Mantle Mining by huanghengdong

VIEWS: 23 PAGES: 76

									Mantle Mining
 Annual Report
       2011
Contents



Corporate Directory                              1

Letter from Managing Director                    2

Directors’ Report                                4

Tenement Schedule                                39

Corporate Governance Statement                   40

Consolidated Statement of Comprehensive Income   44

Consolidated Statement of Financial Position     45

Consolidated Statement of Cash Flows             46

Consolidated Statement of Changes in Equity      47

Notes to the Financial Statements                48

Directors’ Declaration                           68

Independent Auditor’s Report                     69

Auditor’s Independence Declaration               71

Shareholder Information                          72
Corporate DireCtory



Directors                                       Solicitors to the Company
Mr Martin Blakeman     Non-Executive            Steinepreis Paganin
                       Chairman                 Level 4, The Read Buildings
                                                16 Milligan Street
Mr Ian Kraemer         Managing Director
                                                Perth WA 6000
Mr Stephen de Belle    Non-Executive Director
                                                Share Registry
Mr Peter Anderton      Non-Executive Director
                                                Security Transfer Registrars
                                                Alexandria House
Company Secretary
                                                Suite 1
Mr Winton Willesee                              770 Canning Highway
                                                Applecross WA 6153
Principal Place of Business
and Registered Office                           Tel: +61 8 9315 2333
                                                Fax: +61 8 9315 2233
Suite 25
145 Stirling Highway
Nedlands WA 6009
                                                Auditors
                                                RSM Bird Cameron Partners
Contact Details                                 8 St George’s Terrace
                                                Perth WA 6000
Website: www.mantlemining.com
Email: admin@mantlemining.com
Tel: +61 8 9389 3130
                                                Stock Exchange
Fax: +61 8 9389 3199                            Australian Securities Exchange
                                                2 The Esplanade
PO Box 3144                                     Perth WA 6000
Nedlands WA 6009
                                                ASX Code: MNM




                                                  Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                        1
    Letter from the
    managing DireCtor


    Dear fellow shareholders,

    During financial year 2010/11, Mantle continued its re-emergence from the slowdown affected by economic
    conditions in prior years. Corporate overheads were maintained at low levels yet exploration work was
    progressed in key commodity areas.

    New funds raised with the support of existing and new shareholders were applied to tenement preparation and
    exploration drilling activities. Access to priority tenements were advanced via applications, renewals, native title
    agreements, and a Supreme Court action.

    At the Haunted Stream Gold Project in Victoria, the Company undertook a Down Hole Electro-Magnetic
    (DHEM) survey in drill hole HSD12 at Anomaly 4. The survey tested for conductors indicative of accumulations
    of mineralisation. The results from this survey are being reviewed and incorporated into planning for activities
    during the next field season. A Native Title access agreement was executed allowing the Company to be
    granted its first small mining licence on the Haunted Stream licence area. A second small mining licence
    within Haunted Stream was relinquished by others and applied for by Mantle. Agreement in Principle was also
    reached, and drafting begun, for native title access agreements for three large exploration licence applications
    in the area all highly prospective for base and precious metals.

    The Granite Castle Gold and Silver Project in Queensland contains a JORC Code Compliant (Measured,
    Indicated and Inferred) Gold and Silver Resource1. Mineralisation occurs in a single sub-vertical, 600m, long
    shear. An additional 7km of sub-parallel shears have been located and the Company is planning a shallow
    drilling program on the next most prospective shears. Toward the end of the year, after the extended northern
    wet season, Company field crews began to ramp up site works ahead of a drilling program targeting the next
    best shears. This program is targeted for September/October, drill rig availability and weather dependent.

    The Charters Towers Gold Project in Queensland contains a JORC Code Compliant (Inferred) Gold Resource2.
    Work continued on updating the geological model to incorporate an additional 51 drill holes drilled in prior
    years. Review work continued on potential of the old mines to the west of the main historic underground mine
    area at Charters Towers as they appear to have mined extensions of the Day Dawn reef structure.

    At the Trafford Coal and Coal Bed Methane Project in Queensland, the tenements contain a large Exploration
    Target3 of black coal in a historic deposit. Company progress on access discussions with the traditional
    custodians towards signing of an Indigenous Land Use Agreement (ILUA) were delayed by the advent of a
    Third Party Claim. Proceedings were instigated in the Supreme Court to enforce an agreement for the transfer
    of the exploration permits from Calcifer Industrial Minerals Pty Ltd. Although these proceedings have incurred a
    succession of court process delays the Company remains confident of a successful outcome.

    At the Bacchus Marsh Coal Project in Victoria, the Company was granted an exploration licence containing
    a large Exploration Target4 of brown coal in a historic deposit. A Pre Joint Venture Agreement (Pre JVA) has
    been executed with Exergen Pty Ltd, a company that has developed a breakthrough clean coal technology that
    removes the water from brown coal. A 50/50% Exploration and Mine Development Joint Venture Agreement is
    under development. A bulk sample of Bacchus Marsh coal was successfully processed at Exergen’s pilot plant
    and Mantle has since received approval from the relevant authority to progress a 15 hole drill program. The
    program has been designed to deliver the Company’s maiden JORC Compliant Coal Resource.

    At the Barkly Phosphate Project in the Northern Territory, the Company completed its second broad spaced
    scout drilling program. A follow-up program is being planned to begin closer spaced in fill and step out drilling
    in the north-western tenements where historic and company drilling has located phosphatic mineralisation.
    The southern tenements, which were sufficiently tested in previous programs have been surrendered.

    Following a strategic decision to exit the Queensland uranium tenement portfolio the Burke Uranium Project
    tenements (proposed for grant) and the Julia Creek Uranium Project tenements (previously sufficiently tested)
    have been relinquished. The Clarke River Uranium Project tenements are now being reviewed for their base
    and precious metals prospectivity. The prior Joint Venture Manager at Mt Brown has withdrawn.


    Mantle Mining Corporation Ltd | Annual Repor t 2011
2
Business development activities continued to progress during the year, with a large number of opportunities
reviewed. Most were considered of no accretive value and were not pursued. Strategically targeted opportunities
continue to be developed, especially focussed on the gold and coal sectors. Review of east coast Australian
coal basins led to the successful application for highly prospective tenements at Texas in south-east Queensland
and adjacent to the Latrobe Valley in Victoria’s Gippsland Basin. Further opportunities in the coal sector are
under review.

Overall, the Board considers Mantle to be well positioned, considering the negative economic impact endured
in prior years. The Company has refocussed its efforts on higher priority projects containing either gold or coal
deposits that can potentially be progressed more effectively than green field exploration areas.

Substantial upside resides in the two gold deposits at Granite Castle and Charters Towers (Great Britain) and
the two coal deposits at Trafford (Mt Mulligan) and Bacchus Marsh. Haunted Stream is also considered a high
priority exploration area for gold and base metals deposits.

By a strict and continued focus on cash management and a focussed progression of exploration on key
deposits, the Company is confident that the 2011/12 financial year will yield accelerated recovery in the
Company’s overall market capitalisation.

With your continued support, the Board looks forward to continuing the pursuit we began four years ago
to develop Mantle into an emerging mining company with quality resources in key, strategically positioned
mineral commodities.



Best regards




                                       	
  

Ian Kraemer
Managing Director
Mantle Mining Corporation Limited




1, 2, 3 & 4: Footnotes denote JORC Code Compliancy Statements listed under relevant sections at the end of this
operations review.




                                                                 Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                       3
    DireCtors’ report


    Your Directors present their report for the year ended 30 June 2011.


    DireCtors
    Mr Martin Blakeman – Non-Executive Chairman
    Mr Ian Kraemer – Managing Director
    Mr Stephen de Belle – Non-Executive Director
    Mr Peter Anderton – Non-Executive Director

    All Directors have been in office since the start of the financial period to the date of this report unless
    otherwise stated.

    The names and details of the Directors in office at any time during or since the end of the year are as follows.

    Mr Martin Blakeman – Non-Executive Chairman
    Qualifications: BEc.
    Appointed 26 Nov 2003

    Martin completed his tertiary studies at the University of WA graduating with a Bachelor of Economics in
    1976. Since graduation Martin has applied his skills in management and economics to the rural and mining
    industries. Martin’s professional career in the mining industry has included over 25 years’ experience at board
    level in junior resource companies, commencing with his appointment in 1983 as a founding Director of
    Harmark Pty Ltd (the founder and former controlling shareholder of Forrestania Gold NL, one of Australia’s
    more successful resource investment companies of the time), and Kagara Ltd (now Kagara Zinc Ltd), retiring
    from Harmark and Kagara in 1999 after 16 years’ continuous service.

    Martin promoted, and was appointed to the Board as a founding Director, of Metex Resources NL (now Carbon
    Energy Limited) in September 1992. Over a 4 year period to June 1996, he held the position as Manager
    Corporate at Metex, forming an integral part of that company’s executive management team.

    In 2003, Martin incorporated and became a founding Director of Mantle Mining Corporation Ltd. He has
    overseen the strategic decisions of the Company including the acquisition of a substantial tenement package in
    the eastern highlands of Victoria and central north Queensland, and its successful 2006 listing on ASX. Martin
    oversaw the acquisition of the Mt Mulligan project in 2007 and remains Chairman of the Company.

    Over the past three years Martin has held directorships with the following ASX-listed companies:

    Company                                         Commenced                                               Ceased
    Newera Resources Limited                         1 Mar 2006                                                   -

    Mr Ian Kraemer – Managing Director
    Qualifications: BSc MSc FAusIMM
    Appointed 4 Feb 2008

    Ian has an extensive background in the resources sector with over 20 years’ professional experience in
    the exploration, acquisition, construction and operation of diverse mining projects in the coal, gold and
    nickel sectors.

    Prior to involvement in Mantle Mining, Ian worked for 8 years as Business Development Manager with Thiess.
    In that capacity he was responsible for acquisitions and for underground mining project design, development
    and operational takeover. Most recently he held the position of Project Director responsible for the development
    and commercialisation of clean coal technology company Exergen, reporting directly to the Chairman of Thiess.

    Ian first commenced his mining career in 1980 as a cadet Coal Mine Manager in Queensland. During the
    following 8 years he held various line management positions culminating in the appointment of Relieving


    Mantle Mining Corporation Ltd | Annual Repor t 2011
4
Underground Coal Mine Manager at Moura. In 1987, Ian left Moura and relocated to the USA where
he completed Bachelor’s and Master’s Degrees in Mining Engineering at Columbia University in NYC.
He then accepted the position of Director Operational & Strategic Planning for Pittston Coal & Minerals
(15 coal mines in USA and 2 metal mines in Australia) followed by a transfer back to Australia as Director
Australasian Business Development.

Ian holds First and Second Class Coal Mine Manager’s Certificates in QLD and in NSW.

Over the past three years Ian has not held directorships with any ASX-listed companies other than Mantle
Mining Corporation Ltd.

Mr Stephen de Belle – Non-Executive Director
Qualifications: MSc MTCP BA
Appointed 3 Jul 2006

Stephen has an extensive background in resources development, including the start-up of new companies
and projects. In 2005-06 he assisted with the preparation for and listing on the London Alternative Investment
Market of Finders Resources (gold-silver and copper projects currently being developed) and prior to that he was
founding Managing Director of Midwest Corporation Ltd (ASX listed iron ore producer and project developer).

Prior to his work with Midwest, Stephen was a Principal of Kyle Associates (consulting firm), Chairman of
Australian Superannuation Nominees Ltd (a specialist DIY super trustee company), Director of Xylogy Pty
Ltd (software for project management and governance), Head of Resources Finance, ABN AMRO Australia,
Director of Structured Finance, Barclays Bank and had positions with BZW Australia, ANZ Capital Markets,
ANZ McCaughan, Capel Court and CSR Minerals.

Stephen has been closely involved with the start-up and operation of iron ore, coal, base metals, gold and
petroleum projects and companies, and has particular expertise in the development and financing of projects in
the resources and infrastructure sectors both in Australia and overseas.

Over the past three years Stephen has held directorships with the following ASX-listed companies:

Company                                                           Commenced                                Ceased
Midwest Corporation Limited                                       10 Apr 2003                         29 Jan 2009
Finders Resources Limited                                        27 Nov 2004                                       -

Mr Peter R Anderton – Non-Executive Director
Qualifications: BSc MAusIMM
Appointed 26 Nov 2003

Peter has over 30 years’ professional geological experience including 12 years with major mining companies.
He is a founding Director of Mantle Mining Corporation Ltd.

Peter has specialised in gold and base metals mining and exploration, but also has significant experience in tin
and nickel. He has held Senior Geologist positions at a number of mines as well as the Chief Geologist position
at Tindals Gold Mine. Since 1988, he has been contracting and consulting to the mining and exploration
industry in a senior capacity. Companies with which he has had extensive involvement include WMC, MPI,
Normandy and KCGM.

Over the past three years Peter has not held directorships with any ASX-listed companies other than Mantle
Mining Corporation Ltd.

Interests in the shares and options of the Company
As at the date of this report, the interests of the directors in the shares and options of Mantle Mining
Corporation Ltd were:

                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                       5
    DireCtors’ report



    Name                                Number of ordinary shares             Number of options over ordinary shares
    Mr M Blakeman                                       22,228,028                                                       -
    Mr I Kraemer                                         1,263,696                                           3,000,000
    Mr S de Belle                                        6,592,196                                                       -
    Mr P Anderton                                        4,412,259                                                       -


    Company seCretary
    Mr Winton Willesee
    Qualifications: BBus., DipEd., PGDipBus., MCom., FFin, CPA, MAICD, ACIS

    Winton is an experienced Director and Company Secretary in the small capitalisation sector of ASX.
    Mr Willesee brings a broad range of experience in company administration, corporate governance, company
    public listings, merger and acquisition transactions, reconstructions and corporate finance from his background
    with listed and unlisted public companies.

    Winton has a Master of Commerce, Post-Graduate Diploma in Business (Economics and Finance),
    a Graduate Diploma of Applied Corporate Governance, a Diploma in Education and a Bachelor of Business.
    Winton is a Fellow of the Financial Services Institute of Australasia and a Member of CPA Australia and a
    Chartered Secretary.

    As well as Mantle Mining Corporation Limited, Winton is currently the Chairman of Cove Resources Limited,
    Bioprospect Limited and Mining Group Limited, a director of Base Resources Limited, Coretrack Limited,
    Newera Resources Limited and Otis Energy Limited and the Company Secretary of Base Resources Limited,
    Otis Energy Limited, Greenvale Mining NL, and is Joint Company Secretary of Tawana Resources NL along with
    a number of private and unlisted public companies.


    operating resuLts
    The loss of the consolidated entity for the year ended 30 June 2011 after providing for income tax amounted to
    $933,340 (2010: $660,503).


    finanCiaL position
    The net assets of the Company are $10,463,287 as at 30 June 2011 (2010: $9,013,486).


    prinCipaL aCtivities anD
    signifiCant Changes in affairs
    Mantle Mining Corporation Ltd’s principal activities are to acquire mineral tenements and to explore for
    deposits of precious metals (gold and silver), base metals (copper, lead, nickel and zinc), fossil fuels (coal and
    coal bed methane) and energy minerals (uranium and phosphate).

    The Company’s intention is to locate economically developable deposits and progress them into operation.
    The Company ensures its activities are carried out in an environmentally, socially and financially responsible
    manner to the ultimate benefit of its shareholders. During the period there have been no significant changes
    in the affairs of the Company.




    Mantle Mining Corporation Ltd | Annual Repor t 2011
6
Review of operations




Figure 1: Mantle Mining’ project locations




                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                   7
           DireCtors’ report


           Granite Castle Gold and Silver Project
           The Granite Castle Project is located in North Queensland, 165km west of Charters Towers and 90km north of
           Hughenden (Figure 1).




    	
  
           Figure 2: Granite Castle project tenements on regional geology.

           The project consists of two granted exploration permits; EPM 14179 (Range Creek) and EPM 15527
           (Oaky Creek) (Figure 2).




           Mantle Mining Corporation Ltd | Annual Repor t 2011
8
Figure 3: Granite Castle JORC Compliant Resource model (Red = 3-5g/t, Pink = 5-10g/t Au).

EPM 14179 (Range Creek) contains the Granite Castle JORC Code Compliant (Measured, Indicated and
Inferred) gold and silver Resource1 hosted solely in the single Granite Castle shear. The geologic model of the
Granite Castle resource base is relatively simple with the majority of the resource extending from surface, sub-
vertically to 150m depth (Figure 3).

The JORC resource occupies 600m of strike length of the Granite Castle shear however the shear itself can
be traced on surface for over 1km to the west and 200m east from the edges of the resource. In addition, the
project area contains a large swarm of gold-silver mineralised shears with over 7km identified to date. These
additional shears are exposed at surface, in close proximity to and semi parallel to the existing Granite Castle
shear (Figure 4).

Where drilled, holes have confirmed the presence of shear-hosted gold mineralisation below these surface
outcrops. It is apparent that there is excellent potential to deliver a major expansion of the existing resource
base at Granite Castle by targeting drilling on multiple mineralised shears at shallow depths up to 100m
below surface.

During the year site reconnaissance work was undertaken and preparations initiated for a drill program to test
the next most prospective shears. Figure 4 shows the proposed locations of in-fill and step-out holes along the
Coronation shear zone. Holes are designed to nominal 80m spacing. This spacing will allow for targeted infill
drilling in a follow-up program in the new-year at nominal 40m spacing which is the standard for the Granite
Castle shear JORC Inferred Resource base.




                                                              Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                    9
     DireCtors’ report




     Figure 4: JORC resource base, mineralised shears (green), best drill results and proposed drilling areas.




     Figure 5: Granite Castle project interpreted lineaments and shear locations on regional magnetics.



     Mantle Mining Corporation Ltd | Annual Repor t 2011
10
EPM 15527 (Oaky Creek) is contiguous with and surrounds the northern, western and southern boundaries of
Range Creek (Figure 5).

Literary searches found wide, low grade, gold intercepts from previous drilling at Tag Alley. Although low grade,
the intervals imply a significant alteration system.

The Granite Castle area shear swarm sits near a site of structural complexity on the SE side of what appears
to be a major circular intrusive feature. Tag Alley appears to sit to the NW of the same circular intrusive.
Lineament interpretation from regional aeromagnetics has been completed over the entire Granite Castle
project area and Tag Alley appears to sit along strike on the same lineaments as the Granite Castle
shear swarm.

Previous field reconnaissance identified several large areas of altered granite and pyritic tuff breccia systems
in areas approximately 1 km to the north, 2 kms to the west and 3 kms to the south of Tag Alley, and field
mapping and soil sampling defined significant gold – arsenic – base metals anomalies.

The gold mineralization at Tag Alley is also structurally controlled and occurs in volcanic sequences that appear
to overlie the host granites at Granite Castle. It is possible that the gold mineralization at both locations may be
related and reflect the upper portions of a larger scale mineralized porphyry system at depth.

Recent Developments

Your Company has also recently made an Application for EPM 19934 being the ground surrounding three sides
of the Granite Castle Tenements. MNM will keep you updated on progress towards grant of tenement.

Charters Towers Gold and Base Metals Project
EPM 14388 (Charters Towers) is strategically located around the township of Charters Towers, immediately
adjacent to Citigold’s (ASX: CTO) main tenement holdings (Figure 1).

Total historic production from the Charters Towers goldfield is over 9 million ounces. During the year, the
Company was granted a 5 year renewal to EPM 14388.




                                                              Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                       11
     DireCtors’ report




     Figure 6: EPM 14388 location with historic mines on surface geology.

     The tenement contains two main project areas; Great Britain and Gromac/Puzzler. In addition, the Southern
     Cross Block contains a number of historic mines (Figure 6).

     The Great Britain project area contains a JORC Code Compliant Inferred Gold Resource2. The area also
     contains the Day Dawn West mine area.

     Since acquiring the Charters Towers tenement the Company has drilled an additional 51 drill holes totalling
     3780 metres. This work aimed to further define the Great Britain deposit by testing for possible extensions,
     and close off gaps, to the NW and SE of the intensively drilled areas enabling refinement of the lateral and
     down dip extents. This drilling appears to have added incrementally to the overall extent of the alteration
     envelope and contained mineralisation.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
12
Figure 7: Great Britain resource geologic model in section view.

The geological model for Great Britain is relatively simple with mineralisation hosted in three shallowly dipping
lenses that sub-crop just below the surface (Figure 7).




Figure 8: Relationship between Day Dawn West and the Day Dawn reef structure.




                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                    13
     DireCtors’ report


     South of Great Britain are the historic Moondyne, Day Dawn West and Wellington Road mines. These mines
     lie immediately to the west of Citigold’s Day Dawn reef which is the most westerly of the five major historically
     mined reefs at Charters Towers. These historic reefs are currently the subject of evaluation by Citigold for major
     underground mine redevelopment (Figure 8).




     Figure 9: Gromac prospect drill core with zone of intense veining.

     The Gromac/Puzzler area is prospective for bulk tonnage disseminated deposits of copper, gold, silver and
     molybdenum. Drilling by Mantle late in 2008 intersected what appears to be the margin of a molybdenum
     copper porphyry system, intersecting widespread mineralisation from 77m to 148m at the end of drill hole
     08PZD086 (Figure 9).

     The Queensland Government recently announced the concept of reserved areas surrounding urban
     centres, within which minerals exploration and development activities would be prohibited. If this proposal is
     implemented then there is a potential for an adverse impact on the Company’s assets surrounding Charters
     Towers. The Government is currently conducting a consultation exercise regarding the matter, and Mantle has
     made submissions to the Charters Towers council and the Government, noting the potential adverse economic
     impact of what is proposed, unless the Company is compensated appropriately. It is not known what might
     emerge, nor when.

     Trafford Coal and Coal Bed Methane Project
     Mantle’s Trafford Coal and Coal Bed Methane Project consists of EPC 772 (Coal) and ATP 718 (Coal Bed
     Methane). The project is located at Mt Mulligan in far north Queensland approximately 100km west of
     Cairns (Figure 10).




     Mantle Mining Corporation Ltd | Annual Repor t 2011
14
Figure 10: Location of Mt Mulligan with local infrastructure.

The tenements contain a large, historically mined deposit of primarily thermal coal. Mining at Mt Mulligan
(Figure 11) ceased in 1957 due to the advent of competition from hydroelectric power generation and diesel
power for locomotives. Insufficient exploration has been done to confirm the full extent of the deposit, however
the Company considers that the Mt Mulligan deposit within EPC 772 contains an Exploration Target3 of 100 to
500 Million tonnes of black coal.

Prerequisite to exploration activities within the Mt Mulligan tenements is an access agreement with the
traditional custodians. Due to a high level of cultural significance of the Mt Mulligan area, Mantle approached
discussions with the traditional custodians towards sensitive exploration and development of the natural
resources within the tenements. The approach contemplates working in complete and equitable consultation
on such aspects as cultural heritage awareness, site access, indigenous training, sustainable employment and
resource development.

The company is focused on coal seam gas development at Mt Mulligan to bring upgraded energy to market
and, as a result of this initial low impact approach, has been able to progress very positive discussions towards
an Indigenous Land Use Agreement (ILUA).




Figure 11: Mt Mulligan mesa                            Historic mine             Historic town



                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                    15
     DireCtors’ report


     In 2007, Mantle subsidiary Trafford Coal Pty Ltd (Trafford) acquired an 87.5% interest in the Mt Mulligan
     tenements from Calcifer Industrial Minerals Pty Ltd (Calcifer) following exercise by Trafford of an option granted
     by Calcifer.

     In 2008, Calcifer agreed to transfer the remaining 12.5% interest in the Mt Mulligan tenements to Mt Mulligan
     Coal Pty Ltd (Mt Mulligan), prior to Trafford purchasing of all of the shares in that company.

     In 2008, Agreement in Principle was reached with the traditional custodians of Mt Mulligan and a full draft
     Indigenous Land Use Agreement (ILUA) was progressed.

     In 2009, Mantle received a Notice of Intention to Terminate the Agreement for the acquisition of the Mt
     Mulligan tenements. This third party claim caused a delay in finalisation of the ILUA and Mantle became
     aware that Calcifer was acting in a manner inconsistent with what had been agreed in relation to the transfer of
     Calcifer’s interest in the Mt Mulligan Tenements.

     In March 2010, Trafford and Mt Mulligan commenced proceedings against Calcifer in the Supreme Court of
     Queensland to enforce the agreement for assignment of the Mt Mulligan tenements. Trafford and Mt Mulligan
     are claiming injunctive and declaratory relief.

     In April 2010, Calcifer filed a “Notice of Intention to Defend and Defence”, contending that conditions
     precedent to the sale of interests in the Mt Mulligan Tenements were not satisfied. Mantle’s position is that the
     conditions precedents were waived.

     By July 2010, Mantle had provided Calcifer its list of relevant documents however Calcifer filed a Notice of
     Change of Solicitor and alleged that Mantle’s solicitor had a conflict of interest. Mantle retained Allens Arthur
     Robinson Lawyers to further progress the action.

     In May 2011, the Court heard Trafford’s and Mt. Mulligan’s application to file their Amended Claim and
     Statement of Claim and to have the matter placed on the Commercial List. Calcifer opposed the application
     however the Court rejected Calcifer’s opposition and ordered that Trafford and Mt. Mulligan be granted leave
     to file the Amended Claim and Statement of Claim and that the matter be placed on the Commercial List.
     The Court ordered Calcifer file its Amended Defence and Counterclaim by 6 June 2011 and listed the matter
     for review on 13 July 2011.

     Calcifer failed to comply with the order that it file its Amended Defence and Counterclaim by 6 June 2011.
     Moreover, Calcifer’s solicitors applied to the Court for leave to withdraw from representing Calcifer in
     the proceedings.

     Clarke River Gold and Base Metals Project
     The Company’s Clarke River Project consists of two tenements, EPM 15534 (Phantom Creek), and EPM 15535
     (Mt Brown), both situated to the north of Charters Towers (Figure 1).




     Mantle Mining Corporation Ltd | Annual Repor t 2011
16
Figure 12: Clarke River Project tenement locations on surface topography map.




                                                         Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                               17
     DireCtors’ report


     EPM 15534 (Phantom Creek) is located strategically along structure just to the south west of Kagara’s
     (ASX: KZL) Balcooma Copper Project. Phantom Creek is virtually unexplored by modern techniques yet
     lies in a highly prospective base and precious metals province.

     EPM 15535 (Mt Brown) is located approximately 60km southwest of the town of Greenvale, between Charters
     Towers and Georgetown. The area covers geology with potential for volcanic-hosted gold and base metals
     deposits as well as uranium (as exampled in the region at Ben Lomond and Maureen). During the year,
     Southern Uranium (now Investigator Resources Ltd; ASX: IVR) withdrew from the Mt Brown Joint Venture.

     Texas Coal Project
     During the year the Company applied for and was granted two tenements, EPC 2190 (Texas) and EPC 2190
                                                                                               South Wales
     (Mt Gunyan), in Queensland. The tenements are immediately adjacent to the border with New !
     at Texas, 210km south-west of Brisbane (Figure 13).                                !




                                                                                                                                                          t
                                            150°30'0"E                                 151°0'0"E                                 151°30'0"E                                 152°0'0"E
                                                                                                                                                                              140°E                      ! KILLARNEY
                                                                                                                                                                                                        150°E     152°30'0"E
                                                                                                                                                                                                  0     250 500        1000
         0         10       20                       40                60                                                                                                                                                             !


                                                                                                                                                                                                                             t
                                                                                                          INGLEWOOD                                                                                      Kilometers
                                     Kilometers                                                       !
                                                                                                                                                                                                                PACIFIC        !
                                                                                                                                                                     20°S                                       OCEAN28°30'0"S
                                                                                                                                                                                                                         20°S
      28°30'0"S                                                                                                                                                                   Mt Isa
                            GOONDIWINDI
                        !                                                   YELARBON
                                                                                                                                                                                            QLD                 Gladstone
                                     BOGGABILLA
                                                                        !
                                                                                      Mantle Mining's
                                 !                                                                                                                                        STANTHORPE
                                                                                     Texas Coal Project
                                                                                                                              EPC 2192                                !                  MAP LOCATION
                                                                                                                                                                                                                BRISBANE
                                                                                                                              Mt Gunyan                                SA                                                             !
                                                                                                           EPC 2190                                                  30°S                      Inverell       30°S


                                                                                                            Texas                                                             140°E
                                                                                                                                                                                              NSW 150°E Newcastle
                                                                                                                      TEXAS
                                                                                                                  !
                                                                                                                                                                          WALLANGARRA
                                                                                                                                                                      !

                                                                                                                                                                                                                        29°0'0"S

      29°0'0"S                                                                                                                                                                          TENTERFIELD
                                                                                                                                                                                  !




                                                                                                              ASHFORD
                                                                                                          !


                                                                                                                                                    EMMAVILLE       DEEPWATER
                                                                                                                                                !               !
                  PALLAMALLAWA
 !           !                                                                                                                                                                                                         29°30'0"S

      29°30'0"S
                                                                   WARIALDA
                                                               !
                                                                                                                                                                    LEGEND                                                                !

                                                                                   DELUNGRA
                                                                               !                                                                                                Mantle's EPCs
                                                                                                                                                             GLEN INNES
                                                                                                                                                         !                      Current Coal Titles (NSW)
                                                                                                                  INVERELL
                                                                                                              !
                                                                                                                                                                                Current EPCs (QLD)
                                                  150°30'0"E                              151°0'0"E                                151°30'0"E                                152°0'0"E                                   152°30'0"E

                                                                                                              !
     Figure 13: Texas Coal Project location plan.              !


                                                                                                                       !
     The area is located north of historic deposits of hard coking coal, and a new discovery of high volatile
     thermal coal.

     The Permian aged Ashford coal measures (similar to Bowen Basin coals) are known to stretch from the
     QLD - NSW border in the north to Inverell in the south. The Ashford seam is the principal coking coal seam
     and is generally 9m thick. The Bonshaw seam is located above the Ashford seam and is generally 2m thick.
     Historic drilling to the west of Ashford intersected 1.5m thick thermal coal at 50m depth and to the north of
     Texas (near Inglewood) intersected 2m thick thermal coal at 100m depth. More recent drilling, in 2008 and
     2009, to the west of Ashford intersected 2m thick thermal coal at 20m depth.

     A non-operational rail corridor connects the southern centre of Mantle’s Texas Coal Project to the rail head
     of Inglewood, 48km to the north. Inglewood is on the South Western Rail Line allowing options to the port

     Mantle Mining Corporation Ltd | Annual Repor t 2011
18
of Brisbane, or to Gladstone via the proposed Wiggins Island Coal Export Terminal rail line. The freight-only
Southern Rail Line is 34km to the east of Mantle’s Texas Coal Project and offers the same alternatives to port as
the South Western Line. Road transport dominates freight movement currently in the Texas area with all major
eastern seaboard locations accessible via the Bruxner and Cunningham Highways.

Haunted Stream Gold and Base Metals Project
The Haunted Stream Gold Project is located in Victoria’s East Gippsland region and consists of two granted
tenements; EL 3576 (Haunted Stream) and EL 4784 (Mt Baldhead), a small mining licence MIN 5505, and
three tenement applications; EL 4785 (Mt Nugong), EL 4786 (Mt Elizabeth) and EL 4819
(Buchan East) (Figuvre 14).




Figure 14: Haunted Stream Gold Project location.

Haunted Stream is a high grade, historic, gold field concentrated along the Haunted Stream fault and in close
proximity to magnetic intrusions. The Company is exploring for areas offering potential for broad zones of
disseminated sulphides or large stock-works containing gold and/or copper mineralisation with potential for
bulk mining and extended mine life.




                                                            Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                    19
     DireCtors’ report




     Figure 15: Ground magnetic grids (LHS), aerial magnetic anomalies, historic mines & rock chips (RHS).

     The tenements contain literally hundreds of old workings. Following the major bushfires of late in 2006 / early
     2007, Company field crews uncovered well over 200 previously unknown historic workings on the goldfield,
     including a number of mines of reasonable scale (Figure 15 RHS).

     Field wide mapping and rock chip sampling programs led the Company to undertake the first and only known
     modern drilling within the goldfield in 2007/08. These programs confirmed the underground extent of several
     of the biggest of the mines was far greater than originally thought, leading to a view that much larger deposits
     exist, but are yet to be uncovered. The probability of finding a large feeder system and/or bulk-tonnage
     mineralisation is considered relatively high.

     In 2008/09 ground magnetics surveys were undertaken. Results confirmed Anomalies 3 and 4 as priority drill
     targets with potential to contain a large bulk tonnage mineralized system which may have acted as a feeder
     system to the local workings. In 2010, follow-up surveys over Anomalies 3, 4, 5 & 7 re-confirmed Anomalies 3
     and 4 as high priority drill targets (Figure 15 LHS).

     The intensity of the magnetic response, the structural setting of Anomaly 4, the very large number of high
     grade gold workings and the fact that a number of historic workings sit over the top of magnetic Anomaly 4,
     provided strong focus for carefully targeted deep drilling.




     Figure 16: 3D magnetic model of Anomaly 4 (LHS) & section view of planned drill hole HSD12 (RHS).




     Mantle Mining Corporation Ltd | Annual Repor t 2011
20
A 3D model was generated for Anomaly 4 and holes designed to test the mineralisation potential. Drill hole
HSD12 (HS4Plan3) tested a vertical columnar stock and sub-parallel NNE-trending faults and drill hole HSD13
(HS4Plan1A) tested a NNE-trending fracture zone (Figure 16).




Figure 17: Drill rig set over drill hole HSD12 (LHS) and drill hole HSD13 (RHS) at Anomaly 4.

The Company was awarded a $45,000 Rediscover Victoria Drilling (RVD) grant from the Victorian
Department of Primary Industries to assist with drilling costs at Anomalies 3 and 4. Drilling commenced in
April 2010 (Figure 17).

Drill hole HSD12 terminated at 427m after passing through a number of highly altered zones proximal to
the contact between the intrusive and the sedimentary host rocks. Drill hole HSD13 terminated at 141m in
a targeted fault zone. In HSD12 multiple zones of base metal anomalous shearing were intersected, with
significant widths from 192m and 344m.




Figure 18: Strongly pyritic vein within zone of intense shearing intercepted at 199m in drill hole HSD12.

Drill hole HSD12, from 192m to 197m, contained a zone of intense shearing and alteration varying from
strong chlorite to intense carbonate/sericite with moderately intense quartz/calcite veining. One quartz/calcite
vein contained significant irregular blebs of medium grained crystalline pyrite (Figure 18).




                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                   21
     DireCtors’ report


     At 344m in HSD12, within the diorite intrusive, a zone of silica/chlorite alteration was encountered with
     galena mineralization in the form of medium grained blebs in a quartz/carbonate vein with pyrite. A major
     zone of shearing and alteration occurs at the intrusive contact at 369m and persists intermittently through
     the sediments from 372m to 410m.




     Table 1: Drill hole HSD12 best results.                          Figure 19: Section through HSD12.

     The best results were encountered in drill hole HSD12, including from 198.2m a 1m interval reporting 4.7g/t
     gold, 1027ppm copper, 118ppm lead and 363ppm zinc (Table 1 & Figure 19).

     Additional samples have been sent for petrographic analysis in order to further understanding of the host
     geology and metallogenic context of the mineralization intersected at Anomaly 4. A Down Hole
     ElectroMagnetic (DHEM) survey was undertaken drill hole HSD12 to test additional potential for conductive
     sulphides associated with possible gold mineralization both around the intrusive contact aureole and at depth
     under the drill hole. The results from the petrographic analysis are being modelled and reviewed and will be
     incorporated into planning for future work. The modelling of the DHEM survey however indicates no significant
     in-hole or off-hole conductors being evident in the DHEM data.

     Two small Mining Licences were previously held by others within EL 3576, have since been relinquished
     and applied for by the Company. MIN 5505 (Dogtown) was subsequently granted to Mantle in late 2010,
     following successful negotiation of the Company’s first Native Title Access Agreement in Victoria, and
     MIN 5447 (also Dogtown) was applied for in mid 2011.

     Grant of the three outstanding tenement applications; EL 4785 (Mt Nugong), EL 4786 (Mt Elizabeth)
     and EL 4819 (Buchan East), remain pending negotiation of a native title access agreement. During the year
     the Company and the traditional custodians reached Agreement in Principle for the terms of the access
     agreement and full drafts are currently being developed. These tenements are highly prospective for base
     and precious metals.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
22
                                                                                                                                                                                                                                                                !
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             !
                                                                                                                                                                                                                                                                                                                                                                                                                               !



                                                                                                                                                                                                                                                                                                                                   !
                                                                                                                                                                                                                                                                                                                                                                                                                                                                     !

                                                                                                                                                                                                                                                                                                                                                                                                                                                    !
                                                                                                                           !




Bacchus Marsh Coal Project                                                                                                                                                                                                                                                                                                     !
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 !


                                                                                                                                                                                                                                                                                                                                                                                                                                                                         !



                                                                                                                                         ³
37°20'0"S                                                                                                                                                                                                                           37°20'0"S




                                                                                                                                                                                                                                                                                                                          t
                                                                                                                                                                                                                                                    Legend
            144°0'0"E          144°10'0"E        144°20'0"E       144°30'0"E          144°40'0"E      144°50'0"E           145°0'0"E               145°10'0"E              145°20'0"E            145°30'0"E            145°40'0"E                                                                                                                                                                   144°26'0"E                       144°27'0"E
                                                                                                                                                                            AUSTRALIA                                                                               144°10'0"E               144°15'0"E                            144°20'0"E               144°25'0"E                              144°30'0"E                                               144°35'0"E




                                                                                                                                                                                                                                                                                                                                                                                                                                                              t
                                                                                                                                                                                                               NEW SOUTH                            37°30'0"S                                                                                                                                                    INSET




                                                                                                                                                                                                                                                                                                                                                                                    UR AT
                                                                                                                                                                                                                                                                                                                                                                                      NE
                        t
                                                                                                                                                                                                                 WALES




                                                                                                                                                                                                                                                                                                                                                                                  BO AR
                                                                                                                                                                                                                                                            EL 5294 Mantle Mining Corporation Ltd




                                                                                                                                                                                                                                                                                                                                                                                EL L
                                                                                                                                                                                                                                                                                                                                                                               M BAL
                                                                                                                                                                                                              Albury
                                                                                                                                                                                                                                                            EL 5323 Mantle Mining Corporation Ltd
                                                                                                                                                                      VICTORIA                                                                                                                                                                                                             EL 5294                                                      RA 37°42'0"S
                                                                                                                                                                                                                                                                                                                                                                                                                                                          ILW
37°30'0"S                                                                                                                                                                                                                           37°30'0"S
                                                                                                                                                                                                                                                            MIN 4701 Maddingley Brown Coal Pty Ltd                                                                             37°42'0"S
                                                                                                                                                                                                                                                                                                                                                                                                                                                              AY
                                                                                                                                                                    Bacchus Marsh            MELBOURNE                                                      Parwan Sub-basin
                                                                                                                                                                          Geelong^                               Bairnsdale
                                                                                                                                                     Portland                                                                                                                                                                                                                                               MIN4701

37°40'0"S
                                                                 Bacchus Marsh                                                         200   100        0           200                                                             37°40'0"S
                                                                                                                                                                                                                                                                                                                                                                                                                                                  EL5294
                                                                                                                                                                                                                                                                                                                                                                                                                                    EL 5323                                              !
                                       EL 5294                                                                                                     Kilometers
                                                                                                                                                                                                                                                !   37°35'0"S                                                                                                                                                                                       37°35'0"S

                                                                                                                                                                                                                                                                                            BALLAN               WE
                                                                                                                                                                                                                                                                                                                   ST E
                                                                                                                                                                                                                                                                                        !                                 RN
                                                                                                                               Melbourne
                                                                                                                                                                                                                                                                                                                                                                                                                                                             37°43'0"S
                                                                                                                                                                                                                                                                                                                                                                                                0                0.5       1                        2
                                                                                PARWAN                                                                                                                                                              abt. 30km to                                                                                                               37°43'0"S



                                                                               SUB-BASIN                                                                                                                                                              Ballarat                                    BA                                                                                                                   Kilometers
                                                                                                            Altona
                                                                                                                                                                                                                                                                                                                                                                                                      144°26'0"E                       144°27'0"E
37°50'0"S                                                                                                                                                                                                                           37°50'0"S                                                        L   LA
                                                                                                                                                                                                                                                                                                            R   AT
                                                                                                                   !                                                                                                                                                                                                                                                                                                                                                                 !


                                                                                                                       !                                                                                                                                                                                                            Werribee Gorge
38°0'0"S                                                                                                                                                                                                                             38°0'0"S
                                                                                                                                                                                                                                                                                                                                       State Park                FREEWAY
                                                                                                                                                                                                                                                    37°40'0"S                                                                               ME                                                                                                      37°40'0"S
                                                                                                   PORT PHILLIP BAY                                                                                                                                                                                                                            LB                            BACCHUS MARSH
                                                                                                                                                                                                                                                                                                                                                  OU
                                                                                                                                                                                                                                                                                              EL 5294                                                RN                  !                                                                        MELTON
                                                                                                                                                                                                                                                                                                                      White Elephant Soil               E                                                                                              !
                                                              Geelong                                                                               Frankston                              WESTERNPORT                                                                                                                Conservation Area
38°10'0"S                                                                                                                                                                                   SUB-BASIN                               38°10'0"S
                                                                                                                                                                                                                                                                                                                                                                                             RAILW
                                                                                                                                                                                                                                                                                                                                                                                                  AY

                                                                                                                                                                                                                                                                                                                                                                                                                                       abt. 40km to
                                                                                                                                                                     WESTERN PORT                                                                                                                                                                                                                                                       Melbourne
                                                                                                                                                                                                                                                                                                                                                                 SEE INSET
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             !
38°20'0"S                                                                                                                                                                                                                           38°20'0"S


                        COLAC SUB-BASIN                                                                                                                                                    WEST GIPPSLAND                                           37°45'0"S                                                                                                                                                                                       37°45'0"S
                                                                                                                                                                                             SUB-BASIN

                                                                                                                                                                                                                                                                                                                                                                                           PARWAN SUB-BASIN
38°30'0"S                                                                                                                                                                                                                           38°30'0"S


                                                                                                    LEGEND
                                                                                                                                                                                                                                                            0        2.5         5      10
                                                                                                                                                                0         12.5             25                           50
                                                                                                             Mantle's EL 5294                                                                                                                                              Kilometers
                                                                                                                                                                                        Kilometers
            144°0'0"E          144°10'0"E        144°20'0"E       144°30'0"E          144°40'0"E
                                                                                                             Sub-basins
                                                                                                      144°50'0"E           145°0'0"E               145°10'0"E              145°20'0"E            145°30'0"E            145°40'0"E                                   144°10'0"E               144°15'0"E                            144°20'0"E               144°25'0"E                              144°30'0"E                                               144°35'0"E




Figure 20: Bacchus Marsh Project location.                                                                                                                                                                                          !




The Bacchus Marsh Coal Project is located in the northern extremity of Victoria’s Otway basin, specifically
the north-western tip of the Parwan sub-basin approximately 50km west of Melbourne and a similar distance
north of the port of Geelong (Figure 20). An existing rail line is adjacent to the site and links the deposit to the
Port of Geelong.
                                                                                                                                                                                                                                                          !




Figure 21: Upper portion of the coal seam at the Maddingley Mine (within EL 5294 and owned by others).

EL 5294 was granted to Mantle in March this year for an initial 5 year term. The project area contains a large,
historically mined deposit of brown coal. The Maddingley Mine (MIN 4701) is owned and operated by a third
party and is located within Mantle’s EL 5294. Two of three small in-fill EL applications between EL 5294 and
MIN 4701 have been granted. The third, EL 5323, is pending the Native Title advertisement process.
(Figures 20 & 21).




                                                                                                                                                                                                                                                                Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             23
     DireCtors’ report




     Figure 22: Modelled seam thickness (LHS) and long section (vertical scale exaggerated 6:1) (RHS).

     Based on a detailed review and modelling of 156 historic drill holes, Mantle is of the view that EL 5294
     contains an Exploration Target4 of between 1 and 2 billion tonnes of coal.

     4 The potential quantity and grade of Exploration Targets in this report are conceptual in nature, 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.




     Figure 23: Exergen Pty Ltd Consortia Partners.

     Mantle executed a Memorandum of Understanding (MOU) with Exergen Pty Ltd (Exergen) to develop
     the Bacchus Marsh Coal Project (Figure 23).

     Exergen has developed a breakthrough clean coal technology that, when teamed with modern coal-fired
     power station technology, is expected to deliver up to 40% CO2 emissions reductions. The technology
     is known as Continuous Hydrothermal Dewatering (CHTD*) and is patented worldwide including in
     Australia, Indonesia and China.

     * CHTD is in the development stage and is yet to be demonstrated at commercial scale. There is no guarantee that the
        technology will be proven at commercial scale, or that the Bacchus Marsh deposit will ultimately be developed.

     CHTD coal is a transformed coal giving a cleaner burning product with lower emissions than its
     originally mined feed coal. The CHTD process “decarboxylates” high moisture coals, changing their
     molecular structure and liberating inherently bound water in the process. Water is separated in the liquid
     state, eliminating the need to evaporate the water typical in competing technologies. Recovered water
     becomes available for agricultural or industrial use.

     Exergen expects that its CHTD coal would be used in state of the art power stations of the type
     that can already meet new emissions standards for future power stations announced by the
     Victorian Government. Exergen is also working towards demonstrating the use of CHTD fuel in
     a Direct Injection Coal Engine (DICE), which may match gas-fired power station emissions and also
     enable future CO2 capture.

     CHTD has been proven at 4 tonnes per hour scale on Victorian and Indonesian coals with moisture
     contents ranging between 35% and 65% having already been successfully trialled. Bacchus Marsh
     coal has moisture contents in the 55% to 65% range and, depending on requirements of its overseas
     markets; Exergen expects to deliver final products with moisture contents between 10% and 25%.



     Mantle Mining Corporation Ltd | Annual Repor t 2011
24
The MOU contemplated the following:

•	 Agreements	leading	to	a	50/50%	Joint	Venture	for	exploration	and	mine	development,

•	 Construction	of	a	50tph	demonstration	facility	by	Exergen,

•	 Construction	of	an	export	project	by	Exergen	on	its	50%	of	the	coal	deposit,	and

•	 Mantle	being	licenced	to	utilise	CHTD	on	its	50%	of	the	coal	deposit.

Exergen’s major cornerstone investors include:

•	 TATA	Power,	India’s	largest	private	power	utility,	as	major	coal	off-taker,

•	 Leighton	subsidiary	Thiess,	the	world’s	largest	supplier	of	outsourced	mining	services,

•	 Itochu,	Japan’s	3rd	largest	trading	house	with	extensive	coal	trading	experience,	and

•	 Sedgman,	a	global	specialist	provider	of	mineral	engineering	solutions.

Mantle and Exergen aim to execute the following binding “Substantive Agreements”:

•	 an	exploration	Joint	Venture	Agreement	(JVA),	within	1	year

•	 a	CHTD	Technology	Licence	Agreement	(TLA),	within	1	year

•	 a	Mine	Development	Heads	of	Agreement	(HOA),	within	1	year

•	 finalising	the	Mine	Development	Agreement	(MDA),	within	2	years

Mantle and Exergen subsequently executed a Pre-Joint Venture Agreement (Pre-JVA). The purpose of the
Pre JVA was to establish processes for the formation of the full JVA and to set out agreement between
Mantle and Exergen regarding the (50/50) funding arrangements for certain accelerated Pre JVA activities:

•	 bulk	sample	drying	trials	at	Exergen’s	Beaconsfield	pilot	plant	and	subsequent	coal	quality	analyses,

•	 detailed	data	modelling	and	geologic	interpretation	of	pre-existing	exploration	drill	hole	data	across	
   the deposit,

•	 generation	of	pre-feasibility	type	intellectual	property	specific	to	the	Bacchus	Marsh	coal	deposit,	location	
   and infrastructure.




Figure 24: Bench Scale Autoclave ROM coal (47% moisture) and resulting briquette (5% moisture).

                                                              Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                    25
         DireCtors’ report


      Successful laboratory scale drying trials have been carried out on a sample of Bacchus Marsh coal.
      Hydrothermal treatment was performed in Exergen’s bench scale autoclave which simulates pilot plant
      performance. Subsequent dewatering and pressing into a representative briquette was undertaken at
      the pilot plant facility. Run of Mine (ROM) coal moisture content of 47% was reduced by over 90% to a
      briquette moisture content of 5% (Figure 24).




      Figure 25: CHTD Pilot Plant Processing of ROM coal (56.7% moist) and resulting briquettes (9.5% moist).

      A two tonne bulk sample of Bacchus Marsh coal was processed at the CHTD pilot plant. Laboratory analysis
      of the bulk trial product confirmed that decarboxylation (transformation) of the Bacchus Marsh coal had
      successfully occurred on a continuous basis. Subsequent secondary dewatering and pressing of a representative
      sample of low moisture briquettes was also achieved at the pilot plant facility. Run of Mine (ROM) coal feed
      moisture content of 56.7% was reduced to a sample briquette moisture content of 9.5%.
                                                                                                                                                            MANTLE MINING CORPORATION LTD
     144°22'0"E                         144°24'0"E                                     BACCHUS MARSH
                                                                              144°26'0"E          144°28'0"E                                            144°30'0"E               144°32'0"E

                     We                                                                                                                                     Bacchus Marsh Coal Project
                        rrib                                                                                                    WE
                               ee                                                                                                  STE R            EWAY       Drilling Program 2011
                                                                                                  Rive                                     N    FRE
        abt. 33km to                                                                                   r                                                        Borehole Location
          Ballarat




                                                                                                                                                                                       t
             BAL
                 LAR
                     AT
                                     EL 5294                                                          eek
                                                                                                                       ACK




                                                                                            MBM006 Cr
                                                                                                                   OLP
                                                                                                                    RD




                                                                                                                                                                                                      37°42'0"S
                                                                                                                 WO
                                        MELBOURNE




        37°42'0"S
                                                                                                       SCHOOL
                                                                                                                      LANE

                                                    ROWSLEY
                                                                                                                      MBM004                    RAI
                                                                                                                 AD




                                                            STATION                                                                                LW
                                                                    RD                                                                               AY
                                                                                                               RO



                                                                                                                             ROAD




                                                           MBM007                               MBM014
                                                                                           RD




                                    MBM015                                                                                                                                                       abt. 40km to
                                                                                                                                    MILES
                                                                     MBM008   SMITHS                              MBM005                        RD                                                Melbourne
                                                                                       S




                                                                                                       S MARSH
                                                                                    ING




                                                                               RD
                                                        an
                                                      rw
                                                                                                                         SOUTH
                                                                                  MM




                                                    Pa                                                                            Waste Water
                                                                                     AERODR
                                                                                CU




                                                    MBM001                                       OME                             Treatment Plant
                                                                                                     B ACCHU




                                                                                           RD                                                                                                         37°44'0"S
                                                                                                               MBM003
                                                            K




                                                                                      MBM002
                                                          DAISYBAN
                                                                LANE




        37°44'0"S
                                GLE                                              JENS                                                          MBM013
                                    N                                                 Z
                                                                                                                       PARWAN




                                        MOR                                      RD
                                                E
                                                                     MBM009
                                                                                                         G
                                                                                                  GEELON




                                                    MBM010             RD            MBM011                                     MBM012


                                                                                                                                       PARWAN SUB-BASIN
                                                                                                                                                                          0   0.5       1             2

                                                                                                                                                                                    Kilometers



                                                                                                     LEGEND                                                                                           37°46'0"S
                                                                                                        Mantle's EL 5294                                   MBM001       Mantle Bacchus Marsh
        37°46'0"S
                                                                                                        Parwan Sub-basin                                                Borehole No. 1
        144°22'0"E                           144°24'0"E                          144°26'0"E                   144°28'0"E                                   144°30'0"E                        144°32'0"E



      Figure 26: Bacchus Marsh drill program proposed hole locations.




      Mantle Mining Corporation Ltd | Annual Repor t 2011
26
A 15 drill hole layout has been designed for compliance with brown coal JORC Inferred Resource level of
confidence. At the end of the year Mantle was finalizing drilling services contracts with program execution
targeted for August/September 2011 (Figure 26).

Latrobe Valley Coal Project

                                                                                                                                                                                                                                                                                                                                                                    ³
                                                                                                                                                                                                           t
                144°0'0"E         144°30'0"E         145°0'0"E          145°30'0"E                   146°0'0"E                     146°30'0"E              147°0'0"E                      146°0'0"E                                                                                146°30'0"E                   AUSTRALIA
                                                                                                                                   AUSTRALIA              NEW SOUTH                                                                                                                                                                            NEW SOUTH




                                                                                     t
                                                                                                            SOUTH                                           WALES                                                                                                                                       SOUTH                                    WALES
                                                                                                          AUSTRALIA                                                                                                                                                                                   AUSTRALIA                                         A.C.T.
37°0'0"S                                                                                                                                                                37°0'0"S
                                                                                                                                                                                                                                                                                                                                                Albury
                                                                                                                                                        Albury   A.C.T.                38°0'0"S                                                                                                                                                                38°0'0"S
                                                                                                                                                                                                                                                                                                                               VICTORIA
                                                                                                                               VICTORIA
      Mantle's Bacchus Marsh                                                                                                 Bacchus Marsh MELBOURNE
                                                                                                                                                                                                                                            Yallourn Mine                                                             Bacchus Marsh       MELBOURNE
                                                                                                                                                                                                                                                                                                                                                            Bairnsdale
            Coal Project                                                                                                                                                                                                                                                                                                   Geelong




                                                                                                                                                                            ³
                                                                                                                                   Geelong                 Bairnsdale                                                                                                                                                                                    Sale
                                                                                                                                                                                                                                                                                                            Portland
               386 km2                                                                                            Portland
                                                                                                                                                                                                                                                                                                          200   100    0          200

37°30'0"S                                                                                           200   100       0        200                                      37°30'0"S                                                                                                                                   Kilometers

                Ballarat                                                                                        Kilometers


                                     Bacchus Marsh
                                                                                                                                                                                                                                                                                                       RAILWAY                                 WAY
                                       PARWAN
                                                  MELBOURNE                                                                                                                                MELB
                                                                                                                                                                                                     O UR                                                                                                                               FREE
                                                                                                                                                                                                            NE                              SALE
                                      SUB-BASIN                                Mantle's Latrobe Valley                                            LAKES ENTRANCE
                                                                                                                                                                                          PRIN
                                                                                                                                                                                                   CES
                                                   Altona                           Coal Project                                                     PLATFORM




                                                                                                                                                                                                                                                                                    AY
38°0'0"S
                                                                                       569 km 2                                                                         38°0'0"S




                                                                                                                                                                                                                                                                                   W
                                                  PORT




                                                                                                                                                                                                                                                                                  H
                                                                                                                                             LATROBE VALLEY




                                                                                                                                                                                                                                                                                IG
                                               PHILLIP BAY
                                                                      WESTERNPORT                                                              DEPRESSION




                                                                                                                                                                                                                                                                               H
                                                                       SUB-BASIN
                                 Geelong            Frankston                                                                                       BARAGWANATH                                                          Thorpdale
                                                                                                  Thorpdale                                                                                                                                                                                                                               Loy Yang Mine
  COLAC
                                                                  WESTERN                                                                             ANTICLINE                                                                        EL 5337
                                                                   PORT
 SUB-BASIN
                              Anglesea                                                 WEST GIPPSLAND                                                 SEASPRAY
38°30'0"S                                                                                SUB-BASIN                                                   DEPRESSION 38°30'0"S                                                                                                            EL 5336
                                                                                                                                                                                                               KI
                                                                                                                                                                                                          EC
                                                                                                                                    ALBERTON                                                         EL
                                   SOUTH PACIFIC                                                                                                                                                RZ
                                       OCEAN                                                                                       DEPRESSION                                              ST
                                                                                                                                                     TASMAN SEA                                                         EL 5338                         See Figure 28
                                                                                                                                                                                                                                                                               Hazelwood Mine
39°0'0"S                                                                                                                                                                39°0'0"S
                                                                  0       25             50                          100                                                               38°30'0"S                    0      5      10               20                                                                                                         38°30'0"S
                                                                                     Kilometers                                                                                                                                Kilometers

                                                                      LEGEND                                                                                                                                                                                        LEGEND
                                                                                                                                      Current Mining Leases
                                                                                                                                                                                                                                                                       Mantle's Coal Tenure (Latrobe Valley)               Current Mining Leases
                                                                          Mantle's Coal Tenure (Victoria)                             Current Exploration Leases
                                                                          S7 Exempt Areas146°0'0"E                                     Regional   Coal Domains
                                                                                                                                                                                                                                                                        S7 Exempt Areas
                144°0'0"E         144°30'0"E         145°0'0"E          145°30'0"E                                                 146°30'0"E             147°0'0"E                       146°0'0"E                                                                                146°30'0"E




Figure 27: Latrobe Valley Coal Project Location.

The Company’s Latrobe Valley Coal Project is located approximately 150km east of Melbourne in the
highly prospective Gippsland Basin. The project consists of three tenements; EL 5336 (Jeeralang), EL
5337 (Thorpdale) and EL 5338 (Baromi) (Figure 27).




                                                                                                                                                                                                                                                                                                                                          t
                                                  146°10'0"E                                                                                                                          146°20'0"E                                                                                                            146°30'0"E

                                                                          LE
                                                                        SA
            MELBOURN                                                                                                                                                                                                                                                                                         WAY
                    E                                                                                                                                                                                                                                          Hazelwood Mine                            RAIL
                                                          ES                             Yallourn Mine
                                                     PRINC                                                                                                                                                                                                   (Operating, 18Mtpa)
                                                                                         (Operating, 18Mtpa)
                                                                                                                                                                                                                                                                                                 AY
                                                                                                                                                                                                                                                                                                W
                                                                                                                                                                                                                                                                                     EE
                                                                                                                                                                                                                                                                                   FR
                                                       Campbells (Brown)X
                                                       Haswell (Brown)X
                                                                                                                                                                                                                                                                                     Loy Yang Mine
                                                                                                                                                                                                                                                                                     (Operating, 30+Mtpa)
            X Ryans (Black)                                      Thorpdale

                X                                                                                                                                      AY
                                                                                                                                                     HW
                       X                                                                                                                           IG
                                               X                      EL 5337                                                                     H
                                                                                                                                                                                          MIN 5526 Granted 12/5/2010
38°20'0"S                                                                                                                                                                                   Driffield Energy Pty Ltd                                                                                                                           38°20'0"S
                                                                                                                                                                                          Estimated 500Mt resource
                                                                    KI




                                                                                                                                                                          X Mirboo Collieries Co.
                                                                  EC




                                                                                                                                                                                          (Brown)                                                                                                 EL 5336
                                                              EL
                                                            RZ




                              Mirboo North                                           EL 5338
                                                          ST




                                 (Black) X

                            Scarletts / Mirboo
                                 (Black)

            0           2.5          5                           10

                               Kilometers


                                                                                                                                                           LEGEND
                                                                                                                                                                                   Mantle's Coal Tenure                                                                    Current Mining Leases
38°30'0"S                                         146°10'0"E                                                                                                     X                 Nearby historic coal mines
                                                                                                                                                                                      146°20'0"E                                                                           S7 Exempt Areas
                                                                                                                                                                                                                                                                                        146°30'0"E                                             38°30'0"S



Figure 28: Latrobe Valley Project tenements with Thorpdale EL 5337 with historic map of coal regions.




                                                                                                                                                                                           Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                                                                                                                                                                                                                                                                          27
     DireCtors’ report


     The S7 areas, shown in figures 27a & b, around the existing coal mining leases are known coal resources
     which the Victorian Government has in moratorium.

     The tenements are immediately adjacent to the main Latrobe Valley depression within which current mine
     production is in excess of 65Mtpa. EL 5337 Thorpdale has been granted and the other two tenements
     are subject to Native Title. Mantle is confident these will also proceed to grant due to excellent ongoing
     relations with the local traditional custodians who are also the custodians of the Company’s Haunted
     Stream Project area.

     Black coal was first extracted from the Thorpdale region in 1875 at Ryan’s Coal Mine. By 1889 black
     coal mining in the Thorpdale region had extended as far as Scarlett’s in the south. This area was mined
     intermittently until 1959.

     By 1876, a large number of brown coal mines were operating in the Thorpdale region. The first was at Mirboo
     Collieries Company Mine with a shaft in to a 50m thick seam at 40m depth. Smaller operations got underway
     at Haswell and Campbells Mines.

     Mantle is targeting seam extensions of the many historic black and brown coal mines and seeks to define new
     black coal deposits and apply brown coal upgrade technology to develop new coal market opportunities.

     Deans Marsh Coal Project

            ³
                                   AUSTRALIA
                                                                                                                                                      EL4510




                                                                           t
                                                  NEW SOUTH
                                                    WALES                                                                                    Western Victoria Energy Pty Ltd
                                                        Albury                                                                                                                                             To Geelong
                                   VICTORIA                                                                                                                                                                 abt 20km
                                                 MELBOURNE
                                                                                                                                                                                                     Y
                                                                                                                                                                       HIGHWAY                    LWA
                                     Geelong

                                                                                                                                                                                              RAI
                                                       Sale
                                           ^ Anglesea
                                                                                                                                        WARRNAMBOOL
            Portland
                                                                 Tasman
     LOCATION MAP
      200       100       0

                      Kilometers
                                     200
                                                                   Sea
                                                                                                             Winchelsea                                          Moriac
                                                                                                         E
                                                                                                       RN
                                                                                                  OU                        r
                                                                                             LB                        ve
                                                                                        ME                           Ri
                                                         Ricketts Marsh
                                                                                                                                                                                          EL4510
                                                                                                                                                                               Western Victoria Energy Pty Ltd
                                                              ES                   on
                                                           INC                  arw
                                                         PR                    B                                                 Historic Wensleydale Brown Coal Mine
                                                                                                                        # (aka Yan Yan Gurt Mine)
                                                                                                                                                                                                  AD
                                                                                                                                                                                               RO




                                                                      Whoorel
                                                                                                        EL 5367
                                      EL5277                                                                    Historic Deans Marsh Brown Coal Mine
                      ECI International Pty Ltd                                                              # (aka Globrite Mine)
                                                                          Deans Marsh                                                                                                   Anglesea

                                                                                                                                                                  E AN
                                                                                                                                                               OC
                                                                                                                     Historic Benwerrin
                                                                                                                     Brown Coal Mine                                                                  Tasman
                                                                                                                    #                                                                                   Sea
                                                                                                                                                               Aireys Inlet
                                                                                              Benwerrin
                                                                                                                                   AT




                                                                                                                                                                                 0      2.5       5              10
                                                                                                                                    E
                                                                                                                                 GR




                                                                                                                                                                                              Kilometers


                                                                                                                   LEGEND
                                                                                                                                Mantle's EL5367 Deans Marsh                          Current Mining Tenements

                                                                                                                                Colac Sub-basin                                      Populated Places


     Figure 29: Deans Marsh Coal Project Location.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
28
The Deans Marsh Coal Project is located approximately 50km west of the Port of Geelong and covers the
central Colac sub basin (Figure 29).

EL 5367 contains the historic brown coalfields named Deans Marsh and Wensleydale. At Deans Marsh, a 9m
thick seam with 18m of overburden was worked from 1922 variably through 1950. At Wensleydale, a 40m thick
seam with 20m of overburden was worked from 1921 variably through 1959.

However, as announced to ASX on 28 July 2011, the Company has taken the decision to withdraw its
application to the tenement.

Barkly Phosphate Project




Figure 30: Barkly project location (RHS), drill hole locations and retained tenements (LHS).

The Barkly Phosphate Project is located in the Georgina Basin in the Northern Territory, between Minemaker’s
(ASX: MAK) Wonarah and Phosphate Australia’s (ASX: POZ) Highland Plains deposits. POZ’s Alexandria,
Alroy and Buchanan Dam occurrences also sit nearby Mantle’s project area (Figure 30).

Historic holes reported to contain phosphate rock exist both within Company tenements near these occurrences
and near thick lithologies intercepted in the Company’s 2009 drill program. Company tenements immediately
to the northeast of Minemaker‘s (ASX: MAK) Wonarah deposit (ELs 26020 and 26021) that were sufficiently
tested in 2009 have been relinquished.

In late 2010 the Company undertook its second broad spaced drilling program at Barkly. The primary focus
of this drill program was to test two tenements (ELs 27035 and 27037) located to the southwest of Phosphate
Australia’s (ASX: POZ) Highland Plains Phosphate Rock deposit. The program also aimed to follow-up areas of
interest located in ELs 26018 and 26019 during the prior (2009) drill program.

Although no significant intervals of phosphate mineralisation were encountered, basement rocks were
intersected at shallow depths. Depth to basement correlation is important as the presently recognised deposits
lie on, or close to, the basement contact of the Georgina Basin.

The drill programs undertaken in 2009 and 2010 provided sufficient confidence to progress an additional
program targeting in-fill and step-out around the historic holes and thicker low grade areas intersected in
prior drill programs.




                                                            Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                  29
     DireCtors’ report



     mineraL resourCes, eXpLoration targets
     anD Competent persons statements:
     1. Granite Castle Gold & Silver Project:
     Granite Castle Gold and Silver Resource Estimate @ 0.2 g/t Au lower cut-off

      Class              Tonnes             Au g/t             Au oz               Ag g/t              Ag oz
      Measured           122,614            3.99               15,727              53.3                209,941
      Indicated          264,021            3.44               29,198              67.6                574,182
      Inferred           460,443            2.32               34,375              50.4                746,680
      Total              847,078            2.91               79,301              56.2                1,530,803

     Granite Castle Gold and Silver Exploration Target

      Target                                                 Tonnes                   Au g/t            Ag g/t
      Below Granite Castle JORC Resource                     300,000 – 400,000        2.5 – 3.5         55 - 70
      Total                                                  300,000 – 400,000        2.5 – 3.5         55 - 70

     Statements in this report relating to the Granite Castle Gold and Silver Mineral Resource are based on a report
     provided to the Company by Hellman and Schofield Pty Ltd, dated 16th May 2008 and first released to the
     ASX by Mantle on 28th May 2008: “The information in this report that relates to Mineral Resources is based
     on information compiled by Dr William Yeo, a full time employee of Hellman and Schofield Pty Ltd. Dr Yeo is a
     Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant
     to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking,
     to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of
     Exploration Results, Mineral Resources and Ore Reserves”. Dr Yeo consents to the inclusion of the matters
     based on his information in the form and context in which it appears in this report.” The report also covered
     mineralised structures below the resource and quantified a contained exploration potential (Exploration Target)
     within those structures. Note that the potential quantity and grade of the Exploration Target is conceptual in
     nature, that there has been insufficient exploration to define a Mineral Resource, and that it is uncertain if
     further exploration will result in the determination of a Mineral Resource

     2. Charters Towers Gold Project:
     Great Britain Gold Resource Estimate @ 0.5 g/t Au lower cut-off

      Class                                    Tonnes                   Au g/t                 Au oz
      Inferred                              2,128,000                     1.8               125,000
      Total                                 2,128,000                     1.8               125,000

     Statements in this report relating to the Great Britain Gold Mineral Resource are based on a report provided to
     Glengarry Resources Ltd by Resource Evaluations Pty Ltd dated August 2004 and independently confirmed by
     Ravensgate Minerals Industry Consultants and included in Mantle’s 2006 Prospectus as released to the ASX
     by Mantle on 2nd October 2006. The Resource Evaluations Pty Ltd report was compiled by Mr Mark Drabble,
     a Member of the Australasian Institute of Mining and Metallurgy and Mr Gerry Fahey, also a Member of the
     Australasian Institute of Mining and Metallurgy: “This report was completed under the overall supervision and
     direction of Gerry Fahey and the 3D modelling and Mineral Resource estimation was carried out by Mark
     Drabble both of whom are Competent Persons as defined by the Australasian Code for the Reporting of Mineral
     Resources and Ore reserves (JORC Code) 1999 edition and who consent to the inclusion in this report of the
     matters based on his information in the form and context in which it appears.”




     Mantle Mining Corporation Ltd | Annual Repor t 2011
30
3. Trafford Coal Project:
Mount Mulligan Black Coal Exploration Target

Target                                       Tonnes        TM %         Ash %      VM %       FC %     CV MJ/kg
Mulligan Sub-basin         100 Million – 500 Million        2-3        11 - 18    28 - 34   50 - 70        26 - 28
Total                      100 Million – 500 Million        2–3        11 - 18    28 - 34   50 - 70        26 - 28

Statements in this report relating to the Mt Mulligan Coal Exploration Target are based on data provided
to the Company by the vendors of the project, as first released in a report to the ASX by Mantle on
25th September 2007: “Under the Guidelines for the Estimation and Reporting of Australian Black Coal
Deposits (1999), Mount Mulligan had an identified Class 1 deposit of 144m tonnes and an identified Class 2
deposit of 507m tonnes”. Upon review of the geological data in consultation with Mantle’s consultant geologists,
it was considered appropriate that the range of the Exploration Target be considered as 100m to 500m tonnes.
Information in this report that relates to Exploration Results is based on information compiled by Mr Ian Kraemer
an Executive of Mantle Mining Corporation Ltd. Mr Kraemer is a Fellow of the Australasian Institute of Mining
and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr Kraemer consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears. In addition, Mr Kraemer notes that the potential quantity and grade
of the Black Coal Exploration Target is conceptual in nature, that there has been insufficient exploration to
define a Mineral Resource, and that it is uncertain if further exploration will result in the determination of a
Mineral Resource.

4. Bacchus Marsh Coal Project:
Bacchus Marsh Brown Coal Exploration Target

Target                                                     Tonnes                 TM %             Ash %
Parwan Sub-basin                               1 Billion – 2 Billion             35 – 61          4 - 11
Total                                          1 Billion – 2 Billion             35 – 61          4 - 11

Statements in this report relating to the Mt Mulligan Coal Exploration Target are based on data provided
to the Company by the vendors of the project, as first released in a report to the ASX by Mantle on 25th
September 2007: “Under the Guidelines for the Estimation and Reporting of Australian Black Coal Deposits
(1999), Mount Mulligan had an identified Class 1 deposit of 144m tonnes and an identified Class 2 deposit
of 507m tonnes”. Upon review of the geological data in consultation with Mantle’s consultant geologists, it
was considered appropriate that the range of the Exploration Target be considered as 100m to 500m tonnes.
Information in this report that relates to Exploration Results is based on information compiled by Mr Ian Kraemer
an Executive of Mantle Mining Corporation Ltd. Mr Kraemer is a Fellow of the Australasian Institute of Mining
and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined
in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr Kraemer consents to the inclusion in the report of the matters based on his information in the form
and context in which it appears. In addition, Mr Kraemer notes that the potential quantity and grade of the Black
Coal Exploration Target is conceptual in nature, that there has been insufficient exploration to define a Mineral
Resource, and that it is uncertain if further exploration will result in the determination of a Mineral Resource.


other aCtivities
The Australian Tax Office issued the Company a cash refund of $300,268 (including interest) for Research
and Development (R&D) Tax Offsets for the 2008 – 2009 Financial Year. The Company has registered initial
baseline R&D plans for the Barkly Phosphate, Haunted Stream Gold and Trafford (Mt Mulligan) Coal Projects
and intends to register a similar plan for the Bacchus Marsh Coal Project.


                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                     31
     DireCtors’ report


     The Company raised $600,000 with the assistance of Cygnet Capital Pty Ltd by way of a placement to
     sophisticated investors at 3 cents per share. An additional $1,131,000 was raised by way of conversion of
     share options at 7 cents per option.

     The Company raised $600,000 with the assistance of Intersuisse Limited and its associated corporation, Phillip
     Capital Pty Ltd by way of a placement to sophisticated investors at 9.75 cents per share. The Company also
     announced its intention to raise $2,385,690 by way of a 1:8 non renounceable Entitlement (Rights) Issue
     underwritten by Intersuisse Limited at 9.75 cents per share which was subsequently cancelled.

     The Company finalised a new Services Agreement with its Managing Director. An Exploration Manager Coal
     was employed to drive the emerging coal portfolio, in concert with Mantle’s Exploration Manager Minerals
     who is responsible for the gold and phosphate portfolio. Both positions report directly to the Managing Director
     thereby maintaining the Company’s low level of management overhead.

     The Company continued to develop and review a number of project acquisition opportunities, focussing
     primarily on gold and coal projects in eastern Australia. For reasons of either political and operational risk,
     or low perceived prospectivity, none of these opportunities were taken up.

     The Company also undertook a grass roots review of available coal and coal bed methane areas in
     Queensland, New South Wales and Victoria. The Bacchus Marsh Project tenement was secured and is
     considered a major opportunity for the Company. The Texas and Latrobe Valley Coal tenements were also
     secured as a result of this review.

     Ongoing evaluation of Mantle’s existing tenement portfolio led to a number of relinquishments consistent with
     the Company’s policy of turning over low prospectivity areas:

     •	 The	Julia	Creek	Uranium	tenements	in	western	QLD	had	been	sufficiently	drill	tested	in	prior	years	and	
        were relinquished,

     •	 The	Burke	Uranium	tenements	in	far	north	QLD	were	offered	for	grant	however	desktop	study	confirmed	
        low prospectivity and the applications were withdrawn,

     •	 A	major	tenement	position	in	the	south	of	the	Barkly	Phosphate	project	area	that	was	sufficiently	tested	in	
        prior years was relinquished.


     eXpenDiture
     During financial year 2010/11, Mantle continued its re-emergence from the slowdown affected by economic
     conditions during the Global Financial Crisis (GFC). Corporate overheads continued to be maintained at low
     levels yet work was progressed in key commodity areas.

     New funds raised were applied to advanced exploration drilling at Barkly Phosphate and Haunted Stream Gold.
     This high proportion of expenditure “into the ground” is regarded by the Directors as a credible result and in
     line with Mantle’s business objectives.


     DiviDenDs paiD or reCommenDeD
     The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way
     of a dividend to the date of this report.


     after BaLanCe Date events
     Subsequent to the period end, the Company announced the following to the ASX:

     On 14 July 2011, Mantle provided an update on progress of the Mt Mulligan Court action wherein the Court
     gave Calcifer until 10 August 2011 to file their Amended Defence and Counterclaim.


     Mantle Mining Corporation Ltd | Annual Repor t 2011
32
On 14 July 2011, Mantle released a Prospectus for a pro rata non-renounceable entitlement issue of one
share for every twelve shares held at an issue price of 9.75 cents per share to raise approximately $1,590,866
together with one free new option for every one new share issued exercisable at 10.5 cents on or before
15 July 2013.

On 21 July 2011 Mantle announced that it had received a cash refund of $325,059 for Research and
Development Tax Offset for the 2009/10 financial year.

On 27 July 2011 the Company advised that a decision had been taken to withdraw an application for an
exploration licence at Deans Marsh.

On 28 July 2011, Mantle provided an update on the Deans Marsh tenement application in Victoria where, after
considering the potential prospectivity of the area, potential conflict arising from competing land use in the
locality, and the potential costs/benefits over time, the Company had taken the pragmatic decision to withdraw
its application for an exploration licence in order to focus its resources on other higher priority projects.

On 5 August 2011, Mantle released a Notice of General Meeting to be held in Sydney on 8 September 2011,
with Resolutions to ratify prior issues of shares in order to refresh the Company’s 15% placement capacity.

On 9 August 2011, Mantle announced an Extension of Entitlement Issue closing date to 2 September 2011 as
a consequence of then current market conditions.

On 10 August 2011, Mantle released its Supplementary Disclosure Document pursuant to the previously
announced Entitlement Issue Extension.

On 11 August 2011 the Company provided an updates of its key Bacchus Marsh Coal Project noting that
the low impact drilling workplan was approved on August 3rd and that the Substantive Agreements between
the Company and Exergen Pty Ltd: Joint Venture Agreement, Technology Licence Agreement and Heads of
Agreement for Mining. Draft documentation has been exchanged and discussions are being actively progressed.

On 18 August 2011, Mantle provided an update on the Mt Mulligan court action wherein Calcifer was given
a further extension until 2 September 2011 to file its Amended Defence, Mantle file its Amended Reply and
Answer by 16 September 2011, final disclosure by 22 September and next review on 26 September. On 26
September 2011 the Court ordered, amongst other matters, that the defendant will file and serve any further
amended defence by 21 October 2011 and that the matter will be set down for trial on a date to be fixed.

On 30 August the Company announced that it has restructured the capital raising announced prior to the end
of the financial year. The Company noted it had agreed terms with Cygnet Capital Pty Ltd to fully underwrite
a new Rights Issue and that its previously announced Rights Issue would be cancelled, and on 19 September
2011 the Company issued a Prospectus for a non-renounceable entitlement issue on the basis of one Share for
every six Shares held by Shareholders at an issue price of 6 cents per Share to raise approximately $1,958,807
together with one free new Option for every one new Share issued exercisable at 7.5 cents on or before
1 December 2013.

The Company also advised that it had received notification from Intersuisse Limited, the underwriter of
Company’s discontinued previous pro rata non-renounceable entitlement issue that it has elected to exercise
its rights under the Underwriting Agreement and terminate the underwriting and as a consequence of this the
Company had elected to discontinue with the previous entitlement issue.

Other than the above, no other matters or circumstances have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the Company, the results of those operations,
or the state of affairs of the Company in future financial years.




                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                     33
     DireCtors’ report



     future DeveLopments, prospeCts anD
     Business strategies
     Mantle intends to continue to pursue its principal activities, which are to acquire tenements within Australia
     and to locate economically developable deposits. It is the Company’s intention to progress deposits through
     feasibility and into mining operations, to the ultimate benefit of its shareholders.While in very strong demand
     at the moment, Mantle considers precious and base metals (gold, silver, copper, lead, zinc and nickel) fossil
     fuels (coal and coal bed methane) and fertiliser minerals (phosphate rock) to hold excellent medium and long
     term value when current and forecast demand cycles are considered. As a result, the Company has reprioritised
     its focus to those tenements containing known historic deposits of these priority mineral commodities.

     By narrowing its focus in this manner Mantle will be able to concentrate efforts and funds on drilling known
     high potential prospects, potentially through to JORC Compliancy status, through feasibility and into
     development. This process will reduce the amount of time and money spent on longer lead time, green field
     exploration projects, such as those the Company has been working to sell, joint venture or relinquish.

     The addition of the Bacchus Marsh, Texas and Latrobe Valley coal projects during the period considerably
     increased Mantle’s exposure to coal as a core element in the Company portfolio. The Company is currently
     reviewing a number of opportunities to acquire additional coal and gold tenements.

     This refocus on primarily gold and coal projects which hold either JORC Compliant Resources or large historic
     deposits that are considered potentially capable of being advanced to JORC Compliant Resource status within
     a reasonable timeframe, is well advanced.


     environmentaL issues
     The Company is aware of its environmental obligations with regards to its exploration activities and ensures that
     it complies with all regulations at all times.


     forwarD Looking statements
     This Report may include statements deemed “forward-looking statements”. Although the Company believes
     the expectations expressed in such statements are based on reasonable assumptions, such statements are not
     guarantees of future performance and actual results may differ materially.


     remuneration report (auDiteD)
     This report details the nature and amount of remuneration for each Director of Mantle Mining Corporation Ltd,
     and for the executives receiving the highest remuneration.


     remuneration poLiCy (auDiteD)
     In determining competitive remuneration rates, the Board seeks independent advice on local and
     international trends among comparative companies and industry generally. It examines terms and
     conditions for employee incentive schemes benefit plans and share plans. Independent advice is obtained
     to confirm that executive remuneration is in line with market practice and is reasonable in the context of
     Australian executive reward practices.


     performanCe-BaseD remuneration
     (auDiteD)
     The Board recognises that Mantle Mining Corporation Ltd operates in a global environment. To prosper in this
     environment the Company must attract, motivate and retain key executive staff.



     Mantle Mining Corporation Ltd | Annual Repor t 2011
34
The principles supporting the Company’s remuneration policy are that:

•	 Reward	reflects	the	competitive	global	market	in	which	we	operate;

•	 Rewards	to	executives	are	linked	to	creating	value	for	shareholders.	Reward	in	the	form	of	options	where	
   possible	take	the	form	of	options	with	exercise	prices	materially	above	the	share	price	at	the	time	of	grant;•	
   Remuneration arrangements are equitable and facilitate the development of senior management across
   the Company; and

•	 Where	appropriate	senior	managers	receive	a	component	of	their	remuneration	in	equity	to	align	their	
   interests with those of the shareholders.


market Comparisons (auDiteD)
Consistent with attracting and retaining talented executives, the Board endorses the use of incentive and bonus
payments. The Board continues to seek external advice to ensure reasonableness in remuneration scale and
structure, and to compare the Company’s position with the external market. The impact and high cost of
replacing senior employees and the competition for talented executives requires the Company to reward key
employees when they deliver consistently high performance.


BoarD remuneration (auDiteD)
Shareholders approve the maximum aggregate remuneration for Non-Executive Directors. The Board
determines actual payments to directors and reviews their remuneration annually based, on independent
external advice with regard to market practice, relativities, and the duties and accountabilities of directors.
A review of the Directors’ remuneration is conducted annually to benchmark overall remuneration including
retirement benefits.


DetaiLs of remuneration for years enDeD
30 June 2011 anD 30 June 2010 (auDiteD)
The remuneration for each Director and each of the executive officers of the Company receiving the highest
remuneration during the year was as follows:

                                                  Post
                                           Employment             Fees paid in
                                 Salary,      Benefits             shares and
                               fees and        (Super-                options    Share based              Performance
2011                        commissions     annuation) Cash Bonus         1, 2      payment       Total        Related
                                      $             $           $           $            $           $              %
Directors
Martin Blakeman                 26,250               -          -      3,750               -    30,000               -
Stephen de Belle                21,875               -          -      3,125               -    25,000               -
Peter Anderton                  21,875               -          -      3,125               -    25,000               -
Ian Kraemer                   185,827         16,724            -      3,125        35,000     205,676          17.0
                              255,827         16,724            -     13,125        35,000     320,676

Key Management Personnel
Stuart Moore                  123,250         11,093            -            -       3,250     137,593            2.4
                              123,250         11,093            -            -       3,250     137,593               -




                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                         35
     DireCtors’ report



                                                          Post
                                                   Employment                   Fees paid in
                                        Salary,       Benefits                   shares and                                       Perfor-
                                      fees and         (Super-                      options    Share based                        mance
     2011                          commissions      annuation) Cash Bonus               1, 2      payment            Total       Related
                                              $              $            $               $             $               $              %
     Directors
     Martin Blakeman                   31,250                 -            -        7,500                -          38,750              -
     Stephen de Belle                   6,833                 -            -        6,250                -          13,083              -
     Peter Anderton                    18,750                 -            -        6,250                -          25,000              -
     Ian Kraemer                     168,750          14,625               -     (22,330)                -     161,045                  -
                                     225,583          14,625               -       (2,330)               -     237,878
     Key Management Personnel
     Stuart Moore                    121,000          10,890               -               -             -     131,890                  -
                                     121,000          10,890               -               -             -     131,890                  -

     1   The directors’ fees for years ended 30 June 2010 and 30 June 2011 include fees accrued and payable via equity in the
         Company following the approval of shareholders at the Company’s AGM.
     2   During the years ended 30 June 2011 and 30 June 2010, directors and key management personnel elected to receive
         shares in lieu of cash payment for directors’ fees. A total of 2,505,695 (2010: 1,134,513) shares were issued with a total
         fair value of $92,711 (2010: $50,250), including payment for balances owing as at 30 June 2010.
     3   During the year ended 30 June 2010, a write back of options expense totalling $28,580 was recognised in the statement
         of comprehensive income as 1,000,000 options issued to Ian Kraemer in prior periods did not vest.
     4   The Directors have agreed to accept a portion of their remuneration in shares in the Company. Given the shares of the
         Company are publically traded and that there are often long periods between the time the remuneration is earned and
         the time the shares are approved to be issued, it is often the case that the fair value of the shares on the approval date
         has changed from the price of the shares on the date the remuneration was calculated. The Accounting Standards
         applicable to the Company require, for the purposes of these financial reports, that the shares be fair valued on the
         approval date of the issue. The amounts each director accrued in FY 2011 for payment via equity are $15,000 for the
         Chairman and $12,500 for each other directors. Of which one quarter was paid following the shareholders’ approval
         received at the AGM 2010.

     Options granted as remuneration (Audited)
     2011                              Vested              Granted                               Exerciseprice
     Director Executive               Number               Number              Grant Date                    $               Expiry date
     Ian Kraemer                   1,000,000             1,000,000         15 Dec 2010                       0.10       31 Dec 2011
     Ian Kraemer                   2,000,000             2,000,000         15 Dec 2010                       0.20       31 Dec 2012
     Stuart Moore                     250,000              250,000         15 Dec 2010                       0.10       31 Dec 2011

     During the year ended 30 June 2010 there were no options granted as remuneration (apart from those
     issued in lieu of cash for director and consulting fees) to key management personnel.


     shares issueD on eXerCise of
     Compensation options (auDiteD)
     During the year ended 30 June 2011, 50,000 shares (2010: nil) were issued on exercise of
     compensation options.


     empLoyment ContraCts of DireCtors anD
     senior eXeCutives (auDiteD)
     The employment conditions of the Managing Director, Ian Kraemer, are formalised in a contract of
     employment. Mr Kraemer’s contract is on-going from the commencement date of 4 February 2008, and
     was renewed on 22 October 2010.

     Mantle Mining Corporation Ltd | Annual Repor t 2011
36
The employment contract stipulates that in the event Mr Kraemer is terminated by the Company
without reason the Company is required to make payment in lieu of one month of service based on the
individual’s annual salary component.

The employment conditions of Stuart Moore are formalised in a contract of employment. The
employment contract stipulates that in the event Mr Moore is terminated by the Company without
reason the Company is required to make payment in lieu of one month of service based on the
individual’s annual salary component.

Neither Messrs Anderton, de Belle, nor Blakeman have current formal employment contracts that entitle
them to termination payments.


meetings of DireCtors
During the financial year, 13 meetings of Directors were held. Attendances by each Director during the
year were as follows:

                                         Number eligible to attend                Number attended
Martin Blakeman                                                   13                                 13
Ian Kraemer                                                       13                                 13
Stephen de Belle                                                  13                                 13
Peter Anderton                                                    13                                 13

The full Board fulfils the roles of remuneration, nomination and audit committees.


options
Unissued shares
At the date of this report, the unissued ordinary shares of Mantle Mining Corporation Ltd under option are as
follows:

Grant date              Date of expiry                  Exercise price         Number under option
15 Dec 2010             31 Dec 2011                              $0.10                     1,450,000
15 Dec 2010             31 Dec 2012                              $0.20                     2,000,000
                                                                                           3,450,000


shares issueD as a resuLt of the eXerCise
of options
During the financial year, the following options have been exercised to acquire 17,637,069 fully paid ordinary
shares in Mantle Mining Corporation Ltd.

         Number of options exercised                      Exercise price
                           12,587,069                               $0.07
                             5,000,000                              $0.05
                                50,000                              $0.10

During the year ended 30 June 2010, options were exercised to acquire 21 fully paid ordinary shares in Mantle
Mining Corporation Ltd at an exercise price of $0.07 per share.

No person entitled to exercise options had or has any right by virtue of the option to participate in any share
issue of any other body corporate.


                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                   37
     DireCtors’ report



     inDemnifying offiCers or auDitor
     In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every officer
     of the Company shall be indemnified out of the property of the Company against any liability incurred by him
     in his capacity as officer, auditor or agent of the Company or any related corporation in respect of any act
     or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
     During the period the Company paid or agreed to pay premiums for directors’ and officers’ insurance.


     proCeeDings on BehaLf of Company
     No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
     proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
     for all or any part of these proceedings.

     The Company was not a party to any such proceedings during the year.


     non-auDit serviCes
     The Board of Directors, is satisfied that the provision of non-audit services during the year is compatible with
     the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are
     satisfied that the services disclosed below did not compromise the external auditor’s independence for the
     following reasons:

     •	 all	non-audit	services	are	reviewed	and	approved	by	the	board	prior	to	commencement	to	ensure	they	do	
        not adversely affect the integrity and objectivity of the auditor; and

     •	 the	nature	of	the	services	provided	do	not	compromise	the	general	principles	relating	to	auditor	
        independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
        Accounting Professional and Ethical Standards Board.

     The following fees for non-audit services were paid/payable to the external auditors during the year:

                                                                       2011                2010
                                                                          $                   $
     Taxation services                                               39,614               26,400
     Other services                                                   1,600                      -
     Total                                                           41,214               26,400


     auDitor’s inDepenDenCe DeCLaration
     The lead auditor’s independence declaration for the year ended 30 June 2011 has been received and can be
     found within this annual report.

     Signed in accordance with a resolution of the Board of Directors.




     	
  
     MARTIN BLAKEMAN
     Chairman
     Dated at Perth this 28th day of September 2011




     Mantle Mining Corporation Ltd | Annual Repor t 2011
38
tenement sCheDuLe



tenement sCheDuLe
TENEMENT SCHEDULE

       Number                     Project                   Name             Grant Date       Period        Expiry Date     Area       Interest
                                                                                                (yrs)                                    (%)
Queensland
EPM 14388                Charters Towers           Charters Towers           24/02/2005        5+5          23/02/2015        29        100
EPM 14179 1              Granite Castle            Range Creek               25/11/2004        5+3          24/11/2012        6          100
EPM 15527                Granite Castle            Oaky Creek                30/11/2007           5         29/11/2012        54         100
EPM 15534                Clarke River              Phantom Creek             06/03/2007           5         05/03/2012        6          100
EPM 15535                Clarke River              Mount Brown               23/11/2007           5         22/11/2012        41         100
EPM 19334                Granite Castle            Granite Castle               Applic            5                          100         100
EPC 772
           2             Trafford                  Mount Mulligan            05/12/2002      3+5+3            Renewal         72         100
ATP 718
           2             Trafford                  Mount Mulligan               Applic                                       150         100
EPC 2190                 Texas                     Texas                     21/01/2011           5         20/01/2016       300         100
EPC 2192                 Texas                     Mt Gunyan                 25/01/2011           5         24/01/2016       300         100


                                                                                                                          sub-blocks


Victoria
                                                                                                                          grat-sects
EL 3576                  Haunted Stream            Haunted Stream            21/10/1994       annual        20/10/2011        66         100
EL 4784                  Haunted Stream            Mount Baldhead            25/01/2006        5+2          24/01/2013        87        100
EL 4785                  Haunted Stream            Mount Nugong                 Applic                                       179         100
EL 4786                  Haunted Stream            Mount Elizabeth              Applic                                       495         100
EL 4819                  Haunted Stream            Buchan East                  Applic                                       389         100
MIN 5505                 Haunted Stream            Dogtown                   20/08/2010           2         19/08/2012      0.9Ha        100
EL 5294 3                Bacchus Marsh             Bacchus Marsh             23/03/2011           5         22/03/2016       388         100
EL 5323 3                Bacchus Marsh             Bacchus Marsh               10/8/200           2          9/08/2013        1          100
EL 5336                  Latrobe Valley            Jeeralang                    Applic                                       368         100
EL 5337                  Latrobe Valley            Thorpdale                 20/04/2011           5         19/04/2016       198         100
EL 5338                  Latrobe Valley            Baromi                       Applic                                        3          100




Northern Territory
                                                                                                                            blocks
EL 26018                 Barkly                    Mittiebah                 05/12/2007           6         04/12/2013       164         100
EL 26019                 Barkly                    Mitchiebo                 05/12/2007           6         04/12/2013       141         100
EL 27035                 Barkly                    Carrara Bore              01/05/2009           6         30/04/2015        78         100
EL 27037                 Barkly                    Boomerang Creek           07/10/2009           6         06/10/2015        29         100


                                                                                                                            blocks


1.   Held by Zulu Gold Pty Ltd which is a 100% owned subsidiary of Mantle.




                                                                                                                                                  	
  
2.   Held by Calcifer Industrial Minerals Pty Ltd however Mantle holds 100% beneficial interest via its 100% owned subsidiaries:
     Trafford Coal Pty Ltd (87.5% beneficial interest) and Mt Mulligan Coal Pty Ltd (12.5% beneficial interest).
3.   Subject to a Pre JVA with Exergen Pty Ltd whereby the parties intend to form a 50/50% Joint Venture.




                                                                                 Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                                                         39
     Corporate governanCe


     The Company is committed to implementing high standards of corporate governance. In determining what
     those high standards should involve, the Company has turned to the ASX Corporate Governance Council’s
     Principles of Good Corporate Governance and Best Practice Recommendations. The Company is pleased to
     advise that the Company’s practices are largely consistent with those ASX guidelines.

     Unless disclosed below, all the best practice recommendations of the ASX Corporate Governance Council have
     been applied for the entire financial year ended 30 June 2011.


     BoarD Composition
     The skills, experience and expertise relevant to the position of each Director who is in office at the date of the
     annual report and their term of office are detailed in the director’s report. At present there are no independent
     Directors of the Company.

     The Board sets out below its “if not, why not” report in relation to those matters of corporate governance where
     the Company’s practices depart from the Recommendations:

     Recommendation                                               Mantle Mining Corporation Ltd current practice
     1.1    Companies should establish the functions reserved     Satisfied. Board Charter is available at
            for the board and those delegated to senior           www.mantlemining.com in the Corporate
            executives and disclose those functions.              Governance Statement.
     1.2    Companies should disclose the process for             Satisfied. Board Performance Evaluation Policy
            evaluating the performance of senior executives.      is available at www.mantlemining.com in the
                                                                  Corporate Governance Statement.
     1.3    Companies should provide the information              Satisfied. The Board Charter is available at
            indicated in the Guide for reporting on Principle 1   www.mantlemining.com in the Corporate
                                                                  Governance Statement.

                                                                  Whilst the performance of management is
                                                                  appraised on an ongoing basis. During the year no
                                                                  formal appraisal of management was conducted.
     2.1    A majority of the board should be                     Not Satisfied. The shareholding of
            independent directors.                                Mr Blakeman, the executive contract of Mr
                                                                  Kraemer and the previous executive contracts
                                                                  of Mr Anderton and de Belle exclude them
                                                                  from being classed as independent under ASX
                                                                  guidelines. The Board consider that given the
                                                                  current size and nature of the Company, the
                                                                  current Board composition is appropriate.
     2.2    The chair should be an independent director.          Not Satisfied. Given the nature of the Company,
                                                                  Mr Blakeman is considered the most appropriate
                                                                  Director to act as Chairman.
     2.3    The roles of chair and Chief Executive Officer        Satisfied.
            should not be exercised by the same individual.
     2.4    The board should establish a                          Not satisfied. The Board consider that given
            nomination committee.                                 the current size of the board (4), this function is
                                                                  efficiently achieved with full Board participation.
                                                                  Accordingly, the Board has not established a
                                                                  nomination committee.
     2.5    Companies should disclose the process for             Satisfied. Board Performance Evaluation Policy
            evaluating the performance of the board, its          is available at www.mantlemining.com in the
            committees and individual directors.                  Corporate Governance Statement.


     Mantle Mining Corporation Ltd | Annual Repor t 2011
40
Recommendation                                             Mantle Mining Corporation Ltd current practice
2.6   Companies should provide the information             Satisfied. Directors are entitled to take
      indicated in the guide to reporting on Principle 2   independent advice should they deem
                                                           that required.

                                                           Whilst the performance of the Board is appraised
                                                           on an ongoing basis, during the year no formal
                                                           appraisal was conducted.

                                                           The Board is currently developing a diversity policy
                                                           for adoption.
3.1   Companies should disclose a code of conduct and      Satisfied. The Code of Conduct is available
      disclose the code or a summary of the code as to:    at www.mantlemining.com in the Corporate
                                                           Governance Statement.
      •	 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

      •	 The	responsibility	and	accountability	of	
         individuals for reporting and investigating
         reports of unethical practices.


3.2   Companies should establish a policy concerning      Not Satisfied. The Board is currently developing a
      diversity and disclose the policy or a summary of   diversity policy for adoption.
      that policy. The policy should include requirements
      for the board to establish measurable objectives
      for achieving gender diversity for the board to
      assess annually both the objectives and progress in
      achieving them.
3.3   Companies should disclose in each annual             The Board is currently developing a diversity policy
      report the measurable objectives for achieving       for adoption. Once adopted the Company will be
      gender diversity set by the board in accordance      in a position to disclose the measurable objectives
      with the diversity policy and progress towards       for achieving gender diversity set by the board in
      achieving them.                                      accordance with the diversity policy and progress
                                                           towards achieving them.
3.4   Companies should disclose in each annual report      All four board members are male as is the
      the proportion of women employees in the whole       Company Secretary. There is one female employed
      organisation, women in senior executive positions    amongst the balance of the workforce which, at
      and women on the board.                              the date of this report, consists of five people.
3.5   Companies should provide the information             Satisfied. The Board is currently developing a
      indicated in the Guide to reporting on Principle 3   diversity policy for adoption which will be made
                                                           available at that time.
4.1   The board should establish an audit committee.       Not satisfied. The Board consider that given
                                                           the current size of the board (4), this function is
                                                           efficiently achieved with full board participation.
                                                           Accordingly, the Board has not established a
                                                           separate audit committee.




                                                           Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                  41
     Corporate governanCe



     Recommendation                                             Mantle Mining Corporation Ltd current practice
     4.2   The board committee should be structured so          Not satisfied. As the full board participates in the
           that it:                                             audit committee function, executive and non-
                                                                executive directors are included.
              C
           •	 	 onsists	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
     4.3   The audit committee should have a formal charter. Satisfied. Audit Committee charter is available
                                                             at www.mantlemining.com in the Corporate
                                                             Governance statement.
     4.4   Companies should provide the information             Satisfied.
           indicated in the Guide to reporting on Principle 4
     5.1   Companies should establish written policies          Satisfied. Continuous disclosure policy is available
           designed to ensure compliance with ASX Listing       at www.mantlemining.com in the Corporate
           Rule disclosure requirements and to ensure           Governance statement.
           accountability at senior executive level for that
           compliance and disclose those policies or a
           summary of those policies.
     5.2   Companies should provide the information             Satisfied
           indicated in the Guide to reporting on Principle 5
     6.1   Companies should design a communications             Satisfied. Shareholders communication strategy
           policy for promoting effective communication with    is available at www.mantlemining.com in the
           shareholders and encouraging their participation     Corporate Governance statement.
           at general meetings and disclose their policy or a
           summary of their policy.
     6.2   Companies should provide the information             Satisfied
           indicated in the Guide to reporting on Principle 6
     7.1   Companies should establish policies for the          Satisfied. Risk management program is available
           oversight and management of material business        at www.mantlemining.com in the Corporate
           risks and disclose a summary of those policies.      Governance statement.
     7.2   The board should require management to design        Satisfied. The Board, including the
           and implement the risk management and internal       Managing Director, routinely consider risk
           control system to manage the company’s material      management matters.
           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.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
42
Recommendation                                              Mantle Mining Corporation Ltd current practice
7.3   The board should disclose whether it has              Satisfied. The Board has received a section 295A
      received assurance from the chief executive           declaration pursuant to the 2011 financial period.
      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.
7.4   Companies should provide the information              Satisfied.
      indicated in the Guide to reporting on Principle 7
8.1   The board should establish a remuneration             Not Satisfied. The Board consider that given
      committee.                                            the current size of the board (4), this function is
                                                            efficiently achieved with full board participation.
                                                            Accordingly, the Board has not established a
                                                            remuneration committee.
8.2   The remuneration committee should be structured       Not Satisfied. The Board consider that given
      so that it:                                           the current size of the board (4), this function is
                                                            efficiently achieved with full board participation in
      •	 consists	of	a	majority	of	independent	directors
                                                            its current form.
      •	 is	chaired	by	an	independent	chair

      •	 has	at	least	three	members.
8.3   Companies should clearly distinguish the structure    The structure of Directors’ remuneration
      of non-executive directors’ remuneration from that    is disclosed in the remuneration report of the
      of executive directors and senior executives.         annual report.
8.4   Companies should provide the information              Remuneration committee charter is available
      indicated in the Guide to reporting on Principle 8    at www.mantlemining.com in the Corporate
                                                            Governance statement.

Further information about the Company’s corporate governance practices is set out on the Company’s web site
at www.mantlemining.com.




                                                            Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                    43
     ConsoLiDateD statement
     of Comprehensive inCome


     for the year ended 30 June 2011



                                                                                Consolidated Group
                                                                         Note       2011             2010
                                                                                       $                $

     Interest income                                                      7       46,119         46,907
     Research and development tax offset                                  7      323,348        297,299
     Other revenue                                                        7       22,810         25,993


     Administrative expenses                                                    (122,028)       (85,607)
     Consultancy and legal expenses                                             (165,643)       (90,210)
     Compliance and regulatory expenses                                          (72,884)       (58,066)
     Depreciation expense                                                        (34,637)       (46,798)
     Director and employee related expenses                               8     (415,577)      (297,446)
     Promotion and communication costs                                           (76,773)       (87,479)
     Interest expense                                                               (358)             (55)
     Write down of exploration expenditure                                      (437,717)      (365,041)

                                                                                (933,340)      (660,503)
     Loss before income tax benefit
     Income tax benefit                                                   5             -                 -
     Loss after income tax benefit                                              (933,340)      (660,503)

                                                                                        -                 -
     Other comprehensive income
     Total comprehensive income attributable to members of the Company          (933,340)      (660,503)


     Basic and diluted loss per share (cents)                             6        (0.54)            (0.50)

     The accompanying notes form part of these financial statements.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
44
ConsoLiDateD statement
of finanCiaL position


for the year ended 30 June 2011
                                                                             Consolidated Group
                                                                                      2011             2010
                                                                     Note                $                $

Current assets
Cash and cash equivalents                                            19(a)        1,465,522          843,208
Trade and other receivables                                            9           372,360           359,231
Other current assets                                                  10              3,697            5,380
Total current assets                                                              1,841,579        1,207,819


Non-current assets
Receivables                                                           11             37,031           45,482
Plant and equipment                                                   12           107,800           129,292
Exploration expenditure                                               13          8,775,185        7,931,108
Total non-current assets                                                          8,920,016        8,105,882


Total assets                                                                     10,761,595        9,313,701


Current liabilities
Trade and other payables                                              14           239,587           253,732
Provisions                                                            15             58,721           46,483
Total current liabilities                                                          298,308           300,215


Total liabilities                                                                  298,308           300,215


Net assets                                                                      10,463,287         9,013,486


Equity
Contributed equity                                                    16        14,394,307        12,162,666
Reserves                                                              17           486,375           334,875
Accumulated losses                                                    18        (4,417,395)       (3,484,055)
Total equity                                                                    10,463,287         9,013,486

The accompanying notes form part of these financial statements.




                                                         Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                45
     ConsoLiDateD statement
     of Cash fLows


     for the year ended 30 June 2011
                                                                                 Consolidated Group
                                                                                      2011            2010
                                                                        Note             $               $

     Cash flows from operating activities
     Cash payments in the course of operations                                   (657,576)      (496,968)
     Cash payments for exploration expenditure                                  (1,281,627)   (1,326,034)
     Interest received                                                              43,521        46,907
     Interest paid                                                                    (358)            (55)
     R&D tax refund                                                                297,299                -
     Net cash (used in) operating activities                            19(b)   (1,598,741)   (1,776,150)


     Cash flows from investing activities
     Payments for plant and equipment                                               (6,481)       (4,799)
     Net cash (used in) investing activities                                        (6,481)       (4,799)


     Cash flows from financing activities
     Proceeds from issue of shares                                               2,336,096     1,663,969
     Share issue costs                                                           (108,560)      (156,132)
     Net cash provided by financing activities                                   2,227,536     1,507,837
     Net increase / (decrease) in cash and cash equivalents held                   622,314      (273,112)
     Cash and cash equivalents at the beginning of the financial year              843,208     1,116,320
     Cash and cash equivalents at the end of the financial year         19(a)    1,465,522       843,208

     The accompanying notes form part of these financial statements.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
46
ConsoLiDateD statement
of Changes in equity


for the year ended 30 June 2011
                                                  Contributed                   Accumulated
Consolidated Group                                     equity       Reserves         losses           Total

Balance at 1 July 2010                            12,162,666        334,875      (3,484,055)     9,013,486


Loss for the year                                            -              -     (933,340)      (933,340)
Total comprehensive loss for the year                        -              -     (933,340)      (933,340)
Shares issued                                       2,464,096               -              -     2,464,096
Share issue costs                                   (232,455)               -              -     (232,455)
Share options issued                                         -      151,500                -       151,500
Balance at 30 June 2011                           14,394,307        486,375      (4,417,395)    10,463,287


Balance at 1 July 2009                            10,798,397        163,455      (2,823,552)     8,138,300


Loss for the year                                            -              -     (660,503)      (660,503)
Total comprehensive loss for the year                        -              -     (660,503)      (660,503)
Shares issued                                       1,714,219               -              -     1,714,219
Share issue costs                                   (349,950)               -              -     (349,950)
Share options issued                                         -      200,000                -       200,000
Write back of share options expense                          -      (28,580)               -       (28,580)
Balance at 30 June 2010                           12,162,666        334,875      (3,484,055)     9,013,486

The accompanying notes form part of these financial statements.




                                                         Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                               47
     notes to the
     finanCiaL statements


     for the year ended 30 June 2011
     1.        Statement of significant accounting policies
          These consolidated financial statements and notes represent those of Mantle Mining Corporation Limited
          and its controlled entities (“the consolidated entity”). The separate financial statements of the parent entity,
          Mantle Mining Corporation Limited, have not been presented within this financial report as permitted by
          the Corporations Act 2001.

          The financial statements were authorised for issue on 27 September 2011 by the Board of Directors

     (a) Basis of preparation
         The financial statements are general purpose financial statements that have been prepared in accordance
         with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative
         pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

          Australian Accounting Standards set out accounting policies that the AASB has concluded would result
          in financial statements containing relevant and reliable information about transactions, events and
          conditions. Compliance with Australian Accounting Standards ensures that the financial statements and
          notes also comply with International Financial Reporting Standards. Material accounting policies adopted
          in preparation of these financial statements are presented below and have been consistently applied unless
          otherwise stated.

          The financial statements have been prepared on an accrual basis and are based on historical costs,
          modified, where applicable, by the measurement at fair value of selected non-current assets, financial
          assets and financial liabilities.

     New accounting standards applicable for future periods
                                                                                   Application date
                                                                                   (financial years     Expected
          Reference      Title              Summary                                beginning)           Impact
          AASB 9         Financial          Replaces the requirements of            1 January 2013      No expected
                         Instruments        AASB 139 for the classification and                         material
                                            measurement of financial assets.                            impact on the
                                            This is the result of the first part of                     consolidated
                                            Phase 1 of the IASB’s project to                            entity
                                            replace IAS 39.
          AASB 124       Related Party      Revised standard. The definition of 1 January 2011          Disclosure only
                         Disclosures        a related party is simplified to clarify
                                            its intended meaning and eliminate
                                            inconsistencies from the application
                                            of the definition


     (b) Principles of consolidation
         The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
         Mantle Mining Corporation Limited at the end of the reporting period. A controlled entity is any entity is
         any entity over which Mantle Mining Corporation Limited has the ability and right to govern the financial
         and operating policies so as to obtain benefits from the entity’s activities.

          In preparing the consolidated financial statements, all inter-group balances and transactions between
          entities in the consolidated group have been eliminated in full on consolidation.

          Where controlled entities have entered or left the consolidated entity during the year, the financial
          performance of those entities is included only for the period of the year that they were controlled.



     Mantle Mining Corporation Ltd | Annual Repor t 2011
48
    Where controlled entities have entered or left the consolidated entity during the year, the financial
    performance of those entities is included only for the period of the year that they were controlled.

(c) Income tax
    The income tax expense (revenue) for the year comprises current income tax expense (income) and
    deferred tax expense (income).

    Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated
    using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax
    liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the
    relevant taxation authority.

    Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
    during the year as well as unused tax losses.

    Current and deferred income tax expense (revenue) is charged or credited outside profit or loss when the
    tax related to items that are recognised outside profit or loss.

    Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
    when the asset is realised or the liability is settled. Their measurement also reflects the manner in which
    management expects to recover or settle the carrying amount of the related asset or liability.

    Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
    extent that it is probable that future taxable profit will be available against which the benefits of the
    deferred tax asset can be utilised.

    Where temporary differences exist in relation to investments in subsidiaries, branches, associates,
    and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal
    of the temporary difference can be controlled and it is not probable that the reversal will occur in the
    foreseeable future.

    Current tax assets and liabilities are offset where a largely enforceable right of set-off exists and it is
    intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
    will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the
    deferred tax assets and liabilities related to income taxes levied by the same taxation authority on either
    the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
    realisation and settlement of the respective asset and liability will occur in future periods in which significant
    amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(d) Plant and equipment
    Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
    accumulated depreciation and impairment losses.

    Plant and equipment

    Plant and equipment are measured on the cost basis less depreciation and impairment losses.

    The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess
    of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the
    expected net cash flows that will be received from the assets employment and subsequent disposal. The
    expected net cash flows have been discounted to their present values in determining recoverable amounts.

    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
    group 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.



                                                              Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                          49
     notes to the
     finanCiaL statements


     Depreciation
        The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding
        freehold land, is depreciated on a diminishing value basis over their useful lives to the consolidated entity
        commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over
        the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

         The depreciation rates used for each class of depreciable assets are:

         Class of Fixed Asset                    Depreciation Rate
         Plant and equipment                     12.5-40.0%
         Motor Vehicles                          25.0%

         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 the carrying amount. These
         gains and losses are included in the statement of comprehensive income.

     (e) Exploration and development expenditure
         Exploration and development expenditures incurred are capitalised in respect of each identifiable area
         of interest. These costs are only capitalised to the extent that they are expected to be recovered through
         the successful development of the area or where activities in the area have not yet reached a stage that
         permits reasonable assessment of the existence of economically recoverable reserves.

         Accumulated costs in relation to an abandoned area 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.

     (f) Leases
         Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the
         asset, but not the legal ownership that is transferred to entities in the consolidated entity, are classified
         as finance leases.

         Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to
         the fair value of the leased property or the present value of the minimum lease payments, including any
         guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and
         the lease interest expense for the period.

         Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the
         lease term.

         Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor,
         are charged as expenses in the periods in which they are incurred.

         Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis
         over the life of the lease term.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
50
(g) Impairment of assets
    At each reporting date, the consolidated entity reviews the carrying values of its tangible and intangible
    assets to determine whether there is any indication that those assets have been impaired. If such an
    indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs
    to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value
    over its recoverable amount is expensed to the statement of comprehensive income.

    If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying
    amount of the asset is reduced to its recoverable amount. An impairment loss is recognised in profit or
    loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is
    treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount
    of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the
    increased carrying amount does not exceed the carrying amount that would have been determined had no
    impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised
    in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of
    the impairment loss is treated as a revaluation increase.

(h) Provisions
    Provisions are recognised when the Group 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.

    Provisions are measured using the best estimate of the amounts required to settle the obligation at the end
    of the reporting period.

(i) Cash and cash equivalents
    Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
    liquid investments with original maturities of 12 months or less, and bank overdrafts.

(j) Revenue
    Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to
    the financial assets.

(k) Borrowing costs
    All borrowing costs to date are recognised in income in the period in which they are incurred.

(l) Goods and services tax (“GST”)
    Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
    GST incurred is not recoverable from the Australian Tax Office (“ATO”). In these circumstances the GST is
    recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables
    and payables in the statement of financial position are shown inclusive of GST.

    The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability
    in the statement of financial position.

    Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash
    flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are
    classified as operating cash flows.




                                                             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                       51
     notes to the
     finanCiaL statements


     (m) Share-based payment transactions
         The company provides benefits to employees (including senior executives) in the form of share-based
         payments, whereby employees render services in exchange for shares or rights over shares (equity settled
         transactions). The company does not provide cash settled share based payments.

          The cost of equity settled transactions with employees are measured by reference to the fair value of the
          equity instruments at the date at which they are granted. The fair value is determined by reference to the
          market price of the company’s shares on the Australian Securities Exchange.

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

          The cumulative expense recognised for equity settled transactions at each reporting date until vesting date
          reflects the extent to which the vesting period has expired, and the company’s best estimate of the number
          of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents
          the movement in cumulative expense recognised for the period. No cumulative expense is recognised for
          awards that ultimately do not vest (in respect of non-market vesting conditions).

     (n) Comparative figures
         When required by Accounting Standards, comparative figures have been adjusted to conform to changes
         in presentation for the current financial year.

     2.   Critical accounting estimates and judgments
          The Directors evaluate estimates and judgments incorporated into the financial statements based on
          historical knowledge and best available current information. Estimates assume a reasonable expectation
          of future events and are based on current trends and economic data, obtained both externally and within
          the consolidated entity.

          There have been no judgements, apart from those involving estimation, in applying accounting policies
          that have a significant effect on the amounts recognised in these financial statements.

          Following is a summary of the key assumptions concerning the future and other key sources of estimation
          at reporting date that have not been disclosed elsewhere in these financial statements.

          Deferred exploration and evaluation expenditure
          Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current.
          These costs are carried forward in respect of an area that has not at reporting date reached a stage that
          permits reasonable assessment of the existence of economically recoverable reserves.

          Share based payment transactions
          The Company 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.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
52
3.   Financial risk management objectives and policies
     The consolidated group’s principal financial instruments comprise cash and short-term deposits.

     The consolidated group manages its exposure to key financial risks, including interest rate and liquidity
     risk in accordance with the consolidated group’s financial risk management policy. The objective of
     the policy is to support the delivery of the consolidated group’s financial targets whilst protecting future
     financial security.

     The main risks arising from the consolidated group’s financial instruments are interest rate risk and
     liquidity risk. The consolidated group uses different methods to measure and manage different types of
     risks to which it is exposed. These include monitoring levels of exposure to interest rate risk and
     assessments of market forecasts for interest rates. Liquidity risk is monitored through the development of
     future rolling cash flow forecasts.

     Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews
     and agrees policies for managing each of the risks identified below.

     Risk exposures and responses
     Interest rate risk

     The consolidated group’s exposure to market interest rates relates primarily to the consolidated group’s
     cash and short-term deposits.

     At balance date, the consolidated group had the following financial assets exposed to interest rate risk:

                                                             Consolidated Group
                                                                  2011               2010
                                                                     $                  $
     Cash at bank and in hand                               1,415,522              45,293
     Short term deposits                                        50,000            797,915
     Net exposure                                           1,465,522            843,208

     The following sensitivity analysis is based on the interest rate risk exposures in existence at the
     reporting date.

     At balance date, if interest rates had moved, as illustrated in the table below, with all other variables
     held constant, net loss and equity would have been affected as follows:


                                                                                Consolidated Group
                                                                Net loss                         Equity
                                                             Higher / (lower)                Higher / (lower)
                                                                2011            2010            2011             2010
                                                                   $               $               $                $
     +1% (100 basis points)                                 (14,655)          (8,432)       (14,655)         (8,432)
     -1% (100 basis points)                                   14,655            8,432         14,655             8,432

     The movements are due to higher / lower interest revenue from cash balances.

     Credit risk

     Credit risk arises from the financial assets of the consolidated group, which comprise cash and cash
     equivalents. The consolidated group’s exposure to credit risk arises from potential default of the counter
     party, with a maximum exposure equal to the carrying amount of these instruments.



                                                               Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                         53
     notes to the
     finanCiaL statements


          The consolidated group does not hold any credit derivatives to offset its credit exposure. The consolidated
          group’s exposure to credit risk is minimal, as $340,129 relates to amounts receivable from the ATO for
          GST and R&D refunds.

          Liquidity risk

          The consolidated group’s objective is to maintain adequate funding to meet its needs, currently
          represented by cash and short-term deposits sufficient to meet the consolidated group’s current cash
          requirements.

          The remaining contractual maturities of the Company’s financial liabilities are:

                                                                                             Consolidated Group
                                                                                                2011              2010
                                                                                                   $                 $
          6 months or less (trade creditors)                                                 239,587         253,732

          Capital management

          The primary objective of the consolidated group’s capital management is to ensure that it maintains
          a strong credit rating and healthy capital ratios in order to support its business and maximise
          shareholder value.

          The consolidated group manages its capital structure and makes adjustments to it, in light of changes in
          economic conditions. To maintain or adjust the capital structure, the consolidated group may return capital
          to shareholders or issue new shares. No changes were made in the objectives, policies or processes during
          the years ended 30 June 2011 and 30 June 2010.

          The consolidated group monitors capital with reference to the net debt position. The consolidated group
          includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and
          cash equivalents. The consolidated group’s current policy is to keep the net debt position negative, such
          that cash and cash equivalents exceeds debt.

          Trade and other payables                                                           239,587         253,732
          Less cash and short term deposits                                            (1,465,522)          (843,208)
          Net debt                                                                     (1,225,935)          (589,476)

     4.   Auditor’s remuneration
          Remuneration of former auditors of the Company
          - Auditing or reviewing the financial report                                             -           11,000


          Remuneration of current auditor of the Company – RSM
          Bird Cameron Partners
          - Auditing or reviewing the financial report                                        28,500           24,000
          - Taxation services                                                                 39,614           26,400
          Other services                                                                       1,600                    -
                                                                                              69,714           50,400




     Mantle Mining Corporation Ltd | Annual Repor t 2011
54
5.   Income tax
     The prima facie tax payable on loss before income tax is reconciled to the income tax expense as follows:

                                                                                      Consolidated Group
                                                                                             2011               2010
                                                                                                $                  $
     Prima facie tax benefit on operating loss at 30% (2010: 30%)                       280,002              198,151
     Tax effect of:
     Non assessable items (net)                                                          24,380               88,982
     Research and development tax offset                                                 97,004               89,190
     Deferred tax asset not brought to account                                        (401,386)             (376,323)
     Income tax benefit attributable to operating loss                                          -                   -

     Potential deferred tax assets attributable to tax losses carried forward, amount to approximately
     $3,739,416 (2010: $3,081,431) have not been brought to account at 30 June 2011 because the directors
     do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in
     time. These benefits will only be obtained if:

	    •	   t
          	he	Company	derives	future	assessable	income	of	a	nature	and	of	an	amount	sufficient	to	enable	the	
          benefit from the deductions for the loss and exploration expenditure to be realised;

	    •	   	he	Company	continues	to	comply	with	the	conditions	for	deductibility	imposed	by	law;	and
          t

	    •	   n
          	 o	changes	in	tax	legislation	adversely	affect	the	Company	in	realising	the	benefit	from	the	deductions	
          for the loss and exploration expenditure.

6.   Loss per share
     Classification of securities as ordinary shares

     The company has only one category of ordinary shares included in basic loss per share.

     Classification of securities as potential ordinary shares

     There are currently no securities to be classified as dilutive potential ordinary shares on issue.

                                                                                     2011                      2010
                                                                                  Number                     Number
     Weighted average number of ordinary shares used in the
                                                                             172,082,755                  132,026,995
     calculation of basic loss per share

                                                                                         $                          $
     Net loss                                                                   (933,340)                   (660,503)


     The loss per share calculation as disclosed on the statement of comprehensive income does not include
     instruments that could potentially dilute basic earnings per share in the future as these instruments were
     anti-dilutive in the periods presented. A summary of such instruments at 30 June 2011 is as follows:

                                                                                                Number of potential
     Equity securities                                                Number of securities         ordinary shares
     Options over ordinary shares                                               3,900,000                   3,900,000




                                                                 Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                        55
     notes to the
     finanCiaL statements


          Since the reporting date and before the completion of these financial statements 450,000 options expired
          unexercised. Accordingly, a summary of instruments that could potentially dilute basic earnings per share
          in the future as at the date of completion of these financial statements is as follows:

                                                                                                 Number of potential
          Equity securities                                           Number of securities          ordinary shares
          Options over ordinary shares                                          3,450,000                 3,450,000

     7.   Revenue
                                                                                    Consolidated Group
                                                                                              2011             2010
                                                                                                 $                $
          Interest revenue                                                          46,119                   46,907
          Research and development tax refund                                     323,348                   297,299
          Other revenue                                                             22,810                   25,993
                                                                                  392,277                   370,199
     8.   Expenses
          Employee benefits expense
             Wages and salaries                                                   211,272                  236,485
             Defined contribution superannuation expense                            22,082                   19,239
             Share-based payments expense                                           41,500                   50,250
             Share-based payments write-back                                              -                (28,580)
             Other employee benefits expense                                      140,723                    20,052
                                                                                  415,577                  297,446
     9.   Trade and other receivables
          Current
          Other debtors                                                             32,230                   12,871
          ATO receivables                                                         340,130                  346,360
                                                                                  372,360                  359,231

          The ATO receivables include amounts outstanding for Goods and Services Tax (“GST”) and for the
          research and development tax offset.

     10. Other assets
          Current
          Prepayments                                                                3,697                    5,380


     11. Receivables
          Non-current
          Advances and deposits                                                     37,031                   45,482




     Mantle Mining Corporation Ltd | Annual Repor t 2011
56
12. Plant and equipment
(a) Carrying amounts
                                                                                Consolidated Group
                                                                                     2011              2010
                                                                                        $                 $
    Plant and equipment – at cost                                                 272,392           259,248
    Accumulated depreciation                                                    (184,823)          (156,929)
                                                                                   87,570           102,319


    Motor vehicles – at cost                                                       78,095            78,095
    Accumulated depreciation                                                      (57,865)          (51,122)
                                                                                   20,230            26,973
                                                                                  107,800           129,292
(b) Movements in carrying amounts
    Movements in the carrying amounts of each class of plant and equipment between the beginning and the
    end of the year:

                                                                Plant and           Motor
                                                               equipment          vehicles             Total
                                                                        $                $                $
    2011 year
    Balance at 1 July 2010                                       102,319           26,973           129,292
    Additions                                                     13,145                 -           13,145
    Depreciation charge for the year                            (27,894)           (6,743)          (34,637)
    Balance at 30 June 2011                                       87,570           20,230           107,800


    2010 year
    Balance at 1 July 2009                                       130,798           35,965           166,763
    Additions                                                      9,327                 -            9,327
    Depreciation charge for the year                            (37,806)           (8,992)          (46,798)
    Balance at 30 June 2010                                      102,319           26,973           129,292

13. Exploration expenditure
                                                                                Consolidated Group
                                                                                     2011              2010
                                                                                        $                 $
    Exploration expenditure                                                     8,775,185         7,931,108


    Opening balance                                                             7,931,108         6,961,564
    Exploration incurred during the year                                        1,281,794         1,334,585
    Impairment                                                                  (437,717)         (365,041)
    Exploration and evaluation phase expenditure capitalised                    8,775,185         7,931,108




                                                          Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                57
     notes to the
     finanCiaL statements


         The value of the consolidated entity’s interest in exploration expenditure is dependent upon:

     	   •	     	he	continuance	of	the	consolidated	entity’s	rights	to	tenure	of	the	areas	of	interest;
                t

     	   •	     t
                	he	results	of	future	exploration;	and

     	   •	     t
                	he	recoupment	of	costs	through	successful	development	and	exploitation	of	the	areas	of	interest,	or	
                alternatively, by their sale.

         The consolidated entity at 30 June 2011 have capitalised $1,014,420 to the Mt Mulligan area of interest.
         As the date of this report, there are legal proceedings in relation to this area of interest. Refer to note 25
         for details.

         The consolidated entity’s exploration properties may be subjected to claim(s) under native title, or
         contain sacred sites, or sites of significance to Aboriginal people. As a result, exploration properties or
         areas within the tenements may be subject to exploration restrictions, mining restrictions and / or claims
         for compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum of
         such claims.

     14. Trade and other payables
                                                                                            Consolidated Group
                                                                                                 2011              2010
         Current
                                                                                                    $                 $
         Trade payables                                                                      140,381             99,365
         Other payables                                                                        99,206           154,367
                                                                                             239,587            253,732

         Trade and other creditor amounts represent liabilities for goods and services provided to the Company
         prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually
         paid within 30 days of recognition. Due to the short term nature of these payables, their carrying value is
         assumed to approximate their fair value.

     15. Provisions
         Current
         Annual leave                                                                          58,721             46,483

     16. Contributed equity
     (a) Issued capital
         Ordinary shares, fully paid                                                       14,394,307         12,162,666

     (b) Movements in share capital
                                                             2011             2010                2011             2010
                                                           Number           Number                   $                $
         Balance at beginning of year                148,974,939       106,241,216         12,162,666         10,798,397
         Issued during the year
              Share placements                           26,153,856      12,000,000         1,200,001           480,000
              Rights issue                                        -      29,599,189                       -    1,183,968
              Share issued in consideration for
                                                          3,033,032       1,134,513           128,000            50,250
              services
              Exercise of options                        17,637,069               21        1,136,095                     1
              Share issue costs                                   -                 -        (232,455)         (349,950)
         Balance at end of year                      195,798,896       148,974,939         14,394,307         12,162,666



     Mantle Mining Corporation Ltd | Annual Repor t 2011
58
(c) Share options
                                                                                         Expired or
                                             Balance at      Granted        Exercised     forfeited                        Options
                       Exercise             beginning of   during the          during    during the       Balance at exercisable at
                          price Expiry date         year         year        the year          year       end of year end of year
                                                Number       Number          Number        Number           Number        Number
    2011 year
    Unlisted options      $0.25   30/06/11     300,000              -               -    (300,000)                  -             -
    Unlisted options      $0.25   04/02/11     250,000              -               -    (250,000)                  -             -
    Unlisted options      $0.25   13/08/10     450,000              -               -    (450,000)                  -             -
    Unlisted options      $0.25   13/08/11     450,000              -               -                 -     450,000       450,000
    Listed options1       $0.07   31/12/10 30,799,613               - (12,587,069) (18,212,544)                     -             -
    Unlisted options      $0.10   31/12/11             -   1,500,000         (50,000)                 - 1,450,000        1,450,000
    Unlisted options      $0.20   31/12/12             -   2,000,000                -                 - 2,000,000        2,000,000
    Unlisted options      $0.05   30/11/12            -    5,000,000      (5,000,000)        -                      -             -
                                             32,249,613    8,500,000 (17,637,069) (19,212,544) 3,900,000                3,900,000


    2010 year
    Unlisted options      $0.25   30/06/11     300,000              -               -                 -     300,000       300,000
    Unlisted options      $0.25   04/02/11     250,000              -               -                 -     250,000       250,000
    Unlisted options      $0.25   30/12/12    1,000,000             -               -   (1,000,000)                 -             -
    Unlisted options      $0.25   13/08/09     450,000              -               -    (450,000)                  -             -
    Unlisted options      $0.25   13/08/10     450,000              -               -                 -     450,000       450,000
    Unlisted options      $0.25   13/08/11     450,000              -               -                 -     450,000       450,000
    Listed options        $0.07   31/12/10             - 30,799,634              (21)                 - 30,799,613 30,799,613


                                              2,900,000 30,799,634               (21)   (1,450,000) 32,249,613 32,249,613

     The fair value of the 8,500,000 unlisted options granted during the year ended 30 June 2011 was
    determined using the following option pricing models and weighted average inputs to the model:

    Number of options over shares                                   1,500,000               2,000,000                   5,000,000
    Option pricing model fair value                                      $0.0104              $0.0123                      $0.022
    Share price at grant date                                             $0.038               $0.038                      $0.037
    Exercise price                                                         $0.10                 $0.20                      $0.05
    Expected volatility                                                    130%                  130%                       130%
    Option life                                                         1.12years           2.12 years                  1.89years
    Expected dividends                                                          -                          -                      -
    Risk-free rate                                                         5.07%                5.07%                      5.07%
    Option pricing model used                                           Binomial              Binomial             Black Scholes

    The fair value of the 10,000,000 listed share options granted during the year ended 30 June 2010 was
    determined using the listed option price on the measurement date of $0.02.

(d) Terms and conditions of contributed equity
    Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
    to one vote per share at shareholders’ meetings.

    In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and
    creditors and are fully entitled to any proceeds of liquidation.

                                                                 Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                                      59
     notes to the
     finanCiaL statements


     17. Reserves
         Option reserve
                                                                                        Consolidated Group
                                                                                             2011              2010
                                                                                                $                 $
         Balance at beginning of year                                                    334,875            163,455
         Issue of options                                                                151,500            200,000
         Write back of options expense                                                           -          (28,580)
         Balance at end of year                                                          486,375            334,875

     18. Accumulated losses
         Balance at beginning of year                                                 (3,484,055)        (2,823,552)
         Net loss attributable to members of the Company                                (933,340)          (660,503)
         Balance at end of year                                                       (4,417,395)        (3,484,055)

     19. Notes to the statement of cash flows
     (a) Cash and cash equivalents
         For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in
         banks and deposits at call, net of outstanding bank overdrafts.

         Cash and cash equivalents at the end of the year as shown in the statement of cash flows are reconciled to
         the related item in the statement of financial position as follows:

         Cash at bank and in hand                                                       1,415,522             45,293
         Cash on deposit                                                                   50,000           797,915
                                                                                        1,465,522           843,208

         Cash at bank attracts floating interest at current market rates. Short term deposits are made for periods of
         up to 3 months and earn interest at the respective short term deposit rates.

     (b) Reconciliation of operating loss after income tax to net cash used in operating activities
         Operating loss after income tax                                               (933,340)          (660,503)


         Adjustments for:
         Depreciation                                                                     34,637             46,798
         Share-based payments expense                                                     41,500           (28,580)
         Shares issued in consideration for services                                     128,000             50,250


         Changes in assets and liabilities:
         Trade and other receivables                                                      (4,679)         (336,629)
         Other current assets                                                              1,683             (5,380)
         Exploration expenditure                                                       (844,077)          (969,543)
         Trade and other payables                                                        (34,703)           114,577
         Provisions                                                                       12,238             12,861
         Net cash used in operating activities                                       (1,598,741)        (1,776,150)




     Mantle Mining Corporation Ltd | Annual Repor t 2011
60
(c) Non-cash investing and financing activities
    During the financial year ended 30 June 2011, the Company issued 3,033,032 ordinary shares
    (2010: 1,134,513) as consideration for services from directors and key management personnel.

20. Parent entity disclosures
    Financial position
                                                                                   Consolidated Group
                                                                                        2011             2010
    Assets
                                                                                           $                $
    Current assets                                                                 1,841,577        1,207,817
    Non-current assets                                                             9,375,328        8,105,884
    Total assets                                                                 11,216,905         9,313,701


    Liabilities
    Current liabilities                                                              298,308          300,215
    Total liabilities                                                                298,308          300,215


    Equity
    Issued capital                                                               14,394,307        12,162,666
    Reserves                                                                         486,375          334,875
    Accumulated losses                                                           (3,962,085)      (3,484,055)
    Total equity                                                                 10,918,597         9,013,486


    Financial performance
    Loss for the year                                                              (478,030)        (660,503)
    Other comprehensive income                                                                -              -
    Total comprehensive income                                                     (478,030)        (660,503)

(a) Contingent Liabilities
    The parent entity has no contingent liabilities as at 30 June 2011 (30 June 2010: nil).

(b) Commitments
    The parent entity has no capital expenditure commitments as at 30 June 2011 (30 June 2010: nil).




                                                            Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                  61
     notes to the
     finanCiaL statements


     21. Related party disclosures

     (a) Subsidiaries
         The consolidated financial statements include the financial statements of Mantle Mining Corporation Ltd
         and the subsidiaries listed in the following table:
                                                                 Equity interest              Investment of Parent
                                              Country of          2011     2010             2011                2010
         Name                                 incorporation           %       %                $                      $
         Trafford Coal Pty Ltd                Australia             100     100           500,000            500,000
         Mt Mulligan Coal Pty Ltd             Australia             100     100           441,624            441,624
         Phantom Creek Uranium Pty Ltd        Australia                -    100                 -                     1
         Zulu Gold Pty Ltd                    Australia             100     100           780,000            780,000
                                                                                      1,721,624            1,721,625

     (b) Loans to subsidiaries
         Parent Entity
                                                                                                    Parent Entity
                                                                                            2011                2010
                                                                                               $                      $
         Trafford Coal Pty Ltd                                                        1,424,057            1,066,278
         Mt Mulligan Coal Pty Ltd                                                           1,781               1,563
         Phantom Creek Uranium Pty Ltd                                                          -               1,127
         Zulu Gold Pty Ltd                                                                   854                    636
                                                                                      1,426,692            1,069,604
         These loans to subsidiaries are interest free and are repayable on call.

     22. Key management personnel
     (a) Directors and other key management personnel
         The directors of Mantle Mining Corporation Ltd during the financial year were:

     	   •	   Mr	Martin	Blakeman	–	Non-Executive	Chairman

     	   •	   Mr	Ian	Kraemer	–	Managing	Director

     	   •	   Mr	Stephen	de	Belle	–	Non-Executive	Director

     	   •	   Mr	Peter	Anderton	–	Non-Executive	Director

     Other key management personnel consisted of:

     	   •	   Mr	Stuart	Moore	–	Operations	Manager

     (b) Compensation of key management personnel
                                                                                                      Consolidated
                                                                                            2011                    2010
                                                                                               $                       $
         Short-term employment benefit                                                    392,202            346,583
         Post-employment benefits                                                          27,817              25,515
         Share-based payments (net)                                                        38,250            (22,330)
                                                                                          458,269            349,768




     Mantle Mining Corporation Ltd | Annual Repor t 2011
62
(c) Equity instrument disclosures relating to key management personnel

(i) Option holdings
    The number of options over ordinary shares in the Company held during the financial year by each director
    of Mantle Mining Corporation Ltd and other key management personnel of the Company, including their
    personally related parties, is set out below.

                                                                                                     Options
                                            Granted                                               vested and
                                              during                       Other                  exercisable
                            Balance at       year as     Exercised       changes    Balance at             at
    Name                  start of year remuneration   during year    during year   end of year   end of year
                              Number        Number        Number         Number        Number        Number
    2011
    Directors/
    Executive
    Mr M Blakeman          1,520,459               - (3,259,766)      1,739,307               -             -
    Mr I Kraemer             253,438      3,000,000     (717,738)       464,300     3,000,000      3,000,000
    Mr S de Belle            707,438               - (1,121,738)        414,300               -             -
    Mr P Anderton            125,000               -    (200,000)         75,000              -             -
                           2,606,335      3,000,000 (5,299,242)       2,692,907     3,000,000      3,000,000
    Mr S Moore                       -      250,000       (50,000)              -     200,000        200,000
                            2,606,335     3,250,000 (5,349,242)       2,692,907     3,200,000      3,200,000


    2010
    Directors/
    Executive
    Mr M Blakeman                    -             -              -   1,520,459     1,520,459      1,520,459
    Mr I Kraemer            1,250,000              -              -    (996,562)      253,438        253,438
    Mr S de Belle            300,000               -              -     407,438       707,438        707,438
    Mr P Anderton                    -             -              -     125,000       125,000        125,000
                            1,550,000              -              -   1,056,335     2,606,335      2,606,335
    Mr S Moore                       -             -              -             -             -             -
                            1,550,000              -              -   1,056,335     2,606,335      2,606,335




                                                          Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                63
     notes to the
     finanCiaL statements


     (ii) Share holdings
          The number of shares in the Company held during the financial year by each director of Mantle
          Mining Corporation Ltd and other key management personnel of the Company, including their
          personally related parties, is set out below. There were 2,505,695 (2010: 532,749) ordinary shares
          issued during the year in lieu of directors’ fees to the directors as approved by shareholders at the
          Company’s AGM held 18 November 2010.

                                                              Received during
                                       Balance at start of year on exercise of     Other changes Balance at end of
         Name                                        year             options         during year             year
                                                 Number              Number               Number              Number
         2011
         Directors/
         Executive
         Mr M Blakeman                        16,166,781           3,259,766            2,801,481          22,228,028
         Mr I Kraemer                            161,220             717,738              384,738           1,263,696
         Mr S de Belle                         4,201,220           1,121,738            1,269,238           6,592,196
         Mr P Anderton                         3,877,521             200,000              334,738           4,412,259
                                              24,406,742           5,299,242            4,790,195          34,496,179
         Mr S Moore                                      -            50,000                      -               50,000
                                                         -            50,000                      -               50,000
         2010
         Directors
         Mr M Blakeman                        12,411,653                       -        3,755,128          16,166,781
         Mr I Kraemer                                    -                     -          161,220             161,220
         Mr S de Belle                         3,259,500                       -          941,720           4,201,220
         Mr P Anderton                         4,020,676                       -        (143,155)           3,877,521
                                              19,691,829                       -        4,665,038          24,356,867

     (d) Other transactions with key management personnel
         Transactions are on normal commercial terms and conditions no more favourable than those available to
         other parties unless otherwise stated:

                                                                                                2011               2010
                                                                                                   $                  $
         Director fees paid to Tonka Trading Pty Ltd, a company of which
         Martin Blakeman is a director+                                                        30,000             38,750
         Director fees paid to Ian Kramer+
                                                                                               25,000             21,000
         Director fees paid to Exflex Holdings Pty Ltd, a company of which
         Stephen de Belle is a director+                                                       25,000             13,083
         Director fees paid to Mining and Exploration Professionals Pty Ltd,
         a company of which Peter Anderton is a director+                                      25,000             25,000


         +
             These amounts are included in the remuneration report in the directors’ report.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
64
(e) Key management personnel balances
                                                                                         2011                 2010
                                                                                            $                    $
    Amount owing to Tonka Trading Pty Ltd, a company in which Martin
                                                                                       22,500                65,000
    Blakeman is a director


    Amount owing to Ian Kramer                                                         11,458                11,458


    Amount owing to Exflex Holdings Pty Ltd, a company in which
    Stephen de Belle is a director                                                      9,375                13,083


    Amount owing to Mining and Exploration Professionals Pty Ltd, a
    company in which Peter Anderton is a director                                      15,625                12,500

23. Commitments
    Exploration expenditure commitments
                                                                                   Consolidated Group
                                                                                        2011                  2010
                                                                                           $                     $
    Within one year                                                                  963,800              659,300
    After one year but not more than five years                                    1,737,840          1,055,000
                                                                                   2,701,640          1,714,300

    The above exploration expenditure commitments assume no relinquishments or reductions during
    the period.

    Leasing commitments
    The Company has entered into an operating lease on office space for a one year term. Future minimum
    rentals payable under this operating lease are as follows:

    Within one year                                                                     4,527                12,150
    After one year but not more than five years                                              -                    -
                                                                                        4,527                12,150

24. Segment reporting
    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 makers) in assessing performance
    and determining the allocation of resources.

    The consolidated entity operates as a single segment which is mineral exploration within Australia.

    The consolidated entity is domiciled in Australia. All revenue from external parties is generated from
    Australia only. Segment revenues are allocated based on the country in which the party is located.

    Operating revenues of approximately Nil (2010 - Nil) are derived from a single external party.

    All the assets are located in Australia only. Segment assets are allocated to countries based on where the
    assets are located.




                                                            Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                      65
     notes to the
     finanCiaL statements


     25. Contingent assets and liabilities
         Mantle subsidiaries Trafford Coal Pty Ltd (Trafford) and Mt. Mulligan Coal Pty Ltd (Mt. Mulligan) are
         progressing proceedings against Calcifer Industrial Minerals Pty Ltd (Calcifer) in the Supreme Court of
         Queensland to enforce agreements for the assignment of the Mt. Mulligan tenements.

         In July 2011, the Court conducted a review of the proceedings and heard an application by Calcifer
         seeking further time in which to file its Amended Defence and Counterclaim. The Court gave Calcifer until
         10 August 2011 to file their Amended Defence and Counterclaim.

         On 10 August 2011, the Court conducted a further review of the proceedings and gave Calcifer until 16
         August to file any applications and supporting affidavits in respect of an ongoing lien dispute with their
         prior solicitors. The directions hearing was adjourned until 18 August.

         On 18 August, the Court conducted a further review of the proceedings. Calcifer submitted that the
         dispute with its former solicitors had been resolved. Trafford and Mt. Mulligan submitted that the Court
         should make an order that if Calcifer did not file its Amended Defence by the due date set by the Court,
         Trafford and Mt. Mulligan should be granted judgment on their Amended Claim. The Court was not
         prepared to make this order however it ordered that:

         1.   Save for order 6, the orders of the Court dated 13 July 2011 be vacated,

         2.   Calcifer file its Amended Defence by 4pm on 2 September 2011,

         3.   If Calcifer does not file an Amended Defence by 2 September 2011, it may not file an amended
              defence except with prior leave or the consent of Trafford and Mt. Mulligan,

         4.   Should Calcifer file its Amended Defence in accordance with order 2:

              a.   Trafford and Mt. Mulligan file their Amended Reply and Answer by 4pm on 16 September 2011,

              b.   The parties provide any further disclosure by way of lists of documents served no later than 4pm
                   on 22 September 2011,

         5.   The matter be listed for review at 9:30am on 26 September 2011,

         6.   Calcifer pay the costs of Trafford and Mt. Mulligan of the application and the review, including the
              costs of the appearances on 10 August 2011 and 18 August 2011, to be assessed.

         7.   Liberty to apply.

         On 26 September 2011 the Court ordered, amongst other matters, that the defendant will file and serve
         any further amended defence by 21 October 2011 and that the matter will be set down for trial on a date
         to be fixed.

         Whilst the Company remains confident it will be successful in its action there can be no assurances.
         Should the Company not be successful in its action it may lose its interest in the Mt Mulligan tenements
         and may face the prospect of being required to pay a portion of Calcifer’s relevant costs.

     26. Events subsequent to balance date
         Subsequent to the year end, the Company announced the following to the ASX:

         On 14 July 2011, Mantle provided an update on progress of the Mt Mulligan Court action wherein the
         Court gave Calcifer until 10 August 2011 to file their Amended Defence and Counterclaim.

         On 14 July 2011, Mantle released a Prospectus for a pro rata non-renounceable entitlement issue of
         one share for every twelve shares held at an issue price of 9.75 cents per share to raise approximately
         $1,590,866 together with one free new option for every one new share issued exercisable at 10.5 cents on
         or before 15 July 2013.



     Mantle Mining Corporation Ltd | Annual Repor t 2011
66
On 21 July 2011 Mantle announced that it had received a cash refund of $325,059 for Research and
Development Tax Offset for the 2009/10 financial year.

On 27 July 2011 the Company advised that a decision had been taken to withdraw an application for an
exploration licence at Deans Marsh.

On 28 July 2011, Mantle provided an update on the Deans Marsh tenement application in Victoria
where, after considering the potential prospectivity of the area, potential conflict arising from competing
land use in the locality, and the potential costs/benefits over time, the Company had taken the pragmatic
decision to withdraw its application for an exploration licence in order to focus its resources on other higher
priority projects.

On 5 August 2011, Mantle released a Notice of General Meeting to be held in Sydney on
8 September 2011, with Resolutions to ratify prior issues of shares in order to refresh the Company’s
15% placement capacity.

On 9 August 2011, Mantle announced an Extension of Entitlement Issue closing date to
2 September 2011 as a consequence of then current market conditions.

On 10 August 2011, Mantle released its Supplementary Disclosure Document pursuant to the previously
announced Entitlement Issue Extension.

On 11 August 2011 the Company provided an updates of its key Bacchus Marsh Coal Project noting
that the low impact drilling workplan was approved on August 3rd and that the Substantive Agreements
between the Company and Exergen Pty Ltd: Joint Venture Agreement, Technology Licence Agreement
and Heads of Agreement for Mining. Draft documentation has been exchanged and discussions are
being actively progressed.

On 18 August 2011, Mantle provided an update on the Mt Mulligan court action wherein Calcifer was
given a further extension until 2 September 2011 to file its Amended Defence, Mantle file its Amended
Reply and Answer by 16 September 2011, final disclosure by 22 September and next review on 26
September 2011. On 26 September 2011 the Court ordered, amongst other matters, that the defendant
will file and serve any further amended defence by 21 October 2011 and that the matter will be set down
for trial on a date to be fixed.

On 30 August the Company announced that it has restructured the capital raising announced prior to
the end of the financial year. The Company noted it had agreed terms with Cygnet Capital Pty Ltd to fully
underwrite a new Rights Issue and that its previously announced Rights Issue would be cancelled and on
19 September 2011 the Company issued a Prospectus for a non-renounceable entitlement issue on the
basis of one Share for every six Shares held by Shareholders at an issue price of 6 cents per Share to raise
approximately $1,958,807 together with one free new Option for every one new Share issued exercisable
at 7.5 cents on or before 1 December 2013.

The Company also advised on 30 August 2011 that it had received notification from Intersuisse Limited,
the underwriter of Company’s discontinued previous pro rata non-renounceable entitlement issue, that it
has elected to exercise its rights under the Underwriting Agreement and terminate the underwriting and
as a consequence of this the Company had elected to discontinue with the previous entitlement issue.

Other than disclosed above, since the end of the financial year, the Directors are not aware of any matters
or circumstances not otherwise dealt with in this report or consolidated financial statements that have
significantly affected or may significantly affect the operations of the consolidated entity, the results of
those operations or the state of affairs of the consolidated entity in subsequent financial periods.




                                                         Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                                                                  67
     DireCtors’ DeCLaration


     The directors of the Company declare that, in the opinion of the directors:



     (a) the financial statements and notes thereto are in accordance with the Corporations Act 2001, including:

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

         (ii)   complying with Australian Accounting Standards, including the Interpretations, and the Corporations
                Regulations 2001;

     (b) the financial statements and notes thereto also comply with International Financial Reporting Standards, as
         disclosed in Note 1(a);

     (c) the directors have been given the declarations required by s.295A of the Corporations Act 2001; and

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



     Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations
     Act 2001.

     On behalf of the Directors:




     MARTIN BLAKEMAN
     Chairman
     Dated at Perth this 28th day of September 2011.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
68
inDepenDent auDitor’s
report




             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                   69
     inDepenDent
     auDitor’s report




     Mantle Mining Corporation Ltd | Annual Repor t 2011
70
auDitor’s inDepenDenCe
DeCLaration




             Mantle Mining Corporation Ltd | Annual Repor t 2011
                                                                   71
     sharehoLDer information


     Additional information included in accordance with the Listing Rules of the Australian Securities Exchange
     Limited. The information is current as at 12 September 2011.


     1.         suBstantiaL sharehoLDers
     The names of the substantial shareholders listed on the company’s register as at 14 September 2011.

                                                                                                      Percentage of
     Shareholder                                           Number                                issued capital held
     Tonka Trading PL Jakessi S/F A/C                   22,228,028                                            11.35%


     2.         CLass of shares anD voting rights
     The voting rights attached to the Fully Paid Ordinary shares of the Company are:

     (a) at a meeting of members or classes of members each member entitled to vote may vote in person or by
         proxy or by attorney; and

     (b) on a show of hands every person present who is a member has one vote, and on a poll every person present
         in person or by proxy or attorney has one vote for each ordinary share held.

     There are no voting rights attached to any Options on issue.

     Distribution of Fully Paid Ordinary Shareholders

     Shares Range                                           Holders                          Units                   %
     1 – 1000                                                       52                     10,427                  0.01
     1001 – 5000                                                180                       602,988                  0.31
     5001 – 10000                                               258                      2,220,394                 1.13
     10001 – 100000                                             947                     39,432,364                20.13
     100001 –                                                   311                 153,614,513                   78.42
     Total                                                    1748                  195,880,686                100.00

     On 14 September 2011, there were 283 holders of unmarketable parcels comprising a total of
     914,009 ordinary shares. There is no on-market buy back currently in place and there are currently
     no restricted securities.


     3.         options
                                         Exercise                   Expiry            Number                  Number
     Details                                price                    date           of options              of holders
     Unlisted options                      $0.10           31 Dec 2011             1,450,000                         3
     Unlisted options                      $0.20           31 Dec 2012             2,000,000                         1


     4.         quotation
     Listed securities in Mantle Mining Corporation Ltd are quoted on the Australian Securities Exchange.




     Mantle Mining Corporation Ltd | Annual Repor t 2011
72
5.      twenty Largest sharehoLDers
The twenty largest shareholders at 14 September 2011.

      Name                                              Number of Shares      %
1.    TONKA TRADING PL JAKESSI S/F A/C                       22,228,028    11.35
2.    ANDERTON PETER ROBERT                                   4,412,259     2.25
3.    GRACE FASHION PL                                        4,252,850     2.17
4.    BANKS-SMITH KATRINA F                                   4,223,296     2.16
5.    IRIS SYDNEY HLDGS PL                                    4,201,896     2.15
6.    DE BELLE S + SHEEHAN J SJ SUPER A/C                     4,084,038     2.08
7.    TRISTESSE PL BANKS-SMITH FAM A/                         3,511,380     1.79
8.    AVANTI MINING & CONTRACTI                               3,000,000     1.53
9.    JHS & D PL LEWIS FAM A/C                                2,918,650     1.49
10.   DE BELLE S + SHEEHAN J SJ SUPER A/C                     2,189,345     1.12
11.   AZALEA FAM HLDGS PL NO 2 A/C                            2,142,861     1.09
12.   HARRIS NEIL                                             2,037,500     1.04
13.   MCNALLY CLAN INV PL                                     2,000,000     1.02
14.   SLEIJPEN JANE                                           1,700,000     0.87
15.   SHAM HOURANI GRP AUST PL                                1,567,879     0.80
16.   MATT MCLOUGHLIN PL                                      1,502,000     0.77
17.   PENROSE ROGER ARTHUR                                    1,500,000     0.77
18.   PLANK RAINER KARL                                       1,359,549     0.69
19.   BANKS DENNIS + JANINE BANKS S/F A/C                     1,285,000     0.66
20.   IERACE PL IERACE FAM A/C                                1,279,891     0.65
                                                             71,396,422    36.45
Suite 25 145 Stirling Highway Nedlands WA 6009

            ABN 70 107 180 441

								
To top