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ENERGY AND MINERALS AUSTRALIA LIMITED

ABN 56 120 178 949

25 Richardson StreetWest Perth Western Australia 6005Telephone +61 8 9389 2700

www.eama.com.au

2010 ANNUAL REPORT

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Stephen PenroseNon-executive Director

Chris DavisManaging Director

Mike FewsterExecutive Director

Company SecretaryShane McBride

Registered and principal offi ceGround fl oor 25 Richardson Street West Perth WA 6005

Telephone: +61 8 9389 2700Facsimile: +61 8 9389 2722Email: [email protected] Website: www.eama.com.au

AuditorsGrant Thornton Audit Pty LtdLevel 110 Kings Park RoadWest Perth WA 6005

Share registrySecurity Transfer Registrars Pty Ltd770 Canning HighwayApplecross WA 6153

Telephone: +61 8 9315 2333Facsimile: +61 8 9315 2233

BankersWestpac Banking Corporation 109 St George’s TerracePerth WA 6000

Australian Securities ExchangeShares in Energy and Minerals Australia Limitedare quoted on the Australian Securities Exchange.

ASX code: EMA, EMAO

Corporate directory

BOARD OF DIRECTORS

Phillip GoldingNon-executive Chairman

Photograph on facing page and page 4 courtesy of Mattiske Consulting Pty Ltd.

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CONTENTSANNUAL REPORT

Chairman’s letter

Managing Director’s Review of Activities

Resources and Exploration Targets

Tenements

Corporate governance statement

Directors’ report

Financial report

Additional information

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ENERGY AND MINERALS AUSTRALIA - ANNUAL REPORT 2010

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Completion of the scoping study will enable the Company to begin planning for the pre-feasibility study at Ambassador.

22 ENERGY AND MINERALS AUSTRALIA - ANNUAL REPORT 2010

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Fellow Shareholders

The year just completed has been one of substantial progress.

As a result of the successful capital raisings in July and September 2009, the Company was able to commence its scoping study on the Ambassador deposit at Mulga Rocks. At the time of this report, work for the study was substantially complete with results expected shortly.

The scoping study entailed a drilling programme of some 28,000 metres which, with the downstream geological analysis, was a very major undertaking for the Company. Three particularly significant outcomes from the scoping study were:

• the identification of sandstone hosted mineralisation with potential for in situ recovery processing;

• metallurgical test and process development work that demonstrated economic recovery of lignite hosted uranium using conventional techniques;

• confirmation of the presence of other minerals (notably nickel and cobalt) with the potential to add considerable value to the project.

Completion of the scoping study will enable the Company to begin planning for the pre-feasibility study at Ambassador and advancement of the sandstone-hosted uranium mineralisation near Ambassador.

I commented last year about litigation being waged against the Company by unknown persons through the medium of a ‘two dollar’ company. The appeal against a Supreme Court judgement in our favour was rejected unanimously by the Court of Appeal of the Supreme Court in July 2010. The plaintiff has, despite its total lack of success thus far, applied for special leave to appeal to the High Court. Its actions are obviously intended to hinder and frustrate the progress of the Company, presumably in the hope of some financial gain. It is a lamentable state of affairs, but one which the Company unfortunately could not avoid.

On behalf of the Board and shareholders, I thank our management team for their efforts during the year.

Phillip Golding


CHAIRMAN’S LETTERENERGY AND MINERALS AUSTRALIA

3ENERGY AND MINERALS AUSTRALIA - ANNUAL REPORT 2010

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This financial year has been one of steady progress towards our goal of developing Mulga Rocks, targeting production of uranium during 2014.


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Chris Davis Managing Director

MANAGING DIRECTOR’S REVIEW OF ACTIVITIESENERGY AND MINERALS AUSTRALIA

This financial year has been one of steady progress towards our goal of developing Mulga Rocks, targeting production of uranium during 2014. Mulga Rocks – comprising the Ambassador, Emperor and Shogun deposits– contain a uranium Resource of 27,060 tonnes plus additional uranium mineralisation and a number of other potentially economic minerals; hosted in both lignite and sandstone. Mulga Rocks is ranked in the top five of Australian uranium development projects and number three in Western Australia. While the main Resource is hosted in lignite, which is expected to be mined by conventional open pits, the recent discovery of mineralisation in sandstone host-rock has presented the opportunity to use the potentially more economic in-situ recovery (ISR) method of extraction. The scoping study currently being undertaken by the Company will incorporate this as an option.

During the year an extensive drilling programme was conducted focussed on the largest deposit, Ambassador, which has been identified as the Company’s ideal first high grade uranium mine development. In June 2010, the Company announced a 25% increase in the size of Ambassador’s Inferred Resource, bringing the total Inferred Resources for Mulga Rocks to 27,060 tonnes, (approximately 60 million pounds of U

30

8 ). The breakdown

of the Resources is shown in the table on page 7.

The results of this Resource increase were integrated into the Ambassador scoping study, our major focus during the year. These results were obtained from an air core drilling programme comprising 417 holes (27,367 metres). In addition, fourteen PQ3 (83mm core diameter holes) and four 200mm core diameter holes were completed for a total of 751 metres. Three of the holes were located in an area of predominantly sandstone uranium mineralisation and the remainder in areas of lignite-dominant mineralisation; generating approximately 250 kilograms of sample for metallurgical testing. Following this drilling, extensive geological interpretation, resource calculation, engineering design, metallurgical testwork and other scoping study activities were carried out. It is expected that the scoping study will be completed in October 2010.

A review of historic drilling data from the Narnoo Project, the area which surrounds Mulga Rocks, has also identified additional areas prospective for sandstone-hosted uranium mineralisation and these findings were announced to the market on 19 July 2010. These prospects, currently known simply as Prospects 1-4, are less than 10 kilometres away from Ambassador and are

significant in that they may provide additional uranium for the ISR operation being assessed as part of the Ambassador scoping study. Additional sandstone-hosted uranium mineralisation has also been identified near the Emperor and Shogun deposits, and we are confident that more discoveries will be made with further exploration within the large landholding of the Narnoo Project.

Work has also continued on the Minigwal and Gunbarrel projects and we await approval of Programmes of Work from the Department of Mines and Petroleum before embarking on drilling programmes on both projects.

Figure 1 – Project locations

MINIGWALPROJECT

NARNOO ANDMULGA ROCKDEPOSITS

GUNBARRELPROJECT

Esperance

Albany

Bunbury

Geraldton

Carnarvon

KarrathaRoebourne

Port Hedland

BroomeDerby

Nullagine

Newman

Wiluna

Cue

Meekatharra

SouthernCross

Kalgoorlie

Mt Magnet

PERTH

Leonora

Wyndham

WESTERN AUSTRALIA


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METAlluRgiCAl TEsT WoRk AnD PRoCEss DEsign

The samples noted above were sent to ANSTO Minerals, part of the Australian Nuclear Science and Technology Organisation (ANSTO), recognised worldwide as a pre-eminent expert in process development of uranium ores. These samples, together with preliminary extraction testwork already carried out on samples obtained in 2008, formed the basis of the metallurgical testwork and process development work which commenced in the March quarter 2010. ANSTO completed hydrometallurgical studies and assessed a range of process routes to establish a flow sheet for the recovery of uranium. ANSTO’s recommendation is that a conventional, commercially-proven process route be used, comprising atmospheric acid leach and ‘Resin in Pulp’ (RIP) ion exchange. Both the lignite-hosted material and the sandstone-hosted material showed high recoveries from this process route.

ExPloRATion TARgETs FoR oThER CoMMoDiTiEs

Assay results from the air core and diamond drilling completed in Ambassador during late 2009 also permitted the assessment of Exploration Targets for nickel, cobalt, rare earth elements and scandium, which the Company announced on 1 September 2010. The ranges of the amounts of each commodity announced are shown in the table on page 7. The areas of mineralisation of these commodities fall primarily within the Ambassador uranium Resource and metallurgical studies completed to date indicate that they can be extracted as by-products using the currently favoured process route for uranium recovery.

EnviRonMEnT

As a consequence of the climate and geographical isolation of the Mulga Rocks region, pastoralism and agriculture are not considered viable and the region is regarded as relatively undisturbed, with some terrain exhibiting high biological values. Baseline studies – to document the current state of the environment, investigate potential impacts of any proposed mining activities and assist in developing appropriate sustainable management strategies – have commenced. These studies, which include the development of environmental research with leading West Australian research institutes, will play an important role in the public permitting process and ongoing management of operations.

CoMMuniTy

EMA understands that its access to land and its public licence to develop the Mulga Rock Deposits will depend

to a considerable extent on keeping local communities informed of its activities. During the year, project presentations were made to local government, community and business gatherings, indigenous groups and State and Federal Government representatives. While no registered Native Title claims exist over the project area, EMA continues to liaise with indigenous people who have an interest in the area. During the year heritage surveys were conducted over the project area.

sAFETy

The Company has established a range of policies and procedures to instil a culture of safety awareness. The wellbeing of EMA employees, consultants and contractors is of the highest priority to the Company, and a key to delivering to shareholders the value contained in the tenement package. There were no injury-related lost time incidents during the year.

CoRPoRATE

Early in the financial year the Company completed a successful capital raising via a placement to institutional and sophisticated investors and a Share Purchase Plan to eligible shareholders. Despite difficult economic times, the capital raising has allowed the Company to proceed with its objectives.

In August 2008, Yarri Mining commenced proceedings in the Supreme Court of Western Australia against the Company claiming that the grant of Exploration Licences E39/876 and E39/877 (which contain Mulga Rocks) to EMA’s subsidiary Narnoo Mining Pty Ltd, was partly or entirely invalid. In May 2009, The Honourable Justice Le Miere handed down his judgement dismissing all Yarri Mining Pty Ltd’s claims. Yarri Mining Pty Ltd subsequently lodged an appeal which was heard in February 2010. On 21 July 2010, the Court of Appeal of the Supreme Court of Western Australia handed down its judgement unanimously dismissing Yarri Mining Pty Ltd’s appeal.

Despite losing the original case and having its appeal unanimously dismissed, in August 2010 Yarri Mining made an application to the High Court for special leave to appeal the previous judgements. The Company has no reason to consider that the outcome of this latest and second appeal will be different from the preceding actions.

Additionally, in 2006 and 2007, Yarri lodged Plaints and Applications for forfeiture in the Warden’s Court against tenements E39/876 and E39/877, claiming under-expenditure. These were adjourned pending resolution of the writ and appeal.

MANAGING DIRECTOR’S REVIEW OF ACTIVITIES (continued)

ENERGY AND MINERALS AUSTRALIA


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DepositU

3O

8 Cut off

(ppm)Tonnes

(Mt)U

3O

8 Grade

(ppm)Contained U

3O

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(t)Contained U

3O

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(Mlb) *

Ambassador

Upper Lignite 200 16.7 600 10.0 22.05

Lower Lignite 200 3.7 320 1.2 2.65

Sandstone 100 7.2 240 1.7 3.75

Sub-total 27.6 469 12.9 28.44

Emperor 200 24.1 500 12.0 26.46

Shogun 200 3.7 590 2.2 4.85

Total 55.4 27.1 59.75

• Tonnes are metric (2,204.62 pounds)

• Appropriate rounding has been applied

Details of Exploration Targets for the Ambassador Deposit

Metal

Cut-off grade (ppm)

Tonnes (millions)

Grade range from to (ppm)

Contained metal range from to (tonnes)

Ni 800 14.1 2,400 2,800 33,800 39,500

Co 500 13.8 1,100 1,300 15,200 17,900

Sc2O

377 6.8 150 180 1,000 1,200

REO 1,000* 6.5 2,200 3,300 14,300 21,200

• Air core samples were only assayed for the major REE. The cut-off grade for these samples was 500 ppm Ce + La, which comprises about 50% of the total (see Table below).

• Rounding to meaningful levels has been applied.

• The cut-off grades used for the grade ranges are reasonable on the basis that all commodities would be a by-product to uranium production.

• Exploration Targets are conceptual in nature as there has been insufficient exploration to define Mineral Resources. It is uncertain if future exploration will result in complete

or substantial translation to a Mineral Resource.

REE proportions in Lignite mineralisation based on assay of core samples

Ce %

Dy %

Er %

Eu %

Gd %

Ho %

La %

Lu %

Nd %

Pr %

Sm %

Tb %

Tm %

Yb %

39.8 3.4 1.5 1.2 4.2 0.6 10.8 0.2 24.1 6.1 6.0 0.6 0.2 1.2

The information in this review that relates to Minerals Resources is based on information compiled by Neil Inwood, who is a Member of the Australasian Institute of Mining

and Metallurgy. Mr Inwood is a full time employee of Coffey Mining. Mr Inwood has sufficient experience relevant to the style of mineralisation and type of deposit under

consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the JORC ‘Australasian Code for Reporting

of Exploration Results, Mineral Resources and Ore Reserve’s. Mr Inwood consents to the inclusion in the announcement of the matters based on his information in the form

and context in which it appears.

The information in this review that relates to Exploration Results, Exploration Targets and Bulk Density is based on information compiled by Michael Fewster, who is a Member

of the Australian Institute of Geoscientists. Mr Fewster is an executive director of the Company. Mr Fewster has sufficient experience relevant to the style of mineralisation and type

of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the JORC ‘Australasian Code

for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Fewster consents to the inclusion in the announcement of the matters based on his information

in the form and context in which it appears.

Mulga Rock Deposits Uranium Inferred Resource Estimates as at 21 September 2010

Ordinary Kriging Grade Estimates within parent cells of 100m by 100m by 10m

Using cut combU30

8 composites (combined chemical and factored radiometric grades) reported at a variety of lower grade cut-offs.

A dry bulk density of 0.9 t/m3 was used for the Upper Lignite mineralisation, 1.3 t/m3 for the Lower Lignite (which includes a large proportion of sandstone hosted material), and 1.6 t/m3 for the lower Sandstone mineralisation.

RESOURCES AND ExPLORATION TARGETSENERGY AND MINERALS AUSTRALIA


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TENEMENTSENERGY AND MINERALS AUSTRALIA

Project Tenement Ownership Area (km2)

GRANTED TENEMENTS:

Narnoo and Mulga Rock Deposits E39/876 100% 119

E39/877 100% 170

E39/1148 100% 208

E39/1149 100% 208

E39/1150 100% 209

E39/1358 100% 200

P39/4877 100% 1.5

P39/4878 100% 1.2

P39/4879 100% 1.5

P39/4880 100% 0.9

P39/4881 100% 0.2

P39/4882 100% 0.5

P39/4883 100% 1.7

P39/4884 100% 1.9

L39/193 100% 317

Minigwal E39/1185 100% 144

E39/1186 100% 123

E39/1187 100% 57

E39/1380 100% 108

Gunbarrel E39/1183 100% 144

E39/1184 100% 171

E38/1853 100% 165

E39/1428 100% 63

Total area covered by granted tenements: 2,415.4 km2

TENEMENT APPLICATIONS:

E39/1411 100% 9

E39/1412 100% 6

E39/1422 100% 179

E39/1423 100% 110

E39/1551 100% 63

E39/1587 100% 387

E38/2476 100% 219

P39/4984 100% 1.8

P39/4985 100% 2.0

P39/4986 100% 2.0

P39/4987 100% 2.0

P39/4988 100% 1.8

P39/4989 100% 1.5

P39/4990 100% 1.9

P39/4991 100% 1.9

Total area covered by tenement applications: 987.9 km2


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Figure 2: Mulga Rock tenements


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CORPORATE GOVERNANCE STATEMENTENERGY AND MINERALS AUSTRALIA

CORPORATE GOVERNANCE STATEMENT

STATEMENT

Energy and Minerals Australia Limited ("Company") has made it a priority to adopt 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’), 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. Where, after due consideration, the Company's corporate governance practices depart from a recommendation, the Board has offered full disclosure and reason for the adoption of its own practice, in compliance with the "if not, why not" regime.

DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES

Website Disclosures

Further information about the Company's charters, policies and procedures may be found at the Company's website at www.eama.com.au, under the section marked Corporate Governance. A list of the charters, policies and procedures which are referred to in this Corporate Governance Statement, together with the Recommendations to which they relate, are set out below.

Charters Recommendation(s)

Board 1.3

Audit Committee 4.4

Nomination Committee 2.6

Remuneration Committee 8.3

Policies and Procedures

Policy and Procedure for Selection and (Re)Appointment of Directors 2.6

Process for Performance Evaluation 1.2, 2.5

Policy on Assessing the Independence of Directors 2.6

Policy for Trading in Company Securities (summary) 3.2, 3.3

Code of Conduct (summary) 3.1, 3.3

Policy on Continuous Disclosure (summary) 5.1, 5.2

Procedure for Selection, Appointment and Rotation of External Auditor 4.4

Shareholder Communication Policy 6.1, 6.2

Risk Management Policy (summary) 7.1, 7.4

DISCLOSURE – PRINCIPLES AND RECOMMENDATIONS

The Company reports below on how it has followed (or otherwise departed from) each of the Principles and Recommendations during the 2009/2010 financial year ("Reporting Period").

Principle 1 – Lay solid foundations for management and oversight

Recommendation 1.1:

Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions.


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CORPORATE GOVERNANCE STATEMENT Disclosure:

The Company has established the functions reserved to the Board 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.

The Company has established the functions delegated to senior executives and has set out these functions in its Board Charter. Senior executives are responsible for supporting the Managing Director and assisting the Managing Director 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 Managing Director or, if the matter concerns the Managing Director, then directly to the Chair or the lead independent director, as appropriate.

Recommendation 1.2:

Companies should disclose the process for evaluating the performance of senior executives.

Disclosure:

The performance of all directors and senior executives is reviewed at least annually. The Board evaluates the performance of senior executives having regard to such things as: the responsibilities of the executive; performance against budget and goals that have been set; any communicated key performance indicators; and qualitative as well as quantitative measures.

No director or senior executive is involved with their own evaluation, and the remainder of the Board evaluates such parties without such parties being present.

Recommendation 1.3:

Companies should provide the information indicated in the Guide to reporting on Principle 1.

Disclosure:

During the Reporting Period no formal performance evaluations of senior executives took place.

Explanation for departure:

The Board considers that the size of the Company, frequent interaction between the Board and senior executives and the limited number of senior executives, obviated the need for formal evaluation during the year under review.

Principle 2 – Structure the Board to add value

Recommendation 2.1:

A majority of the Board should be independent directors.

Notification of departure:

The Company does not have a majority of independent directors.


The Board considers that the current composition of the Board is adequate for the Company's current size and operations, and includes an appropriate mix of skills and expertise, relevant to the Company's business. The current Board structure presently consists of an equal number of independent and non independent directors. The Chair, however, is an independent director.

The independent directors of the Board are Phillip Golding and Stephen Penrose. The non independent directors of the Board are Michael Fewster and Christopher Davis.

Recommendation 2.2:

The Chair should be an independent director.

Disclosure:

The independent Chair of the Board is Phillip Golding.


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CORPORATE GOVERNANCE STATEMENT (continued)


CORPORATE GOVERNANCE STATEMENT Recommendation 2.3:

The roles of the Chair and Chief Executive Officer should not be exercised by the same individual.

Disclosure:

The Managing Director is Christopher Davis, who is not Chair of the Board.

Recommendation 2.4:

The Board should establish a Nomination Committee.

Disclosure:

The Board has not established a Nomination Committee.


The full Board performs the function of a Nomination Committee.


A separate Nomination Committee has not been formed due to the small size and structure of the Board. The Board considers that at this stage no efficiencies or other benefits would be gained by establishing a separate Nomination Committee. The Board discusses nomination related matters on an on-going basis, as required. When considering matters of nomination, the Board functions in accordance with its Nomination Committee Charter. Items that are usually required to be discussed by a Nomination Committee are marked as separate agenda items at Board meetings when required. The Board deals with any conflicts of interest that may occur when convening in the capacity of Nomination Committee by ensuring the director with conflicting interests is not party to the relevant discussions.

Recommendation 2.5:

Companies should disclose the process for evaluating the performance of the Board, its committees and individual directors.

Disclosure:

The assessment process currently used by the Board requires each director to complete a questionnaire relating to the role, composition, procedures, practices and behaviour of the Board and its members. Senior executives having most direct contact with the Board may also be invited to complete similar questionnaires. Responses to the questionnaires are confidential and provided direct to the Company Secretary with the results individually and in aggregate then communicated to the Chair of the Board.

Recommendation 2.6:


Disclosure:

Skills, experience, expertise and term of office of each director

A profile of each director containing their skills, experience, expertise and term of office is set out in the Directors' Report.

Identification of independent directors

The independent directors of the Company are Phillip Golding and Stephen Penrose. These directors are independent as they are non-executive directors who are not members of management and who are free of any material business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the independent exercise of their judgement.

Independence is measured having regard to the relationships listed in Box 2.1 of the Principles and Recommendations and the Company's materiality thresholds. The materiality thresholds are set out below.

Company's materiality thresholds

In considering the independence of directors, the Board refers to its Policy on Assessing the Independence of Directors.


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CORPORATE GOVERNANCE STATEMENT The Board has agreed on the following guidelines for assessing the materiality of matters, as set out in the Company's Board Charter:

Balance sheet items are material if they have a value of more than 5% of pro-forma net asset.

Profit and loss items are material if they will have an impact on the current year operating result of 5% 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, they could affect the Company’s rights to its assets, if accumulated they would trigger the quantitative tests, involve a contingent liability that would have a probable effect of 5% or more on balance sheet or profit and loss items, or they 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 5%.

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 of such a quantum, triggering any of the quantitative tests, contain or trigger change of control provisions, they are between or for the benefit of related parties, or otherwise trigger the quantitative tests.

Statement concerning availability of independent professional advice

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 for incurring such expense from the Chair, the Company will pay the reasonable expenses associated with obtaining such advice.

Nomination matters

The full Board, in its capacity as the Nomination Committee, did not hold a meeting during the Reporting Period.

To assist the Board to fulfil its function as the Nomination Committee, it has adopted a Nomination Committee Charter.

The explanation for departure set out under Recommendation 2.4 above explains how the functions of the Nomination Committee are performed.

Performance evaluation

During the Reporting Period an evaluation of the Board took place.

Selection and (Re) appointment of directors

When the Board determines that changes are required to the Board or indeed, if a director resigns from the Board, in determining candidates for the Board, the Nomination Committee (or equivalent) will follow a prescribed procedure whereby it considers the balance of independent directors on the Board as well as the skills and qualifications of potential candidates that will best enhance the Board's effectiveness.

The Board recognises that Board renewal is critical to performance and the impact of Board tenure on succession planning. Directors are rotated on the basis of “At each annual general meeting one-third of the directors for the time being, or, if their number is not a multiple of three, then the whole number nearest one-third, shall retire from office and based on that calculation the directors to retire at an annual general meeting are those who have been longest in office since their last election. A retiring director is eligible for re-election. Re-appointment of directors is not automatic”.

Principle 3 – Promote ethical and responsible decision-making

Recommendation 3.1:

Companies should establish a Code of Conduct and disclose the code or a summary of the code as to the practices necessary to maintain confidence in the Company's integrity, the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

Disclosure:

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


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CORPORATE GOVERNANCE STATEMENT Recommendation 3.2:

Companies should establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.

Disclosure:

The Company has established a policy concerning trading in the Company's securities by directors, senior executives and employees.

Recommendation 3.3:


Disclosure:

Please refer to the section above marked Website Disclosures.

Principle 4 – Safeguard integrity in financial reporting

Recommendation 4.1:

The Board should establish an Audit Committee.

Disclosure:

The Company has established an Audit Committee.

Recommendation 4.2:

The Audit Committee should be structured so that it:

consists only of non-executive directors consists of a majority of independent directors is chaired by an independent Chair, who is not Chair of the Board has at least three members.


The Audit Committee is comprised of only two members.


The composition of the Board does not allow for an Audit Committee to be structured in accordance with the recommendation. The Board therefore believes that an Audit Committee comprised of the two independent non executive directors is the most appropriate structure in the Company's circumstances. The Audit Committee functions in accordance with its Audit Committee Charter.

The Audit Committee comprises two independent directors, Stephen Penrose and Phillip Golding.

Recommendation 4.3:

The Audit Committee should have a formal charter.

Disclosure:

The Company has adopted an Audit Committee Charter.

Recommendation 4.4:


Disclosure:

The Audit Committee held two meetings during the Reporting Period. The following table identifies those directors who are members of the Audit Committee and shows their attendance at Committee meetings: Name No. of meetings attended

Stephen Penrose (Chair) 2

Phillip Golding 2


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CORPORATE GOVERNANCE STATEMENT 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 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.


Principle 5 – Make timely and balanced disclosure

Recommendation 5.1:

Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.

Disclosure:

The Company has established written policies designed to ensure compliance with ASX Listing Rule disclosure and accountability at a senior executive level for that compliance.

Recommendation 5.2:


Disclosure:


Principle 6 – Respect the rights of shareholders

Recommendation 6.1:

Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.

Disclosure:

The Company has designed a communications policy for promoting effective communication with shareholders and encouraging shareholder participation at general meetings.

Recommendation 6.2:


Disclosure:


Principle 7 – Recognise and manage risk

Recommendation 7.1:

Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.

Disclosure:

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 Managing Director, who is responsible for identifying, assessing, monitoring and managing risks. The Managing Director is also responsible for updating the Company's material business risks to reflect any material changes, with the approval of the Board.


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CORPORATE GOVERNANCE STATEMENT In fulfilling the duties of risk management, the Managing Director has unrestricted access to Company employees, contractors and records. The Managing Director may obtain independent expert advice on any matter believed appropriate, with the prior approval of the Board.

The Board has established a separate Audit Committee to monitor and review the integrity of financial reporting and the Company's internal financial control systems and risk management systems.

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 exceeded, will require 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.

Recommendation 7.2:

The Board should require management to design and implement the risk management and internal control system to manage the Company's material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the Company's management of its material business risks.

Disclosure:

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. Further, the Board has received oral reports from management as to the effectiveness of the Company's management of its material business risks.

Recommendation 7.3:

The Board should disclose whether it has received assurance from the Chief Executive Officer (or equivalent) and the Chief Financial Officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act 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.

Disclosure:

The Chief Executive Officer (or equivalent) and the Chief Financial Officer (or equivalent) have provided a declaration to the Board in accordance with section 295A of the Corporations Act and have assured the Board that such declaration after considering the size of the group, its complexity, number of personnel and its financial resources is founded on a sound system of risk management and internal control appropriate to the Company and that the system is operating effectively in all material respects in relation to financial reporting risks


The qualified assurance has been provided primarily because of the lack of segregation of financial and administrative responsibilities which is inherent in companies of our size.

Recommendation 7.4:


Disclosure:

The Board has received a report from management under Recommendation 7.2.

The Board has received the assurance from the Chief Executive Officer (or equivalent) and the Chief Financial Officer (or equivalent) under Recommendation 7.3.


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CORPORATE GOVERNANCE STATEMENT Principle 8 – Remunerate fairly and responsibly

Recommendation 8.1:

The Board should establish a Remuneration Committee.


The full Board performs the function of a Remuneration Committee.


The full Board considers those matters that would usually be the responsibility of a Remuneration Committee. The composition of the Board does not make the establishment of a separate Remuneration Committee practicable and the Board considers that no efficiencies or other benefits would be gained by forming a separate Remuneration Committee. The Board has adopted, and applies, its Remuneration Committee Charter. Items that are usually required to be discussed by a Remuneration Committee are marked as separate agenda items at Board meetings when required. The Board deals with any conflicts of interest that may occur when convening in the capacity of Remuneration Committee by ensuring the director with conflicting interests is not party to the relevant discussions.

Recommendation 8.2:

Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.

Disclosure:

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.

Pay and rewards for executive directors and senior executives consists of a base salary and performance incentives. Long term performance incentives may include options granted at the discretion of the Board and subject to obtaining the relevant approvals. Executives are offered a competitive level of base pay at market rates and are reviewed annually to ensure market competitiveness.

Recommendation 8.3:


Disclosure:

Details of remuneration, including the Company’s policy on remuneration, are contained in the ‘Remuneration Report’ which forms of part of the Directors’ Report.

The full Board, in its capacity as the Remuneration Committee, held one meeting during the Reporting Period.

Name No. of meetings attended

Stephen Penrose (Chair) 1

Phillip Golding 1

Christopher Davis 1

Michael Fewster 1

To assist the Board to fulfil its function as the Remuneration Committee, it has adopted a Remuneration Committee Charter.

The explanation for departure set out under Recommendation 8.1 above explains how the functions of the Remuneration Committee are performed.

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.


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DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2010

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 Your directors present their report on Energy and Minerals Australia Limited consolidated entity (‘Group’) for the financial year ended 30 June 2010.

DIRECTORS

The names and details of directors who held office during the year ended 30 June 2010 and up to the date of this report (unless otherwise stated), are:

Phillip Golding (aged 62) BCom (UWA), FCA, FTIA Non-Executive Chairman

Appointed 13 October 2006

Mr Golding is a Chartered Accountant with over twenty years’ experience in corporate and business tax consulting, including consulting for the exploration and mining sector. He has experience as a public company director and is a former Chairman of Giralia Resources NL.

Mr Golding is a graduate of the University of Western Australia, a Fellow of the Institute of Chartered Accountants in Australia and a Fellow of the Taxation Institute of Australia.

Mr Golding is a member of the Audit Committee.

Chris Davis (aged 61) B.Sc (Min.Eng) Managing Director


Mr Davis is a mining engineer with over forty years’ experience. The first fifteen years were on site as an underground miner, mining engineer and a mine manager at mines from the arctic to the equator.

For more than twenty-five years Mr Davis has worked at a corporate level on the permitting and development of mines. As a result of this experience he is able to bring together a team of professionals for the work ahead on the Company’s projects.

Mr Davis is a Fellow of the Australian Institute of Mining and Metallurgy, a Member of the Australian Institute of Company Directors and a Chartered Professional (Management).

Michael Fewster (aged 49) B.App Sc. (Geology), MSc (Geology) Executive Director

Appointed 14 June 2006

Mr Fewster is a geologist with thirty years’ experience. The first seven years were with the Griffin Coal Mining Company, engaged in exploration, development and mining activities.

Mr Fewster then spent the following twenty years managing a private geological research and exploration company, which focused on exploring for a variety of sediment-hosted energy and mineral commodities, mostly in the Gunbarrel and Eucla Basins of Western Australia. He also provided high-level geological consulting services to a small number of client companies including an established Australian uranium producer. Consequently Mr Fewster has exceptional experience in the geology and origin of mineral deposits in the main areas where EMA operates, for supergene uranium and other mineral deposits in general elsewhere in Australia, and the most efficient methods for the exploration and development of these types of mineral deposits.

Mr Fewster is a Member of both the Australian Institute of Geoscientists and the Geological Society of Australia. He provides technical advice to a small number of clients, which include an established Australian uranium producer.


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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 Stephen Penrose (aged 41) B.Juris, B.Com, LLB Non-executive Director


Mr Penrose is a partner with law firm Tottle Partners in Perth. He acts for a number of Western Australian mining companies as well as for major industrial companies and private clients. He is experienced in takeovers litigation and matters before the Takeovers Panel and appears as Counsel in relation to commercial and corporate matters.

Mr Penrose was admitted to the Supreme Court of Western Australia in 1992 and practiced at Clayton Utz (Perth) until joining Tottle Partners in 1996.

Mr Penrose is Chairman of the Audit Committee.

Former listed company directorships in last three years:

Director - Central Asia Resources Limited (April 2007 - August 2008)

Director – Hydrotech International Limited (November 2006 – April 2008)

Director – Enerji Limited (March 2007 – August 2007)

COMPANY SECRETARY AND CHIEF FINANCIAL OFFICER

Shane McBride BBus. (Acct), FCPA, FCIS, MAICD

Appointed 30 July 2009

Mr McBride has 29 years of commercial management experience, including 24 years’ experience in the resources industry. This experience has been gained in listed Australian public companies in the disciplines of corporate management, management and financial accounting, project development and mine site operations, corporate finance and company secretarial functions. Mr McBride has a BBus (Acct) degree, is a Fellow of CPA Australia, Fellow of Chartered Secretaries Australia and the Institute of Chartered Secretaries and Administrators, and is a Member of the Australian Institute of Directors. He was the managing director of an Australian copper producer listed on the ASX and has substantial experience as a public company director.

Derek Humphry B.Com, CA

Appointed 31 July 2008 Resigned 30 July 2009

Mr Humphry is a Chartered Accountant with over twenty years’ experience. He joined the Company as Chief Financial Officer and Company Secretary on 31 July 2008. Mr Humphry was previously the Chief Financial Officer and Company Secretary of Intrepid Mines Limited.

PRINCIPAL ACTIVITIES

The principal activities of the Consolidated entity during the year ended 30 June 2010 were exploration and development of its tenement package, resource expansion and progression of a scoping study on the Ambassador deposit.

There has been no significant change to the nature of the Consolidated Entity activities during the year.

RESULTS OF OPERATIONS

The consolidated operating loss after tax for the year ended 30 June 2010 attributable to members of the Company was $7,471,117 (30 June 2009: operating loss after tax $5,406,691).

DIVIDENDS

No dividends were paid in the current year (June 2009: $Nil). The directors do not recommend the payment of a dividend.


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DIRECTORS’ REPORT (continued)

FOR THE YEAR ENDED 30 JUNE 2010

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 REVIEW OF OPERATIONS

The Consolidated entity is a uranium exploration and development company, its main asset being the Mulga Rock uranium / polymetallic deposits located 240 kilometres northeast of the regional city of Kalgoorlie-Boulder in Western Australia.

During the year the Company continued to expand its resource base at Ambassador, one of the deposits that makes up the Mulga Rocks Deposits and at the same time started and substantially completed a scoping study on Ambassador.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:

On 17 August 2009, the Company issued and allotted 14,285,714 shares and 14,285,714 options in accordance with the Share Purchase Plan (“SPP”) dated 12 August 2009.

On 17 August 2009, the Company issued and allotted 21,800,000 shares and 21,800,000 options (Tranche 2 Placement).

On 20 July 2009, the Company converted 39,021,792 Class B Performance Shares into 39,021,792 ordinary shares, still subject to escrow, following satisfaction of milestones.

On 20 July 2009, the Company issued and allotted 21,800,000 shares and 21,800,000 options (Tranche 1 Placement).

MATTERS SUBSEQUENT TO THE END OF THE YEAR

On 21 July 2010, the Court of Appeal of the Supreme Court of Western Australia handed down its judgement unanimously dismissing Yarri Mining Pty Ltd’s appeal against the judgement in May 2009 by The Honourable Justice Le Miere.

On 18 August 2010, the Company was advised that unsuccessful litigant Yarri Mining Pty Ltd, having lost its case against EMA’s subsidiary Narnoo Mining Pty Ltd and having had its appeal unanimously dismissed by the Court of Appeal of the Supreme Court of Western Australia, has made an application to the High Court for special leave to appeal.

EMA has no reason to consider that the outcome of this application to the High Court for special leave to appeal will be any different to the preceding actions.

The application is likely to be determined late in 2010 or in early 2011.

Other than above, there has not arisen in the interval between 30 June 2010 and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Consolidated entity, the results of those operations, or the state of affairs of the Consolidated entity, in future financial years.

LIKELY DEVELOPMENTS

The Consolidated entity intends to continue to explore and develop its tenement package. New projects will be evaluated on a case by case basis. The main focus will remain the exploration and development of the Mulga Rock Deposits.

The Consolidated entity’s objectives are to:

Complete the scoping study on the Ambassador Deposit;

Complete a pre-feasibility study focused on the Mulga Rock Deposits;

Conduct drilling activities designed to generate resource upgrades at the Mulga Rock Deposits.

Likely developments which may prejudice the Company by disclosure have not been disclosed.


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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 MEETINGS OF DIRECTORS

The meetings of the Company’s Board of directors held during the year ended 30 June 2010, and the numbers of meetings attended by each director were: Full meetings of directors Audit Committee Directors during the year ended 30 June 2010 A B A B P. Golding 9 9 2 2 C. Davis 9 9 * * M. Fewster 9 9 * * S. Penrose 9 8 2 2

A = Number of meetings held during the time that the director held office or was a member of the committee during the year B = Number of meetings attended in person or by conference call * = Not a member of the relevant committee

DIRECTORS’ INTERESTS IN SHARES AND OPTIONS

Particulars of directors’ interests and of persons connected with them (within the meaning of section 34b of the Corporations Act 2001) in shares of the Company as at the date of this report are as follows:

Director Number of shares Number of Class C

Performance Shares Number of options

M. Fewster 287,160,508 29,499,998 Nil

C. Davis 5,277,951 542,204 6,000,000

P. Golding 450,067 - 1,071,428

S. Penrose 483,650 - 1,095,400

SHARE OPTIONS

Options over ordinary shares of the Company at the date of this report are as follows:

Date granted Expiry date Exercise price Number of options

24 August 2007 21 May 2013 $0.45 2,000,000

24 August 2007 21 May 2013 $0.60 6,000,000

21 May 2008 21 May 2013 $0.60 350,000

21 May 2008 21 May 2013 $0.45 50,000

26 September 2008 26 September 2013 $0.53 500,000

20 July 2009 31 July 2011 $0.33 21,800,000

7 September 2009 31 July 2011 $0.33 21,800,000

17 September 2009 31 July 2011 $0.33 14,285,714

4 December 2009 26 September 2014 $0.53 295,000

6 January 2010 26 September 2014 $0.53 150,000

No option holder has any right under the options to participate in any other share issue of the Company or of any other Controlled entity.

Shares issued on the exercise of options

No options were exercised during the year ended 30 June 2010.

ENVIRONMENTAL REGULATIONS AND PERFORMANCE

The Consolidated entity has conducted exploration and development activities on mineral tenements. The right to conduct these activities is granted subject to environmental conditions and requirements. The Consolidated entity aims to ensure a high standard of environmental care is achieved, and as a minimum, to comply with relevant environmental regulations. There have been no known material breaches of any of the environmental conditions.


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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 REMUNERATION REPORT (AUDITED)

The Remuneration Report is set out under the following main headings:

A. Principles used to determine the nature and amount of remuneration B. Details of remuneration C. Service agreements D. Share-based compensation E. Additional information

The information provided in this Remuneration Report has been audited as required by section 308 (3C) of the Corporations Act 2001.

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

The objective of the Consolidated entity’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. As an emerging development and exploration company, remuneration levels are established based on industry standards rather than company performance. These remuneration levels are set to attract qualified and experienced people to pursue the Company’s stated objectives. The Board takes advice on industry remuneration standards through consultation with external agents.

The Board has established a remuneration charter, administered by the full Board, which provides oversight guidance on remuneration and incentive policies and practices and specific recommendations on remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors.

Non-executive directors

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed annually by the Board. The Chairman is not present at any discussions relating to determination of his own remuneration. Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $250,000 per annum. There are no retirement allowances for non-executive directors other than statutory superannuation contributions.

Executive pay

The executive pay and reward framework has three components:

Base pay and benefits, including superannuation; Long-term incentives through participation in the Energy and Minerals Australia Limited Employees Option Plan; and Short-term performance incentives.

Base pay

Structured as a total employment cost package which may be delivered as a combination of cash and prescribed non-financial benefits at the executives’ discretion.

Employees are offered a competitive base pay that comprises the fixed component of pay and rewards. External remuneration consultants provide analysis and advice to ensure base pay is set to reflect the market for a comparable role. Base pay for senior executives is reviewed annually to ensure the executive’s pay is competitive with the market. An executive’s pay is also reviewed on promotion.

There is no guaranteed base pay increases included in any senior executives’ contracts.

Superannuation

Superannuation contributions are made to employees’ chosen superannuation funds in accordance with regulatory requirements of each jurisdiction.


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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 Short-term incentives

The Board is responsible for assessing short term incentives for key management personnel. Service agreements may establish short-term incentives against key performance indicators which are assessed by the Board. To help make this assessment, the Board receives a variety of detailed reports and presentations on every aspect of the performance of the business from management, and external remuneration consultants as required. There were no current short term incentives in place at 30 June 2010.

Long-term incentives

Long-term incentives are provided to certain employees via the Energy and Minerals Australia Limited Employee Option Plan, see section D. Share based compensation for further information.

Company performance

The Company listed on the Australian Securities Exchange on 23 May 2008 with an initial public offering at $0.40 per ordinary share. The closing share price at 30 June 2010 was $0.115 per ordinary share. The weighted average exercise price of options issued during the year was $0.53 per ordinary share. The Company is currently focused on development and exploration of its projects and is not expected to generate profits during this investment phase. Consequently share price performance will be the primary measure of total shareholder return during this period. Share price performance will be a result of the quality of the projects, management’s performance, and external factors.

B. Details of remuneration

Amounts of remuneration

The key management personnel of the Consolidated entity are the directors and specified executives (i.e. those executives that report directly to the Managing Director). Details of the remuneration of the key management personnel of the Consolidated entity for the years ended 30 June 2010 and 2009 are set out in the following tables.

Short-term benefits Post-employment benefits

Share-based

payments

Cash salary

and fees Cash bonus Superannuation

Termination benefits

Value of options Total

Directors

Non-executive

P. Golding 2010 40,000 - - - - 40,000

2009 40,000 - - - - 40,000

S. Penrose 2010 22,936 - 2,064 - - 25,000

2009 22,936 - 2,064 - - 25,000

Executive

C. Davis 2010 238,178 43,333 - 85,251 366,762

2009 250,000 - 22,500 - 188,450 460,950

M. Fewster (1) 2010 306,500 - - - - 306,500

2009 288,190 - - - - 288,190

Total specified directors 2010 607,614 - 45,397 - 85,251 738,262

2009 601,126 - 24,564 - 188,450 814,140

(1) Mr Fewster is remunerated via a Consultancy Agreement dated 3 April 2008 with Eaglefield Holdings Pty Ltd, of which he is a director. There was $82,000 in fees accrued at 30 June 2010 (30 June 2009: $84,036).





Company performance






Share-based

payments

Cash salary




Directors

Non-executive

P. Golding 2010 40,000 - - - - 40,000

2009 40,000 - - - - 40,000

S. Penrose 2010 22,936 - 2,064 - - 25,000

2009 22,936 - 2,064 - - 25,000

Executive

C. Davis 2010 238,178 43,333 - 85,251 366,762

2009 250,000 - 22,500 - 188,450 460,950

M. Fewster (1) 2010 306,500 - - - - 306,500

2009 288,190 - - - - 288,190


2009 601,126 - 24,564 - 188,450 814,140






Company performance






Share-based

payments

Cash salary




Directors

Non-executive

P. Golding 2010 40,000 - - - - 40,000

2009 40,000 - - - - 40,000

S. Penrose 2010 22,936 - 2,064 - - 25,000

2009 22,936 - 2,064 - - 25,000

Executive

C. Davis 2010 238,178 43,333 - 85,251 366,762

2009 250,000 - 22,500 - 188,450 460,950

M. Fewster (1) 2010 306,500 - - - - 306,500

2009 288,190 - - - - 288,190


2009 601,126 - 24,564 - 188,450 814,140



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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010


Share-based

payments

Cash salary




Specified Executives

S. Fleming 2010 - - - - - - GM Geology and Exploration from 12 May 08 to 19 May 09 2009 187,959 - 16,297 74,500 20,531 299,287

D. Humphry 2010 25,608 - 1,860 - - 27,468 CFO and Company Secretary from 31 July 08 to 30 July 09 2009 225,165 - 20,265 - 14,171 259,601

S. Storm 2010 - - - - - - Company Secretary from 5 Dec 07to 31 July 08 2009 20,895 - - - 11,288 32,183

S. McBride 2010 219,437 - 11,250 - 3,595 234,282 CFO and Company Secretary from 31 July 09 2009 - - - - - -

Total specified executives 2010 245,045 - 13,110 - 3,595 261,750

2009 434,019 - 36,562 74,500 45,990 591,071

The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

Fixed remuneration At risk – short term

incentives At risk – long term

incentives

2010 2009 2010 2009 2010 2009

Directors

Non-executive

P. Golding 100% 100% - - - -

S. Penrose 100% 100% - - - -

Executive

C. Davis 77% 59% - - 23% (1) 41%

M. Fewster 100% 100% - - - -


S. Fleming - 93% - - - 7%

D. Humphry - 95% - - - 5%

S. McBride 98.5% - - - 1.5% (2) -

(1) On 24 August 2007, the Company granted 6,000,000 options to Mr Chris Davis with vesting to be 2,000,000 options after 12 months, 2,000,000 options after 24 months and 2,000,000 options after 36 months, each exercisable at $0.60 per share, following the date on which the Company was granted admission to the Official List of the ASX. As the inaugural managing director of the Company, the Board was of the view that this vesting structure provided the executive with appropriate incentive to advance the Company and its share price.

(2) On 6 January 2010, the Company granted 150,000 options to Mr Shane McBride with vesting to be 75,000 options after 12 months and 75,000 options after 24 months from 30 September 2009, each exercisable at $0.53 per share, The Board has developed a policy for granting options to all employees and these options were granted in accordance with that policy.


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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 C. Service agreements

Remuneration and other terms of employment for certain key management are formalised in service agreements or employment letters. Employees are eligible for long term incentive benefits under the Energy and Minerals Australia Limited Employees Option Plan.

Mr C. Davis, Managing Director

Term of agreement - four years from 1 November 2007

In addition to base salary and 9% superannuation, a payment of Income protection insurance premium up to $12,000 per annum.

Annual leave - twenty business days in the first year of employment with 25 business days in each year of continuous service thereafter together with other leave entitlements pursuant to applicable legislation.

Termination - The employment is terminated on the sooner to occur of the following:

₋ six months’ written notice by Mr Davis to the Company;

₋ death; or

₋ the Company giving notice of dismissal to Mr Davis as a result of misconduct, wilful neglect, serious or persistent breaches of his duties, Mr Davis being charged with a criminal offence which brings the Company into serious disrepute, Mr Davis becoming insolvent or making an arrangement with creditors or becoming ineligible to hold office as a director.

If the Company terminates the employment within twelve months of a change of control of the Company, the Company must make a payment to Mr Davis equivalent to one year’s salary.

Mr M. Fewster, Executive Director

Consultancy agreement dated 3 April 2008 with Eaglefield Holdings Pty Ltd (‘Eaglefield’).

Term of agreement - two years from 1 February 2008.

Fees - $1,250 per full day (more than four hours) and half that for a half day (four hours or less) provided that after the first $12,500 per month these fees will, in respect of non ‘Office Work’ (being work in a capital city of a State or Territory of Australia or suburb of such capital city) increase to $1,500 per full day and half that for a half day for the remainder of the month.

Other - Eaglefield is obliged to make Mr Fewster (or such other person agreed to by the Company) available for at least ten days per month during the term to perform the duties required by the consultancy agreement and the Company is obliged to require Mr Fewster to perform such duties for at least ten days per month during the term.

Termination - the agreement may be terminated by:

₋ Eaglefield by giving ninety days’ written notice after the Company has been listed on the ASX for two years;

₋ the Company by giving Eaglefield:

⁻ ninety days’ written notice (but if the termination date is prior to one year after the Company lists on ASX then the Company must pay $12,500 for each month between termination date and date one year after the Company lists on ASX);

⁻ immediate written notice of termination upon bankruptcy, conviction for fraud, dishonest conduct of significant harm to the Company or failure to remedy a breach of the consultancy agreement within fourteen days of notice to do so;

⁻ three months’ written notice in the event of Mr Fewster becoming incapacitated (but if the termination date is prior to one year after the Company lists on ASX then the Company must pay $12,500 for each month between termination date and date one year after the Company lists on ASX).


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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 Mr S. McBride, Financial Controller and Company Secretary (Commenced 27 July 2009)

Term of agreement - employment letter no fixed term from 31 July 2009.

Termination – payment of a termination benefit on early termination by the Company as a result of a change in control, of up to six months’ base salary.

Mr D. Humphry, Chief Financial Officer and Company Secretary (Resigned 31 July 2009)

Term of agreement - employment letter no fixed term from 31 July 2008.

Termination – payment of a termination benefit on early termination by the Company as a result of a change in control, of up to twelve months’ base salary.

Mr S. Fleming, General Manager Geology and Exploration – (Terminated 19 May 2009)

D. Share-based compensation

Options granted for the year

ended 30 June Options vested for the year

ended 30 June

2010 2009 2010 2009

Non-Executive Directors

P. Golding - - - -

S. Penrose - - - -

Executive Directors

C. Davis Managing Director - - 4,000,000 2,000,000

Other Key Management Personnel

S. Fleming GM Geology and Exploration to 19 May 2009 - 100,000 (a) 100,000 50,000

D. Humphry Chief Financial Officer and Company Secretary from 31 July 2008 to 31July 2009 - 150,000 (b) - -

S. McBride Chief Financial Officer and Company Secretary from 31 July 2009 150,000 (c) - - -

(a) Granted on 22 May 2008, these options are charged to expense over the period from date of grant to vesting being, 12 months. Their exercise price is $0.60 and they expire 21 May 2013.

(b) Granted on 26 September 2008, these options are charged to expense over the period from date of grant to vesting being 50% of the options vest 12 months after issue, with the remaining 50% vesting a further 12 months later. Their exercise price is $0.53 and they expire 26 September 2013.

(c) Granted 6 January 2010, these options are charged to expense over the period from date of grant to vesting being 50% of the options vest 12 months after issue, with the remaining 50% vesting a further 12 months later. Their exercise price is $0.53 and they expire 30 September 2014.

No option holder has any right under the options to participate in any other share issue of the Company or any other entity. No options have been exercised at 30 June 2010.


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DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010

27

E. Additional information

Details of remuneration: Options

For each grant of options included in the tables above, the percentage of the grant that vested in the financial year and the percentage that was forfeited are set out below. No cash bonuses were paid during the financial year. Options issued, vest over periods established at grant as detailed above provided vesting conditions are met (typically continued service). No options will vest if the conditions are not satisfied, hence the minimum value of the option yet to vest is $nil. The maximum value of the option yet to vest has been determined as the amount of the grant date fair value of the options that is yet to be expensed.

Year

granted Vested

% Forfeited

%

Financial years in which options

may vest

Minimum total value

of grant yet to vest

$

Maximum total value

of grant yet to vest

$

Directors

P. Golding 2007 100% - 2008 - -

S. Penrose 2007 100% - 2008 - -

C. Davis 2007 66% - 2009, 2010, 2011 - 32,904


S. Fleming 2008, 2009 66% - 2009, 2010 - 1,575

D. Humphry to 30 July 2009 2009 0% - 2009, 2010 - -

S. McBride from 31 July 2009 2010 0% - 2010, 2011 - 9,587

Share-based compensation: Options Further details relating to options are set out below:

A B C D

Remuneration consisting of options

Value at grant date

$

Value at exercise date

$

Value at lapse date

$

Directors

P. Golding 0% - - -

S. Penrose 0% - - -

C. Davis 23% - - -


S. Fleming 0% - - -

D. Humphry 0% - - 22,492

S. McBride 1.5% 9,587 - -

A = The percentage of the value of remuneration consisting of options, based on the value of options expensed during the current year. B = The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of remuneration.

The weighted average fair value of the options at measurement date was $0.064. Volatility of 56% was used in the calculation, based on the volatility for the 50 days prior to grant.

C = The value at exercise date of options that were granted as part of remuneration and were exercised during the year, being the intrinsic value of the options at that date.

D = The value at lapse date of options that were granted as part of remuneration and that lapsed during the year. Lapsed options refer to options that vested but expired unexercised. The weighted average fair value of the options at lapse date was $0.15. Volatility of 118% was used in the calculation, based on the volatility for the 50 days prior to lapse.


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28



DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 Loans to directors and executives

There have been no loans to directors or executives.

AUDITOR

Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.

NON-AUDIT SERVICES

No non audit services were provided during the period.

During the period, the following fees were paid or payable for services provided by the auditor of the Parent entity, its related practices and non-related audit firms:

Consolidated

Year ended 30 June 2010

$

Year ended 30 June 2009

$

Assurance services

1. Audit services

Grant Thornton Audit Pty Ltd:

Audit of financial reports and other audit work under the Corporations Act 2001 20,980 38,070

Total remuneration for audit services 20,980 38,070

Total remuneration for assurance services 20,980 38,070


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29

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2010 AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on the page following this Directors’ Report.

OFFICERS’ INDEMNITIES AND INSURANCE

The Company has agreed to indemnify the following former and current directors and officers of the Company – Messrs Golding, Penrose, Davis, Fewster, McBride and Humphry – against all liabilities to another person and the Company that may arise from their position as directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a wilful breach of duty. The agreement stipulates that the Company will meet the full amount of such liabilities including costs and expenses.

The Company agreed to pay a premium in respect of a contract insuring directors and officers of the Company. That contract of insurance prohibits the Company disclosing the nature of the liability insured against and the amount of the premium paid. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Consolidated entity, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to 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 part of those proceedings.

No proceedings have been brought or intervened in or on behalf of the Company with leave of the court under section 237 of the Corporations Act 2001.

This Directors’ Report, incorporating the Remuneration Report, is made in accordance with a resolution of the directors.

Phillip Golding Chairman

Dated 14 September 2010


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31

Energy and Minerals Australia Limited – Consolidated Entity

CONTENTS Page

Statement of Comprehensive Income 32

Statement of Financial Position 33

Statement of Changes in Equity 34

Statement of Cash Flows 35

Notes to the Financial Statements 37

Directors’ Declaration 64

Independent Auditor’s Report to the Members 65

This financial report covers Energy and Minerals Australia Limited as a Consolidated entity consisting of Energy and Minerals Australia Limited and its subsidiaries. The financial report covers the year ended 30 June 2010 and is presented in Australian dollars.

Energy and Minerals Australia Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Ground Floor, 25 Richardson Street West Perth, Western Australia, 6005

The financial report was authorised for issue by the directors on 14 September 2010. The Company has the power to amend and reissue the financial report.

Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at minimum cost to the Company. Public releases are available at asx.com.au by entering the Company’s ASX code “EMA”. Additional information on the Company is available on its website www.eama.com.au.

ANNUAL FINANCIAL REPORTENERGY AND MINERALS AUSTRALIA


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STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2010

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2010

Consolidated

Notes 2010

$ 2009

$

Revenue 5 333,387 225,717

Exploration expenditure (5,990,202) (3,219,704)

Corporate and administration expense (1,688,062) (2,109,701)

Option value expense (126,240) (303,003)

Loss before income tax 6 (7,471,117) (5,406,691)

Income tax expense 7 - -

Loss attributable to members of the Company (7,471,117) (5,406,691)

Other comprehensive income - -

Total comprehensive loss for the year (7,471,117) (5,406,691)

(Loss) per share from continuing operations attributable to the members of the Company: Cents per share Cents per share

Basic and Diluted loss per share 8 (1.97) (2.09)

The above statement of comprehensive income should be read in conjunction with the accompanying notes

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STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2010

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010

Consolidated

Note 2010

$ 2009

$

CURRENT ASSETS

Cash and cash equivalents 9 5,879,574 1,633,262

Trade and other receivables 10 147,290 88,773

Total Current Assets 6,026,864 1,722,035

NON-CURRENT ASSETS

Plant and equipment 12 554,100 534,587

Total Non-Current Assets 554,100 534,587

TOTAL ASSETS 6,580,964 2,256,622

CURRENT LIABILITIES

Trade and other payables 13 483,716 367,963

Provisions 14 59,958 53,317

Total Current Liabilities 543,674 421,280

TOTAL LIABILITIES 543,674 421,280

NET ASSETS 6,037,290 1,835,342

EQUITY

Contributed equity 15 26,952,667 15,405,842

Reserves 16 579,879 453,639

Accumulated losses 17 (21,495,256) (14,024,139)

TOTAL EQUITY 6,037,290 1,835,342

The above statement of financial position should be read in conjunction with the accompanying notes

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STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2010

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2010

Contributed equity

$

Accumulated losses

$

Option reserve

$ Total

$

CONSOLIDATED

Balance at 1 July 2009 15,405,842 (8,617,448) 150,636 6,939,030

Options issued during the year - - 303,003 303,003

Total comprehensive loss for the period - (5,406,691) - (5,406,691)

Balance at 30 June 2009 15,405,842 (14,024,139) 453,639 1,835,342

Balance at 1 July 2010 15,405,842 (14,024,139) 453,639 1,835,342

Share Issues 12,156,000 - - 12,156,000

Equity issue expenses (609,175) - - (609,175)

Options issued during the period - - 126,240 126,240


Balance at 30 June 2010 26,952,667 (21,495,256) 579,879 6,037,290

The above statement of changes in equity should be read in conjunction with the accompanying notes

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2010

Contributed equity

$

Accumulated losses

$

Option reserve

$ Total

$

CONSOLIDATED

Balance at 1 July 2009 15,405,842 (8,617,448) 150,636 6,939,030

Options issued during the year - - 303,003 303,003


Balance at 30 June 2009 15,405,842 (14,024,139) 453,639 1,835,342

Balance at 1 July 2010 15,405,842 (14,024,139) 453,639 1,835,342

Share Issues 12,156,000 - - 12,156,000

Equity issue expenses (609,175) - - (609,175)

Options issued during the period - - 126,240 126,240


Balance at 30 June 2010 26,952,667 (21,495,256) 579,879 6,037,290

The above statement of changes in equity should be read in conjunction with the accompanying notes

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STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2010

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2010

Consolidated

Note 2010

$ 2009

$

Cash Flows from Operating Activities

Payments to suppliers and employees (7,396,294) (5,191,297)

Interest received 318,584 248,987

Net cash used in Operating Activities 22 (7,077,710) (4,942,310)

Cash Flows from Investing Activities

Purchase of property, plant and equipment (222,803) (433,903)

Net cash used in Investing Activities (222,803) (433,903)

Cash Flows from Financing Activities

Proceeds from issue of equity securities 12,156,000 -

Equity securities issue costs (609,175) -

Net cash provided by Financing Activities 11,546,825 -

Net increase in cash and cash equivalents held 4,246,312 (5,376,213)

Cash and cash equivalents at the beginning of the financial year 1,633,262 7,009,475

Cash and cash equivalents at the end of the financial year 9 5,879,574 1,633,262

The above statement of cash flows should be read in conjunction with the accompanying notes

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2010

Consolidated

Note 2010

$ 2009

$

Cash Flows from Operating Activities

Payments to suppliers and employees (7,396,294) (5,191,297)


Net cash used in Operating Activities 22 (7,077,710) (4,942,310)

Cash Flows from Investing Activities

Purchase of property, plant and equipment (222,803) (433,903)

Net cash used in Investing Activities (222,803) (433,903)

Cash Flows from Financing Activities

Proceeds from issue of equity securities 12,156,000 -

Equity securities issue costs (609,175) -

Net cash provided by Financing Activities 11,546,825 -

Net increase in cash and cash equivalents held 4,246,312 (5,376,213)

Cash and cash equivalents at the beginning of the financial year 1,633,262 7,009,475

Cash and cash equivalents at the end of the financial year 9 5,879,574 1,633,262

The above statement of cash flows should be read in conjunction with the accompanying notes

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NOTES TO THE FINANCIAL STATEMENTS30 JUNE 2010

TABLE OF CONTENTS

1. Summary of significant accounting policies 37

2. Financial risk management 44

3. Critical accounting estimates and judgements 46

4. Segment information 47

5. Revenue 48

6. Loss for the year 48

7. Income tax benefit 48

8. Earnings per share 50

9. Cash and cash equivalents 50

10. Trade and other receivables 50

11. Financial assets 50

12. Plant and equipment 51

13. Trade and other payables 51

14. Provisions 52

15. Contributed equity 52

16. Reserves 54

17. Accumulated losses 54

18. Expenditure commitments 55

19. Related party transactions 56

20. Director and other key management personnel disclosures 56

21. Remuneration of auditors 60

22. Reconciliation of loss after tax to net cash outflow from operating activities 60

23. Share based payments 61

24. Contingent liabilities 62

25. Parent entity information 63

26. Events occurring after reporting date 63

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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010

CORPORATE INFORMATION

The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards (including Australian Accounting Interpretations), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial statements cover Energy and Minerals Australia Limited and its controlled entities as a consolidated entity (“Group”). Energy and Minerals Australia Limited is a company limited by shares, incorporated and domiciled in Australia.

The nature of the operations and principal activities of the Consolidated entity are described in the Directors' Report.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial report covers the Consolidated entity consisting of Energy and Minerals Australia Limited and its subsidiaries.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards (including Australian Interpretations) and the Corporations Act 2001.

Compliance with International Financial Reporting Standards

Compliance with Australian Accounting Standards ensures that the consolidated financial statements and notes of the Consolidated entity comply with International Financial Reporting Standards.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, and financial assets and liabilities (including derivative instruments) at fair value.

Critical accounting estimates

The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Consolidated entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.

(b) Basis of consolidation

A controlled entity is any entity Energy and Minerals Australia Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities. Energy and Minerals Australia Limited and its controlled entities, Narnoo Mining Pty Ltd, Camuco Pty Ltd and Gunbarrel Energy and Minerals Australia Pty Ltd, comprise the Consolidated entity.

Inter-company loans which have no interest or repayment terms are effectively investments in controlled entities and are reflected at cost. All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Parent entity.

Where controlled entities enter the consolidated group during the year their operating results are included from the date control was obtained.

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NOTES TO THE FINANCIAL STATEMENTS (continued)

30 JUNE 2010


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Adoption of new and revised accounting standards

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current annual reporting period. The 2009 comparatives contained in these financial statements therefore differ from those published in the financial statements for the year ended 30 June 2009 as described below.

Significant effects on current, prior or future periods arising from the first-time application of the standards discussed above in respect of presentation, recognition and measurement of accounts are described in the following notes.

AASB 8: Operating Segments

In February 2007 the Australian Accounting Standards Board issued AASB 8 which replaced AASB 114: Segment Reporting. As a result, some of the required operating segment disclosures have changed with the addition of a possible impact on the impairment testing of goodwill allocated to the cash generating units (CGUs) of the entity. Below is an overview of the key changes and the impact on the Group’s financial statements.

Measurement impact

Identification and measurement of segments – AASB 8 requires the ‘management approach’ to the identification measurement and disclosure of operating segments. The ‘management approach’ requires that operating segments be identified on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker, for the purpose of allocating resources and assessing performance. This could also include the identification of operating segments which sell primarily or exclusively to other internal operating segments. Under AASB 114, segments were identified by business and geographical areas, and only segments deriving revenue from external sources were considered.

The adoption of the ‘management approach’ to segment reporting has resulted in the identification of reportable segments largely consistent with the prior year.

Under AASB 8, operating segments are determined based on management reports using the ‘management approach’, whereas under AASB 114 financial results of such segments were recognised and measured in accordance with Australian Accounting Standards. This has resulted in changes to the presentation of segment results, with inter-segment sales and expenses such as depreciation and impairment now being reported for each segment rather than in aggregate for total group operations, as this is how they are reviewed by the chief operating decision maker.

Impairment testing of the segment’s goodwill

AASB 136: Impairment of Assets, paragraph 80 requires that goodwill acquired in a business combination shall be allocated to each of the acquirer’s CGUs that are expected to benefit from the synergies of the combination. Each cash generating unit (CGU) which the goodwill is allocated to must represent the lowest level within the entity at which goodwill is monitored, however it cannot be larger than an operating segment. Therefore, due to the changes in the identification of segments, there is a risk that goodwill previously allocated to a CGU which was part of a larger segment could now be allocated across multiple segments if a segment had to be split as a result of changes to AASB 8.

Management have considered the requirements of AASB 136 and determined the implementation of AASB 8 has not impacted the CGUs of each operating segment.

Disclosure impact

AASB 8 requires a number of additional quantitative and qualitative disclosures, not previously required under AASB 114, where such information is utilised by the chief operating decision maker. This information is now disclosed as part of the financial statements. F

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AASB 101: Presentation of Financial Statements

In September 2007 the Australian Accounting Standards Board revised AASB 101 and as a result, there have been changes to the presentation and disclosure of certain information within the financial statements. Below is an overview of the key changes and the impact on the Group’s financial statements.

Disclosure impact

Terminology changes – The revised version of AASB 101 contains a number of terminology changes, including the amendment of the names of the primary financial statements.

Reporting changes in equity – The revised AASB 101 requires all changes in equity arising from transactions with owners, in their capacity as owners, to be presented separately from non-owner changes in equity. Owner changes in equity are to be presented in the statement of changes in equity, with non-owner changes in equity presented in the statement of comprehensive income. The previous version of AASB 101 required that owner changes in equity and other comprehensive income be presented in the statement of changes in equity.

Statement of comprehensive income – The revised AASB 101 requires all income and expenses to be presented in either one statement, the statement of comprehensive income, or two statements a separate income statement and a statement of comprehensive income. The previous version of AASB 101 required only the presentation of a single income statement.

The Group’s financial statements now contain a statement of comprehensive income.

Other comprehensive income – The revised version of AASB 101 introduces the concept of ‘other comprehensive income’ which comprises of income and expenses that are not recognised in profit and loss as required by other Australian Accounting Standards. Items of other comprehensive income are to be disclosed in the statement of comprehensive income. Entities are required to disclose the income tax relating to each component of other comprehensive income. The previous version of AASB 101 did not contain an equivalent concept.

(d) Business combinations

Business combinations falling within the definition of a 'business combination involving entities under common control' and where the control before and after the combination was not transitory, are specifically scoped out of AASB 3 Business Combinations. There is no prescribed accounting treatment present in Australia for business combinations involving entities under common control.

As a result of being scoped-out of AASB 3 and in the absence of an Australian accounting standard governing common control combinations, the consolidated group considered the requirements of AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors in determining an appropriate accounting policy to account for common control combinations. The consolidated group has elected the predecessor accounting methodology as the most appropriate method of accounting for business acquisitions made by the legal parent.

Excess of consideration of the book value of assets and liabilities acquired in the prior financial year were recognised as a debit against equity.

No fair value adjustments were made to the assets and liabilities of the entities acquired.

(e) Impairment of non-financial assets

At each reporting date, the entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.

Recoverable amount is the higher of fair value less costs 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 rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

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(f) Plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Plant and equipment – 3 to 15 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income. When revalued assets are sold, it is Consolidated entity policy to transfer any amounts included in other reserves in respect of those assets to accumulated losses.

(g) Provisions

Provisions are recognised when the Consolidated entity has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(h) Employee benefits

Share-based payments

Share-based compensation benefits may be provided to employees and directors via various share option plans. The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, 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.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

Upon the exercise of options, the balance of the options reserve relating to those options is transferred to share capital. The market value of shares issued to employees for no cash consideration under the Share Plans is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares.

(i) Financial instruments

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Consolidated entity provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than twelve months after the reporting date which are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position.

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in the statement of comprehensive income in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale are recognised in equity in the available-for-sale investments revaluation reserve.

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The Consolidated entity assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss is removed from equity and recognised in the statement of comprehensive income. Impairment losses recognised in the statement of comprehensive income on equity instruments are not reversed through the statement.

(j) Trade and other payables

Trade payables and other payables are carried at amortised cost which represents future liabilities for goods and services received, whether or not billed to the Company.

(k) Income tax

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Energy and Minerals Australia Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidation group under the Tax Consolidation Regime. Each entity in the group will continue to recognise its own current and deferred tax liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the Parent entity. The current tax liability of each group entity will then subsequently be assumed by the Parent entity. The tax consolidated group entered into a tax sharing agreement whereby each company in the group contributes to the income tax payable in proportion to their contribution to profit before tax of the tax consolidated group.

(l) Exploration and evaluation expenditure

Exploration, evaluation and acquisition costs are expensed in the year they are incurred. Development costs are capitalised. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production.

(m) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

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(n) Employee leave benefits

(i) Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

(o) Leases

Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term.

(p) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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. Bank overdrafts are included within interest-bearing loans and borrowings in current liabilities on the statement of financial position.

(q) Revenue recognition

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Consolidated entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest revenue

Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(r) New accounting standards and interpretations

At the date of authorisation of the financial statements, the following Australian Accounting Standards / Accounting Interpretations have been issued or amended and are applicable to the Group but are not yet effective and have not been adopted in preparation of the financial statements.

AASB 9: Financial Instruments and AASB 2009-11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and interpretations of 10 & 12] (applicable for annual reporting periods commending on or after 1 January 2013).

These standards are applicable retrospectively and amend the classification and measurement of financial assets. The Group has not yet determined the potential impact on the financial statements. F

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The changes made to accounting requirements include:

− simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;

− simplifying the requirements for embedded derivatives;

− removing the tainting rules associated with held-to-maturity assets.

− removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;

− allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument, and

− reclassifying financial assets where there is a change in an entity’s business model as they are initially classified based on:

(i) the objective of the entity’s business model for managing the financial assets; and

(ii) the characteristics of the contractual cash flows.

AASB 2009-8: Amendments to Australian Accounting Standards – Group Cash-settled Share-based Payment Transactions [AASB 2] (applicable for annual reporting periods commencing on or after 1 January 2010)

These amendments clarify the accounting for group cash-settled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the share-based payment transaction. The amendments incorporate the requirements previously included in Interpretation 8 and Interpretation 11 and as a consequence, these two Interpretations are superseded by the amendments. These amendments are not expected to impact the Group.

AASB 2009-12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 112, 119, 133, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011)

This standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of International Financial Reporting Standards by the IASB. The standard also amends AASB 8 to require entities to exercise judgement in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segments disclosures. These amendments are not expected the impact the Group.

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2. FINANCIAL RISK MANAGEMENT

The Consolidated entity’s financial position is not complex. Its activities may expose it to a variety of financial risks in the future such as market risk (including fair value interest rate risk), credit risk, and liquidity risk. The Consolidated entity’s overall financial risk management focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Consolidated entity.

Risk management is carried out under an approved framework covering a risk management policy and internal compliance and control by management. The Board identifies, evaluates and approves measures to address financial risks.

The Consolidated entity holds the following financial instruments:

Consolidated

2010 $

2009 $

Financial assets

Cash and cash equivalents 5,879,574 1,633,262

Loans and other receivables 147,290 88,773

6,026,864 1,722,035

Financial liabilities

Trade and other payables (At amortised cost) 483,716 367,963

(a) Market risk

Cash flow and fair value interest rate risk

The Consolidated entity’s main interest rate risk arises from cash deposits to be applied to future exploration and development of areas of interest. Deposits at variable rates expose the Consolidated entity to cash flow interest rate risk. Deposits at fixed rates expose the Consolidated entity to fair value interest rate risk. During 2010 and 2009, the Consolidated entity’s deposits at variable rates were denominated in Australian dollars.

As at the reporting date, the Consolidated entity had the following variable rate deposits and there were no interest rate swap contracts outstanding:

2010 2009

Weighted average

interest rate %

Balance $

Weighted average

interest rate %

Balance $

Deposit 5,181,554 181,554

Other cash available 698,020 1,451,708

Net exposure to cash flow interest rate risk 5.39% 5,879,574 2.87% 1,633,262

The Consolidated entity analyses its interest rate exposure on each occasion a deposit term expires. The Consolidated entity aims to maximise interest returns from available funds and at the same time retain operating flexibility through adequate access to funds.

Sensitivity – Consolidated entity

During 2010 and 2009, if interest rates had been 10% higher or lower than the prevailing rates realised, with all other variables held constant, there would be an immaterial change in post-tax profit for the year. Equity would not have been impacted.

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2. FINANCIAL RISK MANAGEMENT (continued)

(b) Credit risk

The Consolidated entity has no significant concentrations of credit risk. Cash transactions are limited to high credit quality financial institutions.

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures on outstanding receivables and committed transactions. For banks and financial institutions, the Consolidated entity will only hold deposits with A or better rated banks or financial institutions. All funds are currently banked with Westpac Banking Corporation. Receivables are generally limited to Goods and Services Tax refunds from the Australian Taxation Office. Events leading to other receivables are reviewed on a case by case basis and if there is no independent rating, management assesses the credit quality of the transaction party, taking into account its financial position, past experience and other factors.

The Company has no derivative financial instruments. The Board has not authorised management to engage in derivative financial instruments.

The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised at the beginning of this note. All receivables at 30 June 2010 were received within two months.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close-out market positions. The Consolidated entity manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Consolidated entity will aim at maintaining flexibility in funding by accessing appropriate committed credit lines available from different counterparties where appropriate and possible. Surplus funds when available are generally only invested in high credit quality financial institutions in highly liquid markets.

Financing arrangements

The Consolidated entity has no borrowing facilities.

Maturities of financial liabilities

The note above analyses the Consolidated entity's financial liabilities. These liabilities comprise trade and other payables, are non interest bearing and will mature within twelve months. The amounts disclosed are the contractual undiscounted cash flows. There are no derivatives.

(d) Capital Management

The Consolidated entity’s capital management objective is to ensure adequate funding is obtained to enable it to progress it exploration and project development activities, while retaining sufficient cash reserves to ensure the Consolidated Entity’s continues as a going concern. As a development and exploration company, funds for activities are generally sourced from equity markets, joint venture agreements, product off-take agreements, asset sales, or from borrowing facilities. In the past the Consolidated entity has utilised convertible notes and equity raisings to maintain adequate funding. The Board monitors cash resources against expenditure forecasts associated with the Company’s stated growth strategies and development plans to assess financial requirements.

(e) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments that are not traded in an active market (for example, investments in unlisted subsidiaries) is determined using valuation techniques or cost (impaired if appropriate). The Consolidated entity uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.

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3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Consolidated entity makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i) Income taxes

The Consolidated entity is subject to income taxes in Australia. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Sufficient tax losses exist to offset any deferred tax liabilities. The Consolidated entity’s ability to access existing tax losses is dependent on it demonstrating achievement of either of two income tax defined tests, being the continuity of ownership test or the same business test.

(ii) Share-based payment transactions

The Consolidated entity measures the cost of equity-settled transactions with employees 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 the Black-Scholes formula, with the assumptions detailed in Note 23. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

(iii) Estimation of useful lives of assets

The estimation of the useful lives of assets has been based on historical experience. In addition, the condition of material assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.

(iv) Impairment

The Consolidated entity assesses impairment at each reporting date by evaluating conditions specific to the Consolidated entity that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. The directors considered the impairment of the investments in subsidiaries and loans receivable from subsidiaries based on their estimate of the fair value less costs to sell of the underlying mineral tenements. The inter-company loans have no interest or repayment terms and are effectively investments in controlled entities and are reflected at cost. In accordance with the Consolidated entity’s accounting policies, inter-company loans are classified as part of the investment in controlled entities. Therefore, investments in subsidiaries fall under AASB 127 and are tested for impairment under AASB 136. AASB 136 prescribes the calculation of the recoverable amount of an asset at the higher of Value in Use or Fair Value less cost to sell. Due to a common control business combination in the previous year, assets acquired were recorded at their carrying values instead of fair value under the prescribed ‘predecessor accounting method’. The Consolidated entity’s accounting policy is to expense all exploration expenditure in the year that it is incurred. Because of the matters above, the Board considers the fair value of the investments/loans receivable in subsidiaries totalling $16,897,635 to be directly associated with the value of the underlying minerals tenements. Based on these considerations, no impairment charge has been recognised by the Parent entity.

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4. SEGMENT INFORMATION

The Consolidated entity operates one business segment: Exploration. The activities undertaken by the Exploration segment includes the exploration on tenements in Western Australia and scoping study activities on the Mulga Rocks Deposits. This activity does not generate any sales revenue.

The Consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision maker) in assessing performance and determining the allocation of resources.

Exploration

2010

$ 2009

$

Result

Segment contribution (6,096,930) (3,613,714)

Carrying amount of assets 510,546 479,802

Reconciliation to Consolidated Loss

Segment contribution (6,096,930) (3,613,714)

Corporate expenses (1,378,044) (1,527,158)

Depreciation (203,290) (188,533)

Share based remuneration (126,240) (303,003)

Financial income 333,387 225,717

Loss from continuing operations (7,471,117) (5,406,691)

Assets

Segment assets 510,546 479,802

Reconciliation to Group Assets

Segment assets 510,546 479,802

Corporate assets 43,554 54,785

Group Assets 554,100 534,587

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Consolidated

2010

$ 2009

$

5. REVENUE


333,387 225,717

6. LOSS FOR THE YEAR

The loss from ordinary activities before income tax has been determined after:

(a) Expenses

Depreciation 203,290 188,532

Operating leases 167,555 195,852

Auditor’s fees and provisions for audit of the financial report 20,980 38,070

391,825 422,454

(b) Employee benefits expense

Wages, salaries and directors' fees 1,430,583 1,655,970

Option value expense 126,240 303,003

Other employee benefits expense 217,606 223,415

1,774,429 2,182,388

7. INCOME TAX BENEFIT

(a) Income tax recognised

No income tax is payable by the consolidated entity as it recorded losses for income tax purposes for the year.

(b) Numerical reconciliation between income tax benefit and the loss before income tax

Consolidated

2010

$ 2009

$

Loss before tax (7,471,117) (5,406,691)

Income tax benefit at 30% (2007: 30%) (2,241,335) (1,622,007)

Tax effect of:

- non deductible expenses 639 16,185

- deductible capital raising expenditure (115,484) (69,689)

- deductible temporary differences 2,121 53,214

- equity based remuneration 37,872 90,901

Deferred tax asset not recognised 2,316,187 1,531,396

Income tax benefit attributable to loss from ordinary activities before tax - -

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Consolidated

2010

$ 2009

$

7. INCOME TAX BENEFIT (continued)

(c) Unrecognised deferred tax balances

Tax losses attributable to members of the tax consolidated - revenue 16,255,116 9,898,135

Potential tax (benefit) at 30% 4,876,534 2,969,440

Deferred tax liability

- other (154,810) (143,490)

Deferred tax asset not booked

Amounts recognised in profit and loss

- employee provisions 17,987 43,841

- S40-880 costs 123,167 -

- other costs 8,486 185,444

Amounts recognised in equity

- S40-880 costs 454,286 199,497

Net unrecognised deferred tax asset at 30% 5,325,650 3,254,732

The Consolidated entity entered into a tax-sharing agreement and made an election for the purposes of tax consolidation effective 1 July 2007.

Consolidated

2010 Cents

2009 Cents

8. EARNINGS PER SHARE

Basic and diluted loss per share (cents per share) (1.97) (2.09)

Loss used in the calculation of basic EPS (7,471,117) (5,406,691)

Weighted average number of shares outstanding during the year used in calculations of loss per share 379,053,074 258,850,317

Diluted earnings per share has not been disclosed as all dilutive potential ordinary shares would have an anti-dilutive effect on earnings per share in the current period.

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Consolidated

2010

$ 2009

$

9. CASH AND CASH EQUIVALENTS

Cash at bank and in hand 5,698,020 1,451,708

Short-term deposits 181,554 181,554

5,879,574 1,633,262

(a) The above figures are shown as cash and cash equivalents at the end of the financial period in the statement of cash flows. (b) Cash at bank and on hand includes interest-bearing amounts. The average rate applicable to the Consolidated entity’s balance

at 30 June 2010 was 5.39% (2.87% at 30 June 2009). (c) Included in short-term deposits is a deposit of $181,554 ($181,554 at 30 June 2009) which is secured against a bank guarantee

for a similar amount in respect of an office lease agreement of $171,554 and of environmental bonds of $10,000.

10. TRADE AND OTHER RECEIVABLES

Current

Receivables 25,914 -

Goods and services tax recoverable 113,896 52,211

Prepayments 7,480 36,562

147,290 88,773

11. FINANCIAL ASSETS Controlled entities Percentage owned

Country of

incorporation 2010

% 2009

%

Parent entity:

Energy and Minerals Australia Limited Australia

Subsidiaries of Energy and Minerals Australia Limited:

Narnoo Mining Pty Ltd Australia 100 100

Camuco Pty Ltd Australia 100 100

Gunbarrel Energy and Minerals Australia Pty Ltd Australia 100 100

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Consolidated

2010

$ 2009

$

12. PLANT AND EQUIPMENT

Office equipment

Cost 276,063 212,252

Accumulated depreciation (211,395) (154,677)

Total office equipment 64,668 57,575

Exploration equipment

Cost 773,737 614,745

Accumulated depreciation (284,305) (137,733)

Total exploration equipment 489,432 477,012

Total office and exploration equipment 554,100 534,587

Movements in the carrying amounts of each class of office and exploration equipment at the beginning and end of the current financial period is as set out below:

Office equipment

Balance at the beginning of year 57,575 100,213

Additions 63,811 41,095

Result on disposals - (317)

Depreciation expense (56,718) (83,416)

Carrying amount at the end of the year 64,668 57,575

Exploration equipment

Balance at the beginning of year 477,012 190,246

Additions 158,992 392,808

Disposals - (925)

Depreciation expense (146,572) (105,117)

Carrying amount at the end of the year 489,432 477,012

13. TRADE AND OTHER PAYABLES

Current

Trade payables and accruals 483,716 367,963

483,716 367,963

Net fair value of financial assets and liabilities

On-statement of financial position

The net fair value of financial liabilities of the Consolidated entity approximates their carrying value. The net fair value of other financial liabilities is based upon market prices.

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Consolidated

2010

$ 2009

$

14. PROVISIONS

Current

Employee leave

Opening balance 53,317 40,028

Leave provided for 76,435 97,622

Leave taken (69,794) (84,333)

Closing balance 59,958 53,317

The provision relates solely to annual leave for employees of the Group. Based on past experience, the provision is expected to be used over the forthcoming 12 months.

15. CONTRIBUTED EQUITY

387,899,923 (2009: 290,992,417) fully paid ordinary shares 26,952,667 15,405,842

Consolidated

Number $

Ordinary shares 231,740,566 15,405,842

At 1 July 2008

Conversion of Performance shares into Ordinary shares on satisfaction of performance milestones on 14 January 2009 55,501,695 -

Class A Performance Shares (Refer Note 20) 3,750,156 -

Class B Performance Shares (Refer Note 20) 290,992,417 15,405,842

Balance at 30 June 2009 231,740,566 15,405,842

At 1 July 2009 290,992,417 15,405,842

Issue of shares via placement on 20 July 2009 21,800,000 4,578,000

Conversion of Class B Performance shares on 20 July 2009 (Refer Note 20) 39,021,792 -

Issue of shares via placement on 7 September 2009 21,800,000 4,578,000

Issue of shares pursuant to a Share Purchase Plan on 17 September 2009 14,285,714 3,000,000

Share issue costs - (609,175)

Balance at 30 June 2010 387,899,923 26,952,667

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15. CONTRIBUTED EQUITY (continued)

(a) Fully paid ordinary shares

Ordinary shares participate in dividends and the proceeds on winding up of the Parent entity in proportion to the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

(b) Performance Shares

The Performance Shares are a separate class of shares that will convert into ordinary shares on a one-for-one basis in accordance with the terms outlined below. They do not entitle the holder to a dividend, to participate in a winding up of the Company, do not carry any voting rights and are not transferable.

Class A Performance Shares converted into ordinary shares on 14 January 2009 as follows:

The First Performance Milestone was met prior to the 23 May 2012 deadline. The Company delineated a JORC Code compliant inferred uranium resource of more than15,000 tonnes of U3O8 and the Class A Performance Shares converted into ordinary shares on 14 January 2009.

Class B Performance Shares converted into ordinary shares on 20 July 2009 as follows:

The Second Performance Milestone was met prior to the 23 May 2012 deadline. The Company delineated a JORC Code compliant inferred uranium resource of more than 20,000 tonnes of U3O8 converted into ordinary shares on 20 July 2009.

Class C Performance Shares will convert into ordinary shares as follows:

If the Third Performance Milestone (which ends on 23 May 2013) is met, which means:

(a) the First Performance Milestone being met by the First Performance Milestone End Date and/or the Second Performance Milestone being met by the Second Performance Milestone End Date; and

(b) the Company receiving a Pre-Feasibility Study in respect of the Tenements (or any part of one or more of the Tenements).

There are 30,042,202 Class C Performance shares outstanding.

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Consolidated

2010

$ 2009

$

16. RESERVES

Reserves 579,879 453,639

Reserves comprise the following:

Options reserve

Balance as at start of financial year 453,639 150,636

2,000,000 options issued (a) - -

6,000,000 options issued (b) 85,251 188,450

450,000 options granted (c) - 81,488

900,000 options granted (d) 32,277 33,065

450,000 options cancelled (e) - -

200,000 options cancelled (e) - -

445,000 options granted (f) 8,712 -

200,000 options cancelled (g) - -

Balance as at end of the financial year 579,879 453,639

(a) 2,000,000 class A options fully vested at 30 June 2008.

(b) 2,000,000 class B, 2,000,000 class C and 2,000,000 class D options vesting 12 months, 24 months and 36 months after ASX listing 23 May 2008. Black Scholes valuation expense to be allocated over vesting period.

(c) 400,000 class E options and 50,000 class F options vesting twelve months after ASX listing 23 May 2008. Black Scholes valuation expense to be allocated over vesting period.

(d) 900,000 employee options, 50% vesting twelve months after issue, with the remaining balance vesting a further twelve months later. Black Scholes valuation expense to be allocated over vesting period.

(e) 200,000 options cancelled on employee termination during 2009/2010 (450,000 in 2008/2009).

(f) 445,000 employee options, 50% vesting twelve months after issue, with the remaining balance vesting a further twelve months later. Black Scholes valuation expense to be allocated over vesting period.

(g) 200,000 options cancelled on employee termination during 2009/2010 (Nil in 2008/2009).

The option reserve records items recognised as expenses on valuation of employee share options. Consolidated

2010

$ 2009

$

17. ACCUMULATED LOSSES

Accumulated losses at the beginning of the financial year (14,024,139) (8,617,448)

Net loss attributable to members of the Parent entity (7,471,117) (5,406,691)

Accumulated losses at the end of the financial year (21,495,256) (14,024,139)

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Consolidated

2010

$ 2009

$

18. EXPENDITURE COMMITMENTS

(a) Operating lease commitments

Non-cancellable operating leases contracted for but not capitalised in the financial statements relating to office space and equipment

Payable - minimum lease payments

- not later than 12 months 209,159 213,247

- between 12 months and 5 years 300,766 509,925

- beyond 5 years - -

(A cash backed guarantee bond has been established for $171,554 in relation to these commitments)

509,925 723,172

(b) Expenditure commitments contracted for:

Exploration tenements

In order to maintain current rights of tenure to exploration tenements, the Group is required to outlay rentals and to meet the minimum expenditure requirements. These obligations are not provided for in the financial statements and are payable:

- not later than 12 months 1,184,580 908,914

- between 12 months and 5 years 1,118,660 1,250,740


(A cash backed guarantee bond has been established for $10,000 in relation to these commitments)

2,303,240 2,159,654

(c) Remuneration commitments

Commitments for the payment of salaries and other remuneration under long-term employment contracts in existence at the reporting date but not recognised as liabilities, payable:

- not later than 12 months 284,500 372,000

- between 12 months and 5 years 94,833 379,333


379,333 751,333

Amounts disclosed as remuneration commitments include commitments arising from the service contracts of key management personnel referred to in Section C of the Remuneration Report that are not recognised as liabilities and are not included in the key management personnel compensation reported. F

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19. RELATED PARTY TRANSACTIONS

(a) Parent entity

The ultimate parent entity and controlling party is Energy and Minerals Australia Limited.

(b) Subsidiaries

Interests in subsidiaries are set out in Note 11.

(c) Key management personnel

Disclosures relating to key management personnel are set out in the Remuneration Report and in Note 20.

(d) Transactions with related parties and outstanding balances arising

There were no sales or purchases of goods and services between subsidiaries. However the Parent entity funds the operations of its subsidiaries through interest free inter-company loans for which there are no fixed terms for repayment. In accordance with Australian Accounting Standards these loans have been reported as investments in the subsidiaries.

20. DIRECTOR AND OTHER KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Directors

The following persons were directors of the Company during the financial year: (i) Chairman

P. Golding

(ii) Executive directors C. Davis, Managing Director M. Fewster, Executive Director

(iii) Non-executive director S. Penrose

(b) Other key management personnel

The following additional persons had authority and responsibility for planning, directing and controlling the activities of the Consolidated entity, directly or indirectly, during the year:

Name Position Employer

S. McBride (from 31 July 2010)

Chief Financial Officer and Company Secretary Energy and Minerals Australia Limited

D. Humphry (to 30 July 2009)

Chief Financial Officer and Company Secretary Energy and Minerals Australia Limited

S. Storm (to 31 July 2008)

Company Secretary Consultant

(c) Key management personnel compensation Consolidated 2010

$ 2009

$

Short-term employee benefits 852,659 1,035,145

Post-employment benefits 58,507 135,626

Share-based payments 88,846 234,440

1,000,012 1,405,211

In accordance with AASB124 remuneration disclosures related to key management personnel are included in the Remuneration Report in the Directors’ Report.

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20. DIRECTOR AND OTHER KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

(d) Equity instrument disclosures relating to directors and other key management personnel

Shareholdings

The number of ordinary shares in the Company held during the year by each director and other key management personnel, including their personally related entities or associates, are set out below. There were no shares granted during the reporting period as compensation:

Balance at the start of the period

On exercise of options Acquired

Balance at the end of the period

30 June 2010 Directors P. Golding 378,639 - 71,428 (3) 450,067 S. Penrose 388,250 - 95,400 (3) 483,650 C. Davis 5,277,951 - - 5,277,951 M. Fewster 248,138,716 - 39,021,792 (2) 287,160,508

254,183,556 - 39,188,620 293,372,176

Specified executives S. McBride (from 31 July 2009) - - 15,000 15,000 D. Humphry (to 30 July 2009) 62,500 - - 62,500

62,500 - 15,000 77,500

30 June 2009 Directors P. Golding 378,639 - - 378,639 S. Penrose 388,250 - - 388,250 C. Davis 3,504,301 - 1,773,650 (1) 5,277,951 M. Fewster 190,660,515 - 57,478,201 (1) 248,138,716

194,931,705 - 59,251,851 254,183,556

Specified executives S. Fleming (to 19 May 2009) - - - - D. Humphry (to 31 July 2009) 62,500 - - 62,500 S. Storm (to 31 July 2008) 164,152 - - 164,152

226,652 - - 226,652

(1) Conversion of Performance Shares Class A and some Class B at achievement of milestones. (2) Conversion of balance of Class B Performance Shares at achievement of milestones. (3) The securities were acquired pursuant to the Company’s share purchase plan of September 2009.

The number of Performance Shares in the Company held during the year by each director and other key management personnel, including their personally related entities or associates, are set out below. There were no shares granted during the reporting period as compensation. Performance Shares are a separate class of shares that may convert into ordinary shares in accordance with the terms outlined in Note 15.

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Balance at the start of the period Converted


30 June 2010

Class B Performance Shares

M. Fewster 39,021,792 (39,021,792) (1) -

39,021,792 (39,021,792) -

Class C Performance Shares

C. Davis 542,204 - 542,204

M. Fewster 29,499,998 - 29,499,998

30,042,202 - 30,042,202

(1) Class B Performance shares milestones achieved and converted on 20 July 2009.

Option holdings

Details of options provided as remuneration and shares issued on the exercise of such options can be found in section D of the Remuneration Report.

The number of options over ordinary shares in the Company held during the reporting period by each director and key management personnel, including their personally related entities, are set out below.

Balance at the start of the period Issued Expired


Vested and exercisable at 30 June 2010

30 June 2010

Directors

P. Golding 1,000,000 71,428 (1) - 1,071,428 1,071,428

S. Penrose 1,000,000 95,400 (1) - 1,095,400 1,095,400

C. Davis 6,000,000 - - 6,000,000 4,000,000

M. Fewster - - - - -

8,000,000 166,828 - 8,166,828 6,166,828

Specified executives

S. Fleming (to 19 May 2009) 150,000 - - 150,000 100,000

D. Humphry ( to 30 July 2009) 150,000 - (150,000) - -

S. McBride ( from 31 July 2009) - 186,066 (2) - 186,066 186,066

S. McBride ( from 31 July 2009) - 150,000 - 150,000 -

300,000 336,066 (150,000) 486,066 286,086

(1) The securities were acquired pursuant to the Company’s share purchase plan of September 2009. (2) Acquired on market.

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Balance at the start of the period Issued Expired

Balance at the end of the

period

Vested and exercisable at 30 June 2009

30 June 2009

Directors

P. Golding 1,000,000 - - 1,000,000 1,000,000

S. Penrose 1,000,000 - - 1,000,000 1,000,000

C. Davis 6,000,000 - - 6,000,000 2,000,000

M. Fewster - - - - -

8,000,000 - - 8,000,000 4,000,000

Specified executives

S. Fleming (to 19 May 2009) 50,000 100,000 - 150,000 50,000

D. Humphry (to 31 July 2009) - 150,000 - 150,000 -

S. Storm (to 31 July 2008) 50,000 - - 50,000 50,000

100,000 250,000 - 350,000 100,000

Loans to directors and key management personnel

There have been no loans to directors or key management personnel.

Other transactions with director and key management personnel related entities

Consolidated

2010

$ 2009

$

The Chairman, Mr Golding, is a director of Pickup Golding Pty Ltd, which has provided tax and accounting services to Energy and Minerals Australia Limited on normal commercial terms. There was $10,593 in fees outstanding at 30 June 2010 (30 June 2009: $nil)

Amounts recognised

Tax and accounting fees 12,813 19,103

A non executive director, Mr Penrose, is a partner of Tottle Partners. Tottle Partners has provided legal services in respect of the Yarri Mining Pty Ltd actions and on other commercial matters on normal commercial terms. There was nil in fees outstanding at 30 June 2010 (30 June 2009 : $14,106 )

Amounts recognised

Legal fees 49,628 256,697

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Consolidated

2010

$ 2009

$

21. REMUNERATION OF AUDITORS

During the period the following fees were paid or payable for services provided by the auditor of the Parent entity, its related practices and non-related audit firms:

Assurance services

Audit services

Grant Thornton Audit Pty Ltd:

- audit and review of financial reports and other audit work under the Corporations Act 2001 20,980 38,070

Total remuneration for assurance services 20,980 38,070

22. RECONCILIATION OF LOSS AFTER TAX TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

(a) Reconciliation of cash Consolidated

2010

$ 2009

$

Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

Cash at bank 5,879,574 1,633,262

Reconciliation of cash flow from operations with loss after income tax

(Loss) after income tax (7,471,117) (5,406,691)

Depreciation 203,290 188,533

Share based payments expense 126,240 303,003

Stamp duty on acquisition of subsidiary - (220,500)

Loss on disposal - 1,242

(7,141,587) (5,134,413)

Changes in assets and liabilities, net of the effects of purchase of subsidiaries:

(Increase) / decrease in trade and other receivables (58,516) 48,510

Increase in trade and other payables 115,753 130,304

Increase in employee benefits 6,640 13,289

Net cash outflow from operating activities (7,077,710) (4,942,310)

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22. RECONCILIATION OF LOSS AFTER TAX TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES (continued)

(b) Non-cash financing and investing activities

The following transactions occurred which affected assets and liabilities which are not reflected in the statement of cash flows: Consolidated

2010

$ 2009

$

Share-based payments 126,240 303,003

23. SHARE BASED PAYMENTS

(a) Employee option plan

The Company has established an employee share option plan, which is also available to directors (issue of options to directors requires shareholder approval), known as the 2008 Energy and Minerals Australia Limited Employee Share Option Plan.

Set out below are summaries of options granted to employees under the Energy and Minerals Australia Limited Employee Option Plan:

Consolidated entity

Grant date Expiry date

Number Balance at start of year

Number Granted during year

Number Exercised

during year

Number Expired during year

Number Balance at end of year

Number Exercisable

at end of year

Various Various 900,000 445,000 - (400,000) 945,000 575,000

Weighted average exercise price 0.53 0.53 0.56

Fair value of employee options granted:

The fair value at grant date is determined using a Black-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.

There were two option issues during the year with the model inputs for options granted during the year ended on 30 June 2010 being:

(a) All options are granted for no consideration, have a five year life, and vest 50% twelve months after grant date, with the remaining 50% vesting a further twelve months later

(b) All options have an exercise price $0.53

(c) First options were granted on 4 December 2009 and second options granted on 6 January 2010

(d) All options expire on 30 September 2014

(e) First options have a price volatility 82%, second options 56%

(f) First options have a risk-free interest rate 5.1%, second 5.66%

(g) First options share price at grant date $0.235, second $0.217

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30 JUNE 2010


23. SHARE BASED PAYMENTS (continued)

(b) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows: Consolidated

2010

$ 2009

$

Options issued under employee option plan 126,240 303,003

24. CONTINGENT LIABILITIES

Narnoo Mining Pty Ltd, a wholly owned subsidiary, is the registered holder of exploration licences numbered E39/876 and E39/877. These tenements are the subject of plaints for forfeiture LE2/067 and LE3/067 (‘Plaints’) commenced by Yarri Mining Pty Ltd and applications for forfeiture 272272 and 272273 (‘Applications’), also commenced by Yarri Mining Pty Ltd.

The Plaints allege non-compliance with the expenditure conditions for the year ended 27 February 2006 and were lodged on 12 July 2006. The Applications allege non-compliance with the expenditure conditions for the year ended 27 February 2007 and were lodged on 8 August 2007. The Plaints will be heard by the Warden in Open Court after resolution of the Yarri Mining Pty Ltd Writ (as discussed below). The Applications are listed for mention only at the same time as the hearing of the Plaints, and the directors expect will be allocated hearing dates once the Plaints have been determined.

The Company has legal representation in respect of the Plaints and the Applications in the Warden’s Court. The directors do not believe the Plaints or Applications have a reasonable prospect of success and the Plaints and Applications will be vigorously defended by the Company.

In August 2008, Yarri Mining Pty Ltd commenced proceedings in the Supreme Court of Western Australia against Narnoo Mining Pty Ltd (a wholly owned subsidiary of the Company) and Eaglefield Holdings Pty Ltd (a company related to Company Director Mr Fewster), claiming that the grant of Exploration Licenses E39/876 and E39/877 (which contain the Mulga Rock deposits) was invalid.

The action is based on an alleged breach of the Mining Act in August 2000 when the application for the above tenements was made, which for the purpose of the proceedings was admitted, by reason that these tenements overlap in small part with tenements previously held by Narnoo Mining Pty Ltd (before it became a subsidiary of the Company).

The Honourable Justice Le Miere handed down his judgement in May 2009 dismissing all Yarri Mining Pty Ltd’s claims.

In June 2009, Yarri Mining Pty Ltd filed a Notice of Appeal from Justice Le Miere’s judgement.


On 18 August 2010, the Company was advised that unsuccessful litigant Yarri Mining Pty Ltd, having lost its case against EMA’s subsidiary Narnoo Mining Pty Ltd and having had its appeal unanimously dismissed by the Court of Appeal of the Supreme Court of Western Australia, has made an application to the High Court for special leave to appeal. If the appeal to the High Court is successful, the Company may lose all or part of its rights in and to Exploration Licences E39/876 and E39/877, which will have a material adverse impact on the Company given the value and importance of these tenements to the Company’s prospects.

There are risks and uncertainties associated with all litigation, but the directors believe that the various judgements in favour of the Company’s position demonstrates that there are reasonable and proper grounds for continuing to defend this litigation.

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25. PARENT ENTITY INFORMATION Parent Entity

2010 $

2009 $

Information relating to Energy and Minerals Australia Limited:

Current assets 6,015,537 1,672,447

Total assets 23,264,671 13,011,600

Current liabilities 375,474 421,280

Total liabilities 375,474 421,280

Issued capital 26,952,667 15,405,842

Accumulated losses (4,643,349) (3,269,161)

Options Reserve 579,879 453,639

Total shareholders’ equity 22,889,197 12,590,320

Loss of the parent entity (1,374,188) (1,792,763)

Total comprehensive income of the parent entity (1,374,188) (1,792,763)

Energy and Minerals Australia Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidation group under the Tax Consolidation Regime. Each entity in the group will continue to recognise its own current and deferred tax liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the Parent entity. The current tax liability of each group entity will then subsequently be assumed by the Parent entity. The tax consolidated group entered into a tax sharing agreement whereby each company in the group contributes to the income tax payable in proportion to their contribution to profit before tax of the tax consolidated group.

26. EVENTS OCCURRING AFTER REPORTING DATE


On 18 August 2010, the Company was advised that unsuccessful litigant Yarri Mining Pty Ltd, having lost its case against EMA’s subsidiary Narnoo Mining Pty Ltd and having had its appeal unanimously dismissed by the Court of Appeal of the Supreme Court of Western Australia, has made an application to the High Court for special leave to appeal.

EMA has no reason to consider that the outcome of this application to the High Court for special leave to appeal will be any different to the preceding actions.

The application is likely to be determined late in 2010 or in early 2011.

Other than above, there has not arisen in the interval between 30 June 2010 and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Consolidated entity, the results of those operations, or the state of affairs of the Consolidated entity, in future financial years.

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DIRECTORS’ DECLARATION

In the directors’ opinion:

(a) the financial statements and notes set out on pages 31 to 63 are in accordance with the Corporations Act 2001 including:

(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

(ii) giving a true and fair view of the Consolidated entity’s financial position as at 30 June 2010 and of its performance for the financial year ended on that date; and

(ii) complying with International Financial Reporting Standards as disclosed on Note 1; and

(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; and

(c) the audited remuneration disclosures set out on pages 22 to 28 of the Directors’ Report comply with Accounting Standard AASB 124 Related Party Disclosures and the Corporations Regulations 2001.

The directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

Phillip Golding Chairman

Dated 14 September 2010

DIRECTORS’ DECLARATIONENERGY AND MINERALS AUSTRALIA


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ADDITIONAL INFORMATIONAS AT 28 SEPTEMbER 2010

ADDITIONAL INFORMATION AS AT 28 SEPTEMBER 2010

Capital structure

The capital structure of the Company at the date of this report was:

Ordinary shares Listed options Unlisted Performance shares Class C Unlisted options

387,899,923 57,885,714 30,042,202 9,145,000

The above numbers include all restricted securities.

Distribution of listed ordinary fully paid shares Size of holding Number of shareholders Number of ordinary shares

1 - 1,000 178 26,853

1,001 - 5,000 436 1,429,617

5,001 - 10,000 248 2,087,056

10,001 - 100,000 651 22,220,096

100,001 - and over 119 362,136,301

1,632 387,899,923

The number of shareholders holding less than a marketable parcel of ordinary shares was 314.

Twenty largest shareholders of listed ordinary shares Name Ordinary shares held % of total

1 Sumico WA Pty Ltd 287,160,508 74.03%

2 National Nominees Limited 22,686,645 5.85%

3 J P Morgan Nominees Australia Limited 5,615,303 1.45%

4 Mr Christopher William Davis 5,277,951 1.36%


6 HSBC Custody Nominees Australia Limited 4,170,000 1.08%


8 Citicorp Nominees Pty Ltd 2,218,917 0.57%

9 Yan's Investments Pty Ltd 900,000 0.23%

10 Woodcross Holdings Pty Ltd 698,678 0.18%

11 Mrs Evelyn May Reid Gellatly 600,000 0.15%

12 Reneagle Pty Ltd 550,000 0.14%

13 L. A. and G. M. Fewster 515,000 0.13%

14 Mr Brian Edward Jackson 510,450 0.13%

15 Mr Thomas Harding Ransom 504,000 0.13%

16 Mrs Julie Margaret Mallam 500,000 0.13%

17 Mr Donald Stewart Anson 500,000 0.13%

18 Pennock Pty Ltd 500,000 0.13%

19 Colin Holford and P. M. Jory 500,000 0.13%

20 Mr Ricky James Maple 490,000 0.13%

341,320,163 87.99%

Voting rights of ordinary shares (ASX Code: EMA)

At a general meeting, on a show of hands, every ordinary Shareholder present in person or by proxy has one vote. On the taking of a poll, every ordinary Shareholder present in person or by proxy, and whose shares are fully paid, has one vote for each of his or her shares.


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Distribution of listed option holders Size of holding Number of option holders Number of options

1 - 1,000 2 701

1,001 - 5,000 93 284,014

5,001 - 10,000 77 559,037

10,001 - 100,000 266 8,060,007

100,001 - and over 39 48,981,955

477 57,885,714

Twenty largest holders of listed options Name Ordinary shares held % of total

1 National Nominees Limited 22,211,913 38.37%



4 Citicorp Nominees Pty Ltd 2,301,598 3.98%

5 JP Morgan Nominees Australia Limited 2,250,228 3.89%

6 Damian Paul O'Connor 1,000,000 1.73%

7 Christiaan J. Crause 976,243 1.69%

8 HSBC Custody Nominees Australia Limited 950,000 1.64%

9 Merrill Lynch Australia Nominees Pty Ltd 760,952 1.31%

10 Reuben Mounsey 691,770 1.20%

11 Christian O'Connor 684,587 1.18%

12 ABN AMRO Clearing Sydney 682,291 1.18%

13 Paul Thomson Furniture Pty Ltd 600,243 1.04%

14 Christian T. Langenheim 537,487 0.93%

15 Pin-Yun Chang 500,000 0.86%

16 Douglas Chee Y. and A. Loh 400,000 0.69%

17 Thomas Harding Ransom 383,000 0.66%

18 David Schwartz 380,000 0.66%

19 Panstyn Investments Pty Ltd 380,000 0.66%

20 M & K Korkidas Pty Ltd 375,462 0.65%

45,164,939 78.04%

Voting rights of listed options (ASX Code: EMAO)

Until exercise they confer no voting rights and no rights to subscribe for new securities in the Company. They do not entitle the holder to a dividend or to participate in a winding up of the Company. The listed options are a separate class of security that may be converted into EMA shares on a one-for-one basis once they have been exercised.


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Distribution of unlisted performance shares Size of holding Number of shareholders Number of Performance shares

100,001 - and over 2 30,042,202

2 30,042,202

Sumico (WA) Pty Ltd ATF Busani Family Trust holds 29,499,998 Class C Performance shares.

Unlisted Performance shares

Class C Performance Shares were issued at the time of the Company’s listing on the ASX and were detailed in Replacement Prospectus dated 10 April 2008.

The Class C Performance Shares are a separate class of unlisted shares that will be converted into ordinary shares on a one-for-one basis. They do not entitle the holder to a dividend, to participate in a winding up of the Company, do not carry any voting rights and are not transferable.

Class C Performance Shares will convert into ordinary shares if the Third Performance Milestone is met. The Third Performance Milestone is met if the Company receives a Pre-Feasibility Study in respect of the Tenements (or any part of one or more of the Tenements) by 23 May 2013. Additional performance hurdles required for the conversion of these Class C Performance Shares have already been achieved.

Distribution of unlisted option holders (including employee option plan): Size of holding Number of option holders Number of options

10,001 - 100,000 29 1,145,000

100,001 - and over 5 8,000,000

34 9,145,000

Unlisted options

Until exercise they confer no voting rights and no rights to subscribe for new securities in the Company. They do not entitle the holder to a dividend, to participate in a winding up of the Company and are not transferable. The unlisted options are a separate class of security that may be converted into EMA shares on a one-for-one basis once they have vested (if vesting applies) and are exercised.

Substantial shareholders Name Ordinary shares held % of total

1 Sumico (WA) Pty Ltd ATF Busani Family Trust 287,160,508 74.03%

2 Acorn Capital Limited 29,378,408 7.57%

On-market buy back

There is no current on-market buy back of the Company’s shares in place.

ADDITIONAL INFORMATION (continued)

AS AT 28 SEPTEMbER 2010


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Investor Relations

Announcements, statutory reports and the latest information on the Company’s projects are available on the Energy and Minerals Australia Limited website: www.eama.com.au

Shareholders and investors seeking available information on the Company should reference the Australian Securities Exchange website asx.com.au and search announcements under the Company’s ASX symbol EMA, reference the Company’s website at www.eama.com.au or contact the Managing Director or Company Secretary at:

Energy and Minerals Australia Limited Ground floor 25 Richardson Street West Perth WA 6005

Telephone: +61 8 9389 2700

Facsimile: +61 8 9389 2722

Email: [email protected]

Shareholder enquiries

Enquiries relating to shareholding, tax file number and notification of change of address should be directed to:

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153

Telephone: +61 8 9315 2333

Facsimile: +61 8 9315 2233


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Stephen PenroseNon-executive Director

Chris DavisManaging Director

Mike FewsterExecutive Director

Company SecretaryShane McBride

Registered and principal offi ceGround fl oor 25 Richardson Street West Perth WA 6005

Telephone: +61 8 9389 2700Facsimile: +61 8 9389 2722Email: [email protected] Website: www.eama.com.au

AuditorsGrant Thornton Audit Pty LtdLevel 110 Kings Park RoadWest Perth WA 6005

Share registrySecurity Transfer Registrars Pty Ltd770 Canning HighwayApplecross WA 6153

Telephone: +61 8 9315 2333Facsimile: +61 8 9315 2233

BankersWestpac Banking Corporation 109 St George’s TerracePerth WA 6000

Australian Securities ExchangeShares in Energy and Minerals Australia Limitedare quoted on the Australian Securities Exchange.

ASX code: EMA, EMAO

Corporate directory

BOARD OF DIRECTORS


Photograph on facing page and page 4 courtesy of Mattiske Consulting Pty Ltd.

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ENERGY AND MINERALS AUSTRALIA LIMITED

ABN 56 120 178 949

25 Richardson StreetWest Perth Western Australia 6005Telephone +61 8 9389 2700

www.eama.com.au

2010 ANNUAL REPORT

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