggregate of
41,934,337 shares of Common Stock were issued in connection with this
dividend.
 
 Transfer
Agent
 
 The
transfer agent and registrar for the Company's Common Stock is Continental Stock
Transfer & Trust Company of 17 Battery Place, 8th Floor,
New York, NY 10004.
 
 Recent
Sales of Unregistered Securities
 
 We have
issued no unregistered securities within the period covered by this report which
have not been previously reported on Form 10-Q or Form 8-K.
 
 Item 6.
              Selected
      Financial Data.
 
 Our
selected financial data presented below for each of the years in the two-year
period ended December 31, 2008, and the balance sheet data at December 31, 2008
and 2007 has been derived from financial statements, which have been audited by
PKF, Certified Public Accountants, a Professional Corporation.  The
selected financial data should be read in conjunction with our financial
statements for each of the years in the period ended December 31, 2008 and Notes
thereto, which are included elsewhere in this Annual Report.
 38
  Statement
of Operations Data
 
 
 Year
      ended December 312007
                                                                                                  
                                                                                                  
                                                                                                  2008
                                                                                                  
                                                                                                  
                                                                                                  2008
                                                                                                    Conv.
                                                                                                    TranslA$000s
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  A$000s
                                                                                                  
                                                                                                  
                                                                                                  US$000sRevenues
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -Other
      income (loss)
                                                                                                  
                                                                                                  
                                                                                                  22
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  3,726
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  2,573Costs
      and expenses
                                                                                                  
                                                                                                  
                                                                                                  (8,540
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (23,337
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (16,119
                                                                                                  )Loss
      from operations
                                                                                                  
                                                                                                  
                                                                                                  (8,518
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (19,611
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (13,545
                                                                                                  )Foreign
      currency gain (loss))
                                                                                                  
                                                                                                  
                                                                                                  (120
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  5,390
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  3,723Profit
      (loss) before income
                                                                                                    taxes
                                                                                                  
                                                                                                  
                                                                                                  (8,638
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (14,221
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (9,822
                                                                                                  )Provision
      for income taxes
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -Net
      profit (loss)
                                                                                                  
                                                                                                  
                                                                                                  (8,638
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (14,221
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (9,822
                                                                                                  )A$
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  A$
                                                                                                  
                                                                                                  
                                                                                                  $USNet
      profit (loss) per share
                                                                                                    on
      continuing operations
                                                                                                  
                                                                                                  
                                                                                                  (0.06
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (0.07
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (0.05
                                                                                                  )Weighted
      average number
                                                                                                    of
      shares outstanding (000s)
                                                                                                  
                                                                                                  
                                                                                                  146,740
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  204,501
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  204,501Balance
      Sheet DataA$000s
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  A$000s
                                                                                                  
                                                                                                  
                                                                                                  US$000sTotal
      assets
                                                                                                  
                                                                                                  
                                                                                                  17,994
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  130,076
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  89,843Total
      liabilities
                                                                                                  
                                                                                                  
                                                                                                  1,035
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  3,317
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  2,291Stockholders’
      equity
                                                                                                  
                                                                                                  
                                                                                                  16,959
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  126,759
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  87,552
 39
 Item 7.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation.
 
 General
 
 The
following discussion and analysis of our financial condition and plan of
operation should be read in conjunction with the Financial Statements and
accompanying notes and the other financial information appearing elsewhere in
this report.  This report contains numerous forward-looking statements
relating to our business. Such forward-looking statements are identified by the
use of words such a s believes, intends, expects, hopes, may, should, plan,
projected, contemplates, anticipates or similar words. Actual operating
schedules, results of operations, ore grades and mineral deposit estimates and
other projections and estimates could differ materially form those projected in
the forward-looking statements.
 
 We are an
exploration stage company.  Our principal exploration target is for
phosphate. We are in the initial stages of our exploration program and we have
not yet identified any ore reserves.  We have not generated any
material revenues from operations
 
 Foreign
Currency Translation
 
 The
majority of our administrative operations are in Australia and, as a result, our
accounts are reported in Australian dollars. Foreign income and expenses are
translated into Australian dollars at the average exchange rate prevailing
during the period. Assets and liabilities of the foreign operations are
translated into Australian dollars at the period-end exchange rate. The
following table shows the period-end rates of exchange of the Australian and US
dollar compared with the US dollar during the periods indicated. During the
year, the Company had significant US$ cash balances which when converted to
Australian dollars results in a large foreign exchange gain.
  Year
      endedDecember
      312007
                    
                    
                    A$1.00
                    
                    =
                    
                    
                    US$0.87672008
                    
                    
                    A$1.00
                    
                    =
                    
                    
                    US$0.6907
 
 
 The
exchange rate between the A$ and US$ has moved by 21.22% between December 31,
2007 and 2008.  Accordingly, a direct comparison of costs between
fiscal 2007 and 2008 may not necessarily be a true comparison.
 
 Plan
of Operation
 
 We had
A$119,277,536 in cash at December 31, 2008.
 
 On June 3,
2008, Legend issued 42,000,000 shares of common stock at a placement price of
US$2.50 per share raising A$110,028,293 (US$105,000,000). The direct costs of
the offering totalled A$5,920,448..During the third quarter of 2008, 5,000,000
options were exercised at a price of US$2.50 per share . The total amount
received was A$13,672,091 (US$12,350,000).
 
 We
commenced exploration activities on the tenements we acquired in July 2006 and
since that time and up to December 31, 2008, have spent A$17,723,422 on
exploration and pre-development activities. We plan to continue our exploration
and pre-development program throughout 2009 and anticipate spending A$36.4
million on exploration and pre-development (including A$7.4 million for capital
items for exploration and pre-development) A$3 million on investments and A$9
million on administrative costs.
 
 As set out
in Item 1 “Employees” the services of our Chief Executive Officer, Chief
Financial Officer, General Manager Development and Resources, geologists,
finance and clerical employees are provided by AXIS.  At the current
time, we have no plans to change these arrangements or employ any further
persons.
  40




Results
of Operations
 
 Year
ended December 31, 2008 versus Year ended December 31, 2007
 
 As an
exploration company, we do not have an ongoing source of revenue. Our revenue
stream is normally from ad-hoc tenement disposals and interest received on cash
in bank. During the year ended December 31, 2008, we received A$3,719,371
(US$2,568,969) in interest on funds in the bank (2007: A$22,183) and other
income of A$6,534 (US$4,513) (2007: A$nil). The increase in interest income is a
result of the higher level of cash reserves we held during the year following
the equity raisings from Atticus in December 2007, from the share placement
arranged by BMO in June 2008 and following the exercise of options by IFFCO in
July 2008.
 
 Costs and
expenses increased during the year from A$8,539,934 for the year ended December
31, 2007 to A$23,337,215 (US$16,119,014) for the year ended December 31,
2008.
 
 The main
components of costs and expenses are as follows:-
 
 (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 and a 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
      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 been expensed as part of
      exploration costs. We have 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 compliance
      with 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 Form S-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 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 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.
  41
  (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. Teutonic held
      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
      December 31, 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, trips to 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 costs related to the increase in activity by
      the Companyas 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 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, 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 Directors and 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 papers and 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 consequence
      of 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 forfeited options. See
      note 7 for further details on the options
  issued.
  42




Accordingly,
the loss from operations increased from A$8,517,751 for the year ended December
31, 2007 to A$19,611,310 (US$13,545,531) for the year ended December 31,
2008.


There was
no provision for tax in either 2008 or 2007.
 
 The net
loss amounted to A$14,221,560 (US$9,822,831) for the year ended December 31,
2008, compared to a net loss of A$8,638,129 for the year ended December 31,
2007.
 
 The net
loss per common equivalent share in 2008 was A$0.07 (US$0.05) compared with a
net loss with a common equivalent share price of A$0.06 in the prior
year.
 
 Liquidity
and Capital Resources
 
 As of
December 31, 2008, the Company has cash of A$119,277,536
(US$82,384,994).
 
 During
fiscal 2008, net cash used in operating activities was A$15,359,851
(US$10,608,050), as compared to A$7,045,168 in 2007, reflecting the commencement
of the Company’s phosphate exploration activities in 2008. During fiscal 2008,
net cash used in investing activities was A$5,677,315 (US$3,921,320) and
A$142,292 in 2007. Additions to property, plant and equipment and motor vehicles
were A$4,640,717 (US$3,205,343) in 2008 and A$142,292 in  2007 Capital
expenditure includes, among others, A$1,270,869 (US$877,789) for a lear jet,
A$2,536,607 (US$1,752,034) for land and buildings in Mt Isa, Queensland and
A$20,000 for the purchase of motor vehicles (2007 A$142,292), and non cash
purchase of motor vehicles under capital finance agreements of
A$705,841(US$487,524) in 2008 and A$24,581 in 2007. Investments in trading
securities are classified as current assets and the market value at December 31,
2008 was A$780,946 (US$539,399). During fiscal 2008, net cash provided by
financing activities was A$117,787,531 (US$81,355,847) which represented the
proceeds of private placements offering of shares of Common Stock, as compared
to A$23,435,853 in 2007. At December 31, 2008, the Company held US$14,620,616 in
interest bearing accounts in US banking
   43




institutions. During the year, the Company
had significant US$ cash balances which when converted to Australian dollars
results in a large foreign exchange gain.
 
 We plan to
continue our exploration and pre-development program throughout 2009 and
anticipate spending A$36,4 million on exploration and pre-development (including
A$7.4 million for capital items for exploration and pre-development) A$3 million
on investments and A$9 million on administrative costs . However, if exploration
and pre-development results are positive, we believe that we have the cash
resources or will be able to raise additional equity capital in order to
progress our exploration and development program at a faster rate.
 
 On
December 12, 2007, we entered into a Subscription Agreement with Atticus
European Fund Ltd. and Green Way Managed Account Series Ltd. in respect of its
segregated account, Green Way Portfolio D (collectively “Atticus”) pursuant to
which the Company issued in a private placement transaction (the “Private
Placement”) to Atticus an aggregate of 18,750,000 shares of Common Stock at a
price of US$0.80 per share for an aggregate purchase price of US$15,000,000
(A$16,924,292). We agreed to prepare and file with the Securities and Exchange
Commission a registration statement covering the resale of the shares of Common
Stock, which registration statement was filed on February 13, 2008.
 
 In June 2008, the Company completed a
private placement offering (the “BMO Offering”) of 42,000,000 share of common
stock to institutional investors at a purchase price of US$2.50 per share for
total proceeds of A$110,028,293 (US$105,000,000). BMO Nesbitt Burns Inc.,
Wellington West Capital Markets Inc. and BBY Limited acted as agents for the
offering and received a commission of 5% of the offering proceeds and two year
warrants to purchase 840,000 shares of common stock at an exercise price of
US$2.50 per share.
 
 In connection with the BMO Offering,
the Company agreed not to issue any additional shares of Common Stock (other
than pursuant to existing rights) for a period of 120 days following the closing
without the consent of BMO, which shall not be unreasonably
withheld.  The Company also agreed to appoint a chief operating
officer with the approval of BMO and to use its reasonable best efforts to list
its shares of Common Stock on the American Stock Exchange (“AMEX”) within six
months following the closing date. As a result of the current market conditions,
the Company has put on hold a decision to list on AMEX.
 
 In
connection with the BMO Offering, Joseph Gutnick, Renika Pty Ltd. and Chabad
House of Caulfield Pty Ltd. (the “Gutnick Group”) generally have agreed not to
acquire, transfer or dispose of any shares of Common Stock or other securities
of the Company or enter into any agreements or make any announcements with
respect thereto for a period of one year following the Closing, except that the
Gutnick Group is not prohibited from (i) selling shares to an industry
participant such as a mining company or fertilizer manufacturer or user in an
off-market transaction; (ii) selling up to 2,000,000 shares commencing 180 days
after the closing date; provided that BMO shall have the right to act as the
broker for any sales that are made on market; and (iii)  selling
shares in response to a takeover offer for all of the outstanding shares of the
Company.
 
 Effective
July 14, 2008, the Company entered into a Shares Option Agreement with the
Indian Farmers Fertilizer Cooperative Limited (“IFFCO”) to finance the Company’s
operations.
 
 Under the
Share Options Agreement, IFFCO received options to purchase 30 million shares of
Common Stock of the Company on the following terms:
  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.


44




During the
third quarter of 2008, the 5,000,000 options issued to IFFCO, at an exercise
price of US$2.50 per share and expiring 60 days from July 11, 2008 were
exercised on August 11, 2008 and pursuant to the Share Options Agreement,
received a 1.2% discount on the exercise price. The total amount received was
A$13,672,091 (US$12,350,000) and the Company issued 5,000,000 shares of common
stock.
 
 The total
remaining proceeds amount to US$88 million, and when exercised will be utilized
to fund expenditure related to the Company’s phosphate project.
 
 The
Company accounts for these options as a financing activity and accordingly,
records all proceeds upon exercise of such options within stockholders’
equity.
 
 The Share
Options Agreement also gives IFFCO a pre-emptive right to acquire its pro rata
share of future issuances of Common Stock by the Company, with certain
exceptions.
 
 Pursuant
to the Shares Option Agreement, the parties agreed to enter into a long-term
rock off-take agreement, which shall be separately negotiated but which shall be
based on certain principles which were previously described in the Company’s
Quarterly Report of Form 10-Q for the fiscal quarter ended June 30,
2008.
 
 The
Company is considered to be an exploration stage company, with no significant
revenue, and is dependent upon the raising of capital through placement of its
Common Stock, preferred stock or debentures. In the event the Company is
unsuccessful in raising such capital, it may never commence active
operations.
 
 Impact
of Recent Accounting Pronouncements
 
 For a
discussion of the impact of recent accounting pronouncements on the Company’s
annual financial statements, see Note 2 to the Company’s Financial Statements
which are included herein.
 
 Item 7A.
              Quantitative
      and Qualitative Disclosures About Market
Risk.
 
 At
December 31, 2008, the Company had no outstanding Loan Facilities.
 
 Item 8.
              Financial
      Statements and Supplementary Data.
 
 See the
Financial Statements beginning on page F-1.
 
 Item 9.
              Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.
 
 There have
been no changes in accountants or any disagreements with accountants on any
matter of accounting principles or practices or financial statement disclosures
during the two years ended December 31, 2008.
 
 Item 9A.
              Controls
      and Procedures.
 
 (a)
              Evaluation
      of disclosure controls and procedures.Our
      principal executive officer and our principal financial officer evaluated
      the effectiveness of our disclosure controls and procedures (as defined in
      Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934
      as amended) as of the end of the period covered by this
      report.   Based on that evaluation, such principal
      executive officer and principal financial officer concluded that, the
      Company’s disclosure control and procedures were effective as of the end
      of the period covered by this
report.
  (b)
              Management's
      Report on Internal Control over Financial Reporting.Our
      management is responsible for establishing and maintaining adequate
      internal control over financial reporting, as such term is defined in
      Exchange Act Rules l3a-15(f) under the Securities Exchange Act of 1934, as
      amended. Under the supervision of
      management and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted
      an evaluation of the effectiveness of our internal control over financial
      reporting based on the framework in Internal Control-Integrated Framework
      issued by the Committee of Sponsoring Organizations of the Treadway
      Commission. Based on our evaluation of internal Control over financial
      reporting, our management concluded that our internal control over
      financial reporting was effective as of December 31,
  2008.
    45


This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.
 
 (c)
              Change
      in Internal Control over Financial Reporting.No
      change in our internal control over financial reporting occurred during
      our most recent fiscal quarter that has materially affected, or is
      reasonably likely to materially affect our internal control over financial
      reporting.
  (d)
              We
      believe that a controls system, no matter how well designed and operated,
      can not provide absolute assurance that the objectives of the controls
      system, no matter how well designed and operated, can not provide absolute
      assurance that the objectives of the controls system are met, and no
      evaluation of controls can provide absolute assurance that all control
      issues and instances of fraud, if any, within a company have been
      detected.
 
 Item 9B.
              Other
      Information.
 
 None.
  46




PART
III
  Item 10.
              Directors,
      Executive Officers and Corporate
Governance.
 
 The
following table sets out certain information concerning the Company’s executive
officers and directors.
 
 Name
                  Age
                  Position(s)
      HeldJoseph
      Gutnick
                  56
                  Chairman
      of the Board
                      President, 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
  Joseph
Gutnick
 Mr.
Gutnick has been Chairman of the Board, President and Chief Executive Officer
since November 2004 and has been Chairman of the Board, President and Chief
Executive Officer of numerous public listed companies in Australia and the USA
specialising in the mining sector since 1980. Mr Gutnick is currently Chairman
of the Board, President and Chief Executive Officer of Golden River Resources
Corporation, Northern Capital Resources Corporation, Yahalom International
Resources Corporation, Calvert River Resources Corporation, Executive Chairman
and managing Director of North Australian Diamonds Limited, Top End Uranium
Limited and Quantum Resources Limited.  Mr. Gutnick was previously
been a Director of the World Gold Council.  He is a Fellow of the
Australasian Institute of Mining & Metallurgy and the Australian Institute
of Management and a Member of the Australian Institute of Company
Directors.
 
 David
Tyrwhitt
 
 Dr
Tyrwhitt was appointed a Director in March 2005. He is a geologist, holding a
Bachelor of Science and PhD degrees and has 46 years experience in mineral
exploration and management development and operation of gold mines in
Australia.  Dr Tyrwhitt has been a Director of numerous public listed
companies in Australia in the mining industry and is currently a Director of
Hawthorn Resources Limited, and Quantum Resources Limited and has also been a
Director of Golden River Resources Corp, a Delaware corporation (GORV.OB) since
1996 and Northern Capital Resources Corp., a Nevada corporation since
2008
 
 U.S.
Awasthi
 
 Dr.
Awasthi was appointed a Director in August 2008. Dr. Awasthi has been the
Managing Director of IFFCO since February 1993, the largest producer and seller
of fertilisers in India. Dr. Awasthi has worked in various pivotal positions in
IFFCO & KRIBHCO and acquired all-round expertise in planning and execution
of fertiliser plants and was closely associated with the construction of Hazira
as well as Aonla Projects. In 1986, he joined Pyrites, Phosphates &
Chemicals Limited (PPCL) as its Chairman and Managing Director. He also held
additional charge as Chairman & Managing Director of Rashtriya Chemicals
&
   47




Fertilisers
Ltd. (RCF) from April 1991 to March 1992. Dr. Awasthi was the Chairman of the
Fertiliser Association of India (FAI), New Delhi, during 1994-96. He held the
position of President, International Fertiliser Industry Association (IFA),
Paris during 1997-99. Dr. Awasthi has over 30 papers to his credit and has
co-authored a book ‘Fertiliser Industry in India’.


Manish
Gupta
 
 Mr. Gupta
was appointed a Director in August 2008. Mr Manish Gupta graduated from the
Indian Institute of Technology (IIT), Delhi, India in 1988 with a Bachelor of
Technology specialising in Civil Engineering and continued his studies at the
Institute of Management (IIM), Calcutta, India where he gained a Post Graduate
Diploma in Management in 1990 specialising in Development, Marketing, and then
at the University of Pune, Pune, India where he gained a Bachelor of Laws (LLB)
in 1996 excelling in Taxation and Commercial Laws. Mr Gupta has held several
positions in the Indian Government including with the Indian Taxation Office and
as Deputy Secretary to the Government of India, Ministry of Chemicals and
Fertilisers, and as an Additional Commissioner of Income Tax and Officer on
Special Duty to the Revenue Secretary, Government of India. In May 2004, he
joined IFFCO and currently heads the strategic management team of IFFCO,
responsible for formulating the future vision of the society and associated
strategic decision making including setting up new ventures and partnerships,
acquisition of existing ventures and diversification in new areas.
 
 Allan
Trench
 
 Dr. Trench
was appointed a Director in August 2008. Dr Allan Trench is a
geologist/geophysicist and business management consultant with approximately 20
years experience within the Australian resources sector across a number of
commodity groups. Dr Trench was the Exploration Manager for WMC for the
Leinster-Mt Keith region and then managed a number of exploration companies
associated with Mr. Joseph Gutnick before joining McKinsey & Company as a
management consultant. In his role at McKinsey, Dr Trench was an advisor to a
number of large international resources companies on strategic, organisation and
operational issues. From 2004 to 2006 Dr Trench was employed in a contract role
as corporate strategist end benchmarking manager at Woodside Energy, helping to
building Woodside’s capability in strategy, benchmarking and performance
improvement across its global asset portfolio. Following this, he was employed
by the CRU Group and was firstly responsible for global copper research managing
a team of 12 analysts and more recently as Regional Director - Australasia. Dr
Trench also serves as a non executive director for two other resource companies
and currently holds the title of Adjunct Professor of Mineral Economics &
Mine Management at the WA School of Mines, Curtin University.
 
 Henry
Herzog
 
 Mr. Herzog
was appointed a Director in August 2008. Mr Henry Herzog has served in a number
of various positions as President, Vice President or Director on a number of
publically listed companies in Australia and the United States, predominantly in
the mining sector. Mr. Herzog has restructured and reorganised several
publically listed companies including U.S. company Bayou International Limited
where he served as its President and Chief Executive Office from 1986-1988 and
then as a Vice President through to June, 1999. Mr Herzog has also occupied a
variety of other management and consulting roles and has over forty years of
business experience. Mr Herzog has spent the last six years managing a number of
private investment entities and currently sits on the Board of Trustees of a
non-profit college of higher education.
 
 Peter
Lee
 
 Mr.
Lee has been Chief Financial Officer since March 2005 and Secretary since
November 2004.  He is a Director, Chief Financial Officer and
Secretary of Golden River Resources Corp, a Delaware corporation
(GORV.OB).  Mr. Lee is a Member of the Institute of Chartered
Accountants in Australia, a Fellow of Chartered Secretaries Australia Ltd., a
Member of the Australian Institute of Company Directors and holds a Bachelor of
Business (Accounting) from Royal Melbourne Institute of Technology. He has over
25 years commercial
  48




experience
and is currently General Manager Corporate and Company Secretary of several
listed public companies in Australia.


Craig
Michael
 
 Mr.
Michael has been Executive General Manager of the Company since September 2007
and has more than eight years experience in the mining and resources industry.
From February 2004 to September 2007, he was employed by Oxiana Ltd where he was
based in Laos in a Supervisor/Trainer role, both as a Mine Geologist and
Resource Geologist at the Sepon Copper Gold Project. He was responsible for the
geological interpretation ofthe Khanong copper-gold deposit and the surrounding
oxide and primary gold deposits. In conjuction with training the national
geologic staff in all mining and resource geology functions Mr. Michael also
conducted resource estimates for public reporting. Prior to his time with
Oxiana, he was a Mine Geologist at Sons of Gwalia’s Carosue Dam Gold Project in
Western Australia where he also conducted his honours thesis on their flagship
Karari gold deposit.
 
 Edward
Walker
 
 Mr Walker
has been Project Manager of the Company since October 2008. He has acquired
extensive international experience in the mining and water sectors via a number
of senior engineering and project manager roles in international organizations,
including as Principal Engineer for Parsons Brinckeroff Australia from April
2007 to October 2008 and prior to that was with Bahia Mineracao Limitada as
Senior Project Manager. Mr Walker spent over 10 years in senior engineering
roles in Australia and the United Kingdom before spending two years as a senior
project manager of an Iron Ore Mining project run by Brazilian company Bahia
Mineração Limitada (BML). He then moved to a multi-disciplinary engineering firm
Parsons Brinkerhoff as a Principal Engineer responsible for business development
and delivery of client projects. Mr Walker has a Bachelor of Engineering (Civil)
from Swinburne University of Technology and an Executive MBA from the Business
School of São Paulo.
 
 Involvement
on Certain Material Legal Proceedings During the Last Five Years
 
 No
director, officer, significant employee or consultant has been convicted in a
criminal proceeding, exclusive of traffic violations.  No director,
officer, significant employee or consultant has been permanently or temporarily
enjoined, barred, suspended or otherwise limited from involvement in any type of
business, securities or banking activities. No director, officer or significant
employee has been convicted of violating a federal or state securities or
commodities law.
 
 Board
of Directors
 
 Our
Certificate of Incorporation provides that there must be at least one Director
of the Company.  Our Board of Directors currently consists of six
directors.
 
 Directors
need not be stockholders of the Company or residents of the State of
Delaware.  Directors are elected for an annual term and generally hold
office until the next Directors have been duly elected and
qualified.  Directors may receive compensation for their services as
determined by the Board of Directors. A vacancy on the Board may be filled by
the remaining Directors even though less than a quorum remains.  A
Director appointed to fill a vacancy remains a Director until his successor is
elected by the Stockholders at the next annual meeting of Shareholder or until a
special meeting is called to elect Directors.
 
 The
executive officers of the Company are appointed by the Board of
Directors.  There are no family relationships between any Directors or
executive officers of the Company other than as disclosed.
 
 Our Board
of Directors consists of six members, of whom three would meet the independence
requirement of the NASDAQ Stock Market. During fiscal 2008, our Board of
Directors met nine times. The Board of Directors also uses resolutions in
writing to deal with certain matters and during fiscal 2008, fourteen
resolutions in writing were signed by all Directors.
  49




The
Company encourages all Directors to attend the Annual Meeting of stockholders,
either in person or by telephone. Mr Gutnick, Dr Tyrwhitt and Mr Herzog attended
the 2008 Annual Meeting. Dr Awasthi, Mr Gupta and Dr Trench were unavailable due
to business commitments.
 
 Nominating
Committee
 
 At a
meeting of the Board of Directors on August 12, 2008, it was resolved that Dr.
Allan Trench, Dr. David Tyrwhitt and Mr. Henry Herzog be appointed to the
Nominating Committee and that Dr. David Tyrwhitt be the Chair of the Committee.
The Nominating Committee has authority and responsibilities as vested in it by
the Board of Directors at a Directors Meeting held on June 27, 2008
 
 Audit
and Compensation Committees
 
 At a
meeting of the Board of Directors on August 12, 2008, it was resolved that Dr.
Allan Trench, Dr. David Tyrwhitt and Mr. Henry Herzog be appointed to the Audit
Committee and the Compensation Committee and that Dr. Allan Trench be the Chair
of both of the Committees.  It is the opinion of the Board of
Directors that Dr. David Tyrwhitt, Dr. Allan Trench and Mr. Henry Herzog are
independent directors as defined in Rule 10A-3 of the Securities Exchange Act of
1934. In addition, the Board believes that Dr. David Tyrwhitt, Dr. Allan Trench
and Mr. Henry Herzog would meet the director independence requirements of the
NASDAQ Stock Market if we were listed on such Market.
 
 Code
of Ethics
 
 We have
adopted a Code of Conduct and Ethics and it applies to all Directors, Officers
and employees.  A copy of the Code of Conduct and Ethics will be
posted on our website and we will provide a copy to any person without
charge.  If you require a copy, you will be able to download it from
our website at www.lgdi.net or
alternatively, contact us by facsimile or email and we will send you a
copy.
 
 Stockholder
Communications with the Board
 
 Stockholders
who wish to communicate with the Board of Directors should send their
communications to the Chairman of the Board at the address listed below. The
Chairman of the Board is responsible for forwarding communications to the
appropriate Board members.
 
 Mr. Joseph
Gutnick
 Legend
International Holdings, Inc.
 PO Box
6315 St Kilda Road
 Central
Melbourne, Victoria 8008 Australia
 
 Section
16(a) Beneficial Ownership Reporting Compliance
 
 Pursuant
to Section 16(a) of the Securities Exchange Act of 1934, our Directors,
executive officers and beneficial owners of more than 10% of the outstanding
Common Stock are required to file reports with the Securities and Exchange
Commission concerning their ownership of and transactions in our Common Stock
and are also required to provide to us copies of such reports.  Based
solely on such reports and related information furnished to us, we believe that
in fiscal 2008 all such filing requirements were complied with in a timely
manner by all Directors and executive officers and 10% stockholders, except that
except that Messrs. Herzog, Gupta, Awasthi, Trench and Walker filed Form 3’s
after the respective due dates of such forms,
 
 Item 11.
              Executive
      Compensation.
 
 The
following table sets forth the annual salary, bonuses and all other compensation
awards and pay outs on account of our Chief Executive Officer for services
rendered to us during the fiscal years ended December 31, 2007 and 2008, and for
our Chief Financial Officer and Executive General Manager for
2008.  No other executive officer received more than US$100,000 per
annum during this period.






50




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
              2008
                2007
              487,000
                82,132
              100,000
                -
              -
                -
              1,323,168
                86,764
                (i)
              -
                -
              -
                -
              118,288
                26,768
                (ii)
              2,028,456
                195,664Peter
      Lee, CFO & Secretary
              2008
                2007
              214,634
                115,400
              80,000
                -
              -
                -
              480,499
                65,501
                (i)
              -
                -
              -
                -
              58,339
                38,825
                (ii)(iii)
              833,471
                219,726Craig
      Michael, Executive General  Manager
              2008
                2007
              206,518
                48,988
              80,000
                -
              -
                -
              699,453
                59,341
                (i)
              -
                -
              -
                -
              19,362
                11,948
                (ii)
              1,005,333
                120,277





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


(ii)
            Includes
      share of superannuation contributions made by AXIS applicable to salaries
      charged to the Company.


(iii)
            Includes
      share of cost of motor vehicle costs made by AXIS applicable to Mr Lee as
      charged to the Company.





The
services of our Chief Executive Officer, Chief Financial Officer & Secretary
and Executive General Manager are provided to us pursuant to a Service Agreement
effective December 1, 2004 (the “Service Agreement”) by and between AXIS
Consultants Pty Limited and ourselves.





Outstanding
Equity Awards at Fiscal Year-End





Option
      Awards
                  Stock
      AwardsName
                  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
                  -
                    -
                  -
                    -
                  5,000,000
                    2,250,000
                  US$2.00
                    US$1.00
                  2/07/18
                    9/19/16
                  -
                  -
                  -
                  -Peter
      Lee, CFO and Secretary
                  -
                    -
                    -
                  -
                    -
                    -
                  787,500
                    787,500
                    1,000,000
                  US$0.444
                    US$1.00
                    US$1.00
                  9/19/16
                    9/19/16
                    12/28/17
                  -
                    -
                    -
                  -
                    -
                    -
                  -
                    -
                    -
                  -
                    -
                    -Craig
      Michael, Executive General Manager
                  -
                    -
                    -
                  -
                    -
                    -
                  150,000
                    150,000
                    1,250,000
                  US$0.444
                    US$1.00
                    US$1.00
                  9/10/17
                    9/10/17
                    12/28/17
                  -
                    -
                    -
                  -
                    -
                    -
                  -
                    -
                    -
                  -
                    -
                    -Edward
      Walker, Project Manager
                  -
                  -
                  500,000
                  US$1.00
                  04/12/18
                  -
                  -
                  -
                  -






51




2006
Equity Incentive Plan
 
 The 2006
Plan provides for the granting of options. The maximum number of shares
available for awards is 10% of the issued and outstanding shares of Common Stock
on issue at any time.  If an option expires or is cancelled without
having been fully exercised or vested, the remaining shares will generally be
available for grants of other awards.
 
 The 2006
Plan is administered by the Board comprised solely of directors who are not
employees or consultants to Legend or any of its affiliated
entities.
 
 Any
employee, director, officer, consultant of or to Legend or an affiliated entity
(including a company that becomes an affiliated entity after the adoption of the
2006 Plan) is eligible to participate in the 2006 Plan if the Committee, in its
sole discretion, determines that such person has contributed significantly or
can be expected to contribute significantly to the success of Legend or an
affiliated entity. During any one year period, no participant is eligible to be
granted options to purchase more than 5% shares of our issued and outstanding
Common Stock or if they provide investor relations activities, or are a
consultant to the Company, 2% of the issued and outstanding shares of Common
Stock in any 12 month period.
 
 Options
granted under the 2006 Plan are to purchase Legend Common Stock.  The
term of each option will be fixed by the Board, but no option will be
exercisable more than 10 years after the date of grant.  The option
exercise price is fixed by the Board at the time the option is
granted.  The exercise price must be paid in cash. Options granted to
participants vest and have a term of 10 years.
 
 No award
is transferable, or assignable by the participant except upon his or her
death.
 
 The Board
may amend the 2006 Plan, except that no amendment may adversely affect the
rights of a participant without the participant’s consent or be made without
stockholder approval if such approval is necessary to qualify for or comply with
any applicable law, rule or regulation the Board deems necessary or desirable to
qualify for or comply with.
 
 Subject to
earlier termination by the Board, the 2006 Plan has an indefinite term except
that no ISO may be granted following the tenth anniversary of the date the 2006
Plan is approved by stockholders.
 
 Other than
the issue of these Options, there are no other current plans or arrangements to
grant any options under the 2006 Plan.
 
 Compensation
Pursuant to Plans
 
 The
Company does not have any pension or profit sharing plans.  The
Company does not have any employees and therefore has no superannuation
obligations.
 
 Equity
Compensation Plan Information
 
 The
following table sets forth, as of December 31, 2008, information regarding
options under our 2006 stock option plan, our only active plan.  The
2006 stock option plan has been approved by our stockholders. Outstanding
options under this plan that are forfeited or cancelled will be available for
future grants.  All of the options are for the purchases of our Common
Stock.
  52




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
                                
                                
                                
                                4,730,522Equity
      compensation plans not approved by security holders
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
 
 Director
Compensation
 
 Name
                              
                              Fees
      Earned or
                                Paid
      in Cash
                                (A$)
                              
                              
                              Stock
                                Awards
      ($)
                              
                              
                              Option
                                Awards
      ($)
                              
                              
                              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
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              614,901Dr
      US Awasthi
                              
                              
                              24,390
                              
                              
                              
                              -
                              
                              
                              
                              3,843
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              28,233Manish
      Gupta
                              
                              
                              24,390
                              
                              
                              
                              -
                              
                              
                              
                              3,843
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              28,233Dr
      Allan Trench
                              
                              
                              24,390
                              
                              
                              
                              -
                              
                              
                              
                              51,730
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              76,120Henry
      Herzog
                              
                              
                              24,390
                              
                              
                              
                              -
                              
                              
                              
                              3,843
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              28,233
 
 It is our
policy to reimburse Directors for reasonable travel and lodging expenses
incurred in attending Board of Directors meetings. For the period January 2005
to March 2008, non-executive Directors were paid Directors fees of A$20,000 per
annum. Commencing April 1, 2008, non-executive Directors are to be paid A$60,000
per annum and fees for attendance at board committee meetings have been set at
A$1,500 per meeting.
  Item 12.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
 
 The
following table sets out, to the best of our knowledge, the numbers of shares in
us beneficially owned as at December 31, 2008 by:
 
 (i)
              each
      of our present Executive Officers and
Directors,
 
 (ii)
              each
      person (including any “group” as that term is defined in Section 13(d)(3)
      of the Securities  Exchange Act) who beneficially owns more than
      5% of our Common Stock, and
 
 (iii)
              all
      of our present Directors and officers as a
  group.
 
 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)
                31.74Shares
      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)
                **




53




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 Directors
                  As a
      Group
                74,628,332
                
                32.98Shares
      of Common Stock
                Atticus
      European Fund Ltd.
                  767
      Fifth Avenue –
                  12th
      Fl.
                  New
      York, NY
                  10153
                29,826,901
                (15)
                13.18Shares
      of Common Stock
                Green
      Way
                  Portfolio
      D
                  767
      Fifth Avenue –
                  12th
      Fl.
                  New
      York, NY
                  10153
                1,143,099
                (15)
                0.51Shares
      of Common Stock
                Kisan
      International Trading, FZE
                  Emaar
      Business Park No.2,
                  Office
      562,
                  Jebel
      Ali
                  Dubai,
      UAE
                  Post
      Box 261835
                45,650,500
                (16)
                20.17Shares
      of Common Stock
                Soros
      Fund Management LLC
                  888
      Seventh Avenue
                  New
      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%
 
 Notes
relating to Item 12:
 
 (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, 2010 and
      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 Common Stock 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.
   54




(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 and 416,667
      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 options which 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 Partners Ltd., 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 Chairman of SFM LLC, and Jonathan Soros serves as
      President and Deputy Chairman of SFM
LLC.




55




Item 13.
              Certain
      Relationships and Related Transactions, and Director
      Independence.
 
 In
December 2004, the Company entered into an agreement with AXIS Consultants Pty
Ltd to provide geological, management and administration services to the
Company.  AXIS is affiliated through common management. We are one of
eight affiliated companies.  Each of the companies has some common
Directors, officers and shareholders.  In addition, each of the
companies is substantially dependent upon AXIS for its senior management and
certain mining and exploration staff.  A number of arrangements and
transactions have been entered into from time to time between such
companies.  It has been the intention of the affiliated companies and
respective Boards of Directors that each of such arrangements or transactions
should accommodate the respective interest of the relevant affiliated companies
in a manner which is fair to all parties and equitable to the shareholders of
each. Currently, there are no material arrangements or planned transactions
between the Company and any of the other affiliated companies other than
AXIS.
 
 AXIS is a
company owned by its public companies (including Legend) and any profits
generated by AXIS are returned to its shareholders in the form of
dividends.
 
 AXIS is
paid by each company for the costs incurred by it in carrying out the
administration function for each such company.  Pursuant to the
Service Agreement, AXIS performs such functions as payroll, maintaining employee
records required by law and by usual accounting procedures, providing insurance,
legal, human resources, company secretarial, land management, certain
exploration and mining support, financial, accounting advice and
services.  AXIS procures items of equipment necessary in the conduct
of the business of the Company.  AXIS also provides for the Company
various services, including but not limited to the making available of office
supplies, office facilities and any other services as may be required from time
to time by the Company as and when requested by the Company.
 
 We are
required to reimburse AXIS for any direct costs incurred by AXIS for the
Company.  In addition, we are required to pay a proportion of AXIS’s
overhead cost based on AXIS’s management estimate of our utilisation of the
facilities and activities of AXIS plus a service fee of not more than 15% of the
direct and overhead costs. Amounts invoiced by AXIS are required to be paid by
us.  We are also not permitted to obtain from sources other than AXIS,
and we are not permitted to perform or provide ourselves, the services
contemplated by the Service Agreement, unless we first requests AXIS to provide
the service and AXIS fails to provide the service within one month.
 
 The
Service Agreement may be terminated by AXIS or us upon 60 days prior
notice.  If the Service Agreement is terminated by AXIS, we would be
required to independently provide, or to seek an alternative source of
providing, the services currently provided by AXIS.  There can be no
assurance that we could independently provide or find a third party to provide
these services on a cost-effective basis or that any transition from receiving
services under the Service Agreement will not have a material adverse effect on
us.  Our inability to provide such services or to find a third party
to provide such services may have a material adverse effect on our
operations.
 
 In
accordance with the Service Agreement AXIS provides the Company with the
services of our Chief Executive Officer, Chief Financial Officer, geologists and
clerical employees, as well as office facilities, equipment, administrative and
clerical services. We pay AXIS for the actual costs of such facilities plus a
maximum service fee of 15%.
 
 During
2007, AXIS charged the Company A$1,126,311 in management fees including salaries
incurred in relation to AXIS staff that provided services to the Company,
A$834,552 for exploration services provided to the Company, A$151,800 for asset
usage, interest of A$14,683 and we repaid A$2,432,687. AXIS charged interest at
a rate of 10.10% for 2007. The amount owed to AXIS at December 31, 2007 was
A$6,912. During 2008, AXIS charged the Company A$5,413,203 in management and
administration services including salaries incurred in relation to AXIS staff
that provided services to the Company and A$2,224,638 for exploration services
provided to the Company. The Company placed on deposit with AXIS funds amounting
to A$699,638 to acquire two properties in Mt Isa, which is the base for
the




56




Company’s
phosphate project, to be used to accommodate AXIS employees and consultants when
working in Mt Isa and relocating to the field operations. The Company also
purchased a lear jet owned by AXIS (at cost to AXIS) amounting to A$1,210,000
which includes 10% GST and was based on an independent valuation, to utilize in
its field operations; and a residential property at a value of A$900,000 (cost
to AXIS) used to accommodate AXIS employees when visiting field operations. The
Company has entered into a rental agreement with AXIS for one rental property
used by AXIS staff when conducting field operations for the Company. The rental
agreement is for the period October 1, 2008 to September 30, 2009. The Company
paid rental expense of A$6,240 for 2008. During 2008, the Company paid AXIS an
aggregate of A$10,551,866 which included the cost of the Lear jet, the three
properties and an advance for 2009 charges and ongoing
operations.  The Company charged AXIS interest of A$49,931 at the rate
between 10.35% to 11.75%.The amount owed by AXIS at December 31, 2008 was
A$1,552,919.
 
 Wilzed Pty
Ltd, a company associated with President and CEO of the Company, Joseph Gutnick,
has paid expenses on behalf of the Company and has provided loan funds to enable
the Company to meet its liabilities. During the 2006 fiscal year, Wilzed loaned
A$324,951 and charged A$3,588 in interest, and we repaid $336,081. The amount
owed at December 31, 2006 was A$nil. Wilzed charged interest at a rate of
between 9.35% and 9.85% for 2006.
 
 Mr Joseph
Gutnick, the President of the Company advanced the Company the initial deposit
on opening a US Dollar bank account. In March, 2007, the balance of A$831, owing
of the initial advance of A$1,303 (US$1,000) less expenses incurred of A$472,
was repaid.
 
 Effective
as of March 3, 2006, Legend entered into a Contract for the Sale of Mining
Tenements (“Contract”) with Astro Diamond Mines N.L. (“Astro”) an Australian
company pursuant to which the Company acquired certain diamond mining tenements
in Northern Australia from Astro. The consideration payable by Legend to Astro
was A$1.5 million and Legend was also required to pay to Astro any costs
incurred on the tenements after February 1, 2006.  Astro provided
commercial warranties which are usual for a transaction of this nature in favour
of Legend. Under Australian law, Astro was required to provide an independent
experts report to shareholders for this transaction. In order to prepare the
independent experts report, a mineral valuation was prepared on behalf of Astro
which indicated that the preferred value for the tenements that are the subject
of the transaction was A$1.5 million. This formed the basis of the consideration
agreed by the parties. The President and Chief Executive Officer of the Company,
Mr. J. I. Gutnick, was Chairman and Managing Director of Astro and Dr DS
Tyrwhitt, an independent Director of the Company was also a Director of Astro.
The tenements are located in the Northern Territory of Australia and are
prospective for all minerals. Astro incurred costs on the mining tenements from
February 1, 2006 which at settlement Legend was required to pay. However, Astro
had not quantified the amount at the date of settlement. At December 31, 2006,
the Company owed Astro A$942,433 including interest of A$21,302. During 2007,
the amount was repaid in full including interest charge for 2007 of A$16,774.
Astro charged interest at a rate of 10.10% in 2007.
 
 The
Company appointed Mr. Mordechai Gutnick, as the Company’s General Manager,
Business in December, 2007.  Mr.  Gutnick is the son of
Joseph Gutnick, the Company’s President and Chairman of the
Board.  Mr. Mordechai Gutnick receives an annual salary paid via
AXIS.  In addition, in December, 2007, Mr. Mordechai Gutnick was
granted 2,000,000 stock options:
 
 Transactions
with Management.
 
 We have a
policy that we will not enter into any transaction with an Officer, Director or
affiliate of us or any member of their families unless the transaction is
approved by a majority of our disinterested non-employee Directors and the
disinterested majority determines that the terms of the transaction are no less
favourable to us than the terms available from non-affiliated third parties or
are otherwise deemed to be fair to us at the time authorised.
  57




Item 14.
              Principal
      Accounting Fees and Services.
 
 The
following table shows the audit fees incurred for fiscal 2008 and
2007.
 
 2008
                    A$
                  
                  
                  
                  2007
                    A$Audit
      fees
                  
                  
                  176,198
                  
                  
                  
                  62,049Audit
      related fees
                  
                  
                  -
                  
                  
                  
                  -Tax
      fees
                  
                  
                  11,492
                  
                  
                  
                  2,994Total
                  
                  
                  187,690
                  
                  
                  
                  65,043




Audit fees
were for the audit of our annual financial statements, review of financial
statements included in our 10-Q quarterly reports, and services that are
normally provided by independent auditors in connection with our other filings
with the SEC.  This category also includes advice on accounting
matters that arose during, or as a result of, the audit or review of our interim
financial statements.
 
 As part of
its duties, our Board of Directors pre-approves audit and non-audit services
performed by our independent auditors in order to assure that the provision of
such services does not impair the auditors’ independence. Our Board of Directors
does not delegate to management its responsibilities to pre-approve services
performed by our independent auditors.
  58
  PART
IV
  
  Item 15.
              Exhibits,
      Financial Statement Schedules.
 
 Documents
filed as part of the report.
  (1)
                      All
      Financial
Statements




PageReport
      of Independent Registered Public Accounting Firm
                
                
                F-1Balance
      Sheet
                
                
                F-2Statements
      of Operations
                
                
                F-3Statements
      of Stockholders’ Equity (Deficit)
                
                
                F-4Statements
      of Cash Flows
                
                
                F-6Notes
      to Financial Statements
                
                
                F-7
      - F-33




(2)
                            Financial
      Statements ScheduleAll
      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)
                            ExhibitsSee
      Index to Exhibits at page 62 for a description of the exhibits filed as a
      part of this
report.









SIGNATURES
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorised.
  LEGEND
      INTERNATIONAL HOLDINGS, INC.(Registrant)/s/
      Peter LeeBy:Peter
      J LeeChief
      Financial Officer and
Secretary




Dated:
March 25, 2009
  60




FORM
10-K Signature Page
 
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been
signed below by the following persons in the capacities and on the dates
indicated.
 
 Signature
                                                        
                                                        Title
                                                        
                                                        Date1.
                                                        /s/
      Joseph Gutnick
                                                        
                                                        Chairman
      of the Board,Joseph
      Gutnick
                                                        
                                                        President
      and Chief ExecutiveOfficer
      (Principal ExecutiveOfficer)
      and Director
                                                        
                                                        March
      25, 20092.
                                                        /s/
      David Tyrwhitt
                                                        
                                                        Director
                                                        
                                                        March
      25, 2009David
      Tyrwhitt3.
                                                        /s/
      Peter Lee
                                                        
                                                        Chief
      Financial Officer andPeter
      Lee
                                                        
                                                        Secretary
      (Principal Financial
                                                        
                                                        land
      Accounting Officer)
                                                        
                                                        March
      25, 20094.
                                                        
                                                        
                                                        Director
                                                        
                                                        March
      25, 2009U S
      Awasthi5.
                                                        
                                                        
                                                        Director
                                                        
                                                        March
      25, 2009Manish
      Gupta6.
                                                        /s/
      Allan Trench
                                                        
                                                        Director
                                                        
                                                        March
      25, 2009Allan
      Trench7.
                                                        /s/
      Henry Herzog
                                                        
                                                        Director
                                                        
                                                        March
      25, 2009Henry
      Herzog




61




EXHIBIT
INDEX
 
 Incorporated
by
 Reference
to:
 
 Exhibit
      No.
                Exhibit1.1
                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




62




(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.




Financial
Statements for the years ended December 31, 2007 and 2008.
 
 Legend
International Holdings, Inc.
 Audited
Financial Statements for the Company for the years ended December 31, 2008 and
2007.
  63




LEGEND
INTERNATIONAL HOLDINGS, INC.
 (An
Exploration Stage Company)
 
 
 Financial
Statements
 
 December
31, 2008 and 2007
 
 (with
Report of Independent Registered Public Accounting Firm)




CONTENTS
  PageReport
      of Independent Registered Public Accounting Firm
                
                
                F-1Balance
      Sheet
                
                
                F-2Statements
      of Operations
                
                
                F-3Statements
      of Stockholders’ Equity (Deficit)
                
                
                F-4Statements
      of Cash Flows
                
                
                F-6Notes
      to Financial Statements
                
                
                F-7–
      F-33









Report of Independent
Registered Public Accounting Firm
 
 To the
Board of Directors and Stockholders of
 Legend
International Holdings, Inc
 
 We have
audited the accompanying balance sheet of Legend International Holdings, Inc (An
Exploration Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders’ equity (deficit) and cash flows for the
years ended December 31, 2008 and 2007 and the cumulative amounts from
inception, January 5, 2001 through December 31, 2008.  These financial
statements are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Legend International Holdings, Inc.
at December 31, 2008 and 2007, and the results of its operations and its cash
flows for the periods indicated above in conformity with accounting principles
generally accepted in the United States of America.
  New
      York, NY
                  PKFMarch
      24, 2009
                  Certified
      Public AccountantsA
      Professional
Corporation




F-1




LEGEND
INTERNATIONAL HOLDINGS, INC.
 (An
Exploration Stage Company)
 Balance
Sheet
 December
31, 2008
 
 2008
                  A$
                
                
                
                2007
                  A$
                
                
                Convenience Translation
                  2008
                  US$ASSETSCurrent
      Assets:Cash
                
                
                119,277,536
                
                
                
                17,088,190
                
                
                
                82,384,994Receivables
      (note 12)
                
                
                2,843,331
                
                
                
                507,264
                
                
                
                1,963,889Prepayments
                
                
                371,499
                
                
                
                110,840
                
                
                
                256,595Inventories
                
                
                92,194
                
                
                
                -
                
                
                
                63,678Trading
      Securities (note 11)
                
                
                780,946
                
                
                
                -
                
                
                
                539,399Total
      Current Assets
                
                
                123,365,506
                
                
                
                17,706,294
                
                
                
                85,208,555Non-Current
      Assets:Property
      and Equipment, net (note 3)
                
                
                5,320,625
                
                
                
                158,177
                
                
                
                3,674,955Deposits
      (note 5)
                
                
                793,712
                
                
                
                130,000
                
                
                
                548,217Receivables
      (note 12)
                
                
                555,668
                
                
                
                -
                
                
                
                383,800Prepayments
                
                
                40,194
                
                
                
                -
                
                
                
                27,762Total
      Non-Current Assets
                
                
                6,710,199
                
                
                
                288,177
                
                
                
                4,634,734Total
      Assets
                
                
                130,075,705
                
                
                
                17,994,471
                
                
                
                89,843,289LIABILITIESCurrent
      Liabilities:Accounts
      payable and accrued expenses
                
                
                2,386,575
                
                
                
                671,384
                
                
                
                1,648,407Lease
      liability (note 10)
                
                
                186,785
                
                
                
                273,740
                
                
                
                129,013Total
      Current Liabilities
                
                
                2,573,360
                
                
                
                945,124
                
                
                
                1,777,420Non
      Current Liabilities:Reclamation
      and Remediation Provision (note 9)
                
                
                206,192
                
                
                
                90,000
                
                
                
                142,417Lease
      liability (note 10)
                
                
                537,008
                
                
                
                -
                
                
                
                370,911Total
      Non Current Liabilities
                
                
                743,200
                
                
                
                90,000
                
                
                
                513,328Total
      Liabilities
                
                
                3,316,560
                
                
                
                1,035,124
                
                
                
                2,290,748Commitments
      and Contingencies (Notes 8, 9 and 14)Stockholders’
      EquityCommon
      stock: US$.001 par value
                  300,000,000
      shares authorised226,315,392
      and 176,868,825 shares issued and outstanding
                
                
                275,076
                
                
                
                222,787
                
                
                
                189,995Additional
      Paid-in-Capital
                
                
                154,661,002
                
                
                
                30,691,933
                
                
                
                106,824,354Other
      Comprehensive Gain
                
                
                38,490
                
                
                
                38,490
                
                
                
                26,585Retained
      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
                
                
                
                87,552,541Total
      Liabilities and Stockholders’ Equity
                
                
                130,075,705
                
                
                
                17,994,471
                
                
                
                89,843,289
 
 
 
 The
accompanying notes are integral part of the financial statements.
  F-2




LEGEND
INTERNATIONAL HOLDINGS, INC.
 (An
Exploration Stage Company)
 Statements
of Operations
  For
      the years Ended
                      December
      31
                    
                    
                    Convenience
                      Translation
                    
                    
                    January
      5, 2001 (Inception) to December 31,2007
                      A$
                    
                    
                    
                    2008
                      A$
                    
                    
                    2008
                      US$
                    
                    
                    
                    2008
                      A$Revenues:Sales
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    6,353less
      cost of sales
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,362
                    )Gross
      profit
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4,991Other
      incomeInterest
      income – related entity
                    
                    
                    -
                    
                    
                    
                    49,931
                    
                    
                    
                    34,487
                    
                    
                    
                    49,931Interest
      income – other
                    
                    
                    22,183
                    
                    
                    
                    3,669,440
                    
                    
                    
                    2,534,482
                    
                    
                    
                    3,695,498Other
                    
                    
                    -
                    
                    
                    
                    6,534
                    
                    
                    
                    4,513
                    
                    
                    
                    6,53422,183
                    
                    
                    
                    3,725,905
                    
                    
                    
                    2,573,482
                    
                    
                    
                    3,751,963Costs
      and expenses:Legal,
      professional and accounting
                    
                    
                    213,063
                    
                    
                    
                    707,444
                    
                    
                    
                    488,632
                    
                    
                    
                    1,055,904Exploration
      expenditure
                    
                    
                    5,132,000
                    
                    
                    
                    8,780,037
                    
                    
                    
                    6,064,372
                    
                    
                    
                    17,723,422Aircraft
      maintenance
                    
                    
                    -
                    
                    
                    
                    278,826
                    
                    
                    
                    192,585
                    
                    
                    
                    278,826Stock
      based compensation
                    
                    
                    375,740
                    
                    
                    
                    5,185,743
                    
                    
                    
                    3,581,793
                    
                    
                    
                    6,332,640Interest
      expense
                    
                    
                    62,196
                    
                    
                    
                    32,715
                    
                    
                    
                    22,596
                    
                    
                    
                    144,846Impairment
      of investment
                    
                    
                    -
                    
                    
                    
                    326,526
                    
                    
                    
                    225,532
                    
                    
                    
                    326,526Net
      gain on revaluation of trading securities
                    
                    
                    -
                    
                    
                    
                    (70,874
                    )
                    
                    
                    (48,953
                    )
                    
                    
                    (70,874
                    )Administration
      expenses
                    
                    
                    2,756,935
                    
                    
                    
                    8,096,798
                    
                    
                    
                    5,592,457
                    
                    
                    
                    11,410,442Total
      expenses
                    
                    
                    (8,539,934
                    )
                    
                    
                    (23,337,215
                    )
                    
                    
                    (16,119,014
                    )
                    
                    
                    (37,201,732
                    )(Loss)
      from operations
                    
                    
                    (8,517,751
                    )
                    
                    
                    (19,611,310
                    )
                    
                    
                    (13,545,532
                    )
                    
                    
                    (33,444,778
                    )Foreign
      currency exchange gain/(loss)
                    
                    
                    (120,378
                    )
                    
                    
                    5,389,750
                    
                    
                    
                    3,722,700
                    
                    
                    
                    5,229,355(Loss)
      before income taxes
                    
                    
                    (8,638,129
                    )
                    
                    
                    (14,221,560
                    )
                    
                    
                    (9,822,832
                    )
                    
                    
                    (28,215,423
                    )Provision
      for income taxes
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      (loss)
                    
                    
                    (8,638,129
                    )
                    
                    
                    (14,221,560
                    )
                    
                    
                    (9,822,832
                    )
                    
                    
                    (28,215,423
                    )Basic
      and diluted loss per common shares
                    
                    
                    (0.06
                    )
                    
                    
                    (0.07
                    )
                    
                    
                    (0.05
                    )
                    
                    
                    (0.44
                    )Weighted
      average number of common
                      shares
      used in per share calculations
                    
                    
                    146,739,872
                    
                    
                    
                    204,500,520
                    
                    
                    
                    204,500,520
                    
                    
                    
                    64,491,851




The
accompanying notes are integral part of the financial statements.
  F-3




LEGEND
INTERNATIONAL HOLDINGS, INC.
 (An
Exploration Stage Company)
 Statements
of Stockholders' Equity (Deficit)
 for the
period ended December 31, 2008
 
 Common
      StockShares
                        
                        
                        Par
                          Value
                          A$
                        
                        
                        Additional
                          Paid-In
                          Capital
                          A$
                        
                        
                        Retained
                          (Deficit)
      During
                          the
      Exploration Period
                          A$
                        
                        
                        Retained
      (Deficit) During the Development
                          Period
                          A$
                        
                        
                        Other
      Comprehensive
                          Gain
                          A$
                        
                        
                        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
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        124,446Shares
      Issued for services rendered at US$0.05 per share
                        
                        
                        146,250
                        
                        
                        
                        189
                        
                        
                        
                        4,046
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        4,235Shares
      Issued for Cash
                        
                        
                        616,500
                        
                        
                        
                        796
                        
                        
                        
                        17,056
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        17,852Net
      Loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (131,421
                        )
                        
                        
                        -
                        
                        
                        
                        (131,421
                        )Balance,
      December 31, 2001
                        
                        
                        5,060,250
                        
                        
                        
                        6,535
                        
                        
                        
                        139,998
                        
                        
                        
                        -
                        
                        
                        
                        (131,421
                        )
                        
                        
                        -
                        
                        
                        
                        15,112Shares
      Issued for Cash
                        
                        
                        225,000
                        
                        
                        
                        291
                        
                        
                        
                        6,225
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        6,516Shares
      Issued for Officer’s Compensation
                        
                        
                        11,250,000
                        
                        
                        
                        14,529
                        
                        
                        
                        148,359
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        162,888Net
      Loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (182,635
                        )
                        
                        
                        -
                        
                        
                        
                        (182,635
                        )Balance,
      December 31, 2002
                        
                        
                        16,535,250
                        
                        
                        
                        21,355
                        
                        
                        
                        294,582
                        
                        
                        
                        -
                        
                        
                        
                        (314,056
                        )
                        
                        
                        -
                        
                        
                        
                        1,881Shares
      Issued for services rendered at US$0.022 per share
                        
                        
                        5,026,500
                        
                        
                        
                        6,491
                        
                        
                        
                        139,065
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        145,556Net
      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
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        58,053Options
      Issued for services
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        160,672
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        160,672Loan
      forgiveness-former major shareholder
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        12,144
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        12,144Net
      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
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        35,416Shares
      issued for cash
                        
                        
                        12,756,734
                        
                        
                        
                        16,524
                        
                        
                        
                        3,854,843
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        3,871,367Cost
      of share issues
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (128,376
                        )
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (128,376
                        )Amortisation
      of Options under stock option plan
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        115,307
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        115,307Net
      unrealized gain on foreign exchange translation
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        38,490
                        
                        
                        
                        38,490Net
      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
                        )




F-4




LEGEND
INTERNATIONAL HOLDINGS, INC.


(An
Exploration Stage Company)
 Statements
of Stockholders' Equity (Deficit)
 for the
period ended December 31, 2008
 (continued)
 
 Common
      StockShares
                
                
                Par
                  Value
                  A$
                
                
                Additional
                  Paid-In
                  Capital
                  A$
                
                
                Retained
                  (Deficit)
      During
                  the
      Exploration Period
                  A$
                
                
                Retained
      (Deficit) During the Development Period
                  A$
                
                
                Other
      Comprehensive
                  Gain
                  A$
                
                
                Stockholders’
                  Equity
                  (Deficit)
                  A$Shares
      issued for cash
                
                
                47,686,624
                
                
                
                56,438
                
                
                
                25,684,666
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                25,741,104Cost
      of share issues
                
                
                -
                
                
                
                -
                
                
                
                (1,675,111
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,675,111
                )Shares
      issued for consulting fees
                
                
                2,604,200
                
                
                
                2,984
                
                
                
                1,001,122
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,004,106Shares
      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
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                364,805Shares
      issued for part-settlement of the acquisition of rights to exploration
      licences under agreement
                
                
                500,000
                
                
                
                545
                
                
                
                517,455
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                518,000Amortization
      of options under stock option plan
                
                
                -
                
                
                
                -
                
                
                
                375,740
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                375,740Net
      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
                
                
                
                16,959,347Shares
      issued for cash
                
                
                42,000,000
                
                
                
                44,011
                
                
                
                109,984,282
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                110,028,293Cost
      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
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                13,723,585Shares
      issued for consulting fees
                
                
                30,800
                
                
                
                33
                
                
                
                147,555
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                147,588Shares
      issued under registration rights agreement
                
                
                457,809
                
                
                
                545
                
                
                
                899,950
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                900,495Amortization
      of options under stock option plan
                
                
                -
                
                
                
                -
                
                
                
                5,185,743
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                5,185,743Net
      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




The
accompanying notes are integral part of the financial statements.
  F-5




LEGEND
INTERNATIONAL HOLDINGS, INC.
 (An
Exploration Stage Company)
 Statement
of Cash Flows
 
 For
      the years Ended December 31
                
                
                Convenience
      Translation
                
                
                January
      5, 2001 (Inception) to December 31,2007
                  A$
                
                
                
                2008
                  A$
                
                
                2008
                  US$
                
                
                
                2008
                  A$CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Loss
                
                
                (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
                
                
                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
                
                
                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
                
                
                
                1,265,299Provision
      for rehabilitation
                
                
                90,000
                
                
                
                116,192
                
                
                
                80,254
                
                
                
                206,192Depreciation
                
                
                19,949
                
                
                
                202,943
                
                
                
                140,173
                
                
                
                223,913Interest
      receivable
                
                
                -
                
                
                
                (49,931
                )
                
                
                (34,488
                )
                
                
                (49,931
                )Accrued
      interest added to principal
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                37,282Net
      Change in:Receivables
                
                
                (388,634
                )
                
                
                (2,891,735
                )
                
                
                (1,997,321
                )
                
                
                (3,449,640
                )Prepayments
      and deposits
                
                
                (136,281
                )
                
                
                (964,563
                )
                
                
                (666,224
                )
                
                
                (1,205,403
                )Inventories
                
                
                -
                
                
                
                (92,194
                )
                
                
                (63,679
                )
                
                
                (92,194
                )Accounts
      Payable and Accrued Expenses
                
                
                245,171
                
                
                
                1,441,270
                
                
                
                995,485
                
                
                
                2,251,253Net
      Cash (Used) In Operating Activities
                
                
                (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
                
                
                (142,292
                )
                
                
                (4,640,717
                )
                
                
                (3,205,343
                )
                
                
                (4,795,282
                )Net
      Cash (Used) In Investing Activities
                
                
                (142,292
                )
                
                
                (5,677,315
                )
                
                
                (3,921,320
                )
                
                
                (5,831,880
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Advances
      Payable - Affiliates
                
                
                (1,271,501
                )
                
                
                -
                
                
                
                -
                
                
                
                (26,156
                )Repayment
      of Convertible Debenture
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (130,310
                )Repayment
      of Shareholder Advance
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (641
                )Proceeds
      from Convertible Debenture Payable
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                130,310Shareholder
      Advance
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                6,621Proceeds
      from Issuance of Stock
                
                
                25,741,103
                
                
                
                123,751,878
                
                
                
                85,475,422
                
                
                
                153,388,716Cost
      of share issues
                
                
                (1,033,749
                )
                
                
                (5,964,347
                )
                
                
                (4,119,575
                )
                
                
                (7,126,472
                )Net
      Borrowing/Repayments from Affiliates
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                50,003Net
      Cash Provided by financing activities
                
                
                23,435,853
                
                
                
                117,787,531
                
                
                
                81,355,847
                
                
                
                146,292,071Effect
      of Exchange Rate changes on Cash
                
                
                -
                
                
                
                5,438,981
                
                
                
                3,756,704
                
                
                
                5,438,981Net
      Increase in Cash
                
                
                16,248,393
                
                
                
                102,189,346
                
                
                
                70,582,181
                
                
                
                119,277,536Cash
      at Beginning of Period
                
                
                839,797
                
                
                
                17,088,190
                
                
                
                11,802,813
                
                
                
                -Cash
      at End of Period
                
                
                17,088,190
                
                
                
                119,277,536
                
                
                
                82,384,994
                
                
                
                119,277,536Supplemental
      Disclosures:Cash
      paid for interest
                
                
                62,196
                
                
                
                32,715
                
                
                
                22,596
                
                
                
                94,911Cash
      paid for income taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Stock  and
      options issued for services
                
                
                641,361
                
                
                
                147,588
                
                
                
                101,939
                
                
                
                1,595,523Accrued
      interest and stockholder advances charged to paid in
    capital
                
                
                12,744
                
                
                
                -
                
                
                
                -
                
                
                
                12,744Stock
      issued for exploration agreement
                
                
                518,000
                
                
                
                -
                
                
                
                -
                
                
                
                518,000Stock
      issued for registration payment arrangement
                
                
                364,805
                
                
                
                900,494
                
                
                
                621,971
                
                
                
                1,265,299Equipment
      obtained through a capital lease
                
                
                24,581
                
                
                
                705,841
                
                
                
                487,524
                
                
                
                730,422Capital
      lease obligation for exploration costs
                
                
                362,462
                
                
                
                -
                
                
                
                -
                
                
                
                -Interest
      in relation to capital lease for exploration costs
                
                
                42,313
                
                
                
                -
                
                
                
                -
                
                
                
                42,313Fair
      value of warrants in connection with issuance of capital
    stock
                
                
                -
                
                
                
                1,330,852
                
                
                
                919,219
                
                
                
                1,300,852
 
 The
accompanying notes are integral part of the financial statements.
  F-6




LEGEND
INTERNATIONAL HOLDINGS, INC.
 (An
Exploration Stage Company)
 Notes to
Financial Statements
  1. ORGANISATION
AND BUSINESS
 
 Legend
International Holdings, Inc, ("the Company"), was incorporated under the laws of
the State of Delaware on January 5, 2001.
 
 The
Company has never generated any significant revenues from operations and is
still considered an exploration stage company.  The Company was
initially formed to engage in the business of selling compatible inkjet
cartridges and refill kits on the Internet for the consumer printer
market.  In March 2003, management of the Company decided to engage in
the business of building and acquiring controlling or other interests in one or
more companies engaged in the contract sales and distribution of specialty
medical products, and raise additional capital for this
purpose.  Neither business was successful and operations of both were
eventually discontinued.  During fiscal 2004, management of the
Company developed a plan of operations to acquire income-producing real
property.  The Company did not acquire any properties pursuant to such
plan.
 
 Following
a change of management in November 2004, the Company developed a new plan of
operations for fiscal 2006, which is to engage in mineral exploration and
development activities.  The Company's current business plan calls for
the identification of mineral properties where it can obtain secure title to
exploration, development and mining interests. The Company’s preference is to
identify large minerals deposits with low operating costs. The Company is
prepared to consider the exploration, development and mining of profitable base
metal interests.  At the beginning of 2006, the Company expanded its
areas of interest to include diamond exploration activities and in July 2006,
the Company completed the acquisition of certain diamond mining tenements in
Northern Australia. Since that time, the Company has identified that those
mining tenements in Northern Australia also have potential for uranium and base
metals. In November 2007, the Company acquired mining tenements prospective for
phosphate in the State of Queensland, Australia.
 
 On June 3,
2008, Legend issued 42,000,000 shares of common stock at a placement price of
US$2.50 per share raising A$110,028,293 (US$105,000,000). The direct costs of
the offering totalled A$5,920,448.During the third quarter of 2008, 5,000,000
options were exercised at a  price of US$2.50 per share The total
amount received was A$13,672,091 (US$12,350,000).
 
 The
Company has revised its project strategy for its phosphate project due to the
current financial and economic climate. The strategy aims to deliver positive
operational cash flow as soon as possible with a reduced capital outlay and the
ability to pay for any required infrastructure from this cash flow. To achieve
this aim a three stage approach has been adopted:
 
 ·
              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.
 
 Previously
Legend was conducting a study with GHD to investigate the option of using a
slurry pipeline to transport beneficiated product to the Port of Karumba. This
option has now been abandoned due to high cost and port logistics. The transport
option now considered feasible is via rail from Mt. Isa to the Port of
Townsville. Legend is now conducting its own studies closely with the Indian
Farmers Fertiliser Cooperative (IFFCO) and various external consultants on all
aspects of the project including studies into metallurgy, geology, environment,
mining, transport and infrastructure. These studies will form the basis of a
final feasibility study. Worley Parsons is also working in association with
Legend on various aspects of the project. Worley Parsons is a major
international group with extensive experience offering technical, project and
operational support in the resources and energy sector.
  F-7
 
 Exploration
Stage Enterprise
 
 The
Company complies with FASB Statement No. 7 its characterization of the company
as an exploration stage enterprise. The Company is devoting all of its present
efforts in securing and establishing its exploration business through field
sampling and drilling programs in the State of Queensland and the Northern
Territory of Australia.
  2. RECENT
ACCOUNTING PRONOUNCEMENTS
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements which
provides enhanced guidance for using fair value to measure assets and
liabilities. SFAS No. 157 provides a common definition of fair value and
establishes a framework to make the measurement of fair value in generally
accepted accounting principles more consistent and comparable. SFAS No. 157 also
requires expanded disclosures to provide information about the extent to which
fair value is used to measure assets and liabilities, the methods and
assumptions used to measure fair value, and the effect of fair value measures on
earnings. SFAS No. 157 is effective for financial statements issued in fiscal
years beginning after November 15, 2007 and for interim periods within those
fiscal years. In February 2008, the FASB staff issued Staff Position No. 157-2
”Effective date of FASB Statement No. 157” (“FSP FAS 157-2”). FSP FAS 157-2
delayed the effective date of FAS 157 for nonfinancial assets and nonfinancial
liabilities, except for items that are recognised or disclosed at fair value in
the financial statements on a recurring basis (at least annually). The
provisions of FSP FAS 157-2 are effective for the Company’s fiscal year
beginning January 1, 2009. In October 2008, the FASB issued FSP
No. FAS 157-3, “Determining the Fair Value of a Financial Asset When
the Market for That Asset Is Not Active” (“FSP FAS 157-3”), which clarifies
the application of FASB Statement No. 157, “Fair Value Measurements”
(“FAS 157”) in an inactive market. The intent of this FSP is to provide
guidance on how the fair value of a financial asset is to be determined when the
market for that financial asset is inactive. The provisions of FSP
FAS 157-3 are effective for the Company’s fiscal year beginning
January 1, 2009. The adoption of this pronouncement and interpretation has
not and is not expected to have a material impact on the Company’s future
reported financial position or results of operations.
 
 In
February 2007 the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities-Including an Amendment of FASB Statement No.
115”, which permits companies to choose to measure many financial instruments
and certain other items at fair value. SFAS 159 is effective for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The adoption of this statement is not expected to have a material impact on the
Company’s future reported financial position or results of
operations.
 
 In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS
141(R)”), which replaces SFAS 141. SFAS 141(R) requires assets and liabilities
acquired in a business combination, contingent consideration, and certain
acquired contingencies to be measured at their fair values as of the date of
acquisition. SFAS 141(R) also requires that acquisition-related costs and
restructuring costs be recognized separately from the business combination. SFAS
141(R) is effective for fiscal year beginning January 1, 2009 and will be
applied prospectively. The Company is currently evaluating the potential impact
of adopting this statement on the Company’s financial position, results of
operations or cashflows.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an Amendment of ARB No. 51” (“SFAS 160”).
SFAS 160 clarifies the accounting for noncontrolling interests and establishes
accounting and reporting standards for the noncontrolling interest in a
subsidiary, including classification as a component of equity. SFAS 160 is
effective for the fiscal year beginning January 1, 2009. The Company does not
currently have any minority interests.
  F-8
 
 In March
2008, the FASB issued SFAS No. 161 “Disclosure about Derivative Instruments and
Hedging Activities - an amendment of FASB statements No. 133” (“SFAS 161”) which
provides revised guidance for enhanced disclosures about how and why an entity
uses derivative instruments, how derivative instruments and related hedged items
are accounted for under FAS 133, and how derivative instruments and the related
hedged items affect and entity’s financial position, financial performance and
cash flows. SFAS 161 is effective for the Company’s fiscal year beginning
January 1, 2009. The Company does not currently have any derivative instruments
and is not involved in any hedging activities.
 
 In April
2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful
Life of Intangible Assets” (“FSP 142-3”) which amends the factors that
should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under FASB Statement
No. 142, “Goodwill and Other Intangible Assets” (“FAS 142”). The
intent of this FSP is to improve the consistency between the useful life of a
recognized intangible asset under FAS 142 and the period of expected cash
flows used to measure the fair value of the asset under FASB Statement
No. 141, “Business Combinations” (“FAS 141”). FSP 142-3 is
effective for the Company’s fiscal year beginning January 1, 2009 and will
be applied prospectively to intangible assets acquired after the effective date.
The Company does not expect the adoption of FSP 142-3 to have an impact on
the Company’s financial position, results of operations or cash
flows.
 
 In May
2008, the FASB issued SFAS No. 162 “The Hierarchy of Generally Acceptable
Accounting Principles” (“SFAS 162”). SFAS 162 identifies the source of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of non-governmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. This statement is effective 60 days following the SEC’s approval
of the Public Company Accounting Oversight Board amendments to AU Section 411,
“The Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles”. The adoption of SFAS 162 has had no impact on the Company’s
financial position, results of operations or cash flows.
 
 In
November 2008, the EITF reached consensus on Issue No. 08-6, “Equity Method
Investment Accounting Considerations” (“EITF 08-6”), which clarifies the
accounting for certain transactions and impairment considerations involving
equity method investments. The intent of EITF 08-6 is to provide guidance
on (i) determining the initial carrying value of an equity method
investment, (ii) performing an impairment assessment of an underlying
indefinite-lived intangible asset of an equity method investment,
(iii) accounting for an equity method investee’s issuance of shares, and
(iv) accounting for a change in an investment from the equity method to the
cost method. EITF 08-6 is effective for the Company’s fiscal year beginning
January 1, 2009 and is to be applied prospectively. The Company is
currently evaluating the potential impact of adopting this EITF on the Company’s
consolidated financial position or results of operation.
  3. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Mineral
Property Acquisition and Exploration Costs
  Mineral
property acquisition, exploration and development costs are expensed as incurred
until such time as economic reserves are quantified.  To date, the
Company has not  established any proven
or  probable  reserves on its mineral properties. When it is
determined that a mining deposit can be economically and legally extracted or
produced based on established proven and probable reserves, further exploration
costs and development costs incurred after such determination will be
capitalized. The establishment of proven and probable reserves is based on
results of final feasibility studies which indicate whether a property is
economically feasible. Upon commencement of commercial production, capitalized
costs will be transferred to the appropriate asset category and amortized over
their estimated useful lives. Capitalized costs, net of salvage values, relating
to a deposit which is abandoned or considered uneconomic for the foreseeable
future, will be written off.
  Stock
Options
 
 For the
issuances of stock options, the Company follows the fair value provisions of
Financial Accounting Standards No. 123(R) “Share Based Payments”. SFAS 123(R)
requires the company to measure the cost of employee services received in
exchange for an award of equity instruments based on grant date fair
value.  The cost will be recognised over the period during which an
employee is required to provide service in exchange for the award – usually the
vesting period.  In the case where there is no required service
period, the fair value of the equity instruments is expensed
immediately.
  F-9
 
 Inventories
  Materials
and Supplies
 
 Materials
and supplies are valued at the lower of average cost or net realizable value.
The carrying value of inventory as at December 31, 2008 was A$92,194 (
US$63,678)
 
 Loss per
Common Share
 
 Basic loss
per share is computed on the basis of the weighted average number of common
shares outstanding during each year. Diluted loss per share is not presented as
the effect of Common Stock equivalents would be anti dilutive.
 
 Property
and Equipment
 
 Property
and equipment is stated at cost.  The Company records depreciation and
amortization, when appropriate, using straight-line method over the estimated
useful lives of the assets. Expenditures for maintenance and repairs are charged
to expense as incurred.   Additions, major renewals and
replacements that increase the property's useful life are
capitalized.  Property sold or retired, together with the related
accumulated depreciation is removed from the appropriate accounts and the
resultant gain or loss is included in net income (loss).
 
 At
      December 31, 2008
                                  
                                  
                                  At
      December 31, 2007Depreciable
      Life
                                    (in
      years)
                                  
                                  
                                  Cost
                                    A$
                                  
                                  
                                  Accumulated
      Depreciation
                                    A$
                                  
                                  
                                  Net
      Book Value
                                    A$
                                  
                                  
                                  Cost
                                    A$
                                  
                                  
                                  Accumulated
      Depreciation
                                    A$
                                  
                                  
                                  Net
      Book Value
                                    A$Land
                                  
                                  
                                  
                                  
                                  
                                  1,101,358
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,101,358Buildings
                                  
                                  
                                  40
                                  
                                  
                                  
                                  1,435,249
                                  
                                  
                                  
                                  (3,828
                                  )
                                  
                                  
                                  1,431,421Leasehold
      Improvements
                                  
                                  
                                  1-2
                                  
                                  
                                  
                                  178,944
                                  
                                  
                                  
                                  (6,385
                                  )
                                  
                                  
                                  172,559
                                  
                                  
                                  
                                  16,732
                                  
                                  
                                  
                                  (105
                                  )
                                  
                                  
                                  16,627Motor
      Vehicles
                                  
                                  
                                  5
                                  
                                  
                                  
                                  897,482
                                  
                                  
                                  
                                  (64,970
                                  )
                                  
                                  
                                  832,512
                                  
                                  
                                  
                                  104,782
                                  
                                  
                                  
                                  (13,114
                                  )
                                  
                                  
                                  91,668Equipment
                                  
                                  
                                  1-10
                                  
                                  
                                  
                                  435,340
                                  
                                  
                                  
                                  (50,559
                                  )
                                  
                                  
                                  384,781
                                  
                                  
                                  
                                  57,633
                                  
                                  
                                  
                                  (7,751
                                  )
                                  
                                  
                                  49,882Lear
      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
 
 The
depreciation expense for the year ended December 31, 2008 amounted to A$202,943
(US$140,172) and the year ended December 31, 2007 A$19,949.
 
 Cash
 
 Cash
consists of all cash balances and highly liquid investments with an original
maturity of three months or less. Because of the short maturity of these
investments, the carrying amounts approximate their fair value.
 
 Fair Value
of Financial Instruments
 
 Financial
Accounting Standards Board Statement No. 107,  "Disclosures about Fair
Value of Financial  Instruments",  requires the Company to
disclose,  when  reasonably attainable,  the
fair  market  values of its  assets
and  liabilities  which are deemed to be financial
instruments. The Company's financial instruments consist primarily of cash,
certain investments, receivables and payables. The Company believes that the
fair value of the Company’s financial instruments approximate their carrying
values, unless otherwise noted.
 
 Federal
Income Tax
 
 The
Company accounts for income taxes pursuant to the provisions of the Financial
Accounting Standards Board Statement No. 109, "Accounting for Income Taxes",
which requires an asset and liability approach to calculating deferred income
taxes.  The asset and liability approach requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the tax basis of assets
and liabilities. For the period presented, there was no taxable income. There
are no deferred income taxes resulting from temporary differences in reporting
certain income and expense items for income tax and financial accounting
purposes. The Company, at this time, is not aware of any net operating losses
which are expected to be realised.
  F-10
 
 Foreign
Currency Translation
 
 The
Company’s functional and reporting currency is the Australian
dollar.  Revenue and expenses incurred in a currency other than the
reporting currency, Australian dollars are translated at the date incurred or
invoiced. Assets and liabilities are re-valued at the period end exchange rate
where appropriate. Gains or losses form foreign currency transactions are
included in the results of operations .Foreign currency exchange gain in 2008 is
primarily as a result of the translation of cash maintained in US banking
institutions and amounted to A$5,389,750 (US$3,722,700). Foreign currency
exchange loss for 2007 amounted to A$120,378.
 
 Goods and
Services Tax (“GST”)
 
 Revenues,
expenses and assets generated in Australia are subject to Australian GST which
requires the supplier to add a 10% GST to predominately all expenses and the
cost of assets and for the Company to include a 10% GST to the selling price of
a product. Revenues, expenses and assets are recognized net of the amount of GST
except where the GST incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the GST is recognized as
part of the cost of acquisition of the assets or as part of the expense item as
applicable, and receivables and payables are stated with the amount of GST
included. The net amount of GST recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the balance sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST
component of cash flows arising from investing and financing activities which is
recoverable from, or payable to, the taxation authority are classified as
operating cash flows. Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
authority
 
 Reclamation
and Remediation Obligations (Asset Retirement Obligations)
 
 Reclamation
costs are allocated to expense over the life of the exploration activity and are
periodically adjusted to reflect changes in the estimated present value
resulting from the passage of time and revisions to the estimates of either the
timing or amount of the reclamation and remediation costs. The asset retirement
obligation is based on when the spending for an existing environmental
disturbance will occur. The Company reviews, on at least an annual basis, the
asset retirement obligation at each exploration site.
 
 Future
remediation costs are accrued based on management’s best estimate at the end of
each period of the costs expected to be incurred. Such cost estimates include,
where applicable, plugging of drill holes, removal of consumerables and ripping
of drill pads and tracks. Changes in estimates are reflected in earnings in the
period an estimate is revised.
 
 Accounting
for reclamation and remediation obligations requires management to make
estimates unique to each exploration operation of the future costs the Company
will incur to complete the reclamation and remediation work required to comply
with existing laws and regulations. Actual costs incurred in future periods
could differ from amounts estimated. Additionally, future changes to
environmental laws and regulations could increase the extent of reclamation and
remediation work required. Any such increases in future costs could materially
impact the amounts charged to earnings for reclamation and
remediation.
 
 Concentrations
of credit risk
 
 The
Company monitors its position with, and the credit quality of, the financial
institution it invests with. As of the balance sheet date, and periodically
throughout the year, the Company has maintained balances in various operating
accounts in excess of federally insured limits.
  F-11
 
 Convenience
Translation to US$
 
 The
consolidated financial statements as of and for the year ended December 31, 2008
have been translated into United States dollars using the rate of exchange of
the United States dollar at December 31, 2008 (A$1.00=US$0.6907). The
translation was made solely for the convenience of readers in the United
States.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure on contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
 
 Comparative
Figures
 
 Where
necessary, comparative figures have been restated to be consistent with current
year presentation.
  4. CONCENTRATIONS
OF RISKS
 
 Cash
Balances
 
 The
Company maintains a portion of its cash in US banking institutions insured by
the Federal Deposit Insurance Corporation (FDIC). This government corporation
insured balances up to US$100,000 through October 13, 2008.  As of
October  14, 2008 all  non-interest bearing transaction
deposit accounts at an FDIC-insured  institution,  including
all personal and business  checking  deposit accounts that
do not earn interest, are fully insured for the entire amount in the
deposit  account.  This unlimited insurance coverage is
temporary and will remain in effect for participating institutions until
December 31, 2009.  All other deposit accounts at FDIC-insured
institutions are insured up to at least US$250,000 per depositor until December
31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts,
except for certain retirement accounts, will return to at least US$100,000 per
depositor. Insurance coverage for certain retirement accounts, which include all
IRA deposit accounts, will remain at US$250,000 per depositor. At December 31,
2008, the Company held US$14,620,616 in interest bearing accounts in US banking
institutions.
 
 Cash at
bank in Australia is guaranteed by the Federal Government of Australia to a
maximum of A$1,000,000. For amounts over that, a fee of 0.7% is charged. The
Company has taken out the Federal Government of Australia insurance policy for
amounts in excess of A$1,000,000.
 
 5. DEPOSITS
 
 Deposits
held by the Company as at December 31, 2008:
 2008
                  A$Term
      Deposit as security for a Banker’s Undertaking
                
                
                642,109Other
                
                
                1,603Cash
      deposits provided to Government Departments for the purpose of
      guaranteeing the Company’s performance in accordance with mining
      law
                
                
                150,000793,712
  F-12
  6. ACQUISITIONS
IN MINERAL LICENCES AND JOINT VENTURE
 
 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. Teutonic held 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 December 31, 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 accompanying Statement of
Operations.
 
 On October
27, 2008, the Company entered into a Heads of Agreement with Mt. Isa Metals Ltd.
(“MET”) for the formation of an unincorporated 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,
17443 and 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.
Under the joint venture, the Company as manager, incurs all costs and these are
treated as exploration expenditure in the Company’s records. The Company
invoices the joint venture partner for 20% of the joint venture expenditure and
this is recorded as a joint venture recovery against the exploration
expenditure. The joint venture has no assets and as liabilities are incurred in
the name of the manager, the liabilities of the joint venture are included in
accounts payable and accrued expenses. During 2008, the joint venture incurred
exploration costs totalling approximately A$3,200,000 of which the Company has
recorded its proportionate share (80%) of such costs which amounted to
approximately A$2,550,000 which are included in exploration expenditure in the
accompanying Statement of Operations. In addition, approximately A$650,000 is
due from the joint venture partner at December 31, 2008 which is included in
receivables in the accompanying Balance Sheet.
 
 7. STOCKHOLDERS
EQUITY
 
 Common
Stock
 
 In January
2001, 4,297,500 common shares were issued to the Company's founder for
organization cost valued at A$124,446 (US$95,500), and 146,250 common shares
were issued to a related party in exchange for consulting fee valued at A$4,235
(US$3,250).
 
 In March
2002, 11,250,000 common shares were issued to the Company's founder in exchange
for present and future services valued at A$162,888 (US$125,000).
 
 In April
2002, the Company closed its offering under its registration statement filed
with the United States Securities and Exchange Commission to sell up to
4,500,000 shares of its Common Stock at US$0.022 per share, which became
effective on April 11, 2001. The Company sold 841,500 shares (616,500 shares in
2001 and a further 225,000 shares in 2002) of its Common Stock under the
offering.
 
 In 2003, a
total of 5,026,500 common shares were issued to the Company's sole officer and
director for services valued at A$145,556 (US$111,700) or A$0.029 (US$0.022) per
share.
 
 In 2004, a
total of 2,004,750 common shares were issued to the Company’s former sole
officer and director for services valued at A$58,053 (US$44,550) or A$0.029
(US$0.022) per share.
 
 In
December 2004, the Company issued to Renika Pty Limited (“Renika”), a company
associated with Mr J I Gutnick, 20,250,000 options to be converted into
20,250,000 shares of Common Stock, at an exercise price of US$0.022 and a latest
exercise date of December 2009 for services to be rendered to the
Company.  The Company undertook a Black Scholes valuation of these
options using a A$0.029 (US$0.022) exercise price, US$0.022 market price, 5 year
life, risk free interest rate of 5.155% and a volatility of
16.7%.  The 20,250,000 options were valued at A$160,672 (US$123,300)
or A$0.008 (US$0.006) each.  The stock options were issued for
services rendered, to be rendered and for agreeing to provide financial
assistance to the Company (not the actual provision of financial
assistance).  The issue of the stock options was not contingent upon
any further services or events.  The stock options are not forfeitable
if the services or financial assistance are not
provided.  Accordingly, the value of the stock options were expensed
during 2004.
  F-13
 
 In
September 2005, Renika exercised the 20,250,000 options using the cashless
exercise feature and were issued 17,085,937 shares of Common Stock.
 
 Effective
as of December 12, 2005, the Board of Directors of Company approved the
distribution to all stockholders for no consideration of an aggregate of
36,135,500 non-transferable options, each of which is exercisable to purchase
one share of Common Stock of the Company at an exercise price of US$0.25 cents
per share with a latest exercise date of December 31, 2012.  The
options were issued on a pro-rata basis to all stockholders of record on
December 31, 2005 on the basis of two (2) options for every one (1) share of
Common Stock owned by a stockholder on the record date. The options may not be
exercised until the shares underlying the options are registered under federal
and state securities laws.
 
 At
December 31, 2005 the Company had outstanding 36,135,500 options and as at
December 31, 2006, the Company had outstanding 1,388,280 options, each of which
is exercisable to purchase one share of Common Stock at US$0.25 per
share.  The options cannot be exercised, other than using the cashless
exercise feature, until the Company registers the shares of Common Stock to be
issued upon exercise of the options in accordance with the Securities Act of
1933, as amended and any applicable state securities laws. The only exception is
in the case of a cashless exercise.
 
 Effective
July 21, 2006, Legend issued 71,730,079 shares of Common Stock to Renika Pty Ltd
(“Renika”), a company associated with Mr. J I Gutnick, President of Legend,
following the cashless exercise of 34,778,220 options. The shares of Common
Stock issued are restricted shares.
 
 Between
September 19, 2006 and November 17, 2006, Legend issued 11,703,728 shares of
Common Stock at a placement price of US$0.22 per share raising A$3,425,662. The
securities were issued pursuant to a private placement and are issued in
reliance upon an exemption from the registration requirements of the Securities
Act of 1933, as amended (“The Act”) under Section 4(2) of the Act.
 
 Effective
November 30, 2006, Legend issued a further 112,500 shares of Common Stock and
50,000 options with an exercise price of A$0.25 per option and a latest exercise
date of December 12, 2012 for no consideration to settle outstanding matters
with an external party. The Company has valued these shares and options at
A$35,416.
 
 Effective
December 31, 2006, Legend issued a further 1,053,000 shares of Common Stock at a
placement price of US$0.33 raising A$445,705 (US$351,000). The securities were
issued pursuant to a private placement and are issued in reliance upon an
exemption from the registration requirements of the Securities Act of 1933, as
amended (“the Act”) under Section 4 (2) of the Act.
 
 In
December 2006, 19,000 options issued with no exercise price were exercised and
the Company issued 24,750 shares of Common Stock.
 
 In
December 2006, 351,000 options were exercised using the cashless exercise
feature and the Company issued 526,500 shares of Common Stock.
 
 Between
January 1, 2007 and September 30, 2007, Legend issued a further 29,136,624
shares of Common Stock raising A$8,816,411 (US$7,226,906). The securities were
issued pursuant to a private placement and are issued in reliance upon an
exemption from the registration requirements of the Securities Act of 1933 as
amended (“The Act”) under Section 4(2) of the Act.
  F-14
 
 Effective
June 15, 2007, Legend issued a further 200,000 shares of Common Stock for
consulting fees amounting to A$59,074 (US$50,000).
 
 Between
July 1, 2007 and September 30, 2007, Legend issued a further 2,150,200 shares of
Common Stock for consulting fees amounting to A$614,469
(US$537,550).
 
 On
December 12, 2007, Legend issued a further 18,750,000 shares of Common Stock at
a placement price of US$0.80 per share raising A$16,924,292 (US$15,000,000). The
securities were issued pursuant to a private placement and are issued in
reliance upon an exemption from the registration requirements of the Securities
Act of 1933 as amended (“The Act”) under Section 4(2) of the Act.
 
 Between
October 1, 2007 and December 31, 2007, Legend issued a further 500,000 shares of
Common Stock for part settlement of acquisition of exploration permits amounting
to A$518,000 (US$475,000).
 
 Between
October 1, 2007 and December 31, 2007, Legend issued a further 254,000 shares
for consulting fees amounting to A$330,564 (US$289,420).
 
 Between
October 1, 2007 and December 31, 2007, Legend issued a further 200,000 shares of
Common Stock as a result of delays in lodging a registration statement amounting
to A$364,805 (US$318,000).
 
 Between
January 1, 2008 and June 30, 2008, Legend issued a further 457,809 shares of
common stock as a result of delays in lodging a registration statement amounting
to A$900,494 (US$757,015).
 
 On June 3,
2008, Legend issued 42,000,000 shares of common stock at a placement price of
US$2.50 per share raising A$110,028,293 (US$105,000,000). The securities were
issued pursuant to a private placement and are issued in reliance upon an
exemption from the registration requirements of the Securities Act of 1933 as
amended (“The Act”) under Section 4(2) of the Act. The direct costs of the
offering totalled approximately A$5,920,448. As additional consideration, the
Company issued to the agents 840,000 warrants to purchase common stock with an
exercise price of US$2.50 per warrant. The warrants are exercisable at any time
up to June 3, 2010. The fair value of the warrants was A$1,330,852
(US$919,219).
 
 Between
April 1, 2008 and June 30, 2008, 1,332,000 options were exercised using the
cashless exercise feature and the Company issued 1,274,584 shares of common
stock.
 
 Between
April 1, 2008 and June 30, 2008, 108,000 options were exercised for US$0.111,
total amount received A$12,544 (US$11,988.00) and the Company issued 108,000
shares of common stock.
 
 Between
April 1, 2008 and June 30, 2008, Legend issued a further 30,800 shares for
consulting fees amounting to A$147,588 (US$138,600).
 
 Effective
July 14, 2008, the Company entered into a Shares Option Agreement with the
Indian Farmers Fertilizer Cooperative Limited (“IFFCO”) to finance the Company’s
operations.
 
 Under the
Share Options Agreement, IFFCO received options to purchase 30 million shares of
Common Stock of the Company on the following terms:
 
 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.
  F-15
  During the
third quarter of 2008, the 5,000,000 options issued to IFFCO, at an exercise
price of US$2.50 per share and expiring 60 days from July 11, 2008 were
exercised on August 11, 2008 and pursuant to the Share Options Agreement,
received a 1.2% discount on the exercise price. The total amount received was
A$13,672,091 (US$12,350,000) and the Company issued 5,000,000 shares of common
stock.
 
 Between
July 1, 2008 and December 31, 2008, 281,200 options were exercised using the
cashless exercise feature and the Company issued 247,774 shares of common
stock.
 
 Between
July 1, 2008 and December 31, 2008, an additional 327,600 options were exercised
for US$0.111, total amount received A$51,494 (US$36,364) and the Company issued
327,600 shares of common stock.
 
 Share
Bonus Issue
 
 Effective
November 17, 2006, Legend issued one (1) new bonus share of Common Stock for
every two (2) shares of Common Stock outstanding on the record at that date. The
issue of the new bonus shares of Common Stock were on a pro-rate basis to all
shareholders. As a result, the Company issued 27,599,722 shares of its Common
Stock.
 
 Effective
December 31, 2006, Legend issued one (1) new bonus share of Common Stock for
every two (2) shares of Common Stock outstanding on the record at that date. The
issue of the new bonus shares of Common Stock were on a pro-rata basis to all
shareholders. As a result, the Company issued 41,934,337 shares of its Common
Stock.
 
 The
Company has accounted for these two bonus issues as a stock split and
accordingly, all share and per share data has been retroactively
restated.
 
 Issue of
Options under Equity Incentive Plan
 
 (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 Officer and 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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 8,100,000 options using
the Binomial valuation method using the following inputs:
  Grant
      date
                    Sept
      19, 2006
                    Sept
      19, 2006
                    Sept
      19, 2006
                    Sept
      19, 2006
                    Sept
      19, 2006
                    Sept
      19, 2006Grant
      date share price
                    US$0.222
                    US$0.222
                    US$0.222
                    US$0.222
                    US$0.222
                    US$0.222Vesting
      date
                    Sept
      19, 2007
                    Sept
      19, 2007
                    Sept
      19, 2008
                    Sept
      19, 2008
                    Sept
      19, 2009
                    Sept
      19, 2009Expected
      life in years
                    5.50
                    5.50
                    6.00
                    6.00
                    6.50
                    6.50Risk-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$1.00Call
      option value
                    US$0.09
                    US$0.05
                    US$0.10
                    US$0.06
                    US$0.10
                    US$0.06




The
Company adopted revised SFAS No.123, Share-Based payment, which addresses the
accounting for share-based payment transactions in which a company receives
employee services in exchange for (a) equity instruments of that company or (b)
liabilities that are based on the fair value of the company’s equity instruments
or that may be settled by the issuance of such equity instruments.
  F-16
  Options
                
                
                Option
      Price Per Share
                  US$
                
                
                Weighted
      Average Exercise Price
                  US$Outstanding
      at January 1, 2006
                
                
                -
                
                
                
                -
                
                
                
                -Granted
                
                
                8,100,000
                
                
                
                0.444-1.00
                
                
                
                0.69Forfeited
                
                
                -
                
                
                
                -
                
                
                
                -Outstanding
      at December 31, 2006
                
                
                8,100,000
                
                
                
                0.444-1.00
                
                
                
                0.69Granted
                
                
                -
                
                
                
                -
                
                
                
                -Forfeited
                
                
                (1,575,000
                )
                
                
                -
                
                
                
                -Outstanding
      at December 31, 2007
                
                
                6,525,000
                
                
                
                0.444-1.00
                
                
                
                0.69Granted
                
                
                -
                
                
                
                -
                
                
                
                -Forfeited
                
                
                (337,500
                )
                
                
                -
                
                
                
                -Outstanding
      at December 31, 2008
                
                
                6,187,500
                
                
                
                0.444-1.00
                
                
                
                0.69Options
      exercisable at December 31, 2008
                
                
                4,124,988
                
                
                
                0.444-1.00
                
                
                
                0.69
 
 The range
of exercise price is US$0.444 to US$1.00 per option. The weighted average per
option fair value of options granted during 2006 was US$0.07 and the weighted
average remaining contractual life of those options is
73⁄4  years.
 
 The total
value of the outstanding unvested options at December 31, 2008 equates to
A$48,135 (US$36,236) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$133,530 (US$100,522).
 
 (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. The latest exercise date
      for the options is May 16, 2017.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 862,500 options using
the Binomial valuation method using the following inputs:
  Grant
      date
                  May
      16, 2007
                  May
      16, 2007
                  May
      16, 2007
                  May
      16, 2007
                  May
      16, 2007
                  May
      16, 2007Grant
      date share price
                  US$0.25
                  US$0.25
                  US$0.25
                  US$0.25
                  US$0.25
                  US$0.25Vesting
      date
                  May
      16, 2008
                  May
      16, 2008
                  May
      16, 2009
                  May
      16, 2009
                  May
      16, 2010
                  May
      16, 2010Expected
      life in years
                  5.50
                  5.50
                  6.00
                  6.00
                  6.50
                  6.50Risk-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$1.00Call
      option value
                  US$0.1111
                  US$0.064
                  US$0.117
                  US$0.072
                  US$0.124
                  US$0.079




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




The range
of exercise price is US$0.444 to US$1.00 per option. The weighted average per
option fair value of options granted during 2007 was US$0.0945 and the weighted
average remaining contractual life of those options is 81⁄2 years. The forfeiture
rate of 56.52% is based on personnel retention history for persons in this class
of participants by AXIS Consultants Pty Ltd.
 
 The total
value of the outstanding unvested options at December 31, 2008 including
employee retention factor equates to A$9,579 (US$7,970) and is being amortised
over the vesting periods.
  F-17
 
 For 2008,
the amortization amounted to A$17,086 (US$14,215).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 300,000 options using
the Binomial valuation method using the following inputs:




Grant
      date
                Sept
      10, 2007
                Sept
      10, 2007
                Sept
      10, 2007
                Sept
      10, 2007
                Sept
      10, 2007
                Sept
      10, 2007Grant
      date share price
                US$1.25
                US$1.25
                US$1.25
                US$1.25
                US$1.25
                US$1.25Vesting
      date
                Sept
      10, 2008
                Sept
      10, 2008
                Sept
      10, 2009
                Sept
      10, 2009
                Sept
      10, 2010
                Sept
      10, 2010Expected
      life in years
                5.50
                5.50
                6.00
                6.00
                6.50
                6.50Risk-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$1.00Call
      option value
                US$0.98
                US$0.79
                US$1.00
                US$0.81
                US$1.01
                US$0.83




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




The range
of exercise price is US$0.444 to US$1.00 per option. The weighted average per
option fair value of options granted during 2007 was US$0.9033 and the weighted
average remaining contractual life of those options is 83⁄4 years The forfeiture
rate of 50% in the third year is based on personnel retention history for
persons in this class of participants by AXIS Consultants Pty Ltd.
 
 The total
value of the outstanding unvested options at December 31, 2008 including
employee retention factor equates to A$69,310 (US$57,327) and is being amortised
over the vesting periods.
 
 For 2008,
the amortization amounted to A$147,415 (US$121,927).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 300,000 options using
the Binomial valuation method using the following inputs:




F-18




Grant
      date
                Dec
      19, 2007
                Dec
      19, 2007
                Dec
      19, 2007
                Dec
      19, 2007
                Dec
      19, 2007
                Dec
      19, 2007Grant
      date share price
                US$0.95
                US$0.95
                US$0.95
                US$0.95
                US$0.95
                US$0.95Vesting
      date
                Dec
      19, 2008
                Dec
      19, 2008
                Dec
      19, 2009
                Dec
      19, 2009
                Dec
      19, 2010
                Dec
      19, 2010Expected
      life in years
                5.50
                5.50
                6.00
                6.00
                6.50
                6.50Risk-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$1.00Call
      option value
                US$0.70
                US$0.54
                US$0.71
                US$0.56
                US$0.72
                US$0.58




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




The range
of exercise price is US$0.444 to US$1.00 per option. The weighted average per
option fair value of options granted during 2007 was US$0.6350 and the weighted
average remaining contractual life of those options is 9 years. The forfeiture
rate of 50% in the third year is based on personnel retention history for
persons in this class of participants by AXIS Consultants Pty Ltd.
 
 The total
value of the outstanding unvested options at December 31, 2008 including
employee retention factor equates to A$60,441 (US$51,955) and is being amortised
over the vesting periods.
 
 For 2008,
the amortization amounted to A$119,374 (US$102,614).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 4,787,500 options using
the Binomial valuation method using the following inputs:




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




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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2007 was US$0.67 and the weighted average remaining
contractual life of those options is 9 years The forfeiture rate of 42.85% in
the third year is based on personnel retention history for persons in this class
of participants by AXIS Consultants Pty Ltd.
  F-19




The total
value of the outstanding unvested options at December 31, 2008 including
employee retention factor equates to A$1,254,470 (US$1,097,787) and is being
amortised over the vesting periods.
 
 For 2008,
the amortization amounted to A$2,114,307 (US$1,850,230).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 5,000,000 options using
the Binomial valuation method using the following inputs:


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




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




The
exercise price is US$2.00 per option. The weighted average per option fair value
of options granted during 2008 was US$0.43 and the weighted average remaining
contractual life of those options at December 31, 2008 is 91⁄4 years. No options
are currently exercisable. The options were issued to the Company’s CEO and
therefore the Company applied a 100% retention rate.
 
 The
remaining value of the outstanding options at December 31, 2008 including
employee retention factor equates to A$1,117,417 (US$1,001,541) and is being
amortised over the vesting periods.
 
 For  2008,
the amortization amounted to A$1,281,333 (US$1,148,459).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 400,000 options using
the Binomial valuation method using the following inputs:
  F-20
  Grant
      date
                  Feb
      19, 2008
                  Feb
      19, 2008
                  Feb
      19, 2008Grant
      date share price
                  US$1.04
                  US$1.04
                  US$1.04Vesting
      date
                  Feb
      19, 2009
                  Feb
      19, 2010
                  Feb
      19, 2011Expected
      life in years
                  5.50
                  6.00
                  6.50Risk-free
      rate
                  4.422%
                  4.422%
                  4.422%Volatility
                  60%
                  60%
                  60%Exercise
      price
                  US$1.00
                  US$1.00
                  US$1.00Call
      option value
                  US$0.61
                  US$0.63
                  US$0.65




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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2008 was US$0.63 and the weighted average remaining
contractual life of those options at December 31, 2008 is 91⁄4 years. No options
are currently exercisable. The options were issued to one individual and in that
case, the Company applied a 100% retention rate.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$132,023 (US$120,062) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$145,082 (US$131,938).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 362,500 options using
the Binomial valuation method using the following inputs:




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




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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2008 was US$2.70 and the weighted average remaining
contractual life of those options at December 31, 2008 is 91⁄2 years. No options
are currently exercisable. The options were issued to two individuals and in
that case, the Company applied a 100% retention rate.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$651,371 (US$625,251) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$367,007 (US$352,290).




F-21




(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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 200,000 options using
the Binomial valuation method using the following inputs:


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




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




The
exercise price is US$2.00 per option. The weighted average per option fair value
of options granted during 2008 was US$2.77 and the weighted average remaining
contractual life of those options at December 31, 2008 is 93⁄4 years. No options
are currently exercisable. A retention rate of 66% is based on personnel
retention history for persons in this class of participants by AXIS Consultants
Pty Ltd.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$267,657 (US$257,995) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$111,677 (US$107,645).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 1,000,000 options using
the Binomial valuation method using the following inputs:




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




F-22




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




The
exercise price is US$3.48 per option. The weighted average per option fair value
of options granted during 2008 was US$1.88 and the weighted average remaining
contractual life of those options at December 31, 2008 is 93⁄4 years. No options
are currently exercisable. The options were issued to one individual and in that
case, the Company applied a 100% retention rate.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$1,399,657 (US$1,342,831) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$559,901 (US$537,169).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 150,000 options using
the Binomial valuation method using the following inputs:




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




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




The
exercise price is US$2.00 per option. The weighted average per option fair value
of options granted during 2008 was US$2.11 and the weighted average remaining
contractual life of those options at December 31, 2008 is 93⁄4 years.
 
 During
December, 2008, the entire 150,000 options were forfeited by the employee and
all amounts previously amortized have been reversed.
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 112,500 options using
the Binomial valuation method using the following inputs:




F-23




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


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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2008 was US$1.54 and the weighted average remaining
contractual life of those options at December 31, 2008 is 93⁄4 years. No options
are currently exercisable. A retention rate of 50% is based on personnel
retention history for persons in this class of participants by AXIS Consultants
Pty Ltd.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$72,083 (US$65,581) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$22,924 (US$20,856).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 700,000 options using
the Binomial valuation method using the following inputs:




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




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




The
exercise price is US$2.00 per option. The weighted average per option fair value
of options granted during 2008 was US$1.12 and the weighted average remaining
contractual life of those options at December 31, 2008 is 93⁄4 years. No options
are currently exercisable. The retention rate of 50% is based on personnel
retention history for persons in this class of participants by AXIS Consultants
Pty Ltd.
 
 The
remaining value of the outstanding options to December 31, 2008 equates to
A$337,435 (US$300,014) and is being amortised over the vesting
periods.


F-24




For 2008,
the amortization amounted to A$103,460 (US$91,987).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 962,500 options using
the Binomial valuation method using the following inputs:




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




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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2008 was US$0.16 and the weighted average remaining
contractual life of those options at December 31, 2008 is 10 years. No options
are currently exercisable. The retention rate of 80% is based on personnel
retention history for persons in this class of participants by AXIS Consultants
Pty Ltd.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$182,938 (US$117,757) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$8,455 (US$5,443).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 1,050,000 options using
the Binomial valuation method using the following inputs:




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




F-25




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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2008 was US$0.16 and the weighted average remaining
contractual life of those options at December 31, 2008 is 10 years. No options
are currently exercisable. The options were issued to non-executive directors of
the Company and in that case, the Company applied a 100% retention
rate.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$249,461 (US$160,578) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$11,530 (US$7,422).
 
 (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.
 
 The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 562,500 options using
the Binomial valuation method using the following inputs:




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




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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2008 was US$0.16 and the weighted average remaining
contractual life of those options at December 31, 2008 is 10 years. No options
are currently exercisable. The retention rate of 60% is based on personnel
retention history for persons in this class of participants by AXIS Consultants
Pty Ltd.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$80,184 (US$51,614) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$3,706 (US$2,386).
 
 (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.
  F-26
  The
Company has accounted for all options issued based upon their fair market value
using the Binomial pricing model.
 
 An
external consultant has calculated the fair value of the 500,000 options using
the Binomial valuation method using the following inputs:
  Grant
      date
                  Dec
      4, 2008
                  Dec
      4, 2008
                  Dec
      4, 2008Grant
      date share price
                  US$0.37
                  US$0.37
                  US$0.37Vesting
      date
                  Dec
      4, 2009
                  Dec
      4, 2010
                  Dec
      4, 2011Expected
      life in years
                  5.50
                  6.00
                  6.50Risk-free
      rate
                  2.55%
                  2.55%
                  2.55%Volatility
                  60%
                  60%
                  60%Exercise
      price
                  US$1.00
                  US$1.00
                  US$1.00Call
      option value
                  US$0.15
                  US$0.16
                  US$0.17




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




The
exercise price is US$1.00 per option. The weighted average per option fair value
of options granted during 2008 was US$0.16 and the weighted average remaining
contractual life of those options at December 31, 2008 is 10 years. No options
are currently exercisable. The retention rate of 100% is based on personnel
retention history for persons in this class of participants by AXIS Consultants
Pty Ltd.
 
 The
remaining value of the outstanding options at December 31, 2008 equates to
A$118,790 (US$82,049) and is being amortised over the vesting
periods.
 
 For 2008,
the amortization amounted to A$7,687 (US$4,948).
 
 As of
December 31, 2008, 4,814,522 options over shares were available for future
grants under the Stock Plan.
  8. SHORT-TERM
ADVANCE – AFFILIATE
 
 During
2007, the Company repaid the amount owing to Astro Diamond Mines N.L. for costs
incurred on mining tenements acquired in 2006, including interest charged for
2007 of A$16,744. Astro charged interest at the rate of between 9.85% and
10.10%, being the “reference rate” of the ANZ Banking Group Ltd.
 
 During
June 2007, the Company paid AXIS Consultants Pty Ltd amounts owing under the
Service Agreement (refer footnote 6 for further information). The amount of
A$2,432,687 included an interest charge of A$14,683.
 
 During
March 2007, the Company paid the amount owing to Joseph Gutnick, President and
Chief Executive Officer of Legend International Holdings, Inc. of $1,303, less
expenses incurred of A$472. No interest was incurred.
  F-27
 
 9. RECLAMATION
AND REHABILITATION
 
 December
                      31,
      2008
                      A$
                    
                    
                    December
                      31,
      2007
                      A$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 operations are 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
 
 10. LEASE
LIABILITY
 
 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
                
                
                247,0192010
                
                
                247,7102011
                
                
                305,8362012
                
                
                23,655824,220Less
      amounts representing interest
                
                
                100,427723,793Current
      liability
                
                
                186,785Non-current
      liability
                
                
                537,008723,793At
      December 31, 2008  the net book value of the motor vehicles
      under capital leases amounts to:
                
                
                677,125
 
 11. TRADING
SECURITIES
 
 Management
determines the appropriate classification of its investments in marketable
equity securities at the time of purchase and re-evaluates such determinations
at each reporting date. The Company accounts for its equity security investments
as trading securities in accordance with Financial Accounting Standards Board
Statement (“FAS”) No. 115, “Accounting for Certain Investments in Debt and
Equity Securities.”
 
 On
January 1, 2008, the Company partially adopted SFAS No. 157, which,
among other things, defines fair value, establishes a consistent framework for
measuring fair value and expands disclosure for each major asset and liability
category measured at fair value on either a recurring or nonrecurring basis. The
Company did not adopt the SFAS No. 157 fair value framework for
nonfinancial assets and liabilities, except for items that are recognized or
disclosed at fair value in the financial statements at least annually. SFAS 157
clarifies that fair value is an exit price, representing the amount that would
either be received to sell an asset or be paid to transfer a liability in an
orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As a basis for
considering such assumptions, SFAS No. 157 establishes a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as
follows:
  F-28
 
 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; andLevel 3. Unobservable
      inputs in which there is little or no market data, which require the
      reporting entity to develop its own
assumptions.
 
 Investment Measured at Fair Value on
a Recurring Basis:
 
 Fair
      Value
                  Hierarchy
                
                Fair
      Value at December 31,
                  2008Level
      1
                
                $
                780,946
 
 The
trading securities held at December 31, 2008 are investments in companies in the
phosphate industry that are listed on either a US stock exchange or the
Australian Stock Exchange. For trading securities in companies listed on a US
stock exchange, the cost of the investments was A$381,481, the fair market value
at December 31, 2008 was A$446,348 and the unrealized gain was A$64,867. For
trading securities in companies listed on the Australian Stock Exchange, the
cost of the investments was A$328,591, the fair market value at December 31,
2008 was A$334,598 and the unrealized gain was A$6,007. The total unrealized
gain of A$70,874 has been taken up in the Statement of Operations.
 
 Since
December 31, 2008, the Company has sold certain trading securities with a fair
value of A$511,532 at December 31, 2008 for a consideration of
A$535,764.
  12. AFFILIATE
TRANSACTIONS
 
 In
December 2004, the Company issued to Renika, a company associated with Mr J I
Gutnick, 20,250,000 options to be converted into 20,250,000 shares of Common
Stock, at an exercise price of 5 cents and a latest exercise date of December
2009 for services to be rendered to the Company. The Company undertook a Black
and Scholes valuation of these options using a 2.22 cent exercise price, 2.22
cent market price, 5 year life, risk free interest rate of 5.155% and a
volatility of 16.7%. The Company valued the 20,250,000 options at A$160,672
(US$123,300) or A$0.0178 (US$0.0137) each. In September 2005, Renika exercised
the 20,250,000 options using the cashless exercise feature and were issued
17,085,937 shares of Common Stock.
 
 In
December 2004, the Company entered into an agreement with AXIS Consultants Pty
Ltd to provide geological, management and administration services to the
Company.  AXIS is affiliated through common management.  The
Company is one of four affiliated companies. Each of the companies has some
common Directors, officers and shareholders.  In addition, each of the
companies is substantially dependent upon AXIS for its senior management and
certain mining and exploration staff. A number of arrangements and transactions
have been entered into from time to time between such companies.  It
has been the intention of the affiliated companies and respective Boards of
Directors that each of such arrangements or transactions should accommodate the
respective interest of the relevant affiliated companies in a manner which is
fair to all parties and equitable to the shareholders of each. Currently, there
are no material arrangements or planned transactions between the Company and any
of the other affiliated companies other than AXIS.
 
 AXIS is a
company owned by its public companies (including Legend) and any profits
generated by AXIS are returned to its shareholders in the form of
dividends.
 
 AXIS is
paid by each company for the costs incurred by it in carrying out the
administration function for each such company. Pursuant to the Service
Agreement, AXIS performs such functions as payroll, maintaining employee records
required by law and by usual accounting procedures, providing insurance, legal,
human resources, company secretarial, land management, certain exploration and
mining support, financial, accounting advice and services.  AXIS
procures items of equipment necessary in the conduct of the business of the
Company.  AXIS also provides for the Company various services,
including but not limited to the making available of office supplies, office
facilities and any other services as may be required from time to time by the
Company as and when requested by the Company.
  F-29
 
 The
Company is required to reimburse AXIS for any direct costs incurred by AXIS for
the Company. In addition, the Company is required to pay a proportion of AXIS’s
overhead cost based on AXIS’s management estimate of our utilisation of the
facilities and activities of AXIS plus a service fee of not more than 15% of the
direct and overhead costs. Amounts invoiced by AXIS are required to be paid by
us.  The Company is also not permitted to obtain from sources other
than AXIS, and we are not permitted to perform or provide ourselves, the
services contemplated by the Service Agreement, unless we first requests AXIS to
provide the service and AXIS fails to provide the service within one
month.
 
 The
Service Agreement may be terminated by AXIS or us upon 60 days prior
notice.  If the Service Agreement is terminated by AXIS, the Company
would be required to independently provide, or to seek an alternative source of
providing, the services currently provided by AXIS.  There can be no
assurance that the Company could independently provide or find a third party to
provide these services on a cost-effective basis or that any transition from
receiving services under the Service Agreement will not have a material adverse
effect on us.  The Company’s inability to provide such services or to
find a third party to provide such services may have a material adverse effect
on our operations.
 
 In
accordance with the Service Agreement AXIS provides the Company with the
services of the Company’s Chief Executive Officer, Chief Financial Officer,
geologists and clerical employees, as well as office facilities, equipment,
administrative and clerical services. We pay AXIS for the actual costs of such
facilities plus a maximum service fee of 15%.
 
 During
2007, AXIS charged the Company A$1,126,311 in management fees and administration
services including salaries incurred in relation to AXIS staff that provided
services to the Company, A$834,552 for exploration services, A$151,800 for asset
usage, A$14,683 in interest on the outstanding balance and the Company repaid
A$2,432,687. AXIS charged interest at a rate of 10.10% until June 2007. The
amount owed to AXIS at December 31, 2007 was $6,912 which is included in
accounts payable. During 2008, AXIS charged the Company A$5,413,203 in
management and administration services including salaries incurred in relation
to AXIS staff that provided services to the Company; A$2,224,638 for exploration
services provided to the Company; and AXIS charged interest of A$7,762 for 2008.
The Company placed on deposit with AXIS funds amounting to A$699,638 to acquire
two properties in Mt Isa, which is the base for the Company’s phosphate project,
to be used to accommodate AXIS employees and consultants when working in Mt Isa
and relocating to the field operations. The Company has entered into a rental
agreement with AXIS for one rental property (refer note 14). The Company also
purchased a lear jet owned by AXIS (at cost to AXIS) amounting to A$1,210,000
which includes 10% GST and was based on an independent valuation, to utilize in
its field operations; and a residential property at a value of A$900,000 (cost
to AXIS) used to accommodate AXIS employees when visiting field
operations.  The Company paid A$10,551,866 which includes the cost of
the lear jet, the three properties and an advance for 2009 charges and ongoing
operations.  The Company charged AXIS interest of A$42,168 at the rate
between 10.35% to 11.75%.The amount owed by AXIS at December 31, 2008 was
A$1,552,919 of which A$997,251 and A$555,668 is included in current and
non-current receivables in the accompanying Balance Sheet,
respectively.
 
 Mr Joseph
Gutnick, the President of the Company advanced the Company the initial deposit
on opening a US Dollar bank account. In March, 2007, the balance of A$831, owing
of the initial advance of A$1,303 (US$1,000) less expenses incurred of A$472,
was repaid.
 
 Effective
as of March 3, 2006, Legend entered into a Contract for the Sale of Mining
Tenements (“Contract”) with Astro Diamond Mines N.L. (“Astro”) an Australian
company pursuant to which the Company acquired certain diamond mining tenements
in Northern Australia from Astro. The consideration payable by Legend to Astro
was A$1.5 million and Legend was also required to pay to Astro any costs
incurred on the tenements after February 1, 2006. Astro provided commercial
warranties which are usual for a transaction of this nature in favour of Legend.
Under Australian law, Astro was required to provide an independent experts
report to shareholders for this transaction. In order to prepare the independent
experts report, a mineral valuation was prepared on behalf of Astro which
indicated that the preferred value for the tenements that are the subject of the
transaction was A$1.5 million. This formed the basis of the consideration agreed
by the parties. The President and Chief Executive Officer of the Company, Mr. J.
I. Gutnick, was Chairman and Managing Director of Astro and Dr DS Tyrwhitt, an
independent Director of the Company is also a Director of Astro. The tenements
are located in the Northern Territory of Australia and are prospective for all
minerals. Astro incurred costs on the mining tenements from February 1, 2006
which at settlement Legend was required to pay. However, Astro had not
quantified the amount at the date of settlement and it was only finally
quantified in November 2006. At December 31, 2006, the Company owed Astro
A$942,433 for these costs including interest of A$21,302. During 2007, the
amount was repaid in full including interest charge for 2007 of A$16,774. Astro
charged interest at a rate of 10.10%.
  F-30
 
 The
consideration and all related acquisition costs, costs incurred by Astro since
February 1, 2006 and exploration expenditure incurred by the Company is shown in
the Statement of Operations as Exploration Expenditure.
  13. INCOME
TAXES
 
 The
Company has adopted the provisions of SFAS No. 109 "Accounting for Income
Taxes". SFAS 109 requires recognition of deferred tax liabilities and assets for
the expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax liabilities
and assets are determined based on the differences between the financial
statement and tax basis of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to
reverse.
 
 The
Company has operations in both the USA and Australia and the Company is subject
to taxation in both jurisdictions on the operations in each respective
jurisdiction.
 
 At
December 31, 2008 and 2007 deferred taxes consisted of the
following:
 
 USA
                  2008
                  A$
                
                
                Australia
                  2008
                  A$
                
                
                Total
                  2008
                  A$Deferred
      tax assetsNet
      operating loss carry-forward
                
                
                5,336,889
                
                
                
                5,748,076
                
                
                
                11,084,965Less
      valuation allowance
                
                
                (5,336,889
                )
                
                
                (5,748,076
                )
                
                
                (11,084,965
                )Net
      deferred taxes
                
                
                -
                
                
                
                -
                
                
                
                -
 
 USA
                  2007
                  A$
                
                
                Australia
                  2007
                  A$
                
                
                Total
                  2007
                  A$Deferred
      tax assetsNet
      operating loss carry-forward
                
                
                2,661,999
                
                
                
                2,460,476
                
                
                
                5,122,475Less
      valuation allowance
                
                
                (2,661,999
                )
                
                
                (2,460,476
                )
                
                
                (5,122,475
                )Net
      deferred taxes
                
                
                -
                
                
                
                -
                
                
                
                -
 
 The
valuation allowance offsets the net deferred tax asset for which there is no
assurance of recovery. The valuation allowance will be evaluated at the end of
each year, considering positive and negative evidence about whether the deferred
tax asset will be realized.
 
 At that
time, the allowance will either be increased or reduced; reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax assets is no longer impaired and the allowance is
no longer required.
 
 As a
result of the ownership change that occurred in November 2004 (see note 1),
Internal Revenue Code Section 382 limits the use of available operating loss
carryforwards for losses incurred prior to the ownership change.  In
addition, the Company will need to file a tax return for 2007 to establish the
tax benefits of the net operating loss carry forwards. Future net operating
losses will be fully available to offset future taxable income.  Total
available net operating loss carryforwards, which are subject to limitations,
amount to approximately A$34,856,984, at December 31, 2008 and expire in years
2022 through 2028.
  F-31
 
 14. COMMITMENTS
 
 During
August 2008, the Company entered into a lease agreement for the rental of office
premises which expires in 2010. The lease agreement has a monthly payment amount
of A$3,194 (as adjusted by the increase in the consumer price index in Australia
annually).
 
 The
Company has entered into a rental agreement with AXIS for one rental property
used by AXIS staff when conducting field operations for the Company. The rental
agreement is for the period October 1, 2008 to September 30, 2009. The remaining
commitment is A$18,720.
 
 During
November 2008, the Company entered into a lease agreement for the rental of
office premises which expires in April 2010. The lease agreement has a monthly
repayment amount of A$14,527 (as adjusted by a factor of 105% in year two of the
lease).
 
 Total rent
expenses incurred by the Company amounted to A$30,349 and A$27,457 in 2008 and
2007, respectively.
 
 A$Future
      minimum lease payments under the Company’s non-cancellable operating
      leases which expire between 2008 and 2010 are as follows:.2009
                  
                  
                  202,3782010
                  
                  
                  75,118277,496
 
 The
Company entered into an agreement for drilling on its Queensland phosphate
project whereby the Company guaranteed to drill a set number of metres. If those
metres were not drilled, the Company was required to make a payment for the
metres that had not been drilled. At December 31, 2008, the value of the
commitment was A$4,050,000 (US$2,797,333).
 
 In
December 2008, the Company entered into an agreement to purchase certain mining
tenements adjacent to its Queensland phosphate interests and paid a deposit of
A$295,000 with the balance of the purchase price of A$605,000 being payable
following the receipt of certain regulatory approvals. The regulatory approvals
were received in February 2009 and the balance of the purchase price was paid at
that time.
 
 Exploration
 
 The
Company has to perform minimum exploration work and expend minimum amounts of
money on its tenements. The overall expenditure requirement tends to be limited
in the normal course of the Company’s tenement portfolio management through
expenditure exemption approvals, and expenditure reductions through
relinquishment of parts or the whole of tenements deemed non prospective. Should
the company wish to preserve interests in its current tenements the amount which
may be required to be expended is as follows:
 
 2008
                  A$
                
                
                
                2007
                  A$Not
      later than one year
                
                
                748,755
                
                
                
                1,795,000Later
      than one year but not later than five years
                
                
                2,801,013
                
                
                
                3,085,000Later
      than five years but not later than twenty one years
                
                
                317,912
                
                
                
                115,0003,867,680
                
                
                
                4,995,000
  F-32
 
 15. SUBSEQUENT
EVENTS
 
 The
Company is increasing its diamond exploration activity in the proximity of the
Merlin diamond mine in the Northern territory and is continually sourcing new
ground in this region which is one of the most diamond prospective areas in
Australia. As part of this strategy, the Company acquired a 14.9% interest in
North Australian Diamonds Ltd (“NADL”) at a cost of A$2,368,000 in February
2009. NADL owns the Merlin diamond mine and surrounding tenements. Mr JI Gutnick
is Executive Chairman of and a substantial shareholder in NADL.
 
 Since
December 31, 2008, the Company has acquired motor vehicles, trucks and a
caravan, all to support field activities at an approximate cost of A$250,000 and
has entered into a rental agreement with AXIS for 2 further properties in Mt Isa
at a rental amount of A$2,080 per month for a 12 month period.
  F-33




Appendix
A
 
 GLOSSARY
 
 In this
Form 10-K, we use certain capitalized and abbreviated terms, as well as
technical terms, which are defined below.
 
 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 OxideALKALI
      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 OxideCHALCOPYRITE
                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 rockDYKE
                A
      tabular igneous intrusion that cuts across the bedding or foliation of the
      country rock.EM
                Electromagnetic
      geophysical surveyFACIES
                A
      term applied to sedimentary units and the rocks that belong to
      themFAULT
                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 beneficiationFOLIATED
                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 considered as 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.









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 gravityGREENSTONE
                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 analyzed to 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 limestoneKOMATIITE
                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.









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/MagnesiumMICROSPHORITE
                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 MolybdenumMMI
                Mobile
      Metal Ion, sampling technique used to detect extremely low levels of
      certain elements in soil samplesNET
      SMELTERRETURN
      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 NickelORE
                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.









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 PhosphatePATHFINDER
                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 leadPERMAFROST
                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.









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.









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.









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.