Financial Report

WILDHORSE ENERGY LIMITED

30 September 2011

Wildhorse Energy Ltd ('WHE' or 'the Company'), the AIM and ASX listed company focussed on developing underground coal gasification ('UCG') and uranium projects in Central Europe, has today lodged its Financial Report in line with ASX requirements .

A full statement regarding the Company's activities and progress during the year ended 30 June 2011 will be announced by the end of October 2011 in tandem with WHE's Annual Report. The report is included below, but to view a full version of the Financial Report, including pictures, please visit the Company's website at www.wildhorse.com.au.

For further information please visit www.wildhorse.com.au or contact:

DIRECTORS' REPORT

The directors present their report on the consolidated entity consisting of Wildhorse Energy Limited and its controlled entities for the year ended 30 June 2011.

All directors have held office for the whole financial year unless otherwise stated.

1. Directors' profiles

Mr Mark Hohnen | Chairman

Appointed 19 February 2010

Experience and expertise: Mr Hohnen has been involved in the mineral business since the late 1970s. He has had extensive international business experience in a wide range of industries including mining and exploration, property, investment, software and agriculture. He has held a number of directorships in both public and private companies and was founding Chairman of Cape Mentelle and Cloudy Bay wines, as well as the oil and coal company Anglo Pacific Resources Plc. During the three year period to the end of the financial year, Mr Hohnen has been a Director of the publicly listed company, Frankland River Olive Company (Jul 2006 - Mar 2009). Mr Hohnen is a member of the Company's Remuneration Committee.

Mr Matt Swinney, BBus | Managing Director

Appointed 19 February 2010

Experience and expertise: Mr Swinney has 20 years experience in business and project development, project finance and business start-up situations across a number of industries, including the development of greenfield energy projects in emerging markets. During the three year period to the end of the financial year, Mr Swinney has held no directorships in publicly listed companies.

Mr Brett Mitchell, B Ec | Executive Director

Appointed 22 April 2009

Experience and expertise: Mr Mitchell has worked for both private and publicly listed entities for the past 18 years as a corporate finance executive. Mr Mitchell holds a Bachelor of Economics degree from the University of Western Australia and has specific experience in the financial markets and resources sectors and is a member of the Australian Institute of Company Directors (ACID). Mr Mitchell is currently executive director of the ASX and AIM listed Wildhorse Energy Limited, Non-Executive Director of Quest Petroleum NL, Kilgore Oil and Gas Limited. During the three year period to the end of the financial year, Mr Mitchell has also been a director of the ASX listed company Energy Ventures Limited, Xstate Resources Ltd and Newland Resources Ltd. Mr Mitchell is a member of the Company's Audit Committee and, up until 9 August 2011, was the Company Secretary of Wildhorse Energy Limited.

Mr Ian Middlemas, B.Com, CA | Non-Executive Director

Appointed 21 January 2010

Experience and expertise: Mr Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a Bachelor of Commerce degree. He worked for a large international Chartered Accounting firm before joining the Normandy Mining Group where he was a senior group executive for approximately 10 years. He has had extensive corporate and management experience, and is currently a director with a number of publicly listed companies in the resources sector. During the three year period to the end of the financial year, Mr Middlemas has held directorships in Papillon Resources Limited (May 2011 - present), Pacific Ore Limited (April 2010 - present), Wildhorse Energy Limited (January 2010 - present), Equatorial Resources Limited (November 2009 - present), WCP Resources Limited (September 2009 - present), Global Petroleum Limited (April 2007 - present), Sovereign Metals Limited (July 2006 - present), Sierra Mining Limited (January 2006 - present), Odyssey Energy Limited (September 2005 - present), Mantra Resources Limited (September 2005 - June 2011), Aguia Resources Limited (September 2008 - August 2010), Pacific Energy Limited (June 2006 - August 2010), Indo Mines Limited (December 2006 - June 2010), Neon Energy Limited (November 1995 - June 2010), Transaction Solutions International Limited (July 2001 - February 2010) and Fusion Resources Limited (May 2002 - March 2009). Mr Middlemas is a member of both the Company's Audit Committee and the Remuneration Committee.

Mr Johan Brand | Technical Director

Appointed 23 November 2010

Experience and expertise: Mr Brand was previously an employee of Sasol Limited (Sasol) for 13 years and between the years of 2006 and 2009 held the position of UCG Business Manager. He was responsible for the establishment and management of UCG as a Sasol business unit to supply syngas to the CTL facility. He has extensive coal mining and coal gasification experience and is an internationally recognised leader in the field of UCG. Mr Brand has a degree in mechanical engineering from the University of Pretoria and an MBA from North West University, both in South Africa and is the in-country manager for the Hungarian UCG operations. During the three year period to the end of the financial year, Mr Brand has held no directorships in publicly listed companies.

Mr James Strauss | Non-Executive Director

Appointed 26 August 2010

Experience and expertise: Mr Jamie Strauss has worked for 25 years as a stockbroker in the city of London, specialising in the corporate resource arena. Having left BMO Capital Markets as Managing Director of the UK branch in 2009, Mr Strauss is currently a Director of a mining finance boutique, Strauss Partners Ltd as well as a Director of Extorre Gold Mines and Altius Minerals. Mr Strauss has raised in excess of $1bn in recent years for projects spanning the globe in both the energy and mineral world from leading institutions in North America, Australia and Europe. Mr Strauss has been a committee member of the Association of Mining Analysts for the last five years. During the three year period to the end of the financial year, Mr Strauss has held no directorships in publicly listed companies. Mr Strauss is a member of the Company's Remuneration Committee.

Dr. Konrad Wetzker | Non-Executive Director

Appointed 1 March 2011

Prof. Dr. Konrad Wetzker has an exceptionally strong understanding of, and network within, the Central European government and corporate arena with an emphasis on energy. Prof. Dr. Wetzker spent 20 years as Partner and Senior Partner of the Boston Consulting Group ('BCG'), a leading international management consultancy, and became Regional Head of Energy for BCG in Central and Eastern Europe and subsequently the founding Chairman of BCG in Hungary. During his time at BCG, Prof. Dr. Wetzker worked with multiple international companies in the region including E.ON, RWE, GDF/Suez, EDF Energy and the Hungarian Regulator. He is currently a Professor at the Corvinus University in Budapest and Chairman of the Corvinus School of Management as well as a member of a number of different boards and supervisory boards. Prof. Dr. Wetzker has strong academic and business expertise which has been reflected in almost 100 publications including the Financial Times and he has lectured at leading universities such as Harvard, Cambridge, ESSEC & Mannheim. During the three year period to the end of the financial year, Dr. Konrad Wetzker has held no directorships in publicly listed companies.

Mr Richard Pearce, BSc, MBA | Non-Executive Director

Appointed 10 November 2005

Resigned 26 August 2010

Mr János Csák | Non-Executive Director

Appointed 26 August 2010

Resigned 21 January 2011

2. Company Secretary's profile

Up until 9 August 2011, Mr Brett Mitchell (see above for profile) was the Company Secretary of the Company.

Ms Sophie Raven | Company Secretary

Appointed 9 August 2011

Experience and expertise: Ms Sophie Raven has practised corporate law for over 20 years in Australia, Chile and the Cayman Islands.  Upon graduating in 1991 from the University of Western Australia with a Bachelor of Laws degree, Ms. Raven joined Freehills, one of the largest law firms in Australia, and was admitted to practice law as a solicitor and barrister in 1993.

Ms. Raven moved to Chile in 1995 where she worked at Montt y Cia S.A., a medium-sized law firm, as the firm's foreign legal associate from 1995 to 1997 and as a partner from 1997 to 2001. Ms. Raven moved to the Cayman Islands in 2001 where she practised until early 2005 as a corporate attorney at a local law firm, specializing in the structuring of different types of investment funds and other investment vehicles, and generally advising and acting for investment fund managers, fund administrators and instructing law firms.  In June 2006, Ms. Raven joined Superfund Group Monaco SAM as legal counsel, and since January 2007 has been a non-executive director and company secretary for many of the Superfund group of investment companies' offshore funds.  In addition to the Company, Ms. Raven is currently also the Company Secretary for Transerv Energy Limited, an ASX listed company.

3. Management profiles

Mr Chris Dinsdale | Chief Financial Officer

Experience and expertise: Prior to joining Wildhorse Energy, Mr. Dinsdale was a key member of the KPMG Global Power & Utilities Centre which was based in Budapest, Hungary. While at KPMG, Mr. Dinsdale has worked in numerous large scale energy projects in both the power generation and gas sectors throughout the Central and Eastern European region and beyond. Mr. Dinsdale is highly experienced in the European energy market specialising in regulation, strategy, financial feasibility, commercial structuring and M&A.

Mr Tim Horgan | Legal & Commercial

Experience and expertise: Tim Horgan is a qualified lawyer with seventeen years legal experience both in private practice (ex Australian law firm Minter Ellison) and in commerce and mining. Tim has held senior management and director positions at major Australian, European and US public companies including the Gillette Company and Universal Coal Plc and has extensive commercial experience throughout Eastern Europe.

4. Review of operations

WHE has made significant operational progress over the past twelve months, as we remain centred on the rapid development of our UCG and uranium assets in Hungary. In tandem with this, the WHE team is committed to utilising our first mover advantage in the wider Central European region to facilitate our onward growth and ultimate fulfilment of our strategy to become a leading fuel supplier in Central Europe.

Coal gasification has been a recognised method of extracting the energy value of coal for many years, having been successfully demonstrated in countries such as South Africa since the 1950s. The gasification process, which has historically taken place above ground, is an extremely efficient one, extracting up to 80% of the energy content of coal. When compared to an energy source such as shale gas, where only approximately 35% is recoverable, the potential for UCG to play an important role in the future fuel generation of Central Europe is clearly evident.

Our primary focus remains the Mecsek Hills Gas (UCG) Project, which is the most advanced project within our portfolio. We have been conducting confirmatory drilling in order to improve our confidence in the historic data, to evaluate the resource potential of parts of the Mecsek Exploration Target and to facilitate potential UCG site selection. The entire project area has and a current Exploration Target of 1‐1.25 billion tonnes with coal quality in the range 18‐29MJ/kg1, of which 81Mt has been delineated as a JORC Inferred Resource.

The next stage of development at the Mecsek Hills Gas Project is tied-in closely with the completion of a Preliminary Feasibility Study ('PFS'), which is anticipated for release in Q1 2012. The Company has already received encouraging preliminary key findings in relation to the PFS, with initial analysis indicating the highly attractive potential economics of the project.

The PFS focuses on utilising UCG technology and process for a >400 MWt UCG project consisting of two distinct development phases (see Figure 1 for more detailed megawatt (MW) production profiles and project timeline):

·; Phase IA: Commercial Demonstration - approximately 130 MWt of syngas being supplied to a Combined Cycle Gas Turbine ('CCGT') to generate approximately 60 MWe (megawatt electrical) of which around 8 MWe shall be used internally and approximately 50 MWe shall be available for electricity sales.

·; Phase IB: Following the successful demonstration of reliable syngas production and operation of the related CCGT power plant for a period of 6 to 12 months, it is assumed that the CCGT business unit (to be held by a special purpose vehicle) is sold to a strategic partner. From this point on (Phase IB) the Company will supply the strategic partner with syngas delivered in accordance with a long term gas sales agreement. 

·; Phase II: Commercial Scale - approximately 280 MWt of additionally generated syngas sales to a strategic partner supplied in accordance with a long term gas sales agreement.

For further information regarding detailed megawatt production profiles, please see the Technical Assumptions section of the Australian Stock Exchange ('ASX') release dated 1 June 2011.

The completion of the PFS on the Mecsek Hills UCG Project will be a defining step in the Company's overall development, and as our maiden UCG project moves into its construction and production phase, the Board will be concentrating on the continued advancement of its additional UCG portfolio.

In addition, the Board will remain focussed on expanding our UCG portfolio through the identification and evaluation of additional UCG sites, in order to maximise our first mover advantage in Central Europe. Countries of particular interest to WHE include Germany, Poland and the Czech Republic, due to their overreliance on gas imports from Russia, creating a favourable pricing environment for domestic fuel suppliers, in addition to all three countries' large stranded coal resources.

An important dimension to our business model is our interest in the Mecsek Hills Uranium Project, one of Europe's largest uranium projects, which provides an immediate and clearly visible valuation basis for the Company. Progress at the Mecsek Hills Uranium Project continues to advance in conjunction with state-owned Mecsek-Öko, with whom WHE has a Co-operation Agreement. Mecsek-Öko owns the 19.6 sq km MML-E licence which is contiguous to WHE's 42.9 sq km Pécs uranium licence and together form the Mecsek Hills Uranium Project.

The Co-operation Agreement between WHE, Mecsek-Öko and state owned Mecsekérc has been designed with the express aim to restart uranium mining in the Mecsek Hills vicinity. In line with this, progress to date has focussed on attaining further information regarding the Resource potential of the project. Following the completion of further analysis, an updated total JORC compliant Inferred resource of 48.3Mt at 0.072% U3O8 for 77Mlbs of U3O8 was published on 31 January 2011, followed by a new Exploration Target for of 55 to 90 Mlbs of U3O8 with a grade range of 0.075 - 0.10% U3O8. This Resource update, in addition to the upgraded Exploration Target2, which is in addition to the Inferred Resource, underpins the high prospectivity of the Mecsek Hills Project and the significant value which it brings to the WHE stable of projects. In addition, the Co-operation Agreement with Mecsek-Öko provides further options for mine design through the provision of potential access to the down dip uranium bearing sandstone on the WHE's Pécs licence through the shallower uranium mineralisation on the contiguous MML-E licence.

With our dual focus on UCG and uranium project development, set against a backdrop of heightening concern regarding energy security and the overreliance on gas imports in Central Europe, WHE is perfectly positioned to capitalise on its first mover advantage. We have built a team of unrivalled technical and corporate experts with whom to achieve this, ensuring the onward development and growth of WHE into the next financial year and beyond as we build a leading supplier of fuel in Central Europe.

Competent Persons Statement

The geological modelling and estimation of the Exploration Target1 of 1-1.25 billion tonnes of coal at 18.8 to 29.3GJ/t for Wildhorse Energy Limited's Mecsek UCG Project was completed under the overall supervision and direction of Mr Alan Millar BSc. MSc. MAusIMM, who was a full time employee of CSA Global Pty Ltd and is a Competent Person as defined by the Australasian Code for the Reporting of Mineral Resources and Ore Reserves (JORC Code) 2004 Edition. Alan Millar consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The information in the report to which this statement is attached that relates to the Mecsek Hills Uranium Project Mineral Resource is based on information compiled by Mr Lauritz Barnes and Mr Neil Inwood. The geological modelling and estimation of the Exploration Target for the Mecsek Hills Uranium Project of 55 to 90 Mlbs of U3O8 with a grade range of 0.075 to 0.10% U3O8 was also compiled by Mr Barnes and Mr Inwood. Messrs Barnes and Inwood are both Members of The Australasian Institute of Mining and Metallurgy. Mr Barnes is an independent consultant and Mr Inwood is employed by Coffey Mining. Mr Barnes is the Competent Person responsible for the database, modelling, estimation methodology and Classification. Mr Inwood has reviewed the resource estimate and consents to take dual responsibility for the estimation methodology and Classification.

Both Messrs Barnes and Inwood and have sufficient experience which is 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 "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Barnes and Mr Inwood consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

1 The potential quantity and grade is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

2 The size and grade of the Exploration Target is conceptual in nature and it is uncertain if further exploration will result in the determination of a mineral resource. There is currently insufficient data to define a JORC compliant Mineral Resource for the Exploration Target. Mr Barnes and Mr Inwood (Competent Persons) have reviewed the historical data available for the Mecsek Hills Uranium Project and both made site visits to the area. They consider the Exploration Target to be reasonable based on the data available.

5. Principal activities

The principal activities of the consolidated entity during the course of the financial year were the evaluation of underground coal and gasification projects, and uranium deposits in Europe.

6. Company particulars

Wildhorse Energy Limited, incorporated and domiciled in Australia, is a public company limited by shares (ASX: WHE). The address of the registered office and principal place of business is:

Level 21, Allendale Square

77 St Georges Terrace

Perth, WA 6000

The Company is also listed and the Company's ordinary shares are admitted to trading on the Alternative Investment Market (AIM), the London Stock Exchange's international market for smaller growing companies (AIM: WHE).

7. Results and dividends

The Consolidated Entity reported a loss for the period of $6,777,006 (2010: $10,785,560). There was no income tax expense in either year. As at 30 June 2011 the Consolidated Entity has $13,494,340 (2010: $18,812,420) cash at bank. A detailed operational review is set out in the Directors' Report and Project Overview in this financial report.

8. Events subsequent to reporting date

AIM Listing

On 2 August 2011, the Company was listed and the Company's ordinary shares were admitted to trading on the Alternative Investment Market (AIM), the London Stock Exchange's international market for smaller growing companies.

Memorandum of Understanding with Air Liquide

On 30 August 2011, the Company announced that it had entered into a Memorandum of Understanding ("MOU") with Air Liquide, a world leader in gases for industry, health and the environment. Under the terms of the MOU, Air Liquide will evaluate the technical and commercial conditions for installation of a new state-of-the-art air separation unit on the Company's UCG site in Pécs, Hungary with the capacity to supply all the oxygen needs for the Company's UCG Project in Mecsek Hills, Hungary. The MOU is an integral part of the Company's Preliminary Feasibility Study ('PFS') currently being conducted on the project.

Czech Subsidiary

On 11 August 2011, the Company formally approved the transfer of a 5% ownership interest in the Company's Czech Republic subsidiary, Wildhorse Energy CZ s.r.o., to the Czech management team as part of their remuneration incentive structure.

Other than the above, no material matters or circumstances have arisen since the end of the financial year which have significantly affected or may affect the operations, results or state of affairs or the consolidated entity.

9. Future developments

The consolidated entity will continue to pursue its principal activities. It is not expected that the results in future years will be adversely affected by the continuation of these operations. Further disclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this information has not been disclosed in this report.

10. Environmental regulations

The consolidated entity's operations are subject to significant environmental regulation under international legislation in relation to its conduct of evaluation of uranium deposits. The directors are of the opinion that sufficient procedures and reporting processes have been established to enable the consolidated entity to meet its responsibilities and that the consolidated entity's other business segment operations are not subject to any significant environmental regulations under Australian Law and International Environmental Legislation where applicable.

11. Dividends

No dividends have been paid or declared by the Company during the financial period ended 30 June 2011.

12. Directors' meetings

The number of meetings of the Company's board of directors held during the period ended 30 June 2011, and the number of meetings attended by each director were:

* Appointed 23 November 2010

** Appointed 26 August 2010

*** Appointed 1 March 2011

**** Resigned 26 August 2010

***** Resigned 21 January 2011

Both an Audit Committee (comprising Ian Middlemas and Brett Mitchell) and a Remuneration Committee (comprising Mark Hohnen, James Strauss and Ian Middlemas) were formed by the Company on 4 October 2010.

There were no separate non-executive director or committee meetings held during the financial year.

13. Remuneration report (Audited)

This information provided in this remuneration report has been audited as a requirement of section 308(3C) of the Corporations Act 2001.

This remuneration report sets out remuneration information for the Company's non-executive directors, executive directors, other key management personnel and the five highest remunerated executives of the group and the company.

Details of Directors and Key Management Personnel

Directors

Key Management Personnel - Executives

Compensation of Key Management Personnel

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 to attract and retain experienced Directors and Executives. The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders. As a result of the evaluation and development nature of the Company's activities, the overall level of compensation does not focus on the earnings of the Company.

Compensation is provided by the Company to its Executives by way of base salary, short-term bonus, performance shares, granting employee options, superannuation and health benefits. Non-executive directors are remunerated by way of fees, granting options and statutory superannuation. The Chairman is also eligible to receive performance shares.

Given the nature of the Company's business it continues to review and redesign the overall compensation plan for all employees.

Directors' Fees

Fees payable to Non-Executive Directors were calculated according to a base of $21,900, inclusive of superannuation, with an additional fee component for services provided. Due to the growth in operations during the year, the annual fee was revised to $70,000 for the Chairman and $36,000 to other non-executive directors per annum, with an additional fee component for services provided.

The maximum directors fee pool for non-executive directors requires shareholder approval. Company needs to disclose the amount of that fee pool and the date of the AGM at which the shareholders authorised that amount.

Executive Pay

The executive pay and reward framework has three components:

·; Base pay and benefits, including superannuation and health;

·; Short-term bonus; and

·; Long-term incentives through participation in the Company Employee Option Plan and performance shares.

The combination of these components comprises each executive's total remuneration.

Base Pay

Structured as a total employment cost package which is delivered as a combination of cash, superannuation and, in the United States of America, health benefits.

A competitive base pay is calculated on a total cost basis and includes any fringe benefits tax (FBT) charges related to employee benefits, which comprises the fixed component of pay and rewards, necessary to attract and retain talented, qualified and effective executives.

Base pay is determined in accordance with both market standards and on the advice of external consultants such as Patterson and Associates, London when considered appropriate.

Performance- linked compensation

The consolidated entity currently has no fixed formula for the cash component of performance based remuneration built into director or executive remuneration packages. Compensation levels are reviewed by the Board through a process that considers individual and overall performance of the consolidated entity. There is no direct link between shareholder wealth and performance linked compensation.

The Remuneration Committee of the Company is responsible for setting the remuneration packages of individual directors. This includes agreeing, with the Board, the framework for remuneration of all executive directors, the Company Secretary and such other members of the executive management of the Company as it is designated to consider.

The Remuneration Committee is, furthermore, responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and share options.

The Remuneration Committee agreed to pay Johan Brand 50% of his salary payable immediately. The other 50% payable upon successful completion of the Worley Parsons independent engineer review. The success of the review is to be determined at the discretion of the Remuneration Committee. The Worley Parsons review is expected to be completed in approximately 3 weeks.

Company Employee Option Plan

The consolidated entity believes encouraging its executives and other employees to become shareholders is a significant method of aligning their interests with those of shareholders. Equity participation is accomplished through the Company's employee option plan. Options are granted to employees taking into account a number of factors including the amount and term of options previously granted, base salary, performance and competitive factors.

There is no specific performance criteria required to be met to issue options. The issue of options is at the discretion of the Board.

There are no performance criteria, other than continued employment, required to be met to exercise options.

The consolidated entity does not currently have a policy to limit risk associated with the option holdings or other short term incentives of key management personnel.

Information on the Employee Share Option Plan is set out under Note 9 Share Based Payments. During the financial year, a number of options were granted to attract and retain high calibre executives.

Consequences of performance on shareholder wealth

In considering the consolidated entity's performance and benefits for shareholders wealth, the directors regard the following indices in respect of the current financial year and previous financial years:

Although market capitalisation and increase/decrease in share price  are monitored by the directors, they do not form targets in setting short term incentives and long term incentives. The remuneration policy has been tailored to increase goal congruence between shareholders and directors and executives. Currently, this is facilitated through the issue of options to directors and executives to encourage the alignment of personal and shareholder interests. There are currently no financial targets set for the performance related remuneration.

The reduction in share price and associated decline in capitalisation are due primarily to market factors associated with the global economic conditions and uranium industry which are outside the direct control of management.

i. Details of remuneration

Compensation of Key Management Personnel for the year ended 30 June 2011

* János Csák was appointed on 26 August 2010 and resigned on 21 January 2011.

** Richard Pearce was appointed on 10 November 2005 and resigned on 26 August 2010.

*** Malcolm Shannon changed from being an employee to consultant of the Company on 1 November 2010.

**** Sophie Raven appointed on 9 August 2011.

***** Andràs Barabàs resigned 31 December 2010.

Compensation of Key Management Personnel for the year ended 30 June 2010

* Craig Burton resigned 19 February 2010

** Henry Neugebauer resigned 1 September 2009

ii. Contracts for Services

On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the terms, including compensation, relevant to the office of the director.

Remuneration and other terms of employment for the Executive Directors and other key management personnel are also formalised in service agreements. Each of these agreements provide for the provision of bonuses, other benefits including health and superannuation, and participation in the Company Employee Option Plan. Other major provisions of the agreement relating to remuneration are set out below (expressed in AUD unless otherwise stated).

iii. Analysis of options and rights over equity instruments granted as compensation to key management personnel

* No options for key management personnel that were either previously issued or that vested during the year were exercised.

iv. Options and rights over equity instruments granted as compensation

¹ János Csák was appointed on 26 August 2010 and resigned on 21 January 2011.

The assessed fair value at grant date of options granted to individuals is allocated equally over the period from grant date to vesting date. The fair value at grant date is independently determined using the binomial or black scholes method of valuing options that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The following table lists the inputs to the model used for the year ended 30 June 2011

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

v. Analysis of movements in share options

Further details relating to options are set out below.

* Resigned 21 January 2011

** Resigned 26 August 2010

A = The value of options granted in the year is the fair value of the options calculated at grant date using the

Black Scholes option pricing model. The value of the options granted is included in the above table. This

amount is allocated to remuneration over the period.

B = The rate of options exercised during the year is allocated as the market price of shares of the Company as at close of trading on the date the options were exercised after deducting the price paid to exercise the option.

C = The value of the options that lapsed during the year represents the benefit foregone and is calculated at the date of the option lapsed using the Black Scholes option-pricing model assuming the performance criteria had been achieved.

vi. Shareholdings of Key Management Personnel (Consolidated Entity)

Details of equity instruments (other than options and rights) held directly, indirectly or beneficially by key management personnel and their related parties are as follows:

Shares held in Wildhorse Energy Ltd

* Held by Vynben Pty Ltd

** Held by Bluesail Holdings Pty Ltd

*** Held by Arredo Pty Ltd

**** Held by Joint Blast Extractive Metallurgy (Pty) Ltd

***** Resigned 21 January 2011

****** Resigned 26 August 2010, therefore holding is excluded from Remuneration Report as Richard Pearce is no longer a director of the Company.

vii. Options Holdings of Key Management Personnel (Consolidated Entity)

Details of options and rights held directly, indirectly or beneficially by key management personnel and their related parties are as follows:

¹ Resigned 21 January 2011 therefore holding is excluded from Remuneration Report as János Csák is no longer a director of the Company.

² Resigned 26 August 2010, therefore holding is excluded from Remuneration Report as Richard Pearce is no

longer a director of the Company.

³ Not considered Key Management Personnel for the financial year ended 30 June 2011

⁴ Not considered Key Management Personnel for the financial year ended 30 June 2011

** As at the date of this Report.

End of audited Remuneration Report

14. Shares under option

Unissued ordinary shares of the Company under option at the date of this report are as follows:

No option holder has any right under the options to participate in any other share issue of the Company or of any other entity. During the year 13,235 options were exercised on 14 March 2011, the options were granted on 1 June 2010 at an issue price of 34 cents. (2010: 1,720,000).

Insurance of officers

During the year the Company paid a premium to insure directors and officers of the Company and its subsidiaries.

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. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or 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.

15. Non-audit services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Company and/or the consolidated entity are important.

Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) or associated entities for non- audit services are provided below.

The Board of Directors has considered the position and is satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

·; all non-audit services have been reviewed by the directors to ensure they do not impact the impartiality and objectivity of the auditor

·; none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

During the year BDO Corporate Finance and BDO LLP received a fee of $66,807 for the provision of tax services and AIM listing advisory services.

Auditors' independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 24.

16. Proceedings on behalf of the Company

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

The Directors' Report is made in accordance with a resolution of the Board.

Signed in accordance with a resolution of the directors:

AUDITOR'S INDEPENDENCE DECLARATION

DIRECTOR'S DECLARATION

In the opinion of the directors of Wildhorse Energy Limited:

a The consolidated financial statements and notes set out below , are in accordance with the Corporations Act 2001 and:

i give a true and fair view of the consolidated entity's financial position as at 30 June 2011 and of its performance, for the financial year ended on that date, and

ii complying with Accounting Standards and the Corporations Regulations 2001.

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

c The remuneration disclosures included in the directors' report (as part of the audited Remuneration Report); for the year ended 30 June 2011, comply with section 300A of the Corporations Act 2001.

d The directors have been given the declarations required to be made in accordance with Section 295A of the Corporations Act 2001.

e The consolidated entity has included in the notes to the financial statement an explicitly and unreserved statement of compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of the directors:

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2011

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

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2011

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

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2011

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

STATEMENT OF CASH FLOW

FOR THE YEAR ENDED 30 JUNE 2011

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED30 JUNE 2011

1. Summary of significant accounting policies

Wildhorse Energy Limited is a company domiciled in Australia.

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 years presented, unless otherwise stated. The financial statement report includes Wildhorse Energy Limited and its subsidiaries as the consolidated entity. Separate financial statements for Wildhorse Energy Limited, as an individual entity, are no longer required as a consequence of a change to the Corporation Act. Financial information for Wildhorse Energy Limited as an individual entity is included in Note 29.

(a) Basis of Preparation

These general purpose financial statements have been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.

Compliance with IFRSs

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards. Compliance with AIFRS's ensures that the financial statements and notes of Wildhorse Energy Limited comply with International Financial Reporting Standards (IFRSs).

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 certain classes of property, plant and equipment.

Critical accounting estimates

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity accounting policies (note 3).

Financial Position

The consolidated financial statements have been prepared on a going concern basis, which assumes that the consolidated entity will be able to realise assets and extinguish liabilities in the ordinary course of business. The consolidated entity has recognised a net loss after tax of $6,777,006 for the year ended 30 June 2011.

As at 30 June 2011, the consolidated entity had cash and cash equivalents of $13,494,340 (2010: $18,812,420). The Consolidated entity's cash flow forecasts show that the group will have adequate cash resources to fund operations until 30 June 2012.

In order to continue funding the consolidated entity's operations beyond 30 June 2012, the company will need to raise additional capital in the future. Based on previously successfully completed capital raisings, the Directors are confident that sufficient funds will be obtained to meet the consolidated entity's obligations.

Management acknowledge that uncertainty remains over the ability of the consolidated entity to meet its funding requirements. However, as described above, management has a reasonable expectation that the consolidated entity has adequate resources to continue in operational existence for the foreseeable future. If for any reason the consolidated entity is unable to continue as a going concern, it would impact on the consolidated entity's ability to realise at their recognised values, in particular intangible assets and to extinguish liabilities in the normal course of business at the amounts stated in the consolidated financial statements.

(b) Principles of Consolidation Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Wildhorse Energy Limited (Company) as at 30 June 2011 and the results of all subsidiaries for the year then ended. Wildhorse Energy Limited and its subsidiaries together are referred to in this financial report as the consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which the consolidated entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the consolidated entity controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the consolidated entity.

Intercompany transactions, balances and unrealised gains on transactions between consolidated entity companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income and statement of financial posit respectively.

(c) Business Combinations

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the consolidated entity. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the consolidated entity takes into consideration potential voting rights that currently are exercisable.

Acquisitions on or after 1 July 2009

For acquisitions on or after 1 July 2009, the consolidated entity measures goodwill at the acquisition date as:

·; The fair value of the consideration transferred; plus

·; The recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less

·; The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the consolidated entity incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree's employees (acquiree's awards) and relate to past services, than all or a portion of the amount of the acquirer's replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree's awards and the extent to which the replacement awards relate to past and/or future service.

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.

(d) Segment Reporting

An operating segment is a component of the consolidated entity that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the consolidated entity's other components. All operating segments operating results are viewed regularly by the Managing Director to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. The consolidated entity's segments are reportable in a manner that is consistent with the internal reporting provided to the chief operating decision maker, which has been identified as Hungary Coal, Hungary Uranium, United States of America and Central Europe.

Segment results that are reported to the Managing Director who is the Chief Operating Decision maker include items directly attributed to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly, head office expenses.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, exploration and evaluation expenditure, and intangible assets other than goodwill.

(e) Foreign Currency Translation

Functional and presentation currency

Items included in the financial statements of the consolidated entity are measured using the currency of the primary economic environment in which the Company operates ('the functional currency'). The financial statements are presented in Australian dollars, which is Wildhorse Energy Limited's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

 Consolidated entity companies

The results and financial position of the consolidated entity (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

·; assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

·; income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions) and all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders' equity. When a foreign operation is sold or borrowings repaid a proportionate share of such exchange differences are recognised in the statement of comprehensive income as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(f) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and tax paid. Revenue is recognised for the major business activities as follows:

Interest Income

Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired, the consolidated entity reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate.

Services Income

Services income relates to income generated from office sharing arrangements in both Australia and Hungary. Services income is recognised in the accounting period in which the services are rendered.

(g) 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 applicable income tax rate for each jurisdiction adjusted by changed in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company's subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probably 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.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances related to the same taxation authority. Current tax assets and tax liabilities are offset when the entity has a legally enforceable right to offset and intends either to settle on a new basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, respectively. In this case, the tax is also recognised in after the comprehensive income, or directly in equity respectively.

Wildhorse Energy Limited and its wholly-owned Australian controlled entities have not implemented the tax consolidation legislation.

(h) Leases

The leases of property, plant and equipment where the consolidated entity has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other long term payables. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset's useful life and the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.

(i) Acquisition of Assets

The purchase method of accounting is used to account for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the entity's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the statement of comprehensive income, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the Company's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

(j) Impairment of Assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

Cash and Cash Equivalents

For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities 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.

(k) Trade Receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are due for settlement no more than 60 days from the date of recognition.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the statement of comprehensive statement.

(l) Investments and Other Financial Assets

The Company's classification of its investments depends on the purpose for which the investments were acquired.

Management determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date.

Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the statement of financial position.

Purchases and sales of investments are recognised on trade-date, the date on which the consolidated entity commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.

Available-for-sale financial assets are subsequently carried at fair value. 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. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the statement of comprehensive income as gains and losses from investment securities.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the consolidated entity establishes fair value by using valuation techniques, instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances.

The Company assesses at each balance 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 of comprehensive income.

(m) 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 traded in active markets is based on quoted market prices at the statement of financial position date. The quoted market price used for financial assets held by the consolidated entity is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The consolidated entity uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the consolidated entity for similar financial instruments.

(n) Plant and Equipment

Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Depreciation on plant and equipment assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:

Plant and equipment 2 - 6 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position 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.

(o) Exploration and Evaluation Expenditure

Exploration, evaluation and development expenditure incurred may be accumulated in respect of each identifiable area of interest.

These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which: such costs are expected to be recouped through successful development and exploitation or from sale of the area; or

(i) exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing.

Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit in the year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Notwithstanding the fact that a decision not to abandon an area of interest has been made, based on the above, the exploration and evaluation expenditure in relation to an area may still be written off if considered appropriate to do so.

(p) Intangible Assets