chrysalis resources limited for personal use only · 2011-11-25 · chrysalis resources limited acn...

Chrysalis Resources LimitedACN 125 931 964

Unit 2, Level 1 Churchill Court331-335 Hay StreetSUBIACO WA 6008

T (08) 9380 4430 F (08) 9481 5044

W www.chrysalisresources.com

Annual Report2011

Ch

rysalis Reso

urces Lim

ited ][ A

nnual Rep

ort 2011

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DirectorsDr Neale FongExecutive Chairman

Mr Adrian PaulNon Executive Director

Mr Grant KidnerNon Executive Director

SecretaryMs Mel Cotterell

Registered OfficeUnit 2 Level 1 Churchill Court331-335 Hay StreetSUBIACO WA 6008

Share RegistryComputershare Investor Services Pty LtdLevel 2, Reserve Bank Building45 St Georges TerracePERTH WA 6000

AuditorsHLB Mann JuddLevel 4, 130 Stirling StreetPERTH WA 6000

Australian Securities ExchangeChrysalis Resources Limited shares (CYS) are listed on the Australian Securities Exchange.

Designed by: Chameleon Creative

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Contents

Chairman’s Letter 2

Company overview 3

Directors’ Report 8

Auditor’s Independence Declaration 14

Corporate Governance statement 15

statement of Comprehensive Income 20

statement of Financial Position 21

statement of Changes In equity 22

statement of Cash Flows 23

notes to the Financial statements 24

Directors’ Declaration 41

Independent Auditor’s Report 42

shareholder Information 44

tenement schedule 46

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2 Chrysalis Resources Limited ][ Annual Report 2011

ChAIRmAn’s LetteR

Dear Shareholders,

Over the past year the Company has focussed its exploration activity on three main projects, namely Doolgunna West (Cu/Au), West Angelas (Fe) and Pioneer (Au).

In addition, Chrysalis announced in December 2010 the acquisition (subject to due diligence) of the Zambian Copper Project, which is situated 30km from Equinox’s Lumwana Mines and 20km from First Quantum’s Kansashi Mine. As reported due diligence was successfully completed; however, the Company has not been able to secure ministerial approval for the transfer of shares to Zambian Copper Pty Ltd which would have become a wholly owned subsidiary of Chrysalis. This ministerial approval would have allowed the company to progress an exploration programme in Zambia. In July 2011 Sedgewick lodged an application to the High Court of Zambia to appeal the Minister of Mines decision to refuse the transfer of shares. A hearing date has been set for the near future.

During the year, the Company has followed a methodical approach to progressing its exploration goals.

At West Angelas, the Stage 1 RC drill programme resulted in the identification of significant widths of channel iron deposit in what we have labelled the Turee Creek East CID. The next steps are to define the extents of the Turee Creek East CID and exploration for other CID sites. The Department of Mines and Petroleum (DMP) has approved a Programme of Work (POW) for up to 92 holes of RC drilling to follow up the mineralisation in the Turee Creek East CID prospect.

At Doolgunna West the results of our RC program were equivocal. It now appears unlikely that the project area contains a significant DeGrussa-style at shallow depth, but there were some positive features that will be reviewed in the coming months, along with historical geological, geochemical and geophysical data. A POW has been approved by the DMP to drill one diamond hole up to a maximum of 500 metres. The rationale for this drill program is to assess at greater depth the potential for VMS gold/copper systems and test a structural model to further assess relationships between observed geophysical anomalies, observed lithology and calc-silicate/sulphide alterations. The company was successful in being awarded up to $155,000 towards this drilling through the WA Government Exploration Incentive Scheme.

At the Spongelite Prospect at Pioneer the results from the Stage 3 drilling program were disappointing, but there are positive aspects which are currently being assessed. A POW was approved for three reverse circulation holes. This drilling proposal also received approval for funding of up to $28,000 in the WA Government’s EIS drilling subsidy scheme. A thorough review of the entire project area is also under way.

The Company has spent $1.1 million in exploration during the year and is confident that its more focussed approach will see an improvement in the Company’s outcomes in the upcoming year.

On behalf of the Company I would like to thank all Shareholders who have supported the Company since listing on the ASX and look forward to your continuing support.

Yours faithfully

Dr Neale Fong

Executive Chairman

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3

Company overview

CORPORATE

Chrysalis Resources – Projects

IRON ORE PROJECTS

WEST ANGELAS PROJECT (Fe)The West Angelas Iron Ore Project comprises an area of approximately 87.7km2. The project is located approximately 135 kilometres west of Newman in the world-class Pilbara iron ore province of Western Australia.

During the first quarter of 2010/2011, Southern Geoscience Consultants Pty Ltd completed an aerial magnetic interpretation of the area with a focus on defining CID and insitu/bedded targets. Several CID and a single insitu Brockman Iron Formation target were generated and an approved Programme of Works from the Department of Mines and Petroleum was received. Heritage clearance was completed and a drill program was undertaken in November 2010.

A total of 37 holes for 2214 metres of reverse circulation drilling have been completed over 1 Brockman Iron and 3 channel iron targets.

Drilling results displayed significant widths of channel iron deposit within our tenure at our West Angelas Project. The prospect ‘Turee Creek East CID’ displayed significant thicknesses over a drill line length of approximately 250 metres, and showed that CID development has taken place within our tenement.

Figure 2: Tenement location map

Figure 1: Chrysalis Resources Project Location Map.

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4 Chrysalis resources Limited ][ Annual Report 2011

Company overview

WEST ANGELAS PROJECT (Fe) Below is a table outlining the returned intersections.

Table One – Turee Creek East CID intercept descriptions.

Hole ID UTM East Zone 50

UTM North Zone 50

RC m EOH Dip Comments

WARC0012 646646 7435715 54 -90 22m @ 48.1% Fe from 32m

WARC0013 646633 7435600 66 -9028m @ 55.5% Fe from 32 metresInc 12m @ 57.9% Fe from 40m

WARC0014 646618 7435493 66 -90 12m @ 51.3% Fe from 42m

WARC0031 645291 7432224 66 -90 16m @ 49.6% Fe from 26m

WARC0032 645204 7432182 66 -90 14m @ 48.7% Fe from 48m

*intercepts calculated on a minimum 45% Fe, maximum 2m internal waste

Of the 3 channel iron deposit targets, the Turee Creek East CID returned significant widths of ore grade channel iron deposit. The central line returned significant widths of sub ore grade iron mineralisation within a ‘clayey’ channel iron deposit. Grades observed low but worthy of further investigation to possibly delineate better quality channel iron deposit development.

The other remaining channel iron deposit target did not return any intersections of channel iron mineralisation, but did return immature alluvial profiles. The Brockman target hole was drilled to a depth of 198 metres and did not intersect the Brockman Iron Formation. This hole failed to show the iron formations stratigraphically above the Brockman Iron Formation and was terminated due to the significant depth achieved.

GREGORY RANGE (Fe)The Gregory Range Iron Project comprises an area of approximately 84km2 with further applications pending totalling 1,077km2. The project is located in the Marble Bar Mineral Field, approximately 200 kilometres south east of Port Hedland.

The Gregory Range Project is prospective for iron mineralisation, but Chrysalis does respect the multi commodity potential for this project. Nearby documented occurrences of historic mines of copper-lead-zinc-manganese in and around the Ragged Hills Mining Centre is a facet for this project that will be considered along with iron ore.

The majority of the tenure is still under application except for E45/3120. A reconnaissance field trip to granted tenure E45/3120 and surrounding areas to gain an understanding of the historical sites and the nature of the land was conducted during the first quarter and further strategic review is being undertaken.

Figure 3 – West Angelas drill hole location and CID interval widths. All holes were vertical

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Company overview

SPRING CREEK (Fe)The Spring Creek Project comprises an area of approximately 164km2. The project is located 12 kilometres to the south and south-east of the township of Tom Price and is situated on the sealed Paraburdoo-Tom Price Road: adjacent to the Rio Tinto Paraburdoo Railway Line. No work was completed on this tenement.

BEYONDIE WEST (Fe)The Beyondie West Project comprises an area of approximately 1,152km2. The project is located in the northern region of the mid-west iron province of Western Australia, immediately adjacent to the Great Northern Highway and Goldfields Gas pipeline.

Our exploration tenement applications are immediately adjacent and along strike from Emergent’s (ASX:EMG) granted tenure containing their ‘Beyondie Magnetite Project’. Emergent have reported significant widths and strikes of banded iron formations within their tenure which we interpret to possibly strike or be repeated within our tenure.

The Board decided in July 2011 to relinquish these tenements.

COPPER – GOLD PROJECTS

DOOLGUNNA WEST PROJECT (Cu/Au)The Doolgunna West Copper Gold Project comprises a granted Exploration Licence of approximately 18.5km2. The project is located within the Meekatharra Mineral Field approximately 130 kilometres north of the township of Meekatharra.

The Licence is approximately 20 kilometres west along strike from the Sandfire Resources (ASX: SFR) ‘DeGrussa’ Copper/Gold Deposit that has attracted a lot of interest from junior companies exploring in the area.

The reverse circulation (RC) drilling program that was planned in the fourth quarter of 2009/10 was completed in July-August 2010. Twelve vertical RC holes were drilled into five EM targets for a total of 1,172 metres. No massive sulphides were encountered. Gold and copper were only weakly anomalous. A down-hole transient EM survey was conducted on eight of the RC holes. There were no responses indicative of strongly conductive mineralisation near the drill holes. From these results and the earlier EM surveys it was concluded that if there is a conductive body on the EL then it is below 150-200 metres.

There were some positives from the program. Trace amounts of copper, zinc and nickel sulphides were found in thin sections of drill chips from several holes. The thin sections also revealed several phases of calc-silicate and sulphide alteration. Anomalous copper (1,380 ppm) was returned from a 1m sample from 94m in hole DWRC0005, and in DWRC0008 a 1m sample from 6m returned 1,280 ppm copper, 25 ppb platinum and 50 ppb palladium from an iron-rich sheared dolerite.

A full review of historical and Chrysalis data, and including the drilling proposal, will be carried out early in the 2011/2012 year. The review will assess the potential for deeper conductors and various exploration models for non-conductive mineralization.

Figure 4: Doolgunna West Project Location & Access.

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ComPAny oveRvIew

PIONEER PROJECT (Au)The Pioneer Project is located 25 kilometres north-northwest of Norseman, immediately east of the Coolgardie-Esperance Highway, Kambalda-Esperance Railway and the Kalgoorlie-Esperance Gas Pipeline.

During the year the Company completed its Stage 3 drilling program, consisting of 13 reverse circulation (RC) holes for 1,068 metres and a cored hole of 246.1 metres (78 metres of RC pre-collar and 168.1 metres of HQ2-size diamond core). The RC holes tested the northern extension of the Spongelite mineralization and the Jardine Prospect to the west of Spongelite. The cored hole tested the extrapolated down-dip extension of the shallow Spongelite mineralization.

Several >1 g/t gold values were reported from the cored hole (SPRCD0001), notably:

• 8-9m 1 metre at 1.19 g/t Au (RC chips)• 69-70m 1 metre at 1.06 g/t Au (RC chips)• 93-96m 3 metres at 0.66 g/t Au, including 1 metre

at 1.14 g/t Au from 94m• 120-122m 2 metres at 0.94 g/t Au including 1metre

at 1.09 g/t Au from 121mThe 83-96 metre intercept also reported very high average arsenic assay of 0.39% from a series of laminated quartz veins in volcaniclastic sediments (Figure 5).

The maximum gold value from the fence of four RC holes north of Spongelite was 0.55 g/t Au over 1 metre, effectively closing off the northern extension of the shallow Spongelite mineralization. The rectangular grid of nine RC holes at Jardine reported a maximum of only 0.28 g/t Au over 1 metre.

The assay results, while disappointing, nevertheless confirm that multiple small gold-bearing systems are present in the fresh, unweathered sheared volcaniclastics. There appears to be an association between the better gold grades and high, or at least elevated, arsenic and sulphur, suggesting that much of the gold is in arsenopyrite. Quartz veins and stringers are common in most of the Spongelite drilling, but most lack significant gold; however the gold-arsenic-bearing quartz vein in SPRCD0001 shows the potential of this style of mineralization in the project.

Of interest is that three of the RC holes north of Spongelite and the upper part of SPRCD0001 reported high or elevated zinc, copper and sulphur, for example:

SPRC0002 27-53m 26 metres at 0.37% Zn, 0.06% Cu and 7.04% S

Some of the high zinc-copper intercepts also have elevated (>0.1%) nickel.

The high base-metal and sulphur values appear to be associated with sulphidic sediments near the top of the felsic volcaniclastic pile and within the overlying ultramafic rocks. The significance of these results will be assessed further in the first part of the new financial year.

During the third quarter a PoW was approved for three reverse circulation holes. This drilling proposal also received approval for funding of up to $28,000 in the WA Government’s EIS drilling subsidy scheme. The three holes, to be drilled during 2011-12, will test the gold potential of the sheared eastern ultramafic/felsic contact at Spongelite – the same contact from which the Stage 3 cored and RC holes reported elevated base metals and sulphur as described above.

Figure 5 – Pioneer core photo showing laminated quartz veins.

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ComPAny oveRvIew

HORSESHOE SOUTH (Cu/Au)The Horseshoe South Project comprises an area of approximately 11.3km2 and is located within the Meekatharra Mineral Field approximately 140 kilometres north of the township of Meekatharra.

An auger soil sampling program was carried out in February 2011. Weather conditions hampered the completion of this program in the March quarter, although 263 samples (50% of the program) were delivered to the laboratory. Subsequent to this quarter, the Auger program has been completed and 315 samples sent to the laboratory. No significant results were recorded.

SHEEZA PROJECT (Au)The Sheeza Gold Project comprises an area of approximately 17km2. The project is located within the Broad Arrow Mineral Field approximately 20 kilometres northwest of the historic gold mining centre of Ora Banda and 75 kilometres northwest of Kalgoorlie.

The Board decided in August 2011 to relinquish these tenements.

NICKEL PROJECTS

WINDARRA PROJECT (Ni)The Windarra Nickel Project comprises an area of approximately 4.3km2 and is located in the Laverton Mineral Field, immediately south and south west of the Windarra South nickel mine.

During the first quarter, an infill soil sampling program was conducted to further delineate low order gold and nickel in soil anomalies. Soil sampling results were returned in the second quarter and confirmed the previous tenor of low level gold and nickel soil anomalies.

MISCELLANEOUSDuring the third quarter our Geologist (Jason Livingstone) left the Company.

The Company is very pleased to have the services of Mr John Bunting an eminently qualified and respected geologist working as a consultant to assist in reviewing our projects and providing advice to future exploration priorities.

Negotiations have also been held with CSA Global to assist in future drilling and exploration programs as Chrysalis proceed. CSA Global maintains Chrysalis’ metadata and GIS data.

Competent Person’s Statement:The information in this report that relates to Exploration Results is based on information supplied by Chrysalis Resources Limited and reviewed by Mr John A Bunting, who is a Member of the Australian Institute of Geoscientists. Mr Bunting is an employee and Director of J A Bunting and Associates Pty Ltd and is acting as Consultant to Chrysalis. Mr Bunting has over 30 years of experience in mineral exploration which is relevant to the styles of mineralization and types of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Bunting consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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DIReCtoRs’ RePoRt

Your Directors submit the annual report of the Company for the financial year ended 30 June 2011. In order to comply with the provisions of the Corporations Act, the directors report as follows:

DirectorsThe names of directors who held office during or since the end of the year and up until the date of this report are as follows:

Dr Neale Fong Executive Chairman

Mr Adrian Paul Non Executive Director

Mr Grant Kidner Non Executive Director

Directors were in office for this entire period.

The particulars of the qualifications, experience and special responsibilities of each director are as follows:

Dr Neale Fong – MBBS Dip CS MTS MBA FAICD FACHSM (Hon)Executive ChairmanDr Fong has extensive experience in management of large and complex organisations, especially in the health and human services field. He is a qualified medical practitioner holding Bachelors Degrees in Medicine and Surgery from the University of Western Australia as well as a Masters in Business Administration from the UWA Business School. He also holds a Masters Degree in theological studies from Regent College, University of British Columbia.

Dr Fong is a Fellow of the Australian Institute of Company Directors and is an experienced chairman and director. He is currently a director of Curtin Health Innovation Research Institute, Curtin University. He is also a non-executive director of Realm Resources Limited, Chairman of Bethesda Hospital Inc and a director of Mining Developments International Ltd and Morning Star Holdings (Australia) Ltd, both of which are public unlisted companies. He has held positions as the Director General of the Department of Health, CEO of St John of God Hospital, Subiaco and was a director for 12 years and chairman for 9 years of the West Australian Football Commission.

Mr Adrian PaulNon-Executive DirectorMr Paul has over 20 years of experience in the securities industry, and was previously a partner in the Australian stockbroking firm D.J. Carmichael & Co. He is currently a non-executive director of Morning Star Holdings (Australia) Ltd, a public unlisted company, and has held various non-executive directorships of public companies listed on the ASX most recently Sylvania Resources Ltd (ASX: SLV) from which he resigned in June 2006.

Mr Paul currently manages a private investment company and utilises his extensive networks in the stockbroking and investment banking sectors to assist the Company in achieving its corporate objectives.

Mr Grant Kidner – BBus CPANon Executive DirectorMr Kidner is a qualified accountant (CPA) holding a Bachelor of Business Degree from Edith Cowan University.

Mr Kidner has over 26 years experience in the accounting industry and is currently a director of Equiti Partners. He has advised in his capacity as a director to numerous businesses ranging from the professional sector to manufacturing, retail and the mining industry.

Mr Kidner has also had numerous involvements in a number of businesses and is currently a non-executive director of Morning Star Holdings (Australia) Ltd, Mining Developments International Ltd, Ultimo Catering and Events Pty Ltd and Oaks Liquor Pty Ltd.

Mr Kidner was appointed as a Director on 31 August 2008.

Mr Kidner was appointed as the company secretary of Chrysalis Resources Limited on 12 December 2007 and resigned from this position on 1 December 2010.

Company SecretaryMs Melanie Cotterell

Ms Cotterell was appointed to the position of company secretary on 1 December 2010. Ms Cotterell is a Chartered Accountant with over 8 years experience within the accounting profession. She is also the company secretary of Mining Developments International Ltd, a public unlisted company.

Interests in shares and options of the company and related bodies corporateThe following relevant interests in shares and options of the Company were held by the directors as at the date of this report:

Number of fully paid ordinary

shares*

Number of unlisted options over

ordinary shares

Directors

Neale Fong 1,601,600 500,000

Grant Kidner 1,640,000 2,190,000

Adrian Paul 3,656,229 2,500,001

* Includes shares and options issued under the Employee share incentive plan.

No share options were granted to the directors of the Company during or since the end of the financial year as part of their remuneration:F

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DIReCtoRs’ RePoRt

Listed optionsDetails of ordinary shares issued by the company during or since the end of the financial year as a result of the exercise of an option are:

Number of shares#

Amount paid $

22,800 4,788

22,800 4,788

There are no unpaid amounts on the shares issued.

At the date of this report, the Company has the following listed options over ordinary shares on issue:

Date Granted Expiry Date

Exercise price

Number of shares

under option

11 November 2008 30 June 2013 $0.20 33,036,327

08 September 2009 30 June 2013 $0.20 2,000,000

Total 35,036,327

DividendsNo dividends were paid during the year and no recommendation is made as to dividends.

Principal ActivitiesThe principal continuing activity of the Company was exploration for minerals.

Review of OperationsA review of operations for the financial year and the results of those operations are contained within the Company Overview.

Operating ResultsThe loss after income tax for the financial year was $2,417,426 (2010: ($1,186,307)

Financial PositionAt 30 June 2011, the Company had cash reserves of $386,803 (2010: $2,147,796)

Significant changes in the state of affairsSignificant changes in the state of affairs of the Company during the financial year are detailed in the Company Overview.

In the opinion of the directors, there were no other significant changes in the state of affairs of the Company that occurred during the financial year under review not otherwise disclosed in this report or in the financial report.

Significant events after balance dateThere has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years, other than those detailed below:

• On 22 July 2011 the Company surrendered all of its exploration licences in the Beyondie West project.

• On 30 August 2011 the Company surrendered all of its exploration licences in the Sheeza project.

• On 6 September 2011 the company announced a 1:2 non-renounceable rights issue at 5 cents per share to existing shareholders. Details of the rights issued are disclosed in Note 19.

Likely developments and expected resultsThe Company will continue to pursue its principal activity of exploration for minerals, particularly in respect of the Projects as outlined in the Company Overview. The Company will also continue to pursue the ministerial consent it requires to acquire Zambian Copper Pty Ltd and Sedgwick Resources Ltd which owns the Zambian projects.

Environmental legislationThe Company’s exploration activities are subject to environmental regulations under both Commonwealth and State legislation.

The Board believes the Company has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Company during 2011 and up until the date of this report.

Indemnification and insurance of Directors and OfficersThe Company has agreed to indemnify all the directors of the Company for any liabilities to another person (other than the Company or related body corporate) that may arise from their position as directors of the Company, except where the liability arises out of conduct involving a lack of good faith.

During the financial year the Company paid a premium in respect of a contract insuring the directors and officers of the company and its controlled entities against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

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DIReCtoRs’ RePoRt

Remuneration ReportThis report outlines the remuneration arrangements in place for key management personnel of the Company for the financial year ended 30 June 2011. The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.

The remuneration report details remuneration arrangements for key management personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Key Management Personnel

DirectorsNeale Fong (Chairman)

Grant Kidner (Non-Executive Director)

Adrian Paul (Non-Executive Director)

ExecutivesMelanie Cotterell (Company Secretary)

Details of directors’ and executives’ remuneration are set out under the following main headings:

A Principles used to determine the nature and amount of remuneration

B Details of remuneration including Share-based compensation remuneration

C Employment contracts of directors

The information provided under headings A-C includes remuneration disclosures that are required under Accounting Standard AASB 124 Related Party Disclosures. These disclosures have been transferred from the financial report and have been audited.

A. Principles used to determine the nature and amount of remuneration

The objective of the Company’s reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aims to align reward with the creation of value for shareholders. The Board ensures that employee reward satisfies the following key criteria for good reward governance practices:

• competitiveness and reasonableness• acceptability to shareholders• performance incentives• transparency• capital management

The framework provides a mix of fixed fee, consultancy agreement based remuneration, and share based incentives.

Company performance and link to remunerationThe current remuneration policy adopted is that no element of any director/executive package be directly related to the Company’s financial performance. Indeed there are no elements of any director or executive remuneration that are dependent upon the satisfaction of any specific condition. The overall remuneration policy framework however is structured in an endeavour to advance/create shareholder wealth. Consideration of the Company’s earnings will be more relevant as the Company matures.

At this time, shares and options issued do not have performance criteria attached. The Share Plan provides that the Board has the power to impose performance conditions on the issue of the Plan Shares (such as performance hurdles or retention periods).

Below is a table showing the Company’s performance and EPS over the last 4 financial years.

30 Jun 2008*

30 Jun 2009

30 June 2010

30 June 2011

Financial year profit / (loss) - $ (82,090) (282,940) (1,186,307) (2,417,426)

EPS / (Loss per share) - cents (0.77) (0.68) (2.87) (5.78)

Share price - cents 23 12 13 12

*The Company was incorporated in May 2008.

B. Details of remuneration

Remuneration structureIn accordance with best practice corporate governance, the structure of non-executive director and executive remuneration is separate and distinct.

Non-executive directorsThe Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

The ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. The latest determination was at the Annual General Meeting held on 20 November 2009 when shareholders approved an aggregate remuneration of $300,000 per year as a base salary.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.

Each director receives a fee for being a director of the Company. The remuneration of non-executive directors for the year ended 30 June 2011 is detailed under table 1 of this report.

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DIReCtoRs’ RePoRt

Employee share planNon-executive directors are encouraged by the Board to hold shares in the Company (purchased on market and in accordance with the Company’s approved policies to ensure there is no insider trading). It is considered good governance for directors of a company to have a stake in that company. The non-executive directors of the Company may also participate in the share and option plans as described in this report.

The objective of the Chrysalis Employee Share Plan is to ensure that the Company has appropriate mechanisms in place to continue to attract and retain the services of suitable directors, consultants and employees. The plans provide an incentive for participants to participate in the future growth of the Company and, upon becoming shareholders in the Company, to participate in the Company’s profits and development. There are no performance criteria attached to shares given the Company’s projects are currently within an exploration phase.

The key features of the schemes are set out below.

Executive director remunerationThe Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to:

• reward executives for Company, business team and individual performance;

• align the interests of executives with those of shareholders; and

• ensure total remuneration is competitive by market standards.

Remuneration consists of fixed annual remuneration and variable remuneration (comprising short-term and long-term incentive schemes).

Fixed annual remunerationFixed remuneration is reviewed annually by the Board of directors. The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate external advice on policies and practices. The Board of directors has access to external and independent advice where necessary.

Variable annual remuneration

Short term incentivesThere are currently no short term incentive remuneration arrangements.

Long term incentives

Retirement allowances for directorsApart from superannuation payments paid on base director fees there are no retirement allowances for directors.

Employee share planTo ensure that the Company has appropriate mechanisms in place to continue to attract and retain the services of suitable directors, consultants and employees, the Company established an Employee Share Plan (the “Plan”), which was approved by the Shareholders on 20 November 2009 at the Company’s Annual General Meeting.

The number of Ordinary Shares that may be offered to a Participant is entirely within the discretion of the Board. The Company does not intend to offer more than 10% of the issued share capital of the Company under the current Plan.

The Board’s policy is to remunerate directors at market rates for time, commitment and responsibilities. The board determines payments to the directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of directors’ fees that can be paid is subject to approval by shareholders in general meeting, from time to time. Fees for non-executive directors are not linked to the performance of the Company. However, to align directors’ interests with shareholders’ interests, the directors are encouraged to hold securities in the Company.

The Company’s aim is to remunerate at a level that will attract and retain high-calibre directors and employees. Company officers and directors are remunerated to a level consistent with the size of the company. All remuneration paid to directors and executives is valued at the cost to the Company and expensed.

Participants of the Plan are determined by the Board and can be employees and directors of, or consultants to, the Company or a controlled entity. The Board considers length of service, seniority, responsibilities, potential contribution and any other relevant matters in determining eligibility of potential participants.

The issue price for the shares issued under the Plan are not less than the weighted average share price for the last five trading days immediately preceding the offer to the participant.

A participant who is invited to subscribe for shares under the Plan may also be invited to apply for a loan up to the amount payable in respect of the shares accepted by the participant. These loans are to be made on the following terms:

• Applied directly against the issue price of the shares to be acquired under the Plan;

• For a term to be determined by the Board;• Repayable to the extent of the lesser of the issue price of

the relevant shares issued, less any cash dividends applied against the outstanding principal; and the last market sale price of the shares on the date of repayment of the loan;

• The loan must be repaid in full prior to expiry of the loan; • The Company will have a lien over the shares in respect of

which a loan is outstanding;

The market value of the option implicit in the share issued under the Plan (funded by way of a loan on the conditions noted above), measured using the Black and Scholes option pricing model, is recognised in the financial statements as an equity benefit reserve and as employee benefit costs in the period over which the shares vest.

No ordinary shares in the Company were provided as a result of the exercise of remuneration options during the year.

Details of employee shares affecting remuneration in the previous, this or future reporting periods are detailed in table 2.

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DIReCtoRs’ RePoRt

C. Employment contracts of directorsThe employment arrangements of the directors and executives are not formalised in a contract of employment.

Remuneration of directors and named executivesTable 1: Directors’ and executives remuneration for the years ended 30 June 2011 and 30 June 2010

Short-term employee benefits

Post-employment

benefitsOther long-term

benefits Equity

Salary & Fees

$Bonuses

$Other

$Superannuation

$Long-service leave

$

Share options

$Total

$

Performance Related

%

Directors

Dr Neale Fong20112010

100,000100,000

--

--

9,0009,000

--

-158,351

109,000267,351

--

Mr Adrian Paul20112010

55,00055,000

--

--

4,9504,950

--

-158,351

59,950218,301

--

Mr Grant Kidner20112010

55,00055,000

--

--

4,9504,950

--

-158,351

59,950218,301

--

Executives

Ms Melanie Cotterell*

20112010

14,583-

--

--

1,313-

--

--

15,896-

--

*Appointed 1 December 2010

Table 2: Details of employee shares affecting remuneration in the previous, this or future reporting periods are as follows:

Grant dateNo. under

optionVesting and

exercise date Expiry date Exercise price

Fair value per option at

grant date % vested

% compensation

for year consisting of

options

Directors

Neale Fong11 December

2009 1,000,00011 December

2009 - $0.26 $0.1584 100% -

Grant Kidner11 December

2009 1,000,00011 December

2009 - $0.26 $0.1584 100% -

Adrian Paul11 December

2009 1,000,00011 December

2009 - $0.26 $0.1584 100% -

For details on the valuation of the options, including models and assumptions used, please refer to Note 12. There were no alterations to the terms and conditions of options granted as remuneration since their grant date.

End of the Remuneration report

Directors’ MeetingsThe number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director were as follows:

Directors’ Meetings Audit Committee Remuneration Committee

Nomination committee

Number of meetings held: 13 2 1 1

Number of meetings attended:

Dr Neale Fong 13 2 1 1

Mr Adrian Paul 13 - 1 1

Mr Grant Kidner 13 2 1 1

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DIReCtoRs’ RePoRt

Proceedings on behalf of the company No person has applied for leave to the Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

Acquisition of Zambian Copper ProjectOn 27th January 2011 the Company announced the proposed acquisition of the Zambian Copper Project by signing a binding heads of agreement to acquire 100% of Zambian Copper Pty Ltd, a company which owns all but one of the shares in Sedgwick Resources Ltd (a company incorporated in the Republic of Zambia). Sedgwick Resources Ltd is the registered holder of projects which together hold in excess of 3,000km² of land, of which 2,180km² is held within the core of the highly mineralised Copperbelt of Zambia.

Whilst the Company has completed a successful due diligence program on the Zambian Copper Project, it has been denied the necessary Zambian Ministerial approval for the transfer of shares from Sedgwick Resources Ltd to Zambian Copper Pty Ltd. Sedgwick subsequently lodged an appeal in the high court of Zambia against this decision, with the appeal date listed for the 26th September 2011.

Until this approval is obtained, the Company is unable to finalise the ownership of the project.

Auditor Independence and Non-Audit Services Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 21 and forms part of this directors’ report for the year ended 30 June 2011.

Non-Audit Services There were no non-audit services provided by the Company’s auditors during the financial year ended 30 June 2011.

Signed in accordance with a resolution of the directors.

Dr Neale Fong

Executive Chairman

Perth, 29th September 2011

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AuDItoR’s InDePenDenCe DeCLARAtIon

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4 130 Stirling Street Perth 6000 PO Box 8124 Perth BC 6849 Western Australia. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

International, a world-wide organisation of accounting firms and business advisers

21

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Chrysalis Resources Limited for the year ended 30 June 2011, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

b) any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Chrysalis Resources Limited.

Perth, Western Australia W M CLARK 29 September 2011 Partner, HLB Mann Judd

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CoRPoRAte GoveRnAnCe stAtement

Approach to Corporate GovernanceChrysalis Resources Limited (Company) has adopted systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this statement. Commensurate with the spirit of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 2nd edition (Principles & Recommendations), the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company's corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the "if not, why not" regime, where, after due consideration, the Company's corporate governance practices depart from a recommendation, the Board has offered full disclosure and an explanation for the adoption of its own practice.

Further information about the Company's corporate governance practices may be found on the Company's website at , under the section marked "Company - Corporate Governance".

The Company reports below on how it has followed (or otherwise departed from) each of the Principles & Recommendations during the 2010/2011 financial year (Reporting Period). The Principles & Recommendations were amended in 2010 and these amendments apply to the Company's first financial year commencing on or after 1 January 2011. Accordingly, disclosure against the Principles & Recommendations as amended in 2010 will be made in relation to the Company's financial year ending 30 June 2012. The report below is made against the Principles & Recommendations prior to their amendment in 2010.

However, the Company wishes to report that it has adopted a Diversity Policy in accordance with the new Recommendation 3.2. A summary of the Diversity Policy is available on the Company’s website.

Board

Roles and responsibilities of the Board and Senior Executives(Recommendations: 1.1, 1.3)The Company has established the functions reserved to the Board, and those delegated to senior executives and has set out these functions in its Board Charter.

The Board is collectively responsible for promoting the success of the Company through its key functions of overseeing the management of the Company, providing overall corporate governance of the Company, monitoring the financial performance of the Company, engaging appropriate management commensurate with the Company's structure and objectives, involvement in the development of corporate strategy and performance objectives, and reviewing, ratifying and monitoring systems of risk management and internal control, codes of conduct and legal compliance.

Senior executives are responsible for supporting the Executive Chair and assisting the Executive Chair in implementing the running of the general operations and financial business of the Company in accordance with the delegated authority of the Board. Senior executives are responsible for reporting all matters which fall within the Company's materiality thresholds at first instance to the Executive Chair or, if the matter concerns the Executive Chair, directly to the Chair or the lead independent director, as appropriate.

The Company's Board Charter is available on the Company's website.

Skills, experience, expertise and period of office of each Director(Recommendation: 2.6)A profile of each Director setting out their skills, experience, expertise and period of office is set out in the Directors' Report.

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Director independence(Recommendations: 2.1, 2.2, 2.3, 2.6)The Board does not have a majority of directors who are independent. The Board comprises only non-independent directors and the Board considers that its composition is, and continues to be, appropriate given the current size and operations of the Company, and is of the opinion that an expanded Board is not warranted. The Board believes its directors possess the skills and experience relevant to the Company's circumstances and Board is satisfied with the level of independence of thought and decision making being contributed by its directors. The Board will continue to monitor its composition and make appropriate changes to its composition as and when the Board deems fit.

The Board considers the independence of directors having regard to the relationships listed in Box 2.1 of the Principles & Recommendations and the Company's materiality thresholds. The Board has agreed on the following guidelines, as set out in the Company's Board Charter, for assessing the materiality of matters:

• Statement of financial position items are material if they have a value of more than 10% of pro-forma net assets.

• Statement of comprehensive income items are material if they will have an impact on the current year operating result of 10% or more.

• Items are also material if they impact on the reputation of the Company, involve a breach of legislation, are outside the ordinary course of business, could affect the Company’s rights to its assets, if accumulated would trigger the quantitative tests, involve a contingent liability that would have a probable effect of 10% or more on statement of financial position or statement of comprehensive income items, or will have an effect on operations which is likely to result in an increase or decrease in net income or dividend distribution of more than 10%.

• Contracts will be considered material if they are outside the ordinary course of business, contain exceptionally onerous provisions in the opinion of the Board, impact on income or distribution in excess of the quantitative tests, there is a likelihood that either party will default and the default may trigger any of the quantitative or qualitative tests, are essential to the activities of the Company and cannot be replaced or cannot be replaced without an increase in cost which triggers any of the quantitative tests, contain or trigger change of control provisions, are between or for the benefit of related parties, or otherwise trigger the quantitative tests.

The non-independent directors of the Company are Neale Fong, Grant Kidner and Adrian Paul.

Neale Fong is the Company’s Chair and also carries out the functions of Chief Executive Officer. The Board believes that the current size and operations of the Company do not warrant the employment of a separate Chief Executive Officer. The Board considers that Dr Fong is suitably qualified and experienced to perform both roles because of his extensive experience in the management of large and complex organisations. Dr Fong is a Fellow of the Australian Institute of Company Directors and is an experienced chairman and director.

Independent professional advice(Recommendation: 2.6)To assist directors with independent judgement, it is the Board's policy that if a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of their office as a director then, provided the director first obtains approval from the Chair for incurring such expense, the Company will pay the reasonable expenses associated with obtaining such advice.

Selection and (Re) Appointment of Directors(Recommendation: 2.6)In determining candidates for the Board, the Nomination Committee (or equivalent) follows a prescribed process whereby it evaluates the mix of skills, experience, expertise and diversity of the existing Board. In particular, the Nomination Committee (or equivalent) is to identify the particular skills and diversity that will best increase the Board's effectiveness. Consideration is also given to the balance of independent directors. Potential candidates are identified and, if relevant, the Nomination Committee (or equivalent) recommends an appropriate candidate for appointment to the Board. Any appointment made by the Board is subject to ratification by shareholders at the next general meeting.

The Board recognises that Board renewal is critical to performance and the impact of Board tenure on succession planning. Each director other than the Managing Director, must not hold office (without re-election) past the third annual general meeting of the Company following the director's appointment or three years following that director's last election or appointment (whichever is the longer). However, a director appointed to fill a casual vacancy or as an addition to the Board must not hold office (without re-election) past the next annual general meeting of the Company. At each annual general meeting a minimum of one director or one third of the total number of directors must resign. A director who retires at an annual general meeting is eligible for re-election at that meeting and the re-appointment of directors is not automatic.

The Company's Policy and Procedure for the Selection and (Re) Appointment of Directors is available on the Company's website.

Board committees(Recommendations: 2.4, 2.6, 4.1, 4.4, 8.1, 8.3)The Board has not established separate Nomination, Audit or Remuneration Committees. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing any of these committees separate from the Board. Accordingly, the Board performs the role of each of the Nomination, Audit and Remuneration Committee. Items that are usually required to be discussed by one of these committees are addressed at separately convened Board meetings when required. When the Board convenes as the Nomination, Audit or Remuneration Committee it carries out those functions which are delegated to it in the Company’s Nomination Committee Charter, Audit Committee Charter or Remuneration Committee Charter, respectively. The Board deals with any conflicts of interest that may occur when convening in the capacity of one of the committees by ensuring that the director with conflicting interests is not party to the relevant discussions.

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Nomination Committee(Recommendations: 2.4, 2.6)The full Board, in its capacity as the Nomination Committee, held one meeting during the Reporting Period. Details of attendance at the Nomination Committee meeting are set out in the Directors’ Report.

The Board has adopted a Nomination Committee Charter which describes the role, composition, functions and responsibilities of the Nomination Committee. A copy of the Nomination Committee Charter is available on the Company's website.

Audit Committee

(Recommendations: 4.1, 4.2, 4.3, 4.4)As noted above, the Board has not established a separate Audit Committee and therefore it is not structured in accordance with Recommendation 4.2.

The full Board, in its capacity as the Audit Committee, held two meetings during the Reporting Period. Details of attendance at the Audit Committee meetings are set out in the Directors’ Report. When the Board meets as the Audit Committee, Dr Fong chairs' the meeting. To assist the Board to fulfil its function as the Audit Committee, the Board has adopted an Audit Committee Charter which describes the role, composition, functions and responsibilities of the Audit Committee.

All members of the Board consider themselves to be financially literate and to possess industry knowledge. Mr Kidner is a qualified accountant (CPA) and has over 26 years experience in the accounting industry. Mr Paul has over 20 years of experience in the securities industry and is well qualified by his industry experience. Dr Fong has financial expertise through his extensive experience in the management of large and complex organisations. Details of each of the director's qualifications are set out in the Directors' Report.

The Company has established procedures for the selection, appointment and rotation of its external auditor. The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises, as recommended by the Audit Committee (or its equivalent). Candidates for the position of external auditor must demonstrate complete independence from the Company through the engagement period. The Board may otherwise select an external auditor based on criteria relevant to the Company's business and circumstances. The performance of the external auditor is reviewed on an annual basis by the Audit Committee (or its equivalent) and any recommendations are made to the Board.

The Company's Audit Committee Charter and the Company's Procedure for Selection, Appointment and Rotation of External Auditor are available on the Company's website.

Remuneration Committee(Recommendations: 8.1, 8.2, 8.3)The full Board, in its capacity as the Remuneration Committee, held one meeting during the Reporting Period. Details of attendance at the Remuneration Committee meeting are set out in the Directors’ Report. To assist the Board to fulfil its function as the Remuneration Committee, the Board has adopted a Remuneration Committee Charter which describes the role, composition, functions and responsibilities of the Remuneration Committee.

Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration Report” which forms part of the Directors’ Report. Non-executive directors are remunerated at a fixed fee for time, commitment and responsibilities. Remuneration for non-executive directors is not linked to individual performance. From time to time the Company may grant shares and/or options to non-executive directors. The grant of options is designed to recognise and reward efforts as well as to provide non-executive directors with additional incentive to continue those efforts for the benefit of the Company. The maximum aggregate amount of fees (including superannuation payments) that can be paid to non-executive directors is subject to approval by shareholders at general meeting.

Pay and rewards for executive directors and senior executives consists of a base salary and performance incentives. Long term performance incentives may include shares and/or options granted at the discretion of the Board and subject to obtaining the relevant approvals. The grant of shares and/or options is designed to recognise and reward efforts as well as to provide additional incentive and may be subject to the successful completion of performance hurdles. Executives are offered a competitive level of base pay at market rates (for comparable companies) and are reviewed annually to ensure market competitiveness. Executives are prohibited from entering into transactions or arrangements which limit the economic risk of participating in unvested entitlements.

There are no termination or retirement benefits for non-executive directors (other than for superannuation).

The Company's Remuneration Committee Charter includes a statement of the Company's policy on prohibiting transactions in associated products which limit the risk of participating in unvested entitlements under any equity based remuneration schemes.

The Company's Remuneration Committee Charter is available on the Company's website.

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Performance evaluation

Senior executives(Recommendations: 1.2, 1.3)The Executive Chair reviews the performance of senior executives by way of a formal interview with each senior executive.

The Nomination Committee (or equivalent) formally reviews the performance of the Executive Chair at least annually, including evaluating achievement of key operational goals and strategic objectives, compliance with legal and Company policy requirements, and the achievement of key performance indicators. This performance evaluation is undertaken by round table discussion.

During the Reporting Period an evaluation of senior executives and the Executive Chair took place in accordance with the process disclosed above.

Board, its committees and individual directors(Recommendations: 2.5, 2.6)The Chair is responsible for evaluating the performance of the Board and, when deemed appropriate, Board committees and individual directors.

Board, its committees and individual directors (continued)(Recommendations: 2.5, 2.6)The Board is evaluated annually via round table discussion. The evaluation includes consideration of the following matters: comparison of the performance of the Board against the requirements of the Board Charter, assessment of the performance of the Board over the previous 12 months having regard to the corporate strategies, operating plans and annual budget, review of the level and effectiveness of the Board’s interaction with management, review of the content, format and timing of information provided to directors, and review of Board and committee charters to assess if they remain appropriate to the Company’s activities. Similar procedures to those for the Board review are applied to evaluate the performance of any Board committees. An assessment will be made of the performance of each committee against each charter and areas identified where improvements can be made.

Non-executive directors are evaluated by round table discussion and a meeting with the Chair. Performance evaluations of non-executive directors include consideration of contribution to the Board, degree of independence, availability for and attendance at Board meetings and other relevant events, contribution to Company strategy, membership of and contribution to any Board committees, and suitability to Board and committee structure.

During the Reporting Period an evaluation of the Board and individual directors took place in accordance with the process disclosed above with the additional assistance of an evaluation questionnaire completed by all directors. A formal evaluation of the Board Committees did not occur during the Reporting Period but was captured in the directors’ questionnaire.

Ethical and responsible decision making

Code of Conduct(Recommendations: 3.1, 3.3)The Company has established a Code of Conduct as to the practices necessary to maintain confidence in the Company's integrity, the practices necessary to take into account its legal obligations and the reasonable expectations of its stakeholders, and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

A summary of the Company's Code of Conduct is available on the Company website.

Policy for Trading in Company Securities(Recommendations: 3.2, 3.3)The Company has established a Policy for Trading in Company Securities by directors, officers and employees, and their “connected persons” (which includes spouses and controlled entities).

A copy of the Company's Policy for Trading in Company Securities is available on the Company's website.

Continuous Disclosure(Recommendations: 5.1, 5.2)The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability at a senior executive level for that compliance.

Summaries of the Company's Policy on Continuous Disclosure and of the Company's Compliance Procedures are available on the Company's website.

Shareholder Communication(Recommendations: 6.1, 6.2)The Company has designed a communications policy for promoting effective communication with shareholders and encouraging shareholder participation at general meetings.

A copy of the Company's Shareholder Communication Policy is available on the Company's website.

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Risk ManagementRecommendations: 7.1, 7.2, 7.3, 7.4)The Board has adopted a Risk Management Policy, which sets out the Company's risk profile. Under the policy, the Board is responsible for approving the Company's policies on risk oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control.

Under the policy, the Board delegates day-to-day management of risk to the Executive Chair, who is responsible for identifying, assessing, monitoring and managing risks. The Executive Chair is also responsible for updating the Company's material business risks to reflect any material changes, with the approval of the Board.

In fulfilling the duties of risk management, the Executive Chair may have unrestricted access to Company employees, contractors and records and may obtain independent expert advice on any matter they believe appropriate, with the prior approval of the Board.

In addition, the following risk management measures have been adopted by the Board to manage the Company's material business risks:

• the Board has established authority limits for management, which, if proposed to be exceeded, requires prior Board approval;

• the Board has adopted a compliance procedure for the purpose of ensuring compliance with the Company's continuous disclosure obligations; and

• the Board has adopted a corporate governance manual which contains other policies to assist the Company to establish and maintain its governance practices.

The Board has implemented a system to manage its material business risks in the fourth quarter of the 2010/2011 financial year. This system includes the preparation of a risk register by management to identify the Company's material business risks and a risk management plan and mitigation strategies for these risks. In addition, the process of management of material business risks is allocated to members of senior management. The risk register is reviewed on a half-yearly basis and updated, as required.

Prior to the implementation of the system described above, the following risk management measures were adopted by the Board to manage the Company's material business risks: the Company has in place an experienced Board, competent consultancy arrangements in all disciplines, an effective management information system, annual financial audits and a rigorous appraisal and approval process for new investments.

The categories of risk reported on or referred to as part of the Company’s systems and processes for managing material business risk include: regulatory environment; sovereign/country risk, application and approval risks and tenement management, native title risks; environmental risks, general economic risks, commodity price risks, reliance on key personnel, possible volatility of share price and other risks, and speculative nature of investments.

The Board has required management to design, implement and maintain risk management and internal control systems to manage the Company's material business risks. The Board also requires management to report to it confirming that those risks are being managed effectively. The Board has received a report from management as to the effectiveness of the Company's management of its material business risks for the Reporting Period.

The Executive Chair and the Chief Financial Officer have provided a declaration to the Board in accordance with section 295A of the Corporations Act and have assured the Board that such declaration is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

A summary of the Company's Risk Management Policy is available on the Company's website.

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Statement of CompRehenSive inCome for the year ended 30 June 2011

Note2011

$2010

$

Revenue 2 58,943 101,899

Equity based payments - (475,052)

Consultants’ benefits expense - (160,000)

Depreciation and amortisation (15,581) (5,636)

Stock exchange and registry fees (39,903) (18,914)

Directors’ remuneration (228,900) (228,900)

Employee benefits expense (82,268) (59,228)

Consultancy fees - (36,115)

Accounting fees (53,350) (65,819)

Audit fees (24,612) (19,425)

Tenement management fees (16,515) (32,268)

Costs associated with Zambian Copper Project (89,975) -

Exploration costs written off (55,999) (51,170)

Impairment of exploration costs (1,702,489) -

Other expenses (166,777) (135,679)

Loss before income tax expense (2,417,426) (1,186,307)

Income tax expense 3 - -

Net loss for the year (2,417,426) (1,186,307)

Other comprehensive income - -

Total comprehensive loss for the year (2,417,426) (1,186,307)

Basic loss per share (cents) 4 (5.78) (2.87)

The accompanying notes form part of this financial statement.

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Statement of finanCiaL poSitionaS at 30 June 2011

Note2011

$2010

$

Current Assets

Cash and cash equivalents 5 (i) 386,803 2,147,796

Trade and other receivables 6 35,708 63,515

Total Current Assets 422,511 2,211,311

Non-Current Assets

Property, plant and equipment 9 37,820 42,833

Exploration and evaluation expenditure 7 2,376,551 2,854,076

Total Non-Current Assets 2,414,371 2,896,909

Total Assets 2,836,882 5,108,220

Current Liabilities

Trade and other payables 8 99,312 108,780

Total Current Liabilities 99,312 108,780

Total Liabilities 99,312 108,780

Net Assets 2,737,570 4,999,440

Equity

Issued capital 10 5,787,433 5,631,649

Reserves 11 918,900 919,128

Accumulated losses 11 (3,968,763) (1,551,337)

Total Equity 2,737,570 4,999,440


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Statement of ChangeS in equity for the year ended 30 June 2011


Issued Capital

$

Reserves $

Accumulated Losses

$

Total $

1 July 2009 5,628,419 291,898 (365,030) 5,555,287

Total comprehensive loss for the year - - (1,186,307) (1,186,307)

Conversion of options to shares 10,080 (480) - 9,600

Share and Option issue expenses (6,850) (7,342) - (14,192)

Recognition of share-based payments - 635,052 - 635,052

Balance at 30 June 2010 5,631,649 919,128 (1,551,337) 4,999,440

1 July 2010 5,631,649 919,128 (1,551,337) 4,999,440

Total comprehensive loss for the year - - (2,417,426) (2,417,426)

Share issue 157,560 - - 157,560

Conversion of options to shares 228 (228) - -

Share and Option issue expenses (2,004) - - (2,004)

Balance at 30 June 2011 5,787,433 918,900 (3,968,763) 2,737,570


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Statement of CaSh fLowSfor the year ended 30 June 2011

Note2011

$2010

$

Cash flows from operating activities

Payments to suppliers and employees (846,483) (631,946)

Interest received 58,657 98,872

Other 163,901 70,249

Exploration & evaluation expenditure (1,129,056) (797,165)

Net cash (used in) operating activities 5(ii) (1,752,981) (1,259,990)

Cash flows from investing activities

Purchase of plant and equipment (10,568) (47,065)

Net cash (used in) investing activities (10,568) (47,065)

Cash flows from financing activities

Proceeds from issue of shares and options 4,560 9,600

Payment of capital raising costs (2,004) (14,192)

Net cash provided by financing activities 2,556 (4,592)

Net increase (decrease) in cash held (1,760,993) (1,311,647)

Cash at beginning of the financial year 2,147,796 3,459,443

Cash at end of the financial year 386,803 2,147,796


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noteS to the finanCiaL StatementS for the year ended 30 June 2011

1. Summary of Significant Accounting Policies

(a) Basis of PreparationThe financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law.

The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated.

The financial report has also been prepared on a historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report is presented in Australian dollars. The Company is a listed company incorporated in Australia and operating in Australia. The Company’s principal activities are the exploration of mineral resources.

Where appropriate prior year disclosures have been reclassified for consistency with current year classifications. The re-classification has not impacted the net profit / (loss) for the prior year.

(b) Adoption of new and revised standardsIn the year ended 30 June 2011, the Company has reviewed all the new and revised standards and interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.

It has been determined by the Company that there is no impact, material or otherwise, of the new and revised Standards, and Interpretations on its business and, therefore, no change is necessary to Company accounting policies.

The Company has also reviewed all new standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2011. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Company accounting policies.

(c) Statement of ComplianceThe financial report was authorised for issue on the 29th September 2011.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the financial information, comprising the financial statements and notes thereto, comply with International Financial Reporting Standards (IFRS).

(d) Critical accounting judgements and key sources of estimation uncertaintyThe application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in which the estimate is revised if it affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Share-based payment transactions:The Company measures the cost of equity-settled transactions with employees and consultants by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black and Scholes model, using the assumptions detailed in Note 12.

Exploration and evaluation costs carried forwardThe Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. The ultimate recoupment of value is dependent on the successful development and commercial exploitation or sale of the respective areas.

The recoverability of the carrying amount of exploration and evaluation costs carried forward has been reviewed by the directors and an impairment expense has been recognised in the statement of Comprehensive Income in relation to the Sheeza and Beyondie West projects. Please refer to Note 7 for more details.


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(e) Going ConcernThe Company incurred an operating loss after income tax of $2,417,426 for the year ended 30 June 2011, whilst cash balances as at 30 June 2011 were $386,803. Subsequent to year end the Company announced at 1:2 non-renounceable rights issue at 5 cents to raise up to $1.12 million in cash. The funds raised will be used to meet the ongoing working capital requirements of the Company and conduct further exploration programs of work at the Pioneer, West Angelas and Doolgunna Projects.

Notwithstanding the above, the ability of the Company to continue as a going concern and pay its debts as and when they fall due is dependent on the sourcing of additional funds.

The directors are currently evaluating the various options and sources of funding and, again, on this basis believe the adoption of the going concern basis is justified. However should the sources of funding not become available, there will be a material uncertainty whether the Company will be able to pay its debts as and when they fall due and may be required to realise assets and extinguish liabilities, other than in the normal course of business and at amounts different from those stated in the financial statements. No adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.

(f) Segment ReportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Chrysalis Resources Ltd.

During the financial year, the Company operated in the mineral exploration industry solely within Australia.

(g) Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

(h) Government grantsGrants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in the statement of comprehensive income over the period necessary to match them with the costs that they are intended to compensate.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to the statement of comprehensive income on a straight-line basis over the expected lives of the related assets.

(i) Borrowing costsBorrowing costs are capitalised that are directly attributable to the acquisition, construction or production of qualifying assets where the borrowing cost is added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale.

(j) Income TaxCurrent tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date.

Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

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Chrysalis Resources Limited ][ Annual Report 2011


(j) Income Tax (continued)Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probably that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(k) Goods and services tax (“GST”)Revenues, expenses and assets are recognised net of the amount of GST except:

• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which 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 statement of financial position.

Cash flows are included in the Statement of Cash Flows 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.

(l) Impairment of assetsThe Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at re-valued amount (in which case the impairment loss is treated as a revaluation decrease).

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(l) Impairment of assets (continued)An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of comprehensive income unless the asset is carried at re-valued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(m) Cash and cash equivalentsCash comprises cash at bank and on hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(n) Trade and other receivablesTrade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement within periods ranging from 15 days to 30 days.

Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Company will not be able to collect all amounts due according to the original contractual terms. Factors considered by the Company in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the Company. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-term discounting is not applied in determining the allowance.

The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off in the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income.

(o) Financial assetsRecognitionFinancial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are classified as "financial assets at fair value through profit and loss" as they are acquired principally for the purpose of selling in the short term. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the statement of comprehensive income in the period in which they arise.

Fair valueFair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

ImpairmentAt each reporting date, the directors assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the statement of comprehensive income.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in statement of comprehensive income when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

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(p) Impairment of financial assetsThe Company assesses at each balance date whether a financial asset or group of assets is impaired.

(i) Financial assets carried at amortised costIf there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial assets’ original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the loss is recognised in the statement of comprehensive income.

The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the statement of comprehensive income, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

(ii) Financial assets carried at costIf there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument , the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset.

(q) Property, plant and equipmentPlant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation.

Land and buildings are measured at fair value less accumulated depreciation on buildings and less any impairment losses recognised after the date of revaluation

Depreciation is calculated on a over the estimated useful life of the assets as follows:

Buildings – over 20 years (straight line basis)

Plant and equipment – over 5 to 20 years (diminishing value basis)

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

(i) ImpairmentThe carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.

The recoverable amount of plant and equipment is the higher of fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

For plant and equipment, impairment losses are recognised in the statement of comprehensive income in the cost of sales line item. However, because land and buildings are measured at re-valued amounts, impairment losses on land and buildings are treated as a revaluation decrement.

(ii) De-recognition and disposal. An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognised.

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(r) Trade and other payablesTrade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

(s) ProvisionsProvisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(t) Share-based payment transactions(i) Equity settled transactions:The Company provides benefits to employees (including senior executives) of the Company in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There is currently one plan in place to provide these benefits, being the Employee Share Plan (ESP).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using the Black Scholes model, further details of which are given in Note 12.

In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company (market conditions) if applicable.

The cost of the equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Company’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of the fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(u) Issued capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the purchase consideration.

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(v) Earnings per shareBasic earnings per share is calculated as net profit or loss attributable to members of the Company, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share are calculated as net profit or loss attributable to members of the Company, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised

as expenses; and• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential

ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(w) Exploration and evaluation expenditureExploration and evaluation expenditures in relation to each separate area of interest, are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

(i) the rights to tenure of the area of interest are current; and

(ii) at least one of the following conditions is also met:

• the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or

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

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Exploration and evaluation expenditure is assessed for impairment when facts and circumstances suggest that their carrying amount exceeds their recoverable amount and where this is the case an impairment loss is recognised. Should a project or area of interest be abandoned, the expenditure will be written off in the period in which the decision is made. Where a decision is made to proceed with development, accumulated expenditure will be amortised over the life of the reserves associated with the area of interest once mining operations have commenced.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

2. REVENUE2011

$2010

$

Revenue

Bank interest 56,534 101,899

Other 2,409 -

58,943 101,899

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3. INCOME TAX2011

$2010

$

(a) Income Tax Expense

The income tax expense for the period differs from the prima facie tax as follows:

Loss for the year 2,417,426 1,186,307

Prima facie income tax benefit @ 30% (2010:30%) 725,228 355,892

Tax effect of amounts which are not deductible in calculating taxable income (125,221) 18,904

Deferred tax assets not brought to account (600,007) (374,796)

Total income tax expense - -

(b) Unrecognised Deferred Tax Balances

Deferred tax assets:

Income tax losses 1,737,167 1,137,160

Other 29,325 40,279

1,766,492 1,177,439

Deferred tax liabilities:

Exploration expenditure 584,861 342,724

Other 271 908

585,132 343,632

Net unrecognised deferred tax asset 1,181,360 833,807

4. LOSS PER SHARE (EPS)

Basic loss per share (cents) (5.78) (2.87)

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows:

Earnings – Net loss for the year 2,417,426 1,186,307

No. No.

Weighted average number of ordinary shares used in the calculation of basic EPS 41,841,193 41,397,705

Diluted loss per share is not disclosed as the result is anti-dilutive.

5. CASH AND CASH EQUIVALENTS $ $

(i)

Cash at bank and on hand 45,938 447,796

Short-term deposits 340,865 1,700,000

386,803 2,147,796

Cash at bank earns interest at floating interest rates based on daily bank deposit rates.

Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company and earn interest at the respective short-term interest rates.

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5. CASH AND CASH EQUIVALENTS (CONTINUED)2011

$2010

$

(ii) Reconciliation of loss for the year to net cash flows used in operating activities

Loss for the year (2,417,426) (1,186,307)

Share based payments - 635,052

Exploration costs written off 55,999 51,170

Impairment of exploration costs 1,702,489 -

Exploration costs capitalised (1,129,056) (797,165)

Depreciation 15,581 5,636

(Increase) / decrease in prepayments & other debtors 10,111 (34,015)

(Increase) / decrease in accrued interest 2,124 (3,028)

(Increase) / decrease in GST recoverable 17,150 (11,168)

Increase / (decrease) in trade creditors (2,407) 70,235

Increase / (decrease) in other payables (7,546) -

Proceeds from share issues / conversion of options (net) - 9,600

Net cash flows (used in) operating activities (1,752,981) (1,259,990)

6. CURRENT TRADE AND OTHER RECEIVABLES

Current

Debtors 5,013 17,897

Prepayments 18,823 16,118

GST Receivable 10,900 26,473

Other 972 3,027

35,708 63,515

7. EXPLORATION AND EVALUATION EXPENDITURECosts carried forward in respect of areas of interest in the exploration and evaluation phase:

Exploration and evaluation phase – at cost

Balance at beginning of the year 2,854,076 2,118,964

Tenements acquired 163,696 67,170

Expenditure incurred 1,117,267 719,112

Expenditure written off (55,999) (51,170)

Expenditure impaired (1,702,489) -

Total exploration expenditure 2,376,551 2,854,076

The ultimate recoupment of the exploration and evaluation expenditure carried forward is dependent on the successful development and commercial exploitation and/or sale of the relevant areas of interest, at amounts at least equal to book value.

Subsequent to year end the Company surrendered the Beyondie West and Sheeza project tenements. Costs associated with the tenements were written off or impaired in full at 30 June 2011 and expensed to the profit and loss.

8. CURRENT TRADE AND OTHER PAYABLES

Current

Trade payables and accruals 99,312 108,780

99,312 108,780

Trade creditors are non-interest bearing and are normally settled on 30 day terms.

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9. PROPERTY, PLANT AND EQUIPMENTFurniture and

fittings $

Plant and equipment

$Total

$

Year ended 30 June 2011

At 1 July 2010, net of accumulated depreciation and impairment 25,694 17,139 42,833

Additions 1,950 8,618 10,568

Disposals - - -

Depreciation charge for the year (5,259) (10,322) (15,581)

At 30 June 2011, net of accumulated depreciation and impairment 22,385 15,435 37,820

At 1 July 2010

Net carrying amount 25,694 17,139 42,833

At 30 June 2011

Cost 28,492 30,545 59,037

Accumulated depreciation and impairment (6,107) (15,110) (21,217)

Net carrying amount 22,385 15,435 37,820

10. ISSUED CAPITAL2011 No.

2011 $

2010 No.

2010 $

(a) Issued and paid up capital

Ordinary shares fully paid 41,895,801 5,787,433 41,423,001 5,631,649

Employee share plan shares 3,000,000 - 3,000,000 -

At Reporting date 44,895,801 5,787,433 44,423,001 5,631,649

(b) Movement in ordinary share capital

Balance at the beginning of the year 44,423,001 5,631,649 41,375,001 5,628,419

Issue of employee share plan shares - - 3,000,000 -

Issue of shares for tenements 450,000 153,000 - -

Options exercised 22,800 4,788 48,000 10,080

Transaction costs relating to shares issued - (2,004) - (6,850)

Balance at end of the year 44,895,801 5,787,433 44,423,001 5,631,649

(c) Movement in options

Balance at the beginning of the year 35,059,127 291,418 33,107,127 291,898

Issue of options - - 2,000,000 -

Options exercised (22,800) (228) (48,000) (480)

Transaction costs relating to options issued - - - -

Balance at end of the year 35,036,327 291,190 35,059,127 291,418

All options as at 30 June 2011 are exercisable at 20 cents on or before 30 June 2013.

(d) Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

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11. RESERVES AND ACCUMULATED LOSSES

Accumulated losses2011

$2010

$

Movements in accumulated losses were as follows:

Balance at beginning of financial year 1,551,337 365,030

Net loss for the year 2,417,426 1,186,307

Balance at end of financial year 3,968,763 1,551,337

Reserves

Movement in reserves were as follows:

Option premium reserve

$

Share-based payments reserve

$

Total

$

At 1 July 2009 291,898 - 291,898

Issue of options to consultants - 160,000 160,000

Issue of employee share plan shares - 475,052 475,052

Conversion of options to shares (480) - (480)

Transaction costs relating to shares - (4,290) (4,290)

Transaction costs relating to options - (3,052) (3,052)

At 30 June 2010 291,418 627,710 919,128

At 1 July 2010 291,418 627,710 919,128

Conversion of options to shares (228) - (228)

Transaction costs relating to options - - -

At 30 June 2011 291,190 627,710 918,900

Nature and purpose of reserves

Option issue reserveThis reserve is used to accumulate the net proceeds received from the issue of options.

Share-based payments reserveThis reserve is used to record the value of equity benefits provided to directors, consultants or employees as part of their remuneration. Refer to Note 12 for further details.

12. SHARE BASED PAYMENTS Employee share plansSchemes under which shares may be issued by the Company to directors, consultants or employees for no cash consideration were approved by the shareholders at the 2009 Annual General Meeting.

Participants of the Plan are determined by the Board and can be directors, consultants or employees to the Company. The Board considers length of service, seniority, responsibilities, potential contribution and as a cost any other relevant matters in determining eligibility of potential participants.

The issue price for the shares issued under the Plan is not less than the weighted average share price for the last five trading days immediately preceding the offer to the participant. The market value of shares issued under the scheme, measured as the weighted average market price on the day of issue of the shares, is recognised within the share-based payments reserve in the Statement of Financial Position and as a cost over the period the shares vest.

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12. SHARE BASED PAYMENTS (CONTINUED)A participant who is invited to subscribe for shares under the Plan may also be invited to apply for a loan up to the amount payable in respect of the shares accepted by the participant. These loans are to be made on the following terms:

• Interest free;• Applied directly against the issue price of the shares to be acquired under the Plan;• For a term to be determined by the Board;• Repayable to the extent of the lesser of the issue price of the relevant shares issued, less any cash dividends applied

against the outstanding principal; and the last market sale price of the shares on the date of repayment of the loan;• The term of the loan shall be four (4) years from the date of issue of the shares;• The loan must be repaid in full prior to expiry of the loan; • The Company will have a lien over the shares in respect of which a loan is outstanding;• Shares issued under the Plan are not transferable while a loan amount in respect of those shares remains payable; and

The following share-based payment arrangements were in place during the current and prior periods:

Number Grant date Loan period

Repayment amount per

share $

Fair value at grant date

per share $

11 December 2009 employee shares 3,000,000 11/12/2009 4 years $0.2633 $0.1584

The fair value at grant date of the director shares is independently determined using a black and scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

All shares issued under the Plan with non-recourse loans are considered to be options. Therefore, the fair value of shares issued under the Plan is determined in the same way as options would be.

Consultant OptionsOn 21 September 2009 the Company announced it had issued 2 million options to Mr Ian Kerr and Mr Robert Hawke under the terms of the Mr Ian Kerr and Mr Robert Hawke Consultancy Agreement on 8 September 2009.

The options issued under the terms of the consultancy agreement were issued on the same terms as the other options issued by the Company, being exercisable at a price of $0.20 each, on or before 30 June 2013.

The fair value of the options was determined using the market price of the Company’s options at the date of issue of 8 cents per option.

No options were issued to consultants during the current year.

Expenses relating to share based payment transactionsTotal expenses arising from share-based payment transactions recognised during the period as part of employee and consultant benefit expense were as follows:

2011$

2010$

Issue of options to consultants - 160,000

Issue of employee share plan shares - 475,052

Shares issued under the Plan - 635,052

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13. COMMITMENTS AND CONTINGENCIESExploration CommitmentsThe Company has certain obligations to perform minimum exploration work and to expend minimum amounts of money on such work on mining tenements. These obligations may be varied from time to time subject to approval and are expected to be fulfilled in the normal course of the operations of the Company. These commitments have not been provided for in the financial statements. Due to the nature of the Company’s operations in exploring and evaluating areas of interest, it is difficult to accurately forecast the nature and amount of future expenditure beyond the next year. Expenditure may be reduced by seeking exemption from individual commitments, by relinquishment of tenure or any new joint venture arrangements. Expenditure may be increased when new tenements are granted or joint venture agreements amended. The minimum expenditure commitment on the tenements is:

2011$

2010$

Within one year 248,500 283,540

2 to 5 years 854,080 1,065,040

Over 5 years 418,100 686,400

14. CONTINGENT LIABILITIESIt is possible that native title, as defined in the Native Title Act 1993, might exist over land in which the Company has an interest. It is impossible at this stage to quantify the impact (if any) that the existence of native title may have on the operations of the Company. However, at the date of this report, the Directors are aware that applications for native title claims have been accepted by the Native Title Tribunal over tenements held by the Company.

15. RELATED PARTY DISCLOSURERefer to Note 18 for details of directors’ remuneration

There were no other related party transactions for the year ended 30 June 2011 other than as follows:

(a) Mr Grant Kidner, a non-executive director, is also a director of Equiti Partners. During the financial year, Equiti Partners received remuneration for accounting, secretarial, administration services and reimbursement of car parking facilities from the Company totalling $78,392. (2010: $76,245).

(b) As at 30 June 2011, a loan for $68 was owed by Dr Fong. The loan is interest free and has no fixed date of repayment.

16. FINANCIAL INSTRUMENTS(a) Capital risk managementThe Company does not have any debt facilities outside of normal creditor trading terms and thus does not deem it necessary for a formal capital risk management charter.

The Company manages its capital to ensure it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.

The company’s overall strategy remains unchanged from 2010.

The capital structure of the Company consists of cash and cash equivalents and equity comprising issued capital and reserves.

The Company is not exposed to externally imposed capital requirements.

Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as general administrative outgoings.

(b) Categories of financial instruments

2011$

2010$

Financial assets

Loans & receivables 35,708 63,515

Cash and cash equivalents 386,803 2,147,796

422,511 2,211,311

Financial liabilities

Trade and other payables 99,312 108,780

99,312 108,780

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16. FINANCIAL INSTRUMENTS (CONTINUED)(c) Financial risk management objectivesThe Company’s financial instruments consist mainly of deposits with banks and accounts payable.

The Company does not speculate in the trading of derivative instruments. The main risks the Company is exposed to through its financial instruments are interest rate risk and liquidity risk.

(d) Market riskThe Company’s activities expose it mainly to the financial risks of interest rates. There have been no changes at the reporting date to the Company’s exposure to market risks of the manner in which it manages and measures the risk from the previous period.

(i) Price risk

Given the current level of operations, the Company is not exposed to price risk.

(ii) Interest rate risk

The Company has exposure to the risks of changes in market interest rates relating to its cash and cash equivalents. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Company had no external borrowings or loans as at 30 June 2011.

30 June 2011 30 June 2010

Weighted average interest rate

%Balance

$

Weighted average interest rate

%Balance

$

Cash balances 4.88% 386,803 4.89% 2,147,796

(e) Interest rate risk managementThe Company is exposed to interest rate risk as the Company maintains funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate liquid funds.

The Company’s exposure to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

During the year ended 30 June 2011, if interest rates had been 50 basis points higher or lower than the prevailing rates realised, with all other variables held constant, there would have been an immaterial change in the post tax loss for the year. The impact on equity would have been the same.

(f) Credit riskCredit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company measures credit risk on a fair value basis.

The Company’s cash balances are held with a major Australian lending institution. The Company does not have any other significant credit risk exposure to a single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparty is a bank with high credit ratings assigned by international credit rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the Company’s maximum exposure to credit risk without taking account of the fair value of any collateral or other security obtained.

(g) Liquidity risk managementThe Company manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and marketable securities are available to meet current and future commitments of the Company. Due to the nature of the Company’s activities, being mineral exploration, the Company does not have ready access to credit facilities, with primary source of funding being equity raisings. The Board of Directors constantly monitor the state of equity markets in conjunction with the Company’s current and future funding requirements, with a view to initiating appropriate capital raisings as required.

The financial liabilities of the Company are confined to trade and other payables as disclosed in the Statement of Financial Position. All trade and other payables are non-interest bearing and due within 12 months of reporting date.

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16. FINANCIAL INSTRUMENTS (CONTINUED)Liquidity and interest rate risk tables

Weighted average effective

interest rates %

Less than 1 month

$’0001 – 3 months

$’0003 months – 1 year

$’0001 – 5 years

$’0005 + years

$’000

2011

Non-interest bearing - - 99,312 - - -

Variable interest rate instruments - - - - - -

Fixed interest rate instruments - - - - - -

2010


Variable interest rate instruments - - - - - -

Fixed interest rate instruments - - - - - -

The above table details the Company’s remaining contractual maturity for its financial liabilities. These are based on the undiscounted cash flows of the financial liabilities based on the earliest date on which the Company can be required to pay.

The following tables detail the Company’s contractual maturity for its financial assets. These are based on the undiscounted cash flows of financial assets.

Weighted average effective

interest rates %

Less than 1 month

$’0001 – 3 months

$’0003 months – 1 year

$’0001 – 5 years

$’0005 + years

$’000

2011


Variable interest rate instruments 4.75% - 31,823 - - -

Fixed interest rate instruments 5.10% - 340,865 - - -

Receivables - - 35,708 - - -

2010


Variable interest rate instruments 4.50% - 443,692 - - -

Fixed interest rate instruments 5.00% - 1,700,000 - - -

Receivables - - 44,370 - - -

Fair value of financial instrumentsFor financial assets and liabilities, the net fair value approximates the carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form. The Company has no financial assets where carrying amount exceeds net fair value at reporting date.

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17. AUDITOR REMUNERATION2011

$2010

$

Amounts, received or due and receivable by auditors for:

- an audit or review services 24,612 19,425

- other services - -

24,612 19,425

18. DIRECTORS AND EXECUTIVES DISCLOSURES(a) Details of Key Management Personnel

Mr Neale Fong Chairman (Executive)

Mr Grant Kidner Non-Executive director

Mr Adrian Paul Non-Executive director

Ms Melanie Cotterell Company Secretary

Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report

(b) Shareholdings of Key Management Personnel

30 June 2011Balance at

beginning of periodGranted as

remunerationOn exercise of

optionsOn market

acquisitionsBalance at end of

period

Directors

Dr Neale Fong 1,500,000 - - 101,600 1,601,600

Mr Adrian Paul 3,610,001 - - - 3,610,001

Mr Grant Kidner 1,490,000 - - 150,000 1,640,000

Ms Melanie Cotterell - - - - -

6,600,001 - - 251,600 6,851,601

30 June 2010

Directors

Dr Neale Fong 500,000 1,000,000 - - 1,500,000

Mr Adrian Paul 2,610,001 1,000,000 - - 3,610,001

Mr Grant Kidner 360,000 1,000,000 - 130,000 1,490,000

3,470,001 3,000,000 - 130,000 6,600,001

The above table includes shares and options issued under the Employee share incentive plan.

All equity transactions with key management personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Company would have adopted if dealing at arm’s length.

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18. DIRECTORS AND EXECUTIVES DISCLOSURES (CONTINUED)(c) Option holdings of Key Management Personnel

30 June 2011

Balance at beginning of

periodGranted as

remunerationGranted under

option issueOptions

exercisedOn market

acquisitionsBalance at end

of period Exercisable

Directors

Dr Neale Fong 500,000 - - - - 500,000 500,000

Mr Adrian Paul 2,500,001 - - - - 2,500,001 2,500,001

Mr Grant Kidner* 1,910,000 - - - 280,000 2,190,000 2,190,000

Ms Melanie Cotterell 141,830 - - - - 141,830 141,830

5,051,831 - - - 280,000 5,331,831 5,331,831

30 June 2010

Directors

Dr Neale Fong 500,000 - - - - 500,000 500,000

Mr Adrian Paul 2,500,001 - - - - 2,500,001 2,500,001

Mr Grant Kidner 1,210,000 - - - 700,000 1,910,000 1,910,000

4,210,001 - - - 700,000 4,910,001 4,910,001

19. SUBSEQUENT EVENTSThere has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods other than:

• On 22 July 2011 the Company surrendered all of its exploration licences in the Beyondie West project.• On 30 August 2011 the Company surrendered all of its exploration licences in the Sheeza project. • On 6 September 2011 the company announced a 1:2 non-renounceable rights issue at 5 cents per share to existing

shareholders to raise approximately $1.122 million. The capital raised will be used to fund the costs associated with further exploration at the Pioneer, West Angelas and Doolgunna projects together with meeting general working capital requirements. For further information please refer to the ASX announcement dated 6 September 2011 and the offer document released on 8 September 2011.

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DiReCtoRS’ DeCLaRation

1. In the opinion of the directors of Chrysalis Resources Limited (the ‘Company’):

a. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:

i. giving a true and fair view of the Company’s financial position as at 30 June 2011 and of its performance for the year then ended; and

ii. complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements.

b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.

2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2011.

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

Dr Neale FongExecutive Chairman

Perth, 29th September 2011

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HLB Mann JuddLevel 4, 130 StirEmail: hlb@hlbwLiability limited

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ShaRehoLDeR infoRmation

HOLDINGS AS AT 31 AUGUST 2011:

Number of Securities Held FULLY PAID SHARES LISTED OPTIONS

No. of Holders No. of Holders

1 to 1,000 12 1

1,001 to 5,000 88 16

5,001 to 10,000 122 54

10,001 to 100,000 295 155

100,001 and over 62 57

Total Number of Holders 579 283

Number of holders of less than a marketable parcel 80 113

Percentage of the 20 largest holders 53.48% 58.88%

Substantial ShareholdersThe Company has been notified of the following substantial shareholdings:

No. %

Mr Adrian Paul 3,500,001 7.80%

Mr David Yusoff 2,500,000 5.57%

Mr Robert Hawke 2,422,000 5.39%

Voting RightsThe Constitution of the Company makes the following provision for voting at general meetings:

On a show of hands, every ordinary shareholder present in person, or by proxy, attorney or representative has one vote. On a poll, every shareholder present in person, or by proxy, attorney or representative has one vote for any share held by the shareholder.


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ShaRehoLDeR infoRmation

20 Largest Holders of Securities as at 31 August 2011:

Fully Paid Ordinary Shares No. %

Mr Adrian Stephen PaulMr David Nasir YusoffMr Robert Lawrence HawkeIce Cold Investments Pty Ltd (G & J Brown Super Fund A/C)Mr Ian KerrPareto Nominees Pty Ltd (The Damelle A/c)Mr Grant Anthony KidnerMr Neale William FongDr Salim CassimHSBC Custody Nominees (Australia) LimitedNodlaw Investments Pty Ltd (The Waldon Investment A/C))RPK Nominees Pty Ltd (R & C Kane Super Fund A/C)Bell Potter Nominees Limited (100905 A/C)Mr Grant Michael Button (Wilberforce A/C)Miss Emma WaldonAlmaretta Pty LtdRavenhill Investments Pty Ltd (House of Equity A/C)Mr Neale William Fong (Fong Family A/C)Omondali Pty LtdSharky Holdings Pty Ltd (Morris Family A/C)

3,500,0012,500,0002,422,0002,000,0001,687,674

1,550,0001,250,0001,050,0001,000,0001,000,0001,000,0001,000,000

800,000700,000600,000500,000500,000350,000300,000300,000

7.805.575.394.453.763.452.782.342.232.232.232.231.781.561.341.111.110.780.670.67

24,009,675 53.48%

Listed Options No. %

Mr Robert Lawrence Hawke Mr Ian Kerr Mr Adrian Stephen Paul Mr Grant Michael Button (Wilberforce A/C)Three Zebras Pty LtdMr Don Tsoutsoulis and Mrs Nadica Tsoutsoulis (The Tsoutsoulis A/C)Lizrow Pty Ltd (The Kidner A/C)Mr Leslie Fong (LR Fong Family A/C)Talex Investment Pty LtdOne Dog One Bone Pty LtdMr Christopher Selby Lewis and Jeanette Leonie Lewis (The Cristettes S/F A/C)Mr Robert Reeves and Mrs Mary Reeves (Pelican Point S/F A/C)Ultimo Catering Pty LtdMr Andrew Michael Lane and Ms Michelle Mundy (The Lane Super Fund A/C)Ravenhill Investments Pty Ltd (House of Equity A/C)FDFlex Systems Pty Ltd (F and I Di Fulvio Account)Callnet Nominees Pty LtdMr Neale William Fong (Fong Family A/C)Secor Pty Ltd (Sandover Family No 1 A/C)Fonomes Pty Ltd

4,013,0932,947,0002,500,0011,119,200

998,201982,500950,000900,000826,000800,000600,000600,000600,000560,000500,000400,000355,000350,000320,000310,000

11.458.417.143.192.852.802.712.572.362.281.711.711.711.601.431.141.011.000.910.88

20,630,995 58.60%

Restricted Securities The Company has no restricted securities on issue as at the date of this report.

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tenement SCheDuLe aS at 30 June 2011

Project Tenement Number

Tenement Status

Holder Chrysalis Resources Percentage Interest

Beyondie West* E52/2532E52/2533E52/2535

PendingGrantedPending

Chrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources Limited

100%100%100%

Doolgunna E52/2275 Granted Chrysalis Resources Limited 100%

Gregory Range

Horseshoe South

Pioneer

E45/3120E45/3121E45/3283E45/3284E45/3329E45/3213E46/0782E46/0786E45/3105E45/3131E45/3313E45/3314

E52/2523E52/2524P52/1351P52/1352P52/1363

E63/1117M63/0329M63/0368P63/1429P63/1468

GrantedPendingPendingPendingPendingPendingPendingPendingPendingPendingPendingPending

GrantedGrantedGrantedGrantedGranted

GrantedGrantedGrantedGrantedGranted

Chrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources Limited

Chrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources Limited Chrysalis Resources Limited

Chrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources Limited

100%100%100%100%100%100%100%100%100%100%100%100%

100%100%100%100%100%

80%80%80%80%80%

Sheeza** M24/0938P24/4284P24/4285P24/4357P24/4360P24/4361P24/4362P24/4363P24/4365P24/4366P24/4367P24/4485

GrantedGrantedGrantedGrantedGrantedGrantedGrantedGrantedGrantedGrantedGrantedGranted

Chrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources LimitedChrysalis Resources Limited

100%100%100%100%100%100%100%100%100%100%100%100%

Spring Creek E47/1968 Pending Chrysalis Resources Limited 100%

West Angelas E47/1838P47/1538

GrantedPending

Chrysalis Resources LimitedChrysalis Resources Limited

100%100%

Windarra E39/1324P39/4852

GrantedGranted

Chrysalis Resources LimitedChrysalis Resources Limited

100%100%

* Surrendered 22 July 2011

** Surrendered 30 August 2011

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DirectorsDr Neale FongExecutive Chairman

Mr Adrian PaulNon Executive Director

Mr Grant KidnerNon Executive Director

SecretaryMs Mel Cotterell

Registered OfficeUnit 2 Level 1 Churchill Court331-335 Hay StreetSUBIACO WA 6008

Share RegistryComputershare Investor Services Pty LtdLevel 2, Reserve Bank Building45 St Georges TerracePERTH WA 6000

AuditorsHLB Mann JuddLevel 4, 130 Stirling StreetPERTH WA 6000

Australian Securities ExchangeChrysalis Resources Limited shares (CYS) are listed on the Australian Securities Exchange.

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Chrysalis Resources LimitedACN 125 931 964

Unit 2, Level 1 Churchill Court331-335 Hay StreetSUBIACO WA 6008

T (08) 9380 4430 F (08) 9481 5044

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Annual Report2011

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chrysalis resources limited for personal use only · 2011-11-25 · chrysalis resources limited acn...

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