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					          (ACN 34 113 017 128)




         and
  Controlled Entities


Annual Financial Report




    For the year ended
      30 June 2008
Annual Financial Report 2008                        Bannerman Resources Limited and Controlled Entities




          Corporate Directory                                                           1

          Directors’ Report                                                             4

          Auditors’ Independence Declaration                                           35

          Income Statement                                                             36

          Balance Sheet                                                                37

          Cash Flow Statement                                                          38

          Statement Of Changes in Equity                                               39

          Notes to the Financial Statements                                            41

          Directors’ Declaration                                                       73

          Independent Audit Report To The Members                                     74
          Of Bannerman Resources Limited

          Additional Shareholder Information                                          76




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Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities




                                       CORPORATE DIRECTORY

                                     NON-EXECUTIVE CHAIRMAN
                                           Geoff Stanley

                                        MANAGING DIRECTOR
                                            Clive Jones

                                     NON-EXECUTIVE DIRECTORS
                                           Alastair Clayton
                                          Nathan McMahon
                                            David Tucker

                                        COMPANY SECRETARY
                                            Lisa Wynne

                                  PRINCIPAL & REGISTERED OFFICE
                                        Level 2, 22 Oxford Close
                                          Leederville WA 6008
                                      Telephone: (+61-8) 9381 1436
                                      Facsimile: (+61-8) 9381 1068

                                               AUDITORS
                                              Ernst & Young
                                            11 Mounts Bay Rd
                                            PERTH WA 6000
                                       Telephone: (+61-8) 9429 2222
                                       Facsimile: (+61-8) 9429 2432

                                            SHARE REGISTRARS
                    Advanced Share Registry Services        Computershare Investor Services
                    110 Stirling Highway                    100 University Ave, 11th Floor
                    NEDLANDS WA 6009                        TORONTO CANADA
                    Telephone: (+61-8) 9389 8033            Telephone: (+1-416) 263 9200
                    Facsimile: (+61-8) 9389 7871            Facsimile: (+1-888) 453 0330

                                     STOCK EXCHANGE LISTINGS
Australian Stock Exchange               Toronto Stock Exchange                    Namibia Stock Exchange
Code: BMN                               Code: BAN                                 Code: BMN

                                                BANKERS
                                         Macquarie Australia Bank
                                           77 St Georges Terrace
                                             PERTH WA 6000
                                       Telephone: (+61-8) 9224 0666
                                       Facsimile: (+61-8) 9224 0697

                                                LAWYERS
                                             DLA Phillips Fox
                                        Level 32 St Martins Tower
                                           44 St Georges Terrace
                                             PERTH WA 6000
                                       Telephone: (+61-8) 6467 6000
                                       Facsimile: (+61-8) 6467 6001


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   Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities



Dear Shareholders,

The fiscal year 2007-2008 has proved to be eventful and very successful for Bannerman Resources Ltd. A
number of important milestones were reached on the road towards development of what could be one of the
world’s largest uranium mines in Namibia. The year was not without its challenges with the changing face of
the world debt and equity markets as a result of the sub-prime mortgage crisis and the spot price correction in
uranium having a negative leverage to the uranium equities. Through all this however, Bannerman’s project
activity progressed as planned and we have continued to prove the fundamentals for a viable economic
uranium project. We have set an aggressive schedule with a target to bring the Etango project into production
at a time when spot uranium prices are expected to again peak.

Recently there have been significant developments in the world with respect to uranium. These include India’s
re-emergence into the world scene following the a waiver to import nuclear fuels, materials and technology,
the US Administration indication that it would pull the Russian 123 Agreement from Congressional
consideration and the continued problems at Cigar Lake. These are all generally bullish for the uranium
market, although it may take some time for this to be reflected through an increase in the spot prices.

Tightness in market supply for uranium is expected in 2010 leading into a window of deficit in 2011-13. Spot
prices are expected to rise accordingly in this period at a time when Bannerman is focused on bringing the
Etango mine into production.

At a corporate level, the evolution from an exploration company to a mine development company lead to the
decision to list Bannerman Resources on the Toronto Stock Exchange to gain exposure to the Canadian and
US capital markets. The listing has allowed a direct comparison in those markets with our peers and has
brought in new institutional investors from Toronto, New York and London. The Company also listed on the
Namibian Stock Exchange during the year.

During the year the Company greatly expanded its resource base, completed a scoping study, commenced full
feasibility studies and expanded exploration at Etango.

At the time of writing, substantial progress is being made into the potential development of the mine by a team
of contractors, engineers and employees. Early indications are that the project has the potential to support a
very large operation producing approximately 6mlbs of U3O8 per annum for several years. Additionally, there
is great capacity for further expansion of this mine life given the exploration potential of the project.

Bannerman is at a key inflection point in its growth and has accordingly made several key changes to its
management structure as it evolves from an explorer to a development/mining company. The Company has
appointed a new Chairman to the board in Geoffrey Stanley whilst David Tucker was also appointed as a non-
executive Director. Geoffrey lives in New York City and brings his 20 years experience and network as a
financial industry leader from his career background as an analyst at BMO and a fund manager at Platinum
Partners. David is semi-retired from a 40-year mining career culminating as a senior executive at Barrick Gold
of Australia.

Given the difficult market environment those aspects of the business which the Company can control have
proven that the team is well on top of heading the project towards successful development. We have
continually successfully reached our targeted goals and indeed have surpassed them in some cases. We are
rapidly building the right team and are confident of your company’s future.

In closing, I would like to extend my personal thank you and appreciation to our Board of Directors for their
active involvement and wise counsel. I would also like to thank our executives, employees, consultants and
contractors for their hard work and dedication to the Company. Lastly, on behalf of the Board of Directors and
Management, I would like to thank our shareholders for their support.


Yours truly,
Clive Jones
Managing Director
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Annual Financial Report 2008                                             Bannerman Resources Limited and Controlled Entities



DIRECTORS' REPORT

The directors of Bannerman Resources Limited submit herewith the financial report of the company and its
controlled entities for the financial year ended 30 June 2008. In order to comply with the provisions of the
Corporations Act 2001, the directors report as follows:

1.      DIRECTORS

The names and particulars of the directors of the company during or since the end of the financial year are:

Geoff Stanley                  Non-Executive Chairman (appointed 21/5/08)
Peter Batten                   Managing Director (resigned 26/8/08)
Clive Jones                    Managing Director (appointed 26/8/08)
                               Non-Executive Director (resigned 26/8/08)
Alastair Clayton               Non-Executive Chairman (resigned 21/5/08)
                               Non-Executive Director (appointed 21/5/08)
Nathan McMahon                 Non-Executive Director
David Tucker                   Non-Executive Director (appointed 18/3/08)
Lisa Wynne                     Company Secretary


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

 Geoff Stanley                         Non-Executive Chairman (appointed 21/5/08)

 Qualifications                        BSc.Geol (Hons)

 Experience                            Mr Stanley's career in the mining industry spans over 25 years, including
                                       15 years in New York's financial centre as a Managing Director, Senior
                                       Mining Analyst and Portfolio Manger, most recently with BMO Capital
                                       Markets                and               Platinum                Partners.

                                       Prior to his move to New York from Australia in 1994, Geoff worked as
                                       a mining analyst with Jacksons Ltd, Jardine Fleming, and the Warburg
                                       Group. He spent the first six years of his career as an exploration
                                       geologist with Billiton.

 Interest in Shares                    -
 Interest in Options                   1,000,000 $2.51 Options exercisable on or before 01/09/11
                                       1,000,000 $3.00 Options exercisable on or before 01/09/12




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Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities



                                      DIRECTORS' REPORT

 Clive Jones                   Managing Director (appointed 26/8/08)
                               Non-Executive Director (resigned 26/8/08)

 Qualifications                B.App.Sc(Geol), M.AusIMM.

 Experience                    Mr Jones has been involved in mineral exploration for over 22 years and
                               has worked on the exploration for a range of commodities including
                               gold, base metals, mineral sands, uranium and iron ore. Mr Jones is a
                               Director of several ASX listed companies. He is Chairman of Cortona
                               Resources Ltd., joint Managing Director of Cazaly Resources Ltd. And a
                               Director of Graynic Metals Ltd.

 Interest in Shares            12,587,500 Fully Paid Ordinary Shares
 Interest in Options           4,612,500 20 cent Options exercisable on or before 28/05/10
                               500,000 $6.50 Options exercisable on or before 30/11/10
                               500,000 $7.50 Options exercisable on or before 30/11/11

 David Tucker                  Non-Executive Director (appointed 18/3/08)

 Qualifications                BSc.Geol (Hons) MSc(Mining and Exploration Geology); M.AusIMM;
                               FAICD

 Experience                    Mr Tucker's career in the mining industry spans 39 years including a
                               Master of Science degree in Mining and Exploration Geology. Mr.
                               Tucker first spent 20 years working as an exploration geologist, the first
                               10 years of which were in the uranium sector with United Uranium NL,
                               Noranda Australia, the Australian Atomic Energy Commission, and Esso
                               Australia Limited. His career then advanced into executive positions in
                               business development, public affairs and investor relations for
                               Homestake Gold of Australia. Following the corporate acquisition of
                               Homestake by Barrick Gold of Australia, he eventually became Director
                               of Corporate Affairs for Barrick Australia Pacific and led the
                               management of the business unit's government and community relations
                               until his retirement in December 2007. During the last ten years of his
                               tenure at Barrick Australia, Mr. Tucker served on the Boards of
                               Directors for Homestake's Australian subsidiaries (April 1998-December
                               2001) and for Barrick Mining Company (Australia) and Barrick Gold of
                               Australia (December 2003 to December 2007).

 Interest in Shares            100,000 Fully Paid Shares
 Interest in Options           250,000 $2.44 Options exercisable on or before 01/09/11
                               250,000 $4.00 Options exercisable on or before 01/09/12




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Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities



 Alastair Clayton              Non-Executive Chairman (resigned 21/5/08)
                               Non-Executive Director (appointed 21/5/08)

 Qualifications                BSc.Geol (Hons) Grad Dip Fin Econ (SIA)

 Experience                    Mr Clayton is a qualified geologist with a post graduate diploma in Finance
                               and Economics from the Securities Institute of Australia. Alastair has over
                               10 years experience in the mining and resources sector and has worked in
                               Australia, Africa, Asia and Europe in both a technical and corporate
                               capacity.

                               Now residing in the UK, Alastair is the principal of Synthesis Capital
                               Resources, a London Resources Advisory business. Alastair is an non-
                               executive director of Universal Coal PLC, an AIM listed company with
                               interests in South Africa. Alastair brings a wealth of financial and corporate
                               expertise to the Company with particular access to European markets.

 Interest in Shares            5,350,000 Fully Paid Ordinary Shares
 Interest in Options           500,000 $6.50 Options exercisable on or before 30/11/10
                               500,000 $7.50 Options exercisable on or before 30/11/11

 Nathan McMahon                Non-Executive Director

 Qualifications                B.Com

 Experience                    Mr McMahon has provided tenement management advice to the mining
                               industry for approximately 14 years to in excess of 20 public listed mining
                               companies. Mr McMahon has specialised in native title negotiations, joint
                               venture negotiations and project acquisition due diligence. Mr McMahon is
                               a Director of several listed companies. These include on the ASX; joint
                               Managing Director of Cazaly Resources Ltd., a Director of Catalyst Metals
                               Ltd and a Director of Hodges Resources Ltd. He is also a Director of the
                               AIM listed company Universal Coal PLC.

 Interest in Shares            -
 Interest in Options           4,725,000 20 cent Options exercisable on or before 13/11/10
                               500,000 $6.50 Options exercisable on or before 30/11/10
                               500,000 $7.50 Options exercisable on or before 30/11/11

 Peter Batten                  Managing Director (resigned 26/8/08)

 Qualifications                BAppSc (Geol), QMCC, MAusIMM, MGSA

 Experience                    Mr Batten has been involved in mineral exploration for over 24 years since
                               graduating from Curtin University of Western Australia in 1983. He has
                               worked in the exploration and mining industry for a wide range of
                               commodities including gold, nickel, and industrial minerals. Much of
                               Peter’s time has been spent as a principal consulting geologist working in
                               Australia and overseas. He started Exploration and Mining Consultants
                               (EMC) in 1995 which at its peak had offices in Kalgoorlie, Perth,
                               Melbourne and Indonesia. After EMC Peter worked as a private consultant
                               and project manager and successfully listed Berkeley Resources Ltd on the
                               ASX.

 Interest in Shares            9,802,651 Fully Paid Ordinary Shares
 Interest in Options           750,000 $6.50 Options exercisable on or before 30/11/10
                               750,000 $7.50 Options exercisable on or before 30/11/11



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Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities




                                         DIRECTORS' REPORT

 Directorships of other listed companies
 Directorships of other listed companies held by directors in the three years immediately before the end of
 the financial year are as follows:

 Name                          Company                             Period of directorship
 Geoff Stanley                 Crescent Gold Ltd                   Since December 2006

 Alastair Clayton              Universal Coal PLC                  Since April 2005

 David Tucker                  None

 Nathan McMahon                Graynic Metals Limited              From February 2005 to December 2006
                               Northern Mining Limited             From April 2005 to December 2006
                               Catalyst Metals Limited             Since July 2007
                               Cazaly Resources Limited            Since October 2003
                               Hodges Resources Limited            Since May 2007
                               Universal Coal PLC                  Since June 2005. Executive Chairman
                                                                   since June 2007

 Clive Jones                   Cazaly Resources Limited            Since January 2004
                               Graynic Metals Limited              Since February 2005
                               Cortona Resources Limited           Since January 2006

COMPANY SECRETARY

Ms Wynne has a Bachelor of Commerce and is a Chartered Accountant with 7 years experience working
with listed entities in senior financial roles responsible for management and financial reporting, taxation,
and ensuring continuous disclosure and compliance. Lisa works with a number of emerging ASX and TSX
listed resource companies and specialises in financial and company secretarial transaction and corporate
work.

2.      PRINCIPAL ACTIVITIES

The principal activity of the Consolidated Entity during the financial year was mineral exploration and
development.

There were no significant changes in the nature of the Consolidated Entity’s principal activities during the
financial year.

3.      OPERATING RESULTS

The loss of the Consolidated Entity after providing for income tax and eliminating outside equity interests
amounted to $10,952,297 (year ended 30 June 2007: $1,759,609).




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Annual Financial Report 2008                                  Bannerman Resources Limited and Controlled Entities



4.      REVIEW OF OPERATIONS

REPORTING YEAR HIGHLIGHTS

•    SCOPING STUDY COMPLETED

•    ACID PLANT CASE STUDY COMPLETED

•    SIGNIFICANT RESOURCE ESTIMATE UPGRADE, ETANGO ANOMALY A

•    EXPANDED EXPLORATION DRILLING TO REGIONAL TARGETS

•    TORONTO STOCK EXCHANGE (TSX) AND NAMIBIAN STOCK EXCHANGE (NSX)
     LISTINGS

•    NEW LABORATORY FACILITIES UNDER CONSTRUCTION IN NAMIBIA

•    CDN$ 21 MILLION CAPITAL RAISING

•    MAJOR BOARD AND MANAGEMENT APPOINTMENTS

•    DEFINITIVE FEASIBILITY STUDY (DFS) AWARDED



                               NAMIBIAN URANIUM PROJECTS (BMN 80%)

Bannerman Resources holds, through Bannerman Mining Resources Namibia, two Exclusive Prospecting
Licences (EPL) in the uranium rich Erongo region on the western coast of Namibia.

The two licences are targeting uranium mineralisation both in a primary setting (EPL3345 “Etango”),
similar to the Rössing mine 30 kilometres northeast of the licence and in a secondary oxide setting
(EPL3346 “Swakop River”) analogous to the mineralisation occurring at the adjacent Langer Heinrich
mine.




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Annual Financial Report 2008                                           Bannerman Resources Limited and Controlled Entities




                                        Figure 1 - Projects Location
                                                    Plan




NAMIBIA

Namibia is considered to be one of Africa’s premiere mining jurisdictions. It is a politically stable country
with a long history of resource development and mining. The economy is heavily dependent on the
extraction and processing of minerals for export. Mining accounts for approximately 20% of GDP.

Namibia is serviced by a network of sealed highways connecting the Capital of Windhoek in the central
plateau region of Namibia with the coast at Walvis Bay, and with Botswana, Angola and South Africa.
Generally unsealed but well-maintained access roads provide regional access throughout Namibia.

A railway line extends from the port of Walvis Bay to Tsumeb, where a copper smelter is in operation.
Mobile phone communication is well established near most population centres.

Water is potentially available to the various projects via underground resources within the major river
systems, or can be supplied by pipeline from the coast. The Government water authority, Namwater,
provides assistance in the development of water resources for existing and potential new users and has
committed to the construction of a major desalination plant near Swakopmund to facilitate the future
requirements of the uranium industry.

Areas within the Namib-Naukluft National Park, which includes the Etango and Swakop River Projects, are
approved for exploration, subject to appropriate environmental commitments.

The Etango Anomaly A deposit is well located in the central coastal region of Namibia approximately 40
km northeast of one of Southern Africa’s major ports at Walvis Bay. Access to the deposit is excellent via
well established roads and a rail line to the Port.
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Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities




Power
The country only uses 550MW at peak period, half of this requirement is accessed through the Eskom
(RSA power utility) system from DRC, Zambia, Mozambique, Zimbabwe and Republic of South Africa.

NamPower plans to bring in 200MW of new power into the country, via the Caprivi Link Interconnector,
from Zimbabwe: 150MW from the Hwange coal fired power station that the Namibian Government is
paying to refurbish, and 50MW of hydroelectric from Zambia. This should be available in 2010. The line is
a 400 – 600MW line and has been built, overcapacity, to take advantage of proposed hydroelectric
expansion in the future.

Additionally, a 400MW gas fired power station is being considered for construction to take advantage of
the Kudu gas fields off the southern coats of the country whilst the Ruancana hydroelectric operation on the
Angolan border is being refurbished which will bring its capacity up to 320MW.


EPL3345 – ETANGO

The Etango licence, formerly known as Welwitschia or Goanikontes, contains numerous uranium
anomalies originally identified from the reprocessing of airborne geophysical surveys and from accessing
historic reports. The key result of this initial work was the identification of two zones totalling some 37
kilometres of continuous anomalism prospective for alaskite hosted uranium mineralisation. Follow up
field inspection identified over eight outcropping alaskite bodies within the 37 kilometre anomalism.

“Etango”, is the local Oshivambo word for “Sun”. The Etango Anomaly A prospect refers to the southern
prospect of three known mineralised alaskite zones (the others being “Oshiveli” and “Onkelo”) and was
originally outlined by 257 historic drillholes completed in the 1970s and 1980s. Of these only the Etango
prospect has been explored by the Company to any extent. The alaskites host uranium mineralisation
analogous to the world class Rössing open cut uranium mine located approximately 30 kilometres to the
north east.

To date, the Company has completed 505 holes for 140,558m comprising 456 RC holes and 49 Diamond
Core holes over a 2.5km strike extent at Etango. Diamond and RC drilling is continuing with one diamond
core rig drilling metallurgical, hydrological and geotechnical holes as part of the ongoing Feasibility Study.
The RC drilling comprises drilling to further upgrade the status of the resource, to explore the extensions of
the known mineralisation and to sterilise drill test the proposed process plant and tailings dam areas.




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Annual Financial Report 2008                                  Bannerman Resources Limited and Controlled Entities



                               Figure 2 - Anomaly 'A’ Project Setting




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Annual Financial Report 2008                                                             Bannerman Resources Limited and Controlled Entities




RESOURCE MODEL

In January 2008, the Company announced an interim resource estimate showing the bulk of the U3O8
mineral content in the Inferred category.

Subsequently, the Company focused drilling efforts to drill out the defined deposit area. At the completion
of the infill drilling programme Coffey Mining commenced modelling of the drill data for the final resource
estimation at Anomaly A, in order to support the progress of a Definitive Feasibility Study which was
commissioned to GRD Minproc in May 2008.

The final resource estimate was announced in August 2008 based on 505 holes completed by Bannerman
on a predominantly 50m x 50m grid along a strike length of 2.5 km. The RC drillholes range from 72m to
420m in depth and the diamond drillholes range from 101m to 528m. The database includes in excess of
80,000 samples with 96% of the grades determined from chemical assay.

The resource estimate announced in August described an overall increase of 48% in total resources from
the resource estimate produced in January 2008. Significantly, there are very large amounts of metal
present at the higher cut-offs in this final resource estimate. This indicates a strong potential for the project
to sustain much higher head-grades over many years which could have a significant impact upon
production rates and the overall revenue generated by this first open pit

            Figure 3 - Etango Project, Namibia - August 2008 Resource Estimate Anomaly A Prospect
                                            Reported at various cutoffs using a bulk density of 2.62 t/m3
                                           Ordinary Kriged estimate based upon 3m cut U3O8 composites
                                                Block dimensions of 25mNS by 25mEW by 10mRL


                                                                        Tonnes Above
                                                                                                 U3O8               Contained U3O8
                                             Lower Cut                     Cutoff
                                                                                                (ppm)                   (M lb)
                                                                            (Mt)

                                                    100                         91.6              197                       39.7
                  Inferred
                                                    150                         65.5              224                       32.3
                                                    200                         34.5              268                       20.4

                                                    100                        145.0              209                       66.9
                  Indicated
                                                    150                        112.3              233                       57.7
                                                    200                         69.4              269                       41.2
                  Notes:   Figures have been rounded
                           NI-43-101 Compliant and consistent with the JORC guidelines




Drilling rigs are currently mobilised at the Anomaly A region to focus on the drilling of inferred resource
blocks in the model to upgrade their status to an Indicated level. This is required for economic resource
optimisations to be conducted as part of the ongoing feasibility studies. Additionally, diamond core drilling
is continuing to collect data for geotechnical, metallurgical and hydrological studies concurrent with a
programme of sterilisation drilling which is being conducted over the proposed plant and tailings dam
areas.




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Annual Financial Report 2008                                      Bannerman Resources Limited and Controlled Entities




Significant exploration potential still apparent at Etango
Resource drilling has largely been completed at Anomaly A, however, considerable scope remains to further
expand the resource at depth and along strike to the north and south where mineralisation has yet to be
closed off. Additionally, step out holes to the west, to test the depth extensions of the ore body,
encountered several previously unknown mineralised alaskites in the hanging wall of the known
mineralisation. These may represent the southern continuation of the outcropping Oshiveli mineralised
alaskites to the north and suggests even more scope for the discovery of more mineralisation.

The historic drilling at Oshiveli and Onkelo and the Company’s recent drilling has shown the known
mineralisation around the Palmenhorst Dome to extend for more than double the currently defined strike
length (2.5 km) to the north.

Aside from the potential of the northern and western areas, the extensions to the south around the nose of
the Palmenhorst Dome and then north-eastwards towards the outcropping Ompo alaskites are highly
prospective. This zone extends for ~8km and lies beneath very shallow sand cover and is known as the
Ondjamba prospect. The Company intends to drill this zone in the fourth quarter 2008.


                                     Figure 4: Etango- Anomaly ‘A’




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Annual Financial Report 2008                                          Bannerman Resources Limited and Controlled Entities



FEASIBILITY STUDIES
In September 2007, the Company announced the completion of a scoping study which considered the
potential economic development of the Etango Anomaly A uranium deposit. The Study was produced by
Independent Metallurgical Operations (IMO) in conjunction with Coffey Mining (formerly RSG Global).
Both groups are highly regarded resource consultancy groups with strong backgrounds in global project
development.

The main considerations in the initial scoping were scale, mining and throughput rate, project life,
mineralogy, metallurgy and community and environmental considerations. The study is considered a base
case as the project may have further upside through processing enhancements and the likely discovery of
further similar deposits in the immediate region. Numerous extensive ‘look-alike’ uraniferous alaskite
bodies exist within the Etango project area that have yet to be explored out.

The study confirmed that, subject to the delineation of the target resource base, a viable operation with
strong cash margins could be developed.

The study concluded that given the potential resource size, a 15 M tpa mining and milling operation could
potentially be developed with the ability to produce over 6Mlbs U3O8 per annum. This production, if met,
would make the Etango project one of the largest uranium producers in the world.

The study considered contract mining via conventional open pit, drill and blast followed by load and haul.

Following the positive results of the Scoping Study, the Company engaged GRD Minproc, a subsidiary of
GRD Limited (ASX:GRD), to produce a Definitive Feasibility Study (DFS) for the development of a
uranium mine at the Etango Anomaly A project in Namibia. The feasibility studies are being undertaken in
conjunction with Coffey, IMO and other consultants and are expected to be completed during the second
quarter of 2009.

GRD Minproc is an international engineering contractor with offices on three continents and has
successfully completed over 200 projects and 300 feasibility studies in over 30 countries. Its recent
uranium experience includes the EPCM contract for the Langer Heinrich uranium mine in Namibia, the
feasibility study for the Kayelekera uranium project in Malawi and the feasibility study on the Bakouma
uranium project in the Central African Republic, together with several other feasibility studies on uranium
projects in Africa and Australia.

Following the completion of the DFS, the Company expects that EPCM could commence with a target for
production in 2011/2012.

Based on the case studies developed during the scoping and subsequent feasibility study, the overall
program includes composite testing, comminution and leach variability test programmes, and HPGR pilot
testing. A review of the key parameters of the feasibility studies are summarized below.

Mineralogy
Study work undertaken by IMO demonstrates that the alaskite material hosting uranium mineralisation at
Goanikontes Anomaly A is very similar to alaskite material that is mined and processed at the nearby
Rössing mine.

Preliminary mineralogical identification and mineral deportment has been investigated via Scanning
Electron Microscope (SEM). The host rock was confirmed to be biotite granite (uraniferous alaskite) with
uranium mineralisation occurring along cleavage planes and within fractures, indicating that the ore could
be expected to be substantially liberated at a relatively coarse grind size. The granitic nature of the rock -
associated with feldspar and biotite with little evidence of major acid consuming minerals - indicates the
appropriateness of a sulphuric acid leach to extract uranium.

The dominant acid soluble minerals were identified as uraninite (UO2) and uranothorite ((Th,U)SiO4).
Only minor components of the complex and typically refractory double oxides brannerite
((U,Ca,Ce)(Ti,Fe)2O6) and polycrase ((Y,Ca,Ce,U,Th)(Ti,Nb,Ta)2O6) were also identified.
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Annual Financial Report 2008                                           Bannerman Resources Limited and Controlled Entities




Comminution
Comminution, or grinding, testwork has commenced on drillcore samples selected to spatially represent the
expected pit area and lithological types. The applicability of HPGR (High Pressure Grinding Rolls)
crushing technology within the crushing circuit will also be tested. To date, work has indicated that a
number of potential crushing and milling options are available.

Comminution characterisation test work has indicated a generally soft to moderate ore type which
demonstrates amenability to standard comminution processing via multiple stage crushing and ball milling
or SAG milling approaches.

Metallurgy
A prefeasibility stage metallurgical test work program has been initiated to provide design criteria for
feasibility study and design.

Leach and comminution testing was originally undertaken on a bulk sample of RC drilling chips for the
study. However, IMO noted that the RC chips tested were of a fineness that has likely led to an over-
estimation of acid consumption per tonne of material processed. The calculated figure used in the first base-
case scenarios was 30Kg/t. Subsequent test work has shown that a substantial reduction in expected acid
consumption to less than 20 kg/t is highly probable. This would closely approximate acid consumption
levels published for Rössing Mine.

To date only limited results from recent leach optimisation testing has been received. These interim results
have confirmed the amenability to acid leaching and a general insensitivity to grind size and temperature.
The results also indicate the potential for a substantial reduction in acid consumption compared to
previously tested RC chip samples. A further stage of leach optimisation testing is ongoing to finalise grind
size and acid consumption for the feasibility studies.

Uranium leach recoveries up to 90% are deemed achievable at ambient pressures and temperature.
Testwork is not definitive at this stage however, and is ongoing.

Processing
The original scoping study envisaged two main options for the plant design based upon a dry or wet
comminution circuit as follows:

1. Base case: Dry comminution circuit - two stage crush incorporating a HPGR circuit.
2. Conventional single stage crush followed by a SAG/Ball mill circuit.

Enhancements to the circuits are envisaged which will add value and further improve project returns.

The final design of the process plant is still to be finalised however, all work to date supports the original
proposed processing rate of around 15Mtpa. Process design criteria has been based upon test work
completed to date and design criteria from other similar operations notably the nearby Rössing uranium
mine. The design incorporates comminution, acid leach, solid/liquid separation, ion exchange, solvent
extraction and precipitation circuits.

Numerous trade-off studies are underway in the study including, amongst others, the viability of on site
acid production and the potential for heap leach processing.




Beneficiation
Radiometric sorting was considered as a potential option in the scoping study (2007). Given the
requirement to conduct very large scale trials on a range of potential ore types and crush sizes to obtain

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Annual Financial Report 2008                                          Bannerman Resources Limited and Controlled Entities



data consistent with feasibility study accuracy levels, testing of the radiometric sorting approach has been
postponed until production is underway.

Screening to upgrade the ore by rejecting coarse low grade fraction was tested through several crush size
(19 mm to 2 mm) samples which were tumbled and the products sized and assayed. Only marginal
upgrades were achieved (for the finer size tests) but some further testing at even finer preparation sizes is
planned.

Density separation that is, upgrading by rejecting low density fraction, some amenability to this approach
has been demonstrated and further testing is also planned.

Capital and Operating Costs
Costs at this stage are yet to be refined any further from those estimated from the scoping study originally
produced in September 2007. These have been provided for both the HPGR and the SAG/Ball mill options
and are expected to change as the DFS progresses. The scoping study capital costs were produced with an
expected accuracy of +/-30% and stand as follows:

                                              Capital Costs
                                                   (+/-30%)

                                                                                   Conventional Case
                                             Base Case HPGR                          SAG & Ball
           Cost Component                         (US$)                                 (US$)

Process Plant                                    236,897,814                            264,592,055
Infrastructure                                   35,091,675                              35,091,675

Indirect Costs                                   58,146,400                              63,846,800

Sub-Total                                        330,135,889                            363,530,530

Contingency (10%)                                33,013,589                              36,353,053

Total Capital Cost (+/- 30%)                     363,149,478                            399,883,583

WITH: Radiometric Sorting
(Factored Cost)                                  341,299,690                            372,177,256

WITH: Onsite Acid Plant
($67 million)                                    430,000,000                            467,000,000




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Annual Financial Report 2008                                                Bannerman Resources Limited and Controlled Entities




                                                Operating Costs
                                                       (+/-30%)

                                             HPGR Costs                                    SAG/Ball Cost

Line Item                         US$Mp.a.                 US$/lb               US$Mp.a.                    US$/lb
Mining                               77.2                   12.00                   77.2                     12.00
Labour                                2.3                    0.36                    2.4                      0.37
Power                                 0.6                    0.09                    3.8                      0.59
Reagents                              45.3                   7.01                   59.3                      9.22
Consumables/Water                     12.0                   1.86                   12.6                      1.96
Maintenance Materials                 6.0                    0.94                    6.8                      1.05
Transport                             2.2                    0.34                    2.2                      0.34
Admin/General                         1.3                    0.20                    1.3                      0.20
Total Cost                          146.9                   22.79                  165.6                     25.73

“The information on pages 12 to 17 of this report relates to the Mineral Resources at the Etango Anomaly A Deposit is
based on a resource estimate completed by Mr Neil Inwood who is a full time employee of Coffey Mining Ltd. Mr
Inwood is a Member of The Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the
style of mineralisation and types of deposits under consideration and to the activity which is being undertaken to qualify
as Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’, and is an independent consultant to Bannerman Resources and a Qualified
Person as defined by NI 43-101. Mr Inwood consents to the inclusion in the report the matters based on his
information in the form and context in which it appears.”

“The information on pages 14 to 16 of this report that relates to the metallurgical test work undertaken on Etango
Anomaly A Deposit samples was completed by Mr Gary Jobson who is a consulting metallurgist to Independent
Metallurgical Operations Pty Ltd. Mr Jobson is a Member of The Australasian Institute of Mining and Metallurgy and
has extensive experience relevant to the activity which is being undertaken. Mr Jobson consents to the inclusion in the
report of the matters based on his information in the form and context in which it appears.”

Other
Design investigations for the pit and plant sites are undergoing geotechnical evaluation. This involves
drilling and trench sampling with associated test work. Hydrological studies have also commenced and the
Social and Environmental Impact Assessment (SEIA) study is greatly advanced.




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Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities



EXPLORATION

The Etango license includes over 37 km of prospective alaskite stratigraphy identified by radiometric
surveys and historical data. To date, 15 radioactively “Hot” targets have been identified. Exploration
priorities were originally given to areas comprising similar alaskite intrusions found at Anomaly A. Most
recently the focus has changed to the area immediately around the Etango Anomaly A pit area where D & E
type alaskites have been identified.

Exploration in 2008 targeted the Rossingberg-Ombuga-Gohare trend in the north and over the Oshiveli-
Onkelo alaskite zone, which extends for several kilometres from the northern end of Anomaly A.

Alaskites occur in the Rossingburg-Ombuga-Gohare region as a topographical high, with drilling, trenches,
sampling and pitting remnants being visible from exploration work in the late 1970’s. The alaskites
comprise medium coarse quartz, feldspar, biotite, D type alaskites that have intruded a local sequence of
vertical north east striking Rossing and Chuos Formation metasediments.

Two drill rigs completed 4,455m in 22 holes at Rossingburg. One section line intersected well mineralised
alaskite including 42m@ 196 ppm U3O8 and 94m @ 170 ppm U3O8 (follow up drilling is planned).

At Ombuga drilling completed 5,061m in 18 holes (2008) One section line intersected well mineralised
alaskite including 8m @ 246 ppm U3O8 At Gohare 2,128m was completed in 18 holes. Results from these
holes are pending..

Oshiveli represents the continuation/northern extension of the Anomaly A deposit. The area contains
geology similar to Anomaly A and has the potential to host significant extensions to the deposit which was
still open at its northern extent. Typically D and E type Alaskites are present. Drilling at Oshiveli
completed 38 holes for12,140m with significant drill intercepts received to date including; 7 metres @ 793
eppm and 15 metres @ 560 eppm and 12 metres @ 336 eppm; 16 metres @ 200 eppm.

Two other highly prospective targets in the Anomaly A area are the Western Alaskites and Ondjamba
prospects. These targets exhibit great potential to discover more U3O8 mineralization and are additionally
attractive because of their close proximity to the proposed mine’s operation. Bannerman believes that this
potential, if proven, could significantly improve the economics of the Etango project.




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Annual Financial Report 2008                                          Bannerman Resources Limited and Controlled Entities




The Western Alaskites cover an area to the west of the Anomaly A resource where recently mapped
alaskites are exposed over a strike length of more than 1km to the northwest of the Anomaly A. These
alaskites were initially discovered in the hanging wall during step out drilling to test the depth extents of
the deposit. They occur immediately adjacent to the current proposed pit and will be drill tested for
possible expansion to the proposed pit.

A extensive area along the southern and eastern extent of the Palmenhorst Dome extending from the
southern end of the Anomaly A deposit through to the outcropping Ompo alaskites has been targeted as
potentially hosting very large accumulations of shallowly covered to exposed alaskite. This area was
formerly called the ‘Rossing Position’ as, in structural terms, it lies in a similar position along the
Palmenhorst Dome as the Rossing deposit does in relation to the Rossing Dome. The area largely lies
beneath shallow sand cover as at Anomaly A and has recently been named “Ondjamba” (the Oshivambo
word for elephant).

A ground radiometric survey over the Ondjamba target delineated a string of uranium anomalies over an
extensive area. Subsequent geological mapping delineated several areas of substantial alaskite
accumulation extending for approximately 8 kms between the Anomaly A and Ompo targets.

This area is considered a very high priority target for exploration due to accessibility and relative position
to the proposed processing facilities at the Etango Anomaly A project.




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Annual Financial Report 2008   Bannerman Resources Limited and Controlled Entities




                                                                               19
Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities



HIGH COURT MOTION

On 14 December 2007, Savanna Marble Close Corporation (Savanna) filed a Notice of Motion in the High
Court of Namibia together with a founding affidavit in support naming the Minister for Mines and Energy
(MME) as first defendant, Bannerman Mining Resources (Namibia) (Proprietary) Limited (the Company)
as second defendant and Robert D. Wirtz as third defendant seeking a review of the MME's decision to
grant EPL 3345 to the Company or declaring that decision null and void.

The basis for the claim was that the MME did not notify Savanna of the Company's application for EPL
3345 as was arguably required pursuant to section 69(2)(g)(ii) of the Minerals Act 1992 (Namibia) (the
Act).

On 14 April 2008, Savanna filed an amended Notice of Motion in the High Court of Namibia together with
a supplementary affidavit in support. The basis of the amended claim is that once the MME refused to
grant EPL 3345 to the Company, the MME was not entitled in law to reconsider, vary or amend the
original decision because he was "functus officio".

Broadly speaking, the doctrine of functus officio means that a decision maker is unable to remake a
decision once it has been made so that arguably any decision made subsequent to the original decision
which varies, revokes or reopens the original decision will be null and void.

The Minister for Mines and Energy and the Company have vigorously opposed the application.
Additionally, both the Company and the Minister are of the view that Savanna's claim should be rejected
prior to any substantive hearing of the case on the grounds that Savanna is guilty of serious and
unacceptable delay in waiting nearly 2 years to bring proceedings when it was been aware of the
Company's activities on EPL 3345 during that period.

The Company has approached the Judge President of the High Court of Namibia for a hearing date. The
Company is awaiting a response from the Judge President.

The Company has obtained legal advice from solicitors in both Australia and Namibia and from Senior
Counsel in Namibia. The Company is not able to disclose that legal advice on the basis that it is privileged
and confidential.

The Company is confident in its view that Savanna's application will fail.




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Annual Financial Report 2008                                      Bannerman Resources Limited and Controlled Entities



EPL3346 – SWAKOP RIVER

The Swakop River licence surrounds Paladin Resources Ltd’s Langer Heinrich Uranium mine. The project
area contains an extensive palaeodrainage channel target with uranium documented in calcretised
sediments at Elspe and at Bloedkoppie. Field reconnaissance in the area has confirmed the presence of
these sediments at Bloedkoppie and further east as well. These targets appear to be similar in style to
uranium mineralisation in the nearby Langer Heinrich palaeo-channel. Results from ground radiometric
surveys completed over the area have confirmed the prospectivity of the targets which represent well
defined, immediate exploration targets.

Geological mapping is planned in the Bloedkoppie area during the last quarter of 2008 to be followed by a
programme of aircore drilling.




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Annual Financial Report 2008                                      Bannerman Resources Limited and Controlled Entities




                               BOTSWANA URANIUM PROJECTS (BMN 100%)

Bannerman controls three Prospecting Licences (131/2005 to 133/2005) for uranium, precious metals, base
metals and platinum group minerals in Botswana. These licences are referred to as the Serule South, Serule
North and Dukwe Licences and are located in the Foley and Sua Pan regions in Botswana. The tenements
total 2,307.9km2. Bannerman’s Botswana licences are not currently considered to be material assets of
Bannerman.

Due to Botswana’s poorly exposed geology, exploration techniques rely on geophysics to a large extent.
The Kalahari group covers most of Botswana, increasing in depth from East to West. Karoo age flood
basalts also cover most of Botswana, underlying the Kalahari sand to a large extent. As a result, the
basement geology of most of Botswana is poorly exposed and understood, and information is based on
drilling.

Preliminary drilling at both the Serule And Dukwe projects in Botswana has recently commenced over
uranium and copper anomalies produced from a previously conducted soil programme.




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Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities



                                       AUSTRALIAN PROJECTS


The White Ring Project consists of a single Exploration Licence that covers an area 132km2 in size. It is
situated 157km southwest of Onslow in Western Australia. The project holds some exploration potential
for calcrete and hydrothermal associated uranium mineralisation. Bannerman’s 35% ownership of
Whinnen Resources Ltd’s White Ring Project is not currently considered to be a material asset of
Bannerman.

No work was conducted over this project during the reporting period


                                                SUMMARY


The 2007-2008 fiscal year proved a pivotal one for Bannerman Resources. Aggressive and concentrated
efforts catapulted exploration successes at Etango Anomaly A to a legitimate mining project which could
conceivably become one of the world’s more significant producers of uranium.

The drilling of the first prospect targeted at Etango occurred over a period of eighteen months commencing
with only one drill rig and expanding to five rigs and successfully delineated the resource at Anomaly A.

In August 2008 the Company announced an updated mineral resource estimate which, using a cut-off grade
of 100 ppm U3O8, consists of 66.9 million pounds of Indicated Mineral Resource (January 2008: 12.9
Mlbs.), and 39.7 million pounds of Inferred Mineral Resources (January 2008: 59.3 Mlbs.). The deposit
remains open to the North, South, West and down-dip.

Subsequent drilling to the west, to test the depth extensions of the ore body, resulted in a new discovery,
the Western Alaskites and has confirmed that further extensive mineralisation occurs immediately along
strike to the north into the Oshiveli prospect. The Company has now re-focussed its attentions back into the
region around Anomaly A due to its location to our planned mine site could result in a significant
improvement on the economics of the Etango project.

Early results from the feasibility study have proved to be highly encouraging. These interim results have
confirmed the amenability of the mineralised host rock to acid leaching and a general insensitivity to grind
size and temperature. The results also indicate the potential for a substantial reduction in acid consumption
compared to previously tested RC chip samples. Numerous studies are ongoing with a view towards
maximizing operational efficiencies.

With respect to the proceedings being brought against the Minister of Mines and Energy and the Company
in Namibia, we continue to respect the advice from Senior Counsel in Namibia and the Company’s
Australian lawyers on the basis of the affidavit material filed to date. The Company continues to invest in
and proceed with activity on the license with confidence in the Namibian Government’s legal process.

Bannerman continues to build its team of professionals as it progresses towards production. To this end,
Bannerman has attracted directors and senior mining professional executives of high standards and
experience. The Company is operating at a level commensurate with industry best practice and has the
requisite abilities to develop one of the world’s largest uranium projects.




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Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities




5.      FINANCIAL POSITION

The Company completed a placement in March 2008, of 10,500,000 fully paid shares at an issue price of
CAD$2.00 per share to raise $22,345,180 before costs.

During the year ended 30 June 2008, 7,925,000 listed options were converted, raising $1.205 million.

As at 30 June 2008, the Consolidated Entity has $13.64 million cash on hand (2007 $11.37million).

The Directors believe that the Consolidated Entity will need to raise additional funds to raise sufficient
capital to effectively complete the current feasibility studies and maintain its aggressive exploration
programme.


6.      BUSINESS STRATEGIES AND PROSPECTS FOR THE FORTHCOMING YEAR

The Consolidated Entity remains committed to adding to shareholder wealth. Whilst the current focus is on
uranium, all wealth generating opportunities will be examined.

As exploration progresses the Consolidated Entity may decide to add projects to or divest projects from its
current portfolio.




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Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities



7.      SIGNIFICANT CHANGES IN STATE OF AFFAIRS

The following significant changes in the state of affairs of the Consolidated Entity occurred during the
financial year:

            o    On 19 November 2007, the Company was listed on the Toronto Stock Exchange (‘TSX’).
                 The Company also issued 17,419 fully paid shares to Haywood Securities Inc for their
                 services in relation to the TSX listing.
            o    On 30 November 2007, the Company issued a total of 2,250,000 options at $6.50 exercisable
                 on or before 30 November 2010 to Mr Peter Batten, Mr Alastair Clayton, Mr Nathan
                 McMahon and Mr Clive Jones.
            o    On 30 November 2007, the Company issued a total of 2,250,000 options at $7.50 exercisable
                 on or before 30 November 2011 to Mr Peter Batten, Mr Alastair Clayton, Mr Nathan
                 McMahon and Mr Clive Jones.
            o    On 14 December 2007, a company incorporated in Namibia, Savanna Marble Close
                 Corporation (‘Savanna’) commenced proceedings in the High Court of Namibia against the
                 Minister of Mines and Energy, the Company’s 80% owned subsidiary Bannerman Mining
                 Resources (Namibia) (Pty) Ltd and an individual known as Robert D Wirtz (who has no
                 connection with Bannerman Resources Ltd).
            o    On 30 January 2008, the Company updated its resource statement, using a cut off grade of
                 100ppm U3O8, to 25 million tonnes of Indicated Mineral Resources grading 234 ppm U3O8
                 and 136.4 million tonnes of Inferred Mineral Resources grading 197ppm U3O8 (determined
                 from all available data to December 2007).
            o    On 19 March 2008, the Company appointed Mr David C Tucker a Non-Executive member of
                 to the Board of Directors.
            o    On 27 March 2008, the Company closed a public offering of 10,500,000 fully paid shares at
                 a price of CAD$2.00 per share to raise gross proceeds of A$22,345,180. The shares were
                 sold through a syndicate of underwriters led by Haywood Securities Inc and including GMP
                 Securities LP, Cormark Securities Inc and Thomas Weisel Partners Canada Inc.
            o    On 2 April 2008, the Company listed on the Namibian Stock Exchange (‘NSX’).
            o    On 20 May 2008, the Company appointed GRD Minproc to produce a Full Feasibility Study
                 for the development of a uranium mine at the Goanikontes Anomaly A project in Namibia.
            o    On 22 May 2008, Mr Geoff Stanley was appointed Non-Executive Chairman of the
                 Company and Mr Alastair Clayton stepped down as Chairman but remains on the Board as a
                 Non-Executive Director

8.      SUBSEQUENT EVENTS

On 5 August 2008, the Company announced a significant increase in total mineral resources at the
Goanikontes anomaly A project. The new mineral estimate using a cut off grade of 100ppm U3O8, is 66.9
million pounds of Indicated Mineral Resources and 39.7 million pounds of Inferred Mineral Resources.

On 26 August 2008, Peter Batten, resigned from his position as Managing Director and Mr Clive Jones was
appointed Acting Managing Director.

9.      FUTURE DEVELOPMENTS

The Consolidated Entity will continue its mineral exploration activity at and around its exploration projects
with the object of identifying commercial resources.

10.     ENVIRONMENTAL ISSUES

The Consolidated Entity is aware of its environmental obligations with regards to its exploration activities
and ensures that it complies with all regulations when carrying out any exploration work.

There have been no significant known breaches of the consolidated entity’s environmental conditions.

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Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities



11.     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.

12.     REMUNERATION REPORT (AUDITED)

This remuneration report outlines the director and executive remuneration arrangements of the Company in
accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of
this report, key management personnel (KMP) of the Company are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company,
directly or indirectly, including any director (whether executive or otherwise) and includes the four
executives in the Company receiving the highest remuneration.

 Details of Key Management Personnel

 Name and positions of key management personnel in office at any time during the financial year were:
 Directors
 Geoff Stanley                               Non-Executive Chairman
 Peter Batten                                Managing Director
 Alastair Clayton                            Non Executive Director
 Clive Jones                                 Non Executive Director
 Nathan McMahon                              Non Executive Director
 David Tucker                                Non Executive Director

 Executives
 Peter Christians                            Chief Operating Officer
 Mike Robbins                                Chief Financial Officer
 Lisa Wynne                                  Company Secretary

Remuneration Policy

The remuneration policy of Bannerman Resources Limited has been designed to align director objectives
with shareholder and business objectives by providing a fixed remuneration component which is assessed
on an annual basis in line with market rates. The board of Bannerman Resources Limited believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best directors to
run and manage the company, as well as create goal congruence between directors and shareholders.

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

The board’s policy for determining the nature and amount of remuneration for board members is as
follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior staff
members, was developed by the previous managing director and approved by the board after seeking
professional advice from independent external consultants.

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.

The Company is an exploration entity, and therefore speculative in terms of performance. Consistent with
attracting and retaining talented executives, directors and senior executives are paid market rates associated
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Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities



with individuals in similar positions, within the same industry. The Board members however were issued
shares and options as part of the terms of the Initial Public Offer and until recently were issued with options
to attract additional Board members. Board members have largely retained these securities which assist in
aligning their objectives with overall shareholder value.

Options have been issued to Board members to provide a mechanism to participate in the future
development of the Company and an incentive for their future involvement with and commitment to the
Company.

Options and performance incentives may also be issued in the event that the entity moves from an
exploration entity to a producing entity, and key performance indicators such as profits and growth can
then be used as measurements for assessing Board performance. Due to the current scope of its operations
there are no options on issue that are contingent upon any key performance indicators.

All remuneration paid to directors is valued at the cost to the company and expensed. Options are valued
using the Black-Scholes methodology.

Executives

All executives receive a base salary (which is based on factors such as length of service and experience),
superannuation and non-monetary benefits.

Non-Executive Directors

The board policy is to remunerate non-executive directors at market rates for comparable companies for
time, commitment and responsibilities. The Managing Director in consultation with independent advisors
determines payments to the non-executive directors and reviews their remuneration annually, based on
market practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non-
executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-
executive directors are not linked to the performance of the Company. However, to align directors’
interests with shareholder interests, the directors are encouraged to hold shares in the company and are able
to participate in the employee option plan.

The maximum aggregate remuneration payable by the Company to the non-executive directors as director’s
fees is $750,000. The non-executive directors do not receive any retirement benefits.

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders and directors
and executives. This has been achieved by the issue of shares and options to the majority of the directors
and executives to encourage the alignment of personal and shareholder interest.




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Annual Financial Report 2008                                                                 Bannerman Resources Limited and Controlled Entities



12.     REMUNERATION REPORT (AUDITED)

Details of Remuneration for Year Ended 30 June 2008

Details of the remuneration for each director and the key management personnel of the Company during
the period are set out in the following tables. The key management personnel of the Company includes the
directors as per page 4 above and the following executive officers who’s remuneration must be disclosed
under the Corporations Act 2001 as they are one of the 5 highest remunerated executives:


                                                                                                               SHARE-BASED
                               SHORT-TERM BENEFITS                           POST EMPLOYMENT                                                  TOTAL
                                                                                                                PAYMENTS

                                                               Non-           Super-         Retirement
                                                                                                            Equity        Options
                       Salary & Fees          Other           Monetary       annuation        Benefits                                                $


 Geoff Stanley – Non Executive Chairman (appointed 21/5/08)
            2008                        -               -                -               -            -              -                  -             -
            2007                        -               -                -               -            -              -                  -             -
 Alastair Clayton – Non Executive Chairman (resigned 21/5/08) and Non Executive Director (appointed 21/5/08)
                                                                                                                           1,525,582
                                                                                                                                 (ii)(iii)
            2008                50,035                  -                -               -            -              -                       1,575,617
            2007                33,333                  -                -               -            -              -     925,000 (i)        958,333
 Peter Batten – Managing Director (resigned 25/8/08)
                                                                                                                           2,288,374
                                                                                                                                 (ii)(iii)
            2008               224,583                 -                 -      23,928                -              -                       2,536,885
            2007               152,906                 -                 -      13,761                -              -                  -     166,667
 Clive Jones – Non Executive Director
                                                                                                                           1,525,582
                                                                                                                                 (ii)(iii)
            2008                40,833      15,000 (viii)                -               -            -              -                       1,581,415
            2007                38,427                  -                -               -            -              -                  -      38,427
 Nathan McMahon – Non Executive Director
                                                                                                                           1,525,582
                                                                                                                                 (ii)(iii)
            2008                40,833                 -                 -               -            -              -                       1,566,415
            2007                       -               -                 -               -            -              -                  -             -
 David Tucker – Non Executive Director
            2008                       -     32,539 (ix)                 -               -            -              -                  -      32,539
            2007                       -               -                 -               -            -              -                  -             -
 Stephen Brockhurst (resigned 8/6/07)
            2008                       -               -                 -           -                -              -                  -             -
            2007                21,667           44,473                  -      1,950                 -              -                  -      68,090
 Total Remuneration Directors
            2008               356,284           47,539                  -      23,928                -              -     6,865,120         7,292,871
            2007               246,333           44,473                  -      15,711                -              -       925,000         1,231,517


 Other Key Management Personnel
 Peter Christians – Chief Operating Officer (appointed 1/3/08)
                2008            83,333                 -                 -        7,500               -              -   342,275 (iv)         433,108
                2007                   -               -                 -               -            -              -                  -             -
 Mike Robbins – Chief Financial Officer (appointed 8/10/07)
                2008           108,117                 -                 -        9,730               -              -   220,605 (v)          338,452
                2007                   -               -                 -               -            -              -                  -             -
 Lisa Wynne – Company Secretary
                2008            90,800                 -                 -           -                -              -   147,070 (vi)         237,870
                2007                   -               -                 -           -                -              -                  -             -


No share based payments are related to the performance of the Group.




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Annual Financial Report 2008                                                   Bannerman Resources Limited and Controlled Entities



12.     REMUNERATION REPORT (AUDITED)

(i) The fair value of the Options is calculated at the date of grant using a Black-Scholes model.

The following factors and assumptions were used in determining the fair value of options issued to
Directors on grant date:

 Grant           Expiry        Fair Value     Vesting      Exercise Price of         Estimated      Risk Free          Dividend
 Date            Date           Per Option    Date         Shares                    Volatility      Interest Rate     Yield
 21/08/2006      18/8/2008          $0.37      21/8/2006          $1.16                50%              5.78%                -

(ii) The fair value of the Options is calculated at the date of grant using a Black-Scholes model.

The following factors and assumptions were used in determining the fair value of options issued to
Directors on grant date:

 Grant           Expiry         Fair Value    Vesting      Exercise Price of         Estimated      Risk Free          Dividend
 Date            Date            Per Option   Date         Shares                    Volatility      Interest Rate     Yield
 30/11/2007      30/11/2010        $1.37      30/11/2007          $6.50               81.59%            6.71%                -

(iii) The fair value of the Options is calculated at the date of grant using a Black-Scholes model.

The following factors and assumptions were used in determining the fair value of options issued to
Directors on grant date:

 Grant           Expiry         Fair Value    Vesting      Exercise Price of        Estimated       Risk Free          Dividend
 Date            Date            Per Option   Date         Shares                   Volatility%      Interest Rate     Yield
 30/11/2007      30/11/2011        $1.68      30/11/2007          $7.50              81.59%             6.71%                -

(iv) The fair value of the Options is calculated at the date of grant using a Black-Scholes model.

The following factors and assumptions were used in determining the fair value of options issued to Other
Key Management Personnel on grant date:

 Grant           Expiry        Fair Value     Vesting      Exercise Price of         Estimated      Risk Free          Dividend
 Date            Date           Per Option    Date         Shares                    Volatility      Interest Rate     Yield
  3/6/2008        3/6/2013        $1.3691      3/6/2008           $2.80                85%              6.48%                -

(v) The fair value of the Options is calculated at the date of grant using a Black-Scholes model.

The following factors and assumptions were used in determining the fair value of options issued to Other
Key Management Personnel on grant date:

 Grant           Expiry         Fair Value    Vesting      Exercise Price of         Estimated      Risk Free          Dividend
 Date            Date            Per Option   Date         Shares                    Volatility      Interest Rate     Yield
   25/1/08        25/1/2013       $1.4707       25/1/08           $3.64                85%              6.51%                -

(vi) The fair value of the Options is calculated at the date of grant using a Black-Scholes model.

The following factors and assumptions were used in determining the fair value of options issued to Other
Key Management Personnel on grant date:

 Grant           Expiry         Fair Value    Vesting      Exercise Price of        Estimated       Risk Free          Dividend
 Date            Date            Per Option   Date         Shares                   Volatility%      Interest Rate     Yield
   25/1/08        25/1/2013       $1.4707       25/1/08           $3.64                85%              6.51%                -


                                                                                                                               29
Annual Financial Report 2008                                            Bannerman Resources Limited and Controlled Entities



12.      REMUNERATION REPORT (AUDITED)

Estimated volatility approximates historic volatility. Each option entitles the holder to purchase one
ordinary share in the Company.

(viii)    Fees for extra services performed outside of non-executive director duties of $15,000 were paid to
          a Mr Jones during the financial year.

(ix)      Fees for extra services performed outside of non-executive director duties of $32,539 were paid to
          Mr Tucker during the financial year.

Options issued as part of remuneration for the year ended 30 June 2008

Options are issued to directors and executives as part of their remuneration. The options are not issued
based on performance criteria, but are issued to the majority of directors and executives of Bannerman
Resources Limited and its subsidiaries to increase goal congruence between executives, directors and
shareholders.

                               Number of Options Granted During          Number of Options Vested During the
                                          the Year                                      Year
                                  2008                2007                   2008                 2007

 Directors

 Alastair Clayton                    500,000 (i)          7,500,000                   500,000                7,500,000
 Peter Batten (resigned                     (iii)
                                     750,000 (i)                  -                   750,000                        -
 Clive Jones                                (iii)
                                     500,000 (i)                  -                   500,000                        -
 Nathan McMahon                             (iii)
                                     500,000 (i)                  -                   500,000                        -
                                            (iii)
                                      9,225,000           7,500,000                 9,225,000                7,500,000
 Officers
 Peter Christians                   250,000 (iii)                   -                 250,000                           -
 Mike Robbins                       150,000 (iv)                    -                 150,000                           -
 Lisa Wynne                         100,000 (iv)                    -                 100,000                           -
                                        500,000                     -                 500,000                           -

100% of options granted during the year vested at the grant date.

During the financial period and up to the date of this report the Company issued a total of;

i)        2,250,000 options exercisable at $6.50 on or before 30 November 2010 (approved by shareholders
          at Annual general meeting held on 30 November 2007); and 2,250,000 options exercisable at $7.50
          on or before 30 November 2011 (approved by shareholders at Annual general meeting held on 30
          November 2007)
ii)       On 18 August 2006, shareholders approved the terms of the Heads of Agreement to acquire an 80%
          interest in Bannerman Resources Mining (Namibia) (Pty) Ltd (formerly Turgi Investments Pty
          Ltd). The consideration payable included options over ordinary shares to be issued in two tranches
          (‘Tranche 1’ and ‘Tranche 2’) on a 1 for 1 basis. 4,725,000 Trache 1 options were exercised during
          the 2008 financial year and 4,725,000 Tranche 2 options were issued during the 2008 financial
          year.
iii)      250,000 options issued to Peter Christians exercisable at $2.80 on or before 3 June 2013 (approved
          by the directors on 3 June 2008)
iv)       Part of 350,000 options issued to employees exercisable at $3.64 on or before 25 January 2013
          (approved by the directors on 25 January 2008)



                                                                                                                        30
Annual Financial Report 2008                                               Bannerman Resources Limited and Controlled Entities



12.     REMUNERATION REPORT (AUDITED)

Shares provided on exercise of remuneration options

Details of ordinary shares in the company provided as a result of the exercise of remuneration options to
each director and executives of the Company are set out below:


                                 Number of ordinary shares issued on exercise of options during the year
 Name
                                          2008        Exercise Price                    2007           Exercise Price
 Alastair Clayton                    1,000,000                   $0.40              1,700,000                     $0.10
 Peter Batten                        1,050,000                   $0.20              3,000,000                   $0.1167
 Nathan McMahon                      4,725,000                   $0.10                      -                         -

Options granted as part of remuneration
2008
Name                            Fair Value of    Fair Value of    Fair Value of      Remuneration
                                   options          options       options lapsed      consisting of
                               granted during      exercised        during the       options for the
                                  the year        during the           year              year %
                                                      year
Alastair Clayton                   1,525,582        2,780,000                   -               96.8%
Peter Batten                       2,288,374        1,617,000                   -               90.2%
Clive Jones                        1,525,582                -                   -               96.5%
Nathan McMahon                     1,525,582                -                   -               97.4%

Peter Christians                     342,275                 -                  -               79.0%
Mike Robbins                         220,605                 -                  -               65.2%
Lisa Wynne                           147,070                 -                  -               61.8%



2007
Name                            Fair Value of    Fair Value of    Fair Value of      Remuneration
                                   options          options       options lapsed      consisting of
                               granted during      exercised        during the       options for the
                                  the year        during the           year              year %
                                                      year
Alastair Clayton                     925,000                 -                  -                     -


Share incentive option plan

The Company’s policy prohibits hedging of options granted under share option plans. Prohibited hedging
practices include put/call arrangements over “in money” options to hedge against a future drop in share
price. The Board considers such hedging to be against the spirit of a share option plan and inconsistent
with shareholder objectives




                                                                                                                           31
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities



12.     REMUNERATION REPORT (AUDITED)

Employment Contracts

The employment conditions of the Managing Director, the Chief Operating Officer and the Chief Financial
Officer are formalised in an employment agreement.

The employment of the Managing Director and Chief Financial Officer may be terminated by the Company
by giving the employee four (4) weeks notice in writing. Alternatively, the employment may be terminated
by the Company providing compensation instead of the period of notice required. Termination payments
due are four weeks lieu of notice if the termination period is not worked out. Termination payments are not
payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the
Company can terminate employment at any time.

The employment of the Chief Operating Officer may be terminated by the Company by giving the
employee two (2) months notice in writing. Alternatively, the employment may be terminated by the
Company providing compensation instead of the period of notice required. Termination payments due are
two months lieu of notice if the termination period is not worked out. Termination payments are not
payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the
Company can terminate employment at any time.

This is the end of the Remuneration Report.

13.     MEETINGS OF DIRECTORS

                                                              Board of Directors
    Directors                                       Held                                 Attended

    Peter Batten                                      9                                       9
    Alastair Clayton                                  9                                       5
    Clive Jones                                       9                                       8
    Nathan McMahon                                    9                                       8
    David Tucker                                      3                                       3




14.     INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company has, during the financial period, entered into deeds of access and indemnity with each
Director. These deeds provide access to documentation and indemnification against liability for loss
suffered, as a result of any act or omission, to the extent permitted by the Corporations Act 2001, from
conduct of the Consolidated Entity’s business.

During the financial year, the Company has paid premiums in respect of a contract insuring all the
Directors of the Company against costs incurred in defending proceedings except for conduct involving:

•     a wilful breach of duty; or
•     a contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of
      the Corporations Act 2001

The total amount of insurance contract premiums paid was $55,500. This amount has not been included in
Directors and Executives remuneration.




                                                                                                                   32
Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities



15.     OPTIONS

At the date of this report, the unissued ordinary shares of the Company under option are as follows:

 Expiry Date                                   Exercise Price                      Number of Options

 13 November 2010                                 A$0.20                                                4,725,000
 28 May 2010                                      A$0.20                                                4,612,500
 30 November 2010                                 A$6.50                                                2,250,000
 30 November 2011                                 A$7.50                                                2,250,000
 27 December 2011                                 A$2.40                                                  200,000
 21 June 2012                                     A$3.70                                                   75,000
 1 November 2012                                 CAD$4.12                                                 100,000
 25 January 2013                                  A$3.64                                                  350,000
 3 June 2013                                      A$2.80                                                  250,000
 TOTAL                                                                                                 14,812,500

During the year ended 30 June 2008 there were 7,925,000 ordinary shares issued as a result of the exercise
of options.

16.     PROCEEDINGS ON BEHALF OF COMPANY

In respect of the proceedings being brought by Savanna against the Minister of Mines and Energy and the
Company in Namibia, the Company has taken advice from Senior Counsel in Namibia and the Company's
Australian lawyers on the basis of the affidavit material filed to date. It is the Company's view that
Savanna's application is without merit and will fail. In summary:

High Court Action A338/2007
On 14 December 2007, Savanna Marble Close Corporation (Savanna) filed a Notice of Motion in the High
Court of Namibia together with a founding affidavit in support naming the Minister for Mines and Energy
(MME) as first defendant, Bannerman Mining Resources (Namibia) (Proprietary) Limited (the Company)
as second defendant and Robert D. Wirtz as third defendant seeking a review of the MME's decision to
grant EPL 3345 to the Company or declaring that decision null and void.

The basis for the claim was that the MME did not notify Savanna of the Company's application for EPL
3345 as was arguably required pursuant to section 69(2)(g)(ii) of the Minerals Act 1992 (Namibia) (the
Act).

On 14 April 2008, Savanna filed an amended Notice of Motion in the High Court of Namibia together with
a supplementary affidavit in support. The basis of the amended claim is that once the MME refused to
grant EPL 3345 to the Company, the MME was not entitled in law to reconsider, vary or amend the
original decision because he was "functus officio".

Broadly speaking, the doctrine of functus officio means that a decision maker is unable to remake a
decision once it has been made so that arguably any decision made subsequent to the original decision
which varies, revokes or reopens the original decision will be null and void.

The Minister for Mines and Energy and the Company have vigorously opposed the application.
Additionally, both the Company and the Minister are of the view that Savanna's claim should be rejected
prior to any substantive hearing of the case on the grounds that Savanna is guilty of serious and
unacceptable delay in waiting nearly 2 years to bring proceedings when it was been aware of the
Company's activities on EPL 3345 during that period.


                                                                                                                    33
Auditor's Independence Declaration to the Directors of Bannerman Resources Limited
In relation to our audit of the financial report of Bannerman Resources Limited for the year ended 30 June 2008, to the best of my
knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001
or any applicable code of professional conduct.




Ernst & Young




V W Tidy
Partner
Perth
30 September 2008




VT;LB;BANNERMAN;015




                                                                                         Liability limited by a scheme approved under
                                                                                         Professional Standards Legislation
Annual Financial Report 2008                                            Bannerman Resources Limited and Controlled Entities



                                       INCOME STATEMENT
                                 FOR THE YEAR ENDED 30 JUNE 2008
                                                     Consolidated                                           Company
                                              Note       2008              2007                     2008                2007


                                                           $                 $                        $                   $
Continuing Operations
Other revenue                                  2          661,658           135,540                 643,970             124,706
Other income                                   3           21,804           255,996                   2,340              49,030

Other expenses                                 4      (2,152,651)         (447,869)            (1,640,866)            (367,450)
Employee benefits expense                             (1,768,294)         (243,121)            (1,742,983)            (169,448)
Borrowing costs expense                                  (10,802)           (3,411)                (5,214)                 (23)
Compliance and regulatory expenses                      (554,409)         (161,054)              (546,996)            (156,208)
Directors fees                                          (131,702)         (152,571)              (131,702)            (152,571)
Directors share options expense                       (6,865,121)         (925,000)            (6,865,121)            (925,000)
Foreign exchange loss                                           -                 -            (2,732,231)                    -
Impairment of loan to subsidiary                                -                 -              (510,868)                    -
Depreciation expense                                    (136,761)          (25,398)               (67,540)             (19,057)
Impairment of investment in subsidiary                          -                 -           (10,682,081)                    -
Exploration expenditure written off                      (16,019)         (192,721)               (16,019)            (162,421)

Loss from continuing operations before               (10,952,297)       (1,759,609)           (24,295,311)          (1,778,442)
income tax expense
Income tax expense                             7                    -                 -                       -                -


Net Loss for the year                                (10,952,297)       (1,759,609)           (24,295,311)          (1,778,442)

Loss is attributable to:
    Equity holders of          Bannerman
    Resources Limited                                (10,952,297)       (1,759,609)           (24,295,311)          (1,778,442)
    Minority Interest                                           -                 -                      -                    -

                                                     (10,952,297)       (1,759,609)           (24,295,311)          (1,778,442)


Basic and diluted loss per share (cents per   19               (8.18)            (2.27)
share)




  The above income statement should be read in conjunction with the accompanying notes forming part of
                                       these financial statements.




                                                                                                                        36
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities



                                             BALANCE SHEET
                                            AS AT 30 JUNE 2008
                                                           Consolidated                              Company
                                           Note       2008             2007                   2008                2007

                                                       $                 $                      $                   $

CURRENT ASSETS

Cash and cash equivalents                    8     13,639,963     11,372,832               13,224,248         11,335,198
Other receivables                            9        995,605        106,227                  140,927             68,516
Other                                       10        140,693          7,063                   65,195              7,063

TOTAL CURRENT ASSETS                               14,776,261     11,486,122               13,430,370         11,410,777

NON CURRENT ASSETS

Other receivables                            9              -              -               18,268,947          3,728,180
Available for sale financial assets         12         51,623        162,108                    4,123              2,033
Investment in subsidiaries                  26               -              -              28,493,879         20,891,870
Property, plant and equipment               13        726,468        197,269                  136,563             76,588
Exploration and evaluation expenditure      11     45,550,409     24,694,726                  600,671            457,523

TOTAL NON CURRENT ASSETS                           46,328,500     25,054,103               47,504,183         25,156,194

TOTAL ASSETS                                        61,104,761     36,540,225              60,934,553         36,566,971

CURRENT LIABILITIES

Trade and other payables                    14       1,076,920         739,642               1,041,538            737,187
Provisions                                  15          56,356          12,093                  56,356             12,093

TOTAL CURRENT LIABILITIES                            1,133,276         751,735               1,097,894            749,280

TOTAL LIABILITIES                                    1,133,276         751,735               1,097,894            749,280

NET ASSETS                                          59,971,485     35,788,490              59,836,659         35,817,691

EQUITY

Issued capital                              16      41,797,705    19,690,066               41,797,705        19,690,066
Reserves                                    17      32,989,737    19,962,084               46,214,800        20,008,160
Accumulated losses                                (14,815,957)    (3,863,660)            (28,175,846)        (3,880,535)

TOTAL PARENT ENTITY                                 59,971,485     35,788,490              59,836,659         35,817,691
INTEREST

Minority interest – share capital            27               4                 4                        -               -
Minority interest – accumulated losses       27             (4)               (4)                        -               -

TOTAL EQUITY                                        59,971,485     35,788,490              59,836,659         35,817,691

 The above balance sheet should be read in conjunction with the accompanying notes forming part of these
                                          financial statements.



                                                                                                                   37
Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities



                                      CASH FLOW STATEMENT
                                 FOR THE YEAR ENDED 30 JUNE 2008
                                                        Consolidated                              Company
                                        Note       2008            2007                   2008                 2007

                                                    $               $                       $                    $

Cash Flows from Operating
Activities

- Payments to suppliers and                     (3,339,456)      (880,250)             (2,844,811)            (669,298)
employees
- Interest received                                 587,583        120,196                 567,555              109,363
- Payments for exploration and                 (16,369,290)    (3,264,141)               (153,143)            (365,391)
evaluation

Net cash used in operating activities   20     (19,121,163)    (4,024,195)             (2,430,399)            (925,326)

Cash Flows From Investing
Activities

- Loan to subsidiary                                     -               -           (17,611,553)          (3,149,509)
- Purchase of plant & equipment                  (677,185)       (220,325)              (127,515)             (93,302)
- Purchase of available for sale                   (3,340)        (31,293)                (2,090)             (34,876)
  investments
- Proceeds from disposal of available
  for sale investments                                    -        150,857                           -          150,423
- Proceeds from joint venture
  partnerships                                            -        110,000                           -                 -

Net cash (used in)/provided by                   (680,525)              9,239        (17,741,158)          (3,127,264)
investing activities

Cash Flows from Financing
Activities

Proceeds from issue of shares and               23,550,385      13,464,499             23,550,385           13,464,499
options
Payment for costs of issue of shares            (1,489,778)      (555,361)             (1,489,778)            (555,361)
and options

Net cash provided by financing
activities                                      22,060,607      12,909,138             22,060,607           12,909,138


Net increase in cash held                        2,258,919       8,894,182               1,889,050           8,856,548

Cash and cash equivalents at
beginning of financial year                     11,372,832       2,478,650             11,335,198            2,478,650
Net foreign exchange differences                     8,212               -                      -                    -
Cash and cash equivalents at end of
financial year                           8      13,639,963      11,372,832             13,224,248           11,335,198

The above cash flow statement should be read in conjunction with the accompanying notes forming part of
                                      these financial statements.


                                                                                                                 38
  Annual Financial Report 2008                                                    Bannerman Resources Limited and Controlled Entities



                                          STATEMENT OF CHANGES IN EQUITY
                                            FOR YEAR ENDED 30 JUNE 2008

CONSOLIDATED                                   Issued Capital   Accumulated      Minority     Option         Foreign            Total
                                                                    Losses       Interest     Reserve       Currency
                                                                                                           Translation
                                                                                                             Reserve
                                                     $                $                           $             $                 $
Balance at 1 July 2006                           6,780,930       (2,104,053)            -    2,119,575                   -     6,796,454
Foreign currency translation                             -                   -          -              -       (46,076)          (46,076)
Total income and expense for the period                  -                   -          -              -       (46,076)          (46,076)
recognized directly in equity
Profit / (loss) for the period                           -       (1,759,609)            -              -                 - (1,759,609)
Total income and expense for the period                  -       (1,759,609)            -              -                 - (1,759,609)
Attributable to:
Equity holders of the parent                                                                                                  (1,759,609)
Minority Interest                                                                                                                           -
Equity Transactions:
Shares issued during the year                   13,464,578                   -                         -                 -    13,464,578
Share issue expenses                             (555,442)                   -                         -                 -     (555,442)
Share based payments                                     -                   -              17,888,585                   -    17,888,585
Balance 30 June 2007                            19,690,066       (3,863,660)            -   20,008,160         (46,076)       35,788,490


Balance at 1 July 2007                          19,690,066       (3,863,660)            -   20,008,160         (46,076)       35,788,490
Foreign currency translation                             -                   -                         -   (13,178,987) (13,178,987)
Total income and expense for the period                  -                   -                         -   (13,178,987) (13,178,987)
recognized directly in equity
Profit / (loss) attributable to members                  -      (10,952,297)            -              -             -       (10,952,297)

Total income and expense for the period                  -      (10,952,297)            -              -             -       (10,952,297)
Attributable to:
Equity holders of the parent                                                                                                 (10,952,297)
Minority Interest                                                                                                                       -
Equity Transactions:
Shares issued during the year                   23,597,416                   -                         -             -        23,597,416
Share issue expenses                           (1,489,777)                   -                         -             -        (1,489,777)
Share based payments                                     -                   -              26,206,640               -        26,206,640
Balance 30 June 2008                            41,797,705      (14,815,957)            -   46,214,800     (13,225,063)       59,971,485




                                                                                                                                      39
  Annual Financial Report 2008                                              Bannerman Resources Limited and Controlled Entities



                                          STATEMENT OF CHANGES IN EQUITY
                                            FOR YEAR ENDED 30 JUNE 2008

PARENT                                            Issued Capital   Accumulated        Option Reserve           Total
                                                                     Losses
                                                        $               $                     $                  $
Balance at 1 July 2006                               6,780,930      (2,102,093)            2,119,575            6,798,412
Profit / (loss) attributable to members                      -      (1,778,442)                      -        (1,778,442)
Total income and expense for the period                      -      (1,778,442)                      -        (1,778,442)
Attributable to:
Equity holders of the parent                                                                                  (1,778,442)
Equity Transactions:
Shares issued during the year                      13,464,578                   -                    -         13,464,578
Share issue expenses                                 (555,442)                  -                    -          (555,442)
Share based payments                                         -                  -         17,888,585           17,888,585
Balance at 30 June 2007                            19,690,066       (3,880,535)           20,008,160           35,817,691


Balance at 1 July 2007                             19,690,066       (3,880,535)           20,008,160           35,817,691
Profit / (loss) attributable to members                      -     (24,295,311)                      -       (24,295,311)

Total income and expense for the period                      -     (24,295,311)                      -       (24,295,311)
Attributable to:
Equity holders of the parent                                                                                 (24,295,311)
Equity Transactions:
Shares issued during the year                      23,597,416                   -                    -         23,597,416
Share issue expenses                               (1,489,777)                  -                    -        (1,489,777)
Share based payments                                         -                  -         26,206,640           26,206,640
Balance at 30 June 2008                            41,797,705      (28,175,846)           46,214,800           59,836,659




                                                                                                                            40
Annual Financial Report 2008                                          Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

     1.          STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

           Basis of Preparation

           The financial report is a general purpose financial report that has been prepared in accordance
           with Australian Accounting Standards, including Australian Accounting Interpretations, other
           authoritative pronouncements of the Australian Accounting Standards Board and the
           Corporations Act 2001. The financial report has also been prepared on an historical cost basis,
           except for investment properties, derivative financial instruments and available-for-sale
           investments which have been measured at fair value.

           The financial report covers the consolidated entity of Bannerman Resources Limited and
           controlled entities, and Bannerman Resources Limited as an individual parent entity.
           Bannerman Resources Limited is a listed public company, incorporated and domiciled in
           Australia.

           The financial report is presented in Australian dollars.

           Statement of compliance

           The financial report complies with Australian Accounting Standards as issued by the Australian
           Accounting Standards Board and International Financial Reporting Standards ("IFRS") as
           issued by the International Accounting Standards Board.

           The Group has adopted all of the new and revised Standards and Interpretations issued by the
           Australian Accounting Standards Board (the "AASB") that are relevant to the operations of the
           Group and effective for reporting periods beginning on or after 1 July 2007. The adoption of
           these standards give rise to additional disclosure which did not have a material effect on the
           financial statements of the Group.

           (i)     Adoption of new accounting standard

           The Group has adopted AASB 7 Financial Instruments: Disclosures and all consequential
           amendments which became applicable on 1 January 2007. The Group has also adopted AASB
           2008-4 Amendments to Australian Accounting Standards-Key Management Personnel
           Disclosures by Disclosing Entities . The adoption of these standards has only affected the
           disclosure in the financial statements. There has been no affect on profit or loss or the position
           of the entity.


          a) Going Concern

           In the forthcoming financial period, the Company and the consolidated entity will be required to
           meet various operational outlays which require funds that are above and beyond the working
           capital of the Company and the consolidated entity at 30 June 2008.

           The consolidated financial statements have been prepared on the basis that the Company and
           the consolidated entity will continue to meet their commitments and can therefore continue
           normal business activities and the realisation of assets and settlement of liabilities in the
           ordinary course of business.




                                                                                                                        41
Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

1.        STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

               In arriving at the position, the directors are reviewing various funding alternatives to meet
               these commitments including:

               ·      equity raising; and
               ·      debt raising.

               The directors believe that at the date of signing the financial report there are reasonable
               grounds to believe that having regard to matters set out above, the Company and the
               consolidated entity will be able to raise sufficient funds to meet its obligations as and when
               they fall due.

               Should the Company and the consolidated entity not achieve the matters set out above there
               is significant uncertainty whether the Company and the consolidated entity will continue as
               going concerns and therefore whether they will realise their assets and extinguish their
               liabilities in the normal course of business and at amounts stated in the financial report.

               The financial report does not include any adjustment relating to the recoverability or
               classification of recorded asset amounts or to the amounts or classifications of liabilities that
               might be necessary should the Company and the consolidated entity not be able to continue
               as going concerns.

        b) Basis of Consolidation

               The consolidated financial statements comprise the financial statements of Bannerman
               Resources Limited and its subsidiaries (as outlined in Note 26) as at 30 June each year (the
               Group).

               Subsidiaries are all those entities over which the Group has the power to govern the
               financial and operating policies so as to obtain benefits from their activities.

               The financial statements of the subsidiaries are prepared for the same reporting period as the
               parent company, using consistent accounting policies.

               In preparing the consolidated financial statements, all inter-company balances and
               transactions, income and expenses and profit and losses resulting from intra-group
               transactions have been eliminated in full.

               Subsidiaries are fully consolidated from the date on which control is obtained by the Group
               and cease to be consolidated from the date on which control is transferred out of the Group.

               Investments in subsidiaries held by Bannerman Resources Limited are accounted for at cost
               in the accounts of the parent entity.

               The acquisition of subsidiaries is accounted for using the purchase method of accounting.
               The purchase method of accounting involves allocating the cost of the business combination
               to the fair value of the assets acquired and the liabilities and contingent liabilities assumed
               at the date of acquisition.




                                                                                                                      42
Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

1.    STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

               Minority equity interests not held by the Group are allocated their share of the net profit or
               losses in the income statement and are presented within equity in the consolidated balance
               sheet, separately from parent shareholder’s equity.

        c) Income Tax

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

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

                • except where the deferred income tax liability arises from the initial recognition of an
                  asset or liability in a transaction that is not a business combination and, at the time of
                  the transaction, affects neither that accounting profit nor taxable profit or loss; and
                • in respect of taxable temporary differences associated with investments in subsidiaries,
                  associates and interests in joint ventures, except where the timing of the reversal of the
                  temporary differences will not reverse in the foreseeable future.

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

                 • except where the deferred income tax asset relating to the deductible temporary
                   difference arises from the initial recognition of an asset or liability in a transaction that
                   is not a business combination and, at the time of the transaction, affects neither the
                   accounting profit nor taxable profit or loss; and
                • in respect of deductible temporary differences with investments in subsidiaries,
                   associates and interests in joint ventures, deferred tax assets are only recognised to the
                   extent that it is probable that the temporary differences will reverse in the foreseeable
                   future and taxable profit will be available against which the temporary differences can
                   be utilised.

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

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

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

                Income taxes relating to items recognised directly in equity are recognised in equity are not
                in the income statement.




                                                                                                                       43
Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities
                                  NOTES TO THE FINANCIAL STATEMENTS
                                         FOR THE YEAR ENDED
                                             30 JUNE 2008

1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

        d) Exploration and evaluation expenditure

                Exploration, evaluation and development expenditure incurred is accumulated in respect of
                each identifiable area of interest. These costs are carried forward only if they relate to an
                area of interest for which rights of tenure are current and in respect of which:

                (i)      such costs are expected to be recouped through successful development and
                         exploitation or from sale of the area; or

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

                Accumulated costs in respect of areas of interest which are abandoned are written off in
                full against profit in the year in which the decision to abandon the area is made.

                A regular review is undertaken of each area of interest to determine the appropriateness of
                continuing to carry forward costs in relation to that area of interest.

        e) Property, Plant and Equipment

                Plant and equipment are measured at historical cost less accumulated depreciation and any
                accumulated impairment costs.

                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 which will be received from the assets’
                employment and subsequent disposal. The expected net cash flows have not been
                discounted to their present values in determining recoverable amounts.

                Land and buildings are measured at fair value, based on periodic valuations by external
                independent valuers less accumulated depreciation on buildings.
                Depreciation

                The depreciable amount of all fixed assets is depreciated on a diminishing value basis over
                their useful lives to the Company commencing from the time the asset is held ready for use.
                The depreciation rates used for each class of depreciable assets are:

                       Class of Fixed Asset                                       Depreciation Rate
                                                                                  2008        2007
                       Plant and equipment                                        40.0%         40.0%
                       Office Furniture & Equipment                               18.0%         18.0%
                       Vehicles                                                   33.3%         33.3%




                                                                                                                       44
Annual Financial Report 2008                                      Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008

1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

        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, are transferred to entities in the
                Company are classified as finance leases. Finance leases are capitalised, recording an asset
                and a liability equal to the present value of the minimum lease payments, including any
                guaranteed residual values. Leased assets are depreciated on a diminishing value basis
                over their estimated useful lives where it is likely that the Company will obtain ownership
                of the asset or over the term of the lease. Lease payments are allocated between the
                reduction of the lease liability and the lease interest expense for the period.

                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.

        g) Basic Earnings/Loss Per Share

                Basic earnings/loss per share is calculated by dividing the net loss attributable to members
                for the reporting period, after excluding any costs of servicing equity, by the weighted
                average number of ordinary shares of the Company, adjusted for any bonus issue.

                Diluted earnings per share adjusts the figures used in the determination of basic earnings
                per share to take into account the after income tax effect of interest and other financing
                costs associated with dilutive potential ordinary shares and the weighted average number of
                shares assumed to have been issued for no consideration in relation to dilutive potential
                ordinary shares.

        h) Revenue

                Revenue is recognised to the extent that it is probable that the economic benefits will flow
                to the Company and the revenue can be reliably measured. The following specific
                recognition criteria must also be met before revenue is recognised:

                Interest

                Revenue is recognised as the interest accrues (using the effective interest method, which is
                the rate that exactly discounts estimated future cash receipts through the expected life of
                the financial instrument) to the net carrying amount of the financial asset.

        i)   Cash and cash equivalents

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

                For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and
                cash equivalents as defined above, net of outstanding bank overdrafts.




                                                                                                                    45
Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

        j)   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 balance sheet 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 balance sheet.

                Cash flows are included in the cash flow statement 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.

                Commitments and contingencies are disclosed net of the amount of GST recoverable from,
                or payable to, the taxation authority.

        k) Impairment of assets

                At each reporting date the Company assesses whether there is any indication that an asset
                may be impaired. Where an indication of impairment exists, the Company makes a formal
                estimate of recoverable amount. Where carrying amount of an asset exceeds it’s
                recoverable amount the asset is considered impaired and is written down to its recoverable
                amount.

                Recoverable amount is the greater of fair value less costs to sell and value in use. It is
                determined for an individual asset, unless the asset’s value in use cannot be estimated to be
                close to its fair value less costs to sell and it does not generate cash inflows that are largely
                independent of those from other assets or Companys assets, in which case, the recoverable
                amount is determined for the cash-generating unit to which the asset belongs.

                In assessing value in use, the estimated future cash flows are discounted to their present
                value using a pre-tax discount rate that reflects current market assessments of the time
                value of money and the risks specific to the asset.

        l)   Receivables

                Receivables, which generally have 30-60 day terms, are recognised initially at fair value
                and susbsequently measured at amortised cost using the effective interest method, less an
                allowance for impairment.

                Collectibility of receivables is reviewed on an ongoing basis. Individual debts that are
                known to be uncollectible are written off when identified. An impairment provision is
                recognised when there is objective evidence that the Group will not be able to collect the
                receivable. Financial difficulties of the debtor, default payments or debts more than 60 days
                overdue are considered objective evidence of impairment. The amount of the impairment
                loss is the receivable carrying amount compared to the present value of estimated future
                cash flows, discounted at the original effective interest rate.




                                                                                                                       46
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008

1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

        m) Payables

                Payables are carried at amortised cost due to their short term nature they are not
                discounted. They represent liabilities for goods and services provided to the Group prior to
                the end of the financial year that are unpaid and arise when the Group becomes obliged to
                make future payments in the respect of the purchase of these goods and services, The
                amounts are unsecured and usually paid within 30 days of recognition.

        n) Financial Assets

                Financial assets are initially recognised at fair value plus directly attributable transaction
                costs.

                After initial recognition, financial assets, which are classified as available-for-sale, are
                measured at fair value.

                Gains or losses on available-for-sale financial assets are recognised as a separate
                component of equity until the financial asset is sold, collected or otherwise disposed of, or
                until the financial asset is determined to be impaired, at which time the cumulative gain or
                loss previously reported in equity is included in the income statement.

                For financial assets that are actively traded in organised financial markets, fair value is
                determined by reference to Stock Exchange quoted market bid prices at the close of
                business on the balance sheet date.

        o) Provisions

                Provisions are recognised when the Group has a present obligation (legal or constructive)
                as a result of a past event, it is probable that an outlay of resources embodying economic
                benefits will be required to settle the obligation and a reliable estimate can be made of the
                amount of the obligation.

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

                Provisions are measured at the present value of management’s best estimate of the
                expenditure required to settle the present obligation at the balance sheet date using a
                discounted cash flow methodology. If the effect of the time value of money is material,
                provisions are discounted using a current pre-tax rate that reflects the time value of money
                and the risks specific to the liability. Any increase in the provision due to the passage of
                time is recognised as a finance cost.

        p) Employee Benefits

                Provision is made for the Company’s liability for employee benefits arising from services
                rendered by employees to balance date. Employee benefits expected to be settled within
                one year together with entitlements arising from wages and salaries, annual leave and sick
                leave which will be settled after one year, have been measured at the amounts expected to
                be paid when the liability is settled, plus related on-costs. Other employee benefits payable
                later than one year have been measured at the present value of the estimated future cash
                outflows to be made for those benefits.

                                                                                                                     47
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008

1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

                Contributions are made by the Company to employee superannuation funds and are
                charged as expenses when incurred.

        q) Contributed Equity

                Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
                of new shares or options are shown as equity as a deduction, net of tax, from the proceeds.

        r) Loans from Related Parties

                Loans from related parties that are not subject to a contract, are non-interest bearing, and
                have no specified repayment date are classified as contributed equity. The loans do not
                represent shares and do not have a right to dividend distributions.

        s) Share-based payment transactions

                The Company provides benefits to employees (including directors) of the Company and
                acquires assets through consideration in the form of share-based payment transactions,
                whereby employees render services or assets are acquired in exchange for shares or rights
                over shares (‘equity-settled transactions’).

                There is currently an Employee Share Option Plan (ESOP), which provides benefits to
                directors and senior executives.

                The cost of these equity-settled transactions with employees is measured by reference to
                the fair value at the date at which they are granted. The fair value is determined by an
                external valuer using a Black Scholes model.

                In valuing equity-settled transactions, no account is taken of any performance conditions,
                other than conditions linked to the price of shares of Bannerman Resources Limited
                (‘market conditions’). The value is recognised in the income statement for the period.

        t)   Foreign currency translation

                (i) Functional and presentation currency
                Items included in the financial statements of each of the Group’s entities are measured
                using the currency of the primary economic environment in which the entity operates (“the
                functional currency”). The consolidated financial statements are presented in Australian
                dollars, which is Bannerman Resources Limited’s functional and presentation currency.

                (ii) Transactions and balances
                Foreign currency transactions are translated into the functional currency using the
                exchange rates prevailing at the dates of the transactions. Foreign exchange gains and
                losses resulting from the settlement of such transactions and from the translation at year-
                end exchange rates of monetary assets and liabilities denominated in foreign currencies are
                recognised in the Income Statement. Translation differences on available-for-sale financial
                assets are included in the available-for-sale reserve.




                                                                                                                     48
Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

                (iii) Group companies
                For all group entities with a functional currency other than Australian dollars, the
                functional currency has been translated into Australian dollars for presentation purposes.
                Assets and liabilities are translated using exchange rates prevailing at the balance sheet
                date; revenues and expenses are translated using average exchange rates prevailing for the
                income statement year; and equity transactions are translated at exchange rates prevailing
                at the dates of transactions. The resulting difference from translation is recognised in a
                foreign currency translation reserve.

        u) Significant Accounting Judgements, Estimates and Assumptions

                The preparation of the financial statements requires management to make judgements,
                estimates and assumptions that affect the reported amounts in the financial statements.
                Management continually evaluates its judgements and estimates in relation to assets,
                liabilities, contingent liabilities, revenue and expenses. Management bases its judgements
                and estimates on historical experience and on other various factors it believes to be
                reasonable under the circumstances, the results of which form the basis of the carrying
                values of assets and liabilities that are not readily apparent from other sources. Actual
                results may differ from these estimates under different assumptions and conditions.

                Management has identified the following critical accounting policies for which significant
                judgements, estimates and assumptions are made. Actual results may differ from these
                estimates under different assumptions and conditions and may materially affect financial
                results or the financial position reported in future periods.

                Further details of the nature of these assumptions and conditions may be found in the
                relevant notes to the financial statements.

                (i)      Significant accounting judgments

                In the process of applying the Group’s accounting policies, management has made the
                following judgements, apart from those involving estimations, which have the most
                significant effect on the amounts recognised in the financial statements.

                Determination of mineral resources and ore reserves

                The Consolidated Entity estimates its mineral resources in accordance with the Australian
                Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2004 (the
                ‘JORC’ Code). The information on mineral resources was prepared by or under the
                supervision of Competent Persons as defined in the JORC Code. The amounts presented
                are based on the mineral resources determined under the JORC Code.

                There are numerous uncertainties inherent in estimating mineral resources, and
                assumptions that are valid at the time of estimation may change significantly when new
                information becomes available.

                Changes in the forecast prices of commodities, exchange rates, production costs or
                recovery rates may change the economic status of reserves and may ultimately result in
                reserves being restated.




                                                                                                                   49
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities
                                 NOTES TO THE FINANCIAL STATEMENTS
                                        FOR THE YEAR ENDED
                                            30 JUNE 2008

1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

                (ii)      Significant estimates and assumptions

                The carrying amounts of certain assets and liabilities are often determined based on
                estimates and assumptions of future events. The key estimates and assumptions that have a
                significant risk of causing a material adjustment to the carrying amounts of certain assets
                and liabilities within the next annual reporting period are:

                Impairment of capitalised exploration and evaluation expenditure

                The future recoverability of capitalised exploration and evaluation expenditure is
                dependent on a number of factors, including whether the Group decides to exploit the
                related lease itself or, if not, whether it successfully recovers the related exploration and
                evaluation asset through sale.

                Factors which could impact the future recoverability include the level of proved, probable
                and inferred mineral resources, future technological changes which could impact the cost of
                mining, future legal changes (including changes to environmental restoration obligations)
                and changes to commodity prices.

                To the extent that capitalised exploration and evaluation expenditure is determined not to
                be recoverable in the future, this will reduce profits and net assets in the period in which
                this determination is made.

                Share-based payment transactions

                The Group 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 and taking into
                consideration of the likelihood on non market based conditions occurring.

                The Group measures the cost of cash-settled share-based payments at fair value at the grant
                date using the Black-Scholes formula taking into account the terms and conditions upon
                which the instruments were granted.




                                                                                                                     50
Annual Financial Report 2008                                Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008


                                              Consolidated                             Company
                                         2008             2007                  2008               2007

                                          $                $                      $                   $
2.         OTHER REVENUE

           Interest received               661,658        135,540                643,970             124,706
                                           661,658        135,540                643,970             124,706

3.         OTHER INCOME
           Gain on disposal of other             -         53,151                         -           49,030
           financial assets
           Joint Venture Option income          -         202,845                         -                -
           Sundry income                   21,804               -                     2,340                -
                                           21,804         255,996                     2,340           49,030


4.         OTHER EXPENSES

           Administration                1,675,571         316,250             1,260,143             267,325
           Consulting                      284,498          71,090               284,498              71,090
           Occupancy                       147,407          55,308                72,694              27,166
           Insurance                        45,175           5,221                23,531               1,869
                                         2,152,651         447,869             1,640,866             367,450


5.         KEY MANAGEMENT PERSONNEL

a)      Compensation of Key Management Personnel by Category:

                                                                   2008                         2007
Directors
                                                                     $                           $
Short-term employee benefits                                           403,823                      290,806
Post-employment benefits                                                23,928                       15,711
Share based payments                                                 6,865,120                      925,000
                                                                     7,292,871                    1,231,517
                                                                   2008                         2007
Officers
                                                                     $                           $
Short-term employee benefits                                           282,250                                 -
Post-employment benefits                                                17,230                                 -
Share based payments                                                   709,950                                 -
                                                                     1,009,430                                 -




                                                                                                               51
Annual Financial Report 2008                                                Bannerman Resources Limited and Controlled Entities
                                   NOTES TO THE FINANCIAL STATEMENTS
                                          FOR THE YEAR ENDED
                                              30 JUNE 2008

5.      KEY MANAGEMENT PERSONNEL (Cont’d)

b)       Option Holdings of Key Management Personnel

The numbers of options over ordinary shares in the company held during the period by each director of
the Company and other key management personnel, including their personally related parties, are set out
below:

2008                           Options at the        Issued as          Exercised           Other (i)            Balance
                               beginning of        remuneration                                                  30.06.08
                                the period            (ii)(iii)
Directors
Geoff Stanley                        -                    -                  -                 -                     -
Alastair Clayton                 5,800,000           1,000,000          (1,000,000)            -                5,800,000
Peter Batten                     1,050,000           1,500,000          (1,050,000)            -                1,500,000
Clive Jones                      4,612,500           1,000,000               -                 -                5,612,500
Nathan McMahon                   4,725,000           1,000,000          (4,725,000)        4,725,000            5,725,000
David Tucker                         -                    -                  -                 -                     -
                                16,187,500        4,500,000 (ii)(iii)   (6,775,000)        4,725,000            18,637,500
Officers
Peter Christians (iv)                -                 250,000               -                   -               250,000
Mike Robbins (v)                     -                 150,000               -                   -               150,000
Lisa Wynne (v)                       -                 100,000               -                   -               100,000
                                     -                 500,000               -                   -               500,000
(i)
          On 18 August 2006, shareholders approved the terms of the Heads of Agreement to acquire an 80%
          interest in Bannerman Resources Mining (Namibia) (Pty) Ltd (formerly Turgi Investments Pty Ltd). The
          consideration payable included options over ordinary shares to be issued in two tranches (‘Tranche 1’ and
          ‘Tranche 2’) on a 1 for 1 basis. 4,725,000 Trache 1 options were exercised during the 2008 financial year
          and 4,725,000 Tranche 2 options were issued during the 2008 financial year.
(ii)      2,250,000 options exercisable at $6.50 on or before 30 November 2010 (approved by shareholders at
          annual general meeting held on 30 November 2007)
(iii)     2,250,000 options exercisable at $6.50 on or before 30 November 2010 (approved by shareholders at
          annual general meeting held on 30 November 2007)
(iv)      250,000 options issued to Peter Christians exercisable at $2.80 on or before 3 June 2013 (approved by the
          directors on 3 June 2008)
(v)       Part of 350,000 options issued to employees exercisable at $3.64 on or before 25 January 2013 (approved
          by the directors on 25 January 2008)

2007                            Options          Issued         3 for 1          Exercised           Other         Balance
                                 at the                       Share Split                                          30.06.07
                                beginnin
                                g of the
                                 period
Directors
Alastair Clayton                    -           2,500,000      5,000,000       (1,700,000)            -           5,800,000
Peter Batten                    1,350,000       1,050,000      2,700,000       (4,050,000)            -            1,050,000
Stephen Brockhurst                  -               -              -                -                 -                -
Clive Jones                         -           4,612,500          -           (5,962,500)       5,962,500        4,612,500
Nathan McMahon                      -               -              -                -            4,725,000        4,725,000
                                1,350,000       8,162,500      7,700,000      (11,712,500)       10,687,500       16,187,500



                                                                                                                              52
Annual Financial Report 2008                                              Bannerman Resources Limited and Controlled Entities
                                 NOTES TO THE FINANCIAL STATEMENTS
                                        FOR THE YEAR ENDED
                                            30 JUNE 2008

  5.    KEY MANAGEMENT PERSONNEL (Cont’d)

c)         Shareholdings of Key Management Personnel

2008                            Balance         Granted    Received         (Sales)           Other (i)          Balance
                                01.07.07          as         on            Purchases                             30.06.08
                                               Remunera    Exercise
Directors

Geoff Stanley                              -          -               -                -                   -                -

Alastair Clayton                 300,000              -    1,000,000            50,000                     -     1,350,000

Peter Batten                    9,136,480             -    1,050,000         (383,829)                     -     9,802,651
Clive Jones                    12,587,500             -               -                -                   -    12,587,500
Nathan McMahon (i)              6,957,252             -    4,725,000          215,506       (11,897,758)                    -
David Tucker                               -          -               -                -                   -                -
                               28,981,232             -    6,775,000         (118,323)      (11,897,758)        23,740,151
Officers
Peter Christians                           -          -               -                -                   -                -
Mike Robbins                               -          -               -                -                   -                -
Lisa Wynne                                 -          -               -          2,800                     -          2,800
                                           -          -               -          2,800                     -          2,800

(i)         As disclosed in an ASX release on 8 April 2008, an involuntary sale of 11,897,758 ordinary shares in
            April 2008 pursuant to the (purported) exercise of rights by a secured creditor of Opes Prime Group Ltd.
            No consideration has been received by Mr McMahon at this time. Mr McMahon is pursing actions to
            recover the ordinary shares disposed without the director’s consent or authority.



2007                            Balance         Granted    Received          3 for 1           Other            Balance
                                01.07.06          as          on             Share                              30.06.07
                                               Remunera    Exercise           Split
Directors
Alastair Clayton                   -              -       1,700,000              -          (1,400,000)          300,000
Peter Batten                   1,850,000          -       4,050,000        3,700,000         (463,520)         9,136,480
Stephen Brockhurst              50,001            -            -             100,002         (150,003)              -
Clive Jones                        -                      5,962,500                          6,625,000         12,587,500
Nathan McMahon                     -              -            -                 -           6,957,252         6,957,252
                               1,900,001          -       11,712,500       3,800,002        11,568,729         28,981,232



All equity transactions with Key Management Personnel other than those arising from the exercise of
remuneration options or asset acquisition options have been entered into under terms and conditions no
more favourable than those the Consolidated Entity would have adopted if dealing at arm’s length.




                                                                                                                            53
 Annual Financial Report 2008                                   Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

     5.   KEY MANAGEMENT PERSONNEL (Cont’d)

 Other Transactions with Key Management Personnel

 The Company paid $15,000 (as remuneration) to Widerange Corporation Pty Ltd, a company associated
 with Clive Jones, a non executive director, for extra services performed outside of non-executive
 director duties provided during the year.

 The Company paid $32,539 (as remuneration) to Responsible Resources Pty Ltd, a company associated
 with David Tucker, a non executive director, for extra services performed outside of non-executive
 director duties provided during the year.


                                                    Consolidated                         Company
                                                 2008            2007                2008                2007

                                                  $                $                   $                   $
6.         AUDITORS’ REMUNERATION

 The auditor of the Consolidated and
 Parent Entity is Ernst & Young

 Amounts received or due and receivable
 by Ernst & Young (Australia) for:
        Auditing or reviewing the                 69,060                  -           62,735                      -
        financial report
         Other non audit services                 43,057                  -           43,057                      -
                                                 112,117                  -          105,792                      -

 Amounts received or due and receivable
 by non Ernst & Young audit firms:
        Auditing or reviewing the
                                                        -         26,196                      -           21,350
        financial report


 The 2008 fees all relate to services provided by Ernst & Young but do not include audit fees paid or
 payable to Ernst & Young Namibia of N$112,500.




                                                                                                                  54
 Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities
                                  NOTES TO THE FINANCIAL STATEMENTS
                                         FOR THE YEAR ENDED
                                             30 JUNE 2008


 7.        INCOME TAX EXPENSE
                                                    Consolidated                               Company
                                                2008           2007                     2008                 2007
                                                  $              $                        $                    $
         The components of the tax
         expense comprise:
         Current tax                                       -                   -                   -                    -
         Deferred tax                                      -                   -                   -                    -
                                                           -                   -                   -                    -
         The prima facie tax on loss from
         ordinary activities before income
         tax is reconciled to the income tax
         as follows:

         Prima facie tax (benefit) on loss
         from ordinary activities before       (3,494,438)       (527,883)             (7,288,593)            (533,533)
         income tax at 30% in Australia and
         37.5% in Namibia (2007: 30%)

 Tax effect of:
        Other non-allowable items               2,524,458         307,629                5,698,596              307,629
        Tax benefit of revenue losses not       1,062,769         283,061                1,682,792              288,711
        recognised

 Less:
 Tax effect of:
        Tax benefit of equity raising            (92,789)         (62,807)                (92,789)             (62,807)
        costs not recognised
Income tax attributable to entity                          -                   -                    -                   -

The following deferred tax balances at 30%
Australia and 37.5% in Namibia (2007: 30%
have not been recognised

Deferred Tax Assets:
Carry forward revenue losses                    1,617,442        119,938                  106,712                119,938
Capital raising costs                            513,588         159,443                  513,588                159,443
Provisions and accruals                          112,828              22,226                99,560                 22,226
Other                                              35,541               207                  1,266                   207
Gross deferred tax asset                        2,279,399         301,814                  721,126               301,814
Offset against deferred tax liability           (207,538)       (301,814)                (207,538)             (301,814)
Unrecognised deferred tax asset                 2,071,861               -                  513,588                     -


Deferred Tax Liabilities:
Exploration expenditure                          180,201         137,257                    180,201                137,257
Other                                             27,337         164,557                     27,337                164,557
                                                 207,538          301,814                   207,538                301,814
Offset deferred tax asset                      (207,538)        (301,814)                 (207,538)              (301,814)
Net deferred tax liability                              -               -                         -                      -
The Company has not elected to form a tax consolidated group.


                                                       Consolidated                              Company
                                                                                                                        55
 Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

                                               2008             2007                2008                  2007

                                                $                 $                   $                     $
8.         CASH AND CASH EQUIVALENTS

           Cash at bank and on hand            639,963        10,634,944            224,248             10,634,944
           Short-term deposits              13,000,000           737,888         13,000,000                700,254
                                            13,639,963        11,372,832         13,224,248             11,335,198

The effective interest rate on short-term bank deposits
was 7.30%; these deposits have an average maturity of
30 days


                                                      Consolidated                           Company
                                               2008              2007               2008                  2007

                                                $                 $                   $                     $
 9.        OTHER RECEIVABLES

           Current

           GST/VAT recoverable                 904,482            75,148              49,804                 51,468
           Other receivables                    91,123            31,079              91,123                 17,048
                                               995,605           106,227             140,927                 68,516
           Non-Current

           Amounts receivable from:
           Subsidiaries                                 -                -       18,268,947              3,728,180


 The loan receivable from subsidiary is a non-interest bearing loan with no repayment date or maximum
 drawdown limit. The Company does not intend to recall the loan within the next 12 months.

 Fair value and credit risk

 Due to the short term nature of these receivables, their carrying value is assumed to approximate their
 fair value.

 The maximum exposure to credit risk is the fair value of the receivables. Collateral is not held as
 security, nor is it the Group’s policy to transfer (on-sell) receivables to special purpose entities.

 Foreign exchange and interest risk

 Detail regarding foreign exchange and interest rate risk exposure is disclosed in Note 18.




                                                                                                                    56
 Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008


                                                       Consolidated                              Company
                                                2008              2007                  2008                  2007

                                                   $                  $                   $                        $

 10.       OTHER CURRENT ASSETS

           Prepayments                          140,693                   7,063              65,195                    7,063


11.        EXPLORATION AND EVALUATION
           EXPENDITURE

           Opening balance                    24,694,726           293,268                457,523                  250,943
           Expenditure incurred               31,553,783        24,594,179                159,167                  369,001
           during the period
           Foreign currency
           translation movements            (10,682,078)                 -                      -                     -
           Write downs                          (16,019)         (192,721)               (16,019)             (162,421)
           Closing balance                    45,550,409        24,694,726                600,671               457,523

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

       •         the continuance of the Company’s rights to tenure of the areas of interest;
       •         the results of future exploration; and
       •         the recoupment of costs through successful development and exploitation of the areas of
                 interest, or alternatively, by their sale.

                                                     Consolidated                              Company
                                              2008                  2007               2008                  2007

                                               $                     $                   $                     $
 12.       AVAILABLE FOR SALE
           FINANCIAL ASSETS

           Listed investments - at fair
           value
           Shares in listed                     51,623              162,108                  4,123                 2,033
           corporations


 Available-for-sale financial assets consist of investments in ordinary shares or listed options of various
 entities. The fair value of listed available-for-sale investments has been determined directly by reference
 to public priced quotations in an active market.




                                                                                                                          57
Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008


13.       PROPERTY, PLANT AND EQUIPMENT

Consolidated                   Office         Field    Software  Vehicles Land &                            Total
                               Equipment    Equipment and Sundry          Buildings
Year ended 30 June                   $              $         $         $         $                               $
2008
Opening net book amount           36,718       32,086         21,900       106,565              -         197,269
Additions                         89,107        9,586         80,678       121,309        365,280         665,960
Disposals                            -              -              -             -              -               -
Depreciation charge              (39,176)     (13,461)       (31,198)      (52,926)             -        (136,761)
Closing net book amount          86,649        28,211        71,380        174,948        365,280         726,468

At 30 June 2008
Cost or fair value               128,911       55,297       106,886        232,252        365,280         888,626
Accumulated depreciation         (42,262)     (27,086)      (35,506)       (57,304)             -        (162,158)
Net book amount                  86,649        28,211        71,380        174,948        365,280         726,468


Parent                           Office    Field    Software  Vehicles                   Land &            Total
                               Equipment Equipment and Sundry                           Buildings
Year ended 30 June 2008            $             $         $         $                          $                 $
Opening net book amount           22,601          32,085      21,900                -               -      76,588
Additions                         65,939            -         61,576                -               -     127,515
Disposals                            -              -              -                -               -           -
Depreciation charge              (29,827)       (12,835)     (24,878)               -               -     (67,540)
Closing net book amount          58,713           19,252     58,598                 -               -     136,563

At 30 June 2008
Cost or fair value                89,922          45,713      87,784                -               -     223,419
Accumulated depreciation         (31,209)       (26,461)     (29,186)               -               -     (86,856)
Net book amount                  58,713           19,252     58,598                 -               -     136,563


Consolidated                   Office         Field        Software      Vehicles        Land &            Total
                               Equipment    Equipment                                   Buildings
Year ended 30 June
2007
Opening net book amount           2,343             -             -                 -               -       2,343
Additions                        37,461       156,655        26,208                 -               -     220,324
Disposals                           -               -             -                 -               -           -
Depreciation charge              (3,086)      (18,004)       (4,308)                -               -     (25,398)
Closing net book amount          36,718       138,651        21,900                 -               -     197,269

At 30 June 2007
Cost or fair value               39,804       156,655        26,208                 -               -     222,667
Accumulated depreciation         (3,086)      (18,004)       (4,308)                -               -     (25,398)
Net book amount                  36,718       138,651        21,900                 -               -     197,269


                                                                                                                    58
Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

13.      PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Parent                           Office    Field          Software       Vehicles         Land &              Total
                               Equipment Equipment                                       Buildings
Year ended 30 June 2007
Opening net book amount          2,343            -               -                 -               -        2,343
Additions                       21,381       45,713          26,208                 -               -       93,302
Disposals                          -              -                                 -               -            -
Depreciation charge             (1,123)     (13,626)          (4,308)               -               -      (19,057)
Closing net book amount          22,601      32,087          21,900                 -               -         76,588

At 30 June 2007
Cost or fair value              23,983       45,713          26,208                 -               -       95,904
Accumulated depreciation        (1,382)     (13,626)         (4,308)                -               -      (19,316)
Net book amount                  22,601      32,087          21,900                 -               -         76,588

                                              Consolidated                                 Company
                                           2008               2007                2008                  2007

                                            $                   $                   $                     $
14.       TRADE AND OTHER
          PAYABLES
          Current
          Trade payables                     736,644           639,611            736,644                639,611
          Other payables and                 340,276           100,031            304,894                 97,576
          accruals

                                           1,076,920           739,642          1,041,538                737,187

Trade payables are non interest bearing and are normally settled on 30 day terms (or less). Other
payables are non interest bearing and have an average term of 60 days.

Fair value
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair
value.

The net of GST/VAT payable and GST/VAT receivable is remitted to the appropriate tax body on a
quarterly basis.
                                                    Consolidated                           Company
                                             2008              2007               2008                   2007

                                                $               $                   $                      $
15.       PROVISIONS
          Current
          Annual leave provision                56,356          12,093              56,356                     12,093




                                                                                                                      59
  Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities
                                   NOTES TO THE FINANCIAL STATEMENTS
                                          FOR THE YEAR ENDED
                                              30 JUNE 2008

  16.        ISSUED CAPITAL
                                               Consolidated and Company                     Consolidated and
                                                                                                Company
                                                   2008               2007                  2008        2007
                                                  Shares             Shares                   $          $
           Share capital
           Ordinary shares (no par value)      145,975,036         127,532,617          41,797,705         19,690,066


      (i) Movement in Ordinary Shares

                                                           Notes       Shares          Issue price              A$

      At 1 July 2007                                                 127,532,617                           19,690,066

      Issue to Haywood Securities                            (i)          17,419             A$2.70             47,031
      Exercise of options proceeds received                 (ii)       4,725,000             A$0.10            472,500
      Exercise of options proceeds received                (iii)         300,000          A$0.10667             32,001
      Exercise of options proceeds received                (iv)        1,000,000             A$0.40            400,000
      Exercise of options proceeds received                 (v)          850,000          A$0.10667             90,670
      Placement                                            (vi)       10,500,000          CAD$2.00          22,345,215
      Share issue costs                                                        -                           (1,489,778)
      Exercise of options proceeds received                (vii)       1,050,000              A$0.20           210,000

      At 30 June 2008                                                145,975,036                           41,797,705


(i)          On 19 November 2007 the Company issued Haywood Securities Ltd 17,419 fully paid ordinary shares
             for services rendered when the Company listed on the TSX.
(ii)         On 13 December 2007 the Company issued 4,725,000 ordinary shares following the exercise of
             4,725,000 10 cent options with an expiry date of 9 February 2009
(iii)        On 14 January 2008 the Company issued 300,000 ordinary shares following the exercise of 300,000
             10.667 cent options with an expiry date of 25 July 2008..
(iv)         On 21 January 2008, the Company issued 1,000,000 ordinary shares upon the exercise of 1,000,000 40
             cent options with an expiry date of 18 August 2008.
(v)          On 8 February 2008 the Company issued 850,000 ordinary shares following the exercise of 850,000
             10.667 cent options with an expiry date of 25 July 2008..
(vi)         In February 2008 the Company engaged Haywood Securities Inc of Toronto to raise CAD$21,000,000
             before costs by way of a placement to North American and European institutional investor clients of
             Haywoods. The placement was finalised 28 March 2008.
(vii)        On 11 May 2008 the Company issued 1,050,000 ordinary shares following the exercise of 1,050,000 20
             cent options with an expiry date of 9 February 2009.




                                                                                                                        60
  Annual Financial Report 2008                                          Bannerman Resources Limited and Controlled Entities
                                  NOTES TO THE FINANCIAL STATEMENTS
                                         FOR THE YEAR ENDED
                                             30 JUNE 2008


 16.       ISSUED CAPITAL (Cont’d)

 (i) Movement in Ordinary Shares
                                                           Notes       Shares            Issue price                 $
 At 1 July 2006                                                       22,353,336                                6,625,130
 Exercise of options proceeds received                     (viii)        935,429                    $0.20         187,086
 Exercise of options proceeds received                       (ix)         50,000                    $0.32          16,000
 1:3 Share-Split                                              (x)     46,677,530                                        -
 Exercise of options proceeds received                        (x)     43,928,822                 $0.0667        2,930,052
 Exercise of options proceeds received                       (ix)        200,000                 $0.1067           21,340
 Exercise of options proceeds received                       (xi)      5,775,000                   $0.10          577,500
 Exercise of options proceeds received                      (xii)        112,500                   $0.20           22,500
 Exercise of options proceeds received                     (xiii)      3,000,000                 $0.1167          350,100
 Exercise of options proceeds received                     (xiv)       1,700,000                   $0.40          680,000
 Exercise of options proceeds received                      (xv)       2,800,000                   $3.10        8,680,000
 Transfer issue price of options exercised                                     -                   $0.01          155,800
                                                                               -                                (555,442)
 At 30 June 2007                                                     127,532,617                               19,690,066

(viii)      During the 2007 financial year, a total of 44,864,251 listed options with an expiry date of 31 May 2007
            were converted into ordinary shares and 4,900 lapsed. 935,429 were converted at the pre-split
            conversion price of 20 cents and 43,928,822 at the post-split conversion price of 6.67 cents. In total the
            funds raised through the conversion of these options was $3,117,138.
(ix)        During the 2007 financial year, a total of 44,864,251 listed options with an expiry date of 25 July 2008
            were converted into ordinary shares. 50,000 were converted at the pre-split conversion price of 32 cents
            and 200,000 at the post-split conversion price of 10.67 cents. In total the funds raised through the
            conversion of these options was $37,340.
(x)         On 18 August 2006 gave their approval for the Company to subdivide the issued capital on the basis that
            every one (1) fully paid ordinary share be subdivided into three (3) fully paid ordinary shares (Share-
            Split).
(xi)        In 2006 the Company issued 3,500,000 30 cent options exercisable on or before 9 February 2009 to
            various parties in consideration for the acquisition of Turgi Investments Pty Ltd (First Tranch Options).
            During the financial year, 5,775,500 of these First Tranch Options were exercised at the post-split
            exercise price of 10 cents to raise a total of $577,500.
(xii)       In October 2006 the company issued a 112,500 ordinary shares following the exercise of 112,500 20 cent
            options with an expiry date of 2 February 2009.
(xiii)      On 17 May 2007, the company issued 3,000,000 ordinary shares upon the exercise of 11.67 options with
            an expiry date of 12 August 2007.
(xiv)       In May 2007 the company issued a further 1,700,000 shares following the exercise of 1,700,000 40 cent
            options with an expiry date of 18 August 2008.
(xv)        In May 2007 the Company engaged Haywood Securities Inc of Toronto to raise $8,680,000 before costs
            by way of a placement to North American and European institutional investor clients of Haywoods. The
            placement was finalised 22 June 2007.




                                                                                                                          61
Annual Financial Report 2008                                            Bannerman Resources Limited and Controlled Entities
                                   NOTES TO THE FINANCIAL STATEMENTS
                                          FOR THE YEAR ENDED
                                              30 JUNE 2008


 16.           ISSUED CAPITAL (Cont’d)

 (ii) Movement in Unlisted Options

 Unlisted Options:                                                              Notes                    Options
 At 1 July 2007                                                                                            17,612,500
  Issued                                                                                                     9,925,000
  Exercised                                                                                                  7,925,000
 At 30 June 2008                                                                                           19,612,500


 Unlisted Options:
 At 1 July 2006                                                                                               5,000,000
  Issued                                                                                                      8,550,000
  1:3 Share-Split                                                               (i)                          14,900,000
  Exercised                                                                                                (10,837,500)
 At 30 June 2007                                                                                             17,612,500


(i)           On 18 August 2006 gave their approval for the Company to subdivide the issued capital on the basis that
              every one (1) fully paid ordinary share be subdivided into three (3) fully paid ordinary shares (Share-
              Split).


(iii) Movement in Listed Options

Listed Options:                                           Notes        Options           Issue price              $’000
At 1 July 2006                                                        15,580,003                                  155,800
 Transfer exercised options to ordinary shares               (ii)      (935,429)                  $0.01            (9,354)
 1:3 Share-Split                                            (iii)     29,289,148                      -                  -
 Transfer exercised options to ordinary shares               (ii)   (43,928,822)                 $0.003         (146,446)
 Transfer lapsed options to retained earnings                (ii)         (4,900)                     -                  -
At 30 June 2007                                                                 -                                        -


      (ii)        During the financial year, a total of 44,864,251 listed options with an expiry date of 31 May 2007
                  were converted into ordinary shares and 4,900 lapsed.
      (iii)       On 18 August 2006 shareholders gave their approval for the Company to subdivide the issued capital
                  on the basis that every one (1) fully paid ordinary share be subdivided into three (3) fully paid
                  ordinary shares (Share-Split).

Terms of Ordinary Shares

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion
to the number of shares held and in proportion to the amount paid up on the shares held.

At shareholders meetings each ordinary share is entitled to one vote in proportion to the paid up amount
of the share when a poll is called, otherwise each shareholder has one vote on a show of hands.

Capital Management

When managing capital, management’s objective is to ensure the entity continues as a going concern as
well as to obtain optimal returns to shareholders and benefits for other stakeholders. Management also
aims to maintain a capital structure that ensures the lowest cost of capital available to the company.

Management are constantly adjusting the capital structure to take advantage of favourable costs of
capital or high returns on assets.
                                                                                                                          62
Annual Financial Report 2008                                  Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008


                                                   Consolidated                          Company
                                                2008            2007              2008                2007

                                                  $               $                 $                   $
17.      RESERVES

a) Option Reserve
Balance at the beginning of the reporting     20,008,160     2,119,575        20,008,160            2,119,575
period
2,250,000 Incentive Options issued to          3,090,171                 -      3,090,171                       -
Directors @ A$6.50 each (iii)
2,250,000 Incentive Options issued to          3,774,950                 -      3,774,950                       -
Directors @ A$7.50 each (iv)
7,500,000 Incentive Options issued to
Directors (i)                                           -       925,000                    -           925,000
700,000 Incentive Options issued to
employees (v) (vi) (vii)                         960,138                 -        960,138                       -
275,000 Incentive Option issued to
employees                                         97,290         64,341             97,290              64,341
5,775,000 Tranche 2 options issued on
exercise of Tranche 1 options for the                   -   16,899,244                     -       16,899,244
acquisition of Turgi Investments Pty Ltd
(ii)
4,725,000 Tranche 2 options issued on
exercise of Tranche 1 options for the         18,284,091                 -    18,284,091                        -
acquisition of Turgi Investments Pty Ltd
(ii)

Balance at the end of the reporting period    46,214,800    20,008,160        46,214,800           20,008,160


b) Foreign Currency translation reserve

Reserves at the beginning of the reporting
                                                 (46,076)                -                 -                    -
period
Currency translation differences arising
during the year                              (13,178,987)      (46,076)                    -                    -

Balance at the end of the reporting period   (13,225,063)      (46,076)                    -                    -




                                                                                                                63
Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008

    17. RESERVES

    Option Reserve

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

    (i)       On 29 August 2006 a total of 2,500,000 Options exercisable at $1.20 on or before 18 August
              2008 were issued to Alastair Clayton as approved by shareholders at the Annual General
              Meeting held 18 August 2006. Following the completion of the share split approved by
              shareholders at the same general meeting, Mr Clayton held 7,500,000 options exercisable at
              $0.40 on or before 18 August 2007.

    (ii)      On 18 August 2006, shareholders approved the terms of the Heads of Agreement to acquire
              80% interest in Turgi Investments Pty Ltd. The consideration payable included 7,000,000
              options over ordinary shares to be issued in two tranches (“Tranche 1” and “Tranche 2”).
              5,775,000 Trache 1 options were exercised during the 2007 financial year and 5,775,000
              Tranche 2 options were issued.
    (iii)     2,250,000 options exercisable at $6.50 on or before 30 November 2010 (approved by
              shareholders at annual general meeting held on 30 November 2007)
    (iv)      2,250,000 options exercisable at $6.50 on or before 30 November 2010 (approved by
              shareholders at annual general meeting held on 30 November 2007)
    (v)       250,000 options issued to Chief Operating Officer exercisable at $2.80 on or before 3 June
              2013 (approved by the directors on 3 June 2008)
    (vi)      350,000 options issued to various employees exercisable at $3.64 on or before 25 January
              2013 (approved by the directors on 25 January 2008)
    (vii)     100,000 options issued to employee exercisable at CAD$4.12 on or before 1 November 2012
              (approved by directors on 1 November 2007)

    Foreign currency translation reserve

    This reserve is used to record exchange differences arising on translation of the group entities that do
    not have a functional currency of Australian dollars and have been translated into Australian dollars
    for presentation purposes, as described in note 1 (u).

    18. FINANCIAL INSTRUMENTS

    The Consolidated Entity’s principal financial instruments comprise cash and short term deposits,
    receivables and payables.

    The Consolidated Entity uses different methods to measure and manage different types of risks to
    which it is exposed. These include the monitoring of levels of exposure to interest rates and foreign
    exchange risk and assessments of market forecasts for interest rate and foreign exchange prices.
    Liquidity risk is monitored through the development of future rolling cash flow forecasts.

    The Board reviews and agrees policies for managing each of the above risks and they are
    summarised below:




                                                                                                                   64
Annual Financial Report 2008                                  Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008

    18. FINANCIAL INSTRUMENTS (Cont’d)

    (a)  Interest Rate Risk
    Interest rate risk is managed by obtaining the best commercial deposit interest rates available in the
    market by the major Australian Financial Institutions.
    The Consolidated Entity’s exposure to interest rate risk, which is the risk that a financial
    instrument’s value will fluctuate as a result of changes in market interest rates and the effective
    weighted average interest rate for each class of financial assets and financial liabilities comprises:

          Consolidated         Floating       Fixed          Fixed                 2008
             2008              Interest      Interest       Interest               Total
                                 Rate       maturing       maturing
                                            in 1 year      over 1 to 5
                                              or less        years
                                  $              $                                    $
     Financial assets
       Cash                      639,963    13,000,000                   -       13,639,963
                                 639,963    13,000,000                   -       13,639,963
     Weighted average
     Interest rate                               7.6%

          Consolidated         Floating       Fixed          Fixed                 2007
             2007              Interest      Interest       Interest               Total
                                 Rate       maturing       maturing
                                            in 1 year      over 1 to 5
                                              or less        years
                                  $              $             $                      $
     Financial assets
       Cash                    10,634,744     737,888                    -       11,372,832
                               10,634,744     737,888                    -       11,372,832
     Weighted average              4.35%       6.30%
     Interest rate


             Parent            Floating       Fixed          Fixed                 2008
              2008             Interest      Interest       Interest               Total
                                 Rate       maturing       maturing
                                            in 1 year      over 1 to 5
                                              or less        years
                                  $              $                                    $
     Financial assets
       Cash                      224,248    13,000,000                   -       13,224,248
                                 224,248    13,000,000                   -       13,224,248
     Weighted average
     Interest rate                               7.6%

             Parent            Floating       Fixed          Fixed                 2007
              2007             Interest      Interest       Interest               Total
                                 Rate       maturing       maturing
                                            in 1 year      over 1 to 5
                                              or less        years
                                  $              $             $                      $
     Financial assets
       Cash                    10,634,744     700,254                    -       11,335,198
                               10,634,744     700,254                    -       11,335,198
     Weighted average              4.35%       6.30%
     Interest rate
                                                                                                                65
Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities
                                  NOTES TO THE FINANCIAL STATEMENTS
                                         FOR THE YEAR ENDED
                                             30 JUNE 2008

      18. FINANCIAL INSTRUMENTS (Cont’d)

      The following table summaries the impact of reasonably possible changes on interest rates for the
      Consolidated Entity and the Parent company at 30 June 2008. The sensitivity analysis is based on the
      assumption that interest rate changes by 1% with all other variables remaining constant. The 1%
      sensitivity is based on reasonably possible changes over a financial year, using the observed range of
      actual historical rates for the preceding 5 year period.

                                                Consolidated                                  Parent
       Impact       on         post-tax     2008            2007                    2008                    2007
       gain/(loss):                           $               $                       $                       $

            1% increase                       132,029            106,349                132,029                106,349

            1% decrease                     (132,029)          (106,349)              (132,029)                106,349

      There is no impact on other reserves in equity for the Parent and Consolidated Entity.

(b)             Net Fair Values

         The carrying value and net fair values of financial assets and liabilities at balance date are:

        Consolidated                                 2008                                       2007
                                          Carrying           Net fair            Carrying                 Net fair
                                          Amount              Value              Amount                    Value
                                             $                  $                   $                        $

        Financial assets
        Cash and deposits                  13,639,963        13,639,963             11,372,832             11,372,832
        Receivables                           995,605           995,605                106,227                106,227

                                           14,635,568        14,635,568             11,479,059             11,479,059
        Financial liabilities
        Payables                            1,076,920          1,076,920                739,642                739,642

                                            1,076,920          1,076,920                739,642                739,642

        Parent                                       2008                                       2007
                                          Carrying           Net fair            Carrying                 Net fair
                                          Amount              Value              Amount                    Value
                                             $                  $                   $                        $

        Financial assets
        Cash and deposits                  13,224,248        13,224,248             11,335,198             11,335,198
        Receivables                           140,927           140,927                 68,516                 68,516

                                           13,365,175        13,365,175             11,403,714             11,403,714
        Financial liabilities
        Payables                            1,041,538          1,041,538                737,187                737,187

                                            1,041,538          1,041,538                737,187                737,187



                                                                                                                      66
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008

      18. FINANCIAL INSTRUMENTS (Cont’d)

(c)     Foreign Currency Risk

        Foreign exchange risk arises from future commitments, assets and liabilities that are denominated
        in a currency that is not the entity’s functional currency. At balance sheet date, there was no
        significant foreign currency exposure.

(d)     Credit Risk

        Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting
        in financial loss to the Consolidated Entity. The Consolidated Entity has adopted the policy of
        only dealing with credit worthy counterparties and obtaining sufficient collateral or other security
        where appropriate, as a means of mitigating the risk of financial loss from defaults.

        The Consolidated Entity does not have any significant concentration of credit risk exposure to
        any single counterparty or any group of counterparties having similar characteristics. The
        carrying amount of financial assets recorded in the financial statements, net of any provisions for
        losses, represents the Consolidated Entity maximum exposure to credit risk.

                                                                               2008                      2007
 19.       EARNINGS/(LOSS) PER SHARE                                             $                         $

(a)       Earnings/(Loss) used in the calculation of weighted             (10,952,299)                (1,759,609)
          average basic and dilutive Earnings/(Loss) per share
                                                                           Number of                  Number of
                                                                            Shares                     Shares
(b)       Weighted average number of ordinary shares outstanding
          during the period used in the calculation of basic loss per      133,909,957                77,374,738
          share
(c)       Weighted average number of options issuable
          under the Company Executive Share Option Plan                    19,439,835                 13,890,110
          that could be potentially dilutive




                                                                                                                     67
Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008


                                                            Consolidated                            Company
 20.       CASH FLOW INFORMATION                     2008              2007                  2008               2007

                                                      $                  $                     $                  $

       (a) Reconciliation from the net loss
           after tax to the net cash flow
           from operations
           - (Loss) from continuing              (10,952,299)      (1,759,609)         (24,295,311)        (1,778,442)
           operations after income tax

         Non-cash flows in operating loss
         - Depreciation                              136,761            25,398                 67,540            19,057
         - Share based payments included in
            income statement                       7,969,582           989,341             7,969,582            989,341
         - Net exchange differences                        -            14,944             2,732,231                  -
         - Fair value (gain)/loss on financial
           instruments                               113,825          (61,510)                     -                   -
         - Impairment of intercompany loan                 -                 -               510,868               2,515
         - Impairment of intercompany
           investment                                      -                 -           10,682,081                   -
         - Exploration expenditure written            16,019           192,721               16,019             162,421
           off
         - Net gain on joint venture option                    -    (202,846)                         -                    -
           agreement
         - Net gain on disposal of other                       -      (53,151)                        -        (49,030)
           financial assets

         Changes in assets and liabilities
         - Increase in receivables and            (1,023,008)         (96,725)             (130,543)           (12,250)
           prepayments
        - Increase in exploration and
           evaluation expenditure                (15,763,585)      (3,763,330)             (159,166)          (369,002)
         - Increase in trade and other                337,279          678,479               132,037             97,971
           creditors and accruals
         - Movement in provisions                     44,263            12,093                 44,263            12,093
         Net cash inflows (outflows) from
         Operating Activities                    (19,121,163)      (4,024,195)           (2,430,399)          (925,326)


20.        CASH FLOW INFORMATION (Cont’d)
                                                            Consolidated                            Company
                                                     2008              2007                  2008               2007

                                                      $                  $                     $                  $

        (b) Non-cash financing and
             investing activities
           Acquisition of assets through the      16,499,700       16,899,244            16,499,700         16,899,244
           issue of options
           Share based payments                    9,706,940          989,341             9,706,940            989,341
          Total                                   26,206,640       17,888,585            26,206,640         17,888,585



                                                                                                                       68
 Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008


 21.     COMMITMENTS
 In order to maintain current rights of tenure to mining tenements, the Company has the following
 exploration expenditure requirements up until expiry of leases. These obligations, which are subject to
 renegotiation upon expiry of the leases, are not provided for in the financial statements and are payable:

                                                                         2008                            2007
                                                                           $                               $
  Not longer than one year                                             6,435,000                      1,100,000
  Longer than one year, but not longer than five years                         -                      2,750,000
  Longer than five years                                                       -                              -
                                                                       6,435,000                      3,850,000

 If the Company decides to relinquish certain leases and/or does not meet these obligations, assets
 recognised in the balance sheet may require review to determine the appropriateness of carrying values.
 The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish these
 obligations.

 22.     SEGMENT INFORMATION

 The Economic Entity operates predominantly in two geographical segments, being Australia and Africa,
 and in one business segment, mineral mining and exploration and substantially all of the entity’s
 resources are deployed for this purpose.

        2008
 Primary Reporting                                    Australia                Africa             Consolidated
 - Geographical Segments
                                                           $                       $                     $
 Unallocated revenue                                                                                   683,462
 Segment results (loss)                              (10,566,163)             (386,136)           (10,952,299)
 Segment assets                                        14,219,226            46,896,760             61,115,985
 Segment liabilities                                    1,097,894                35,381              1,133,276
 Acquisitions of plant and equipment,                     286,681            31,933,059             32,219,740
 exploration and evaluation, and other non-
 current segment assets.
 Significant non-cash expenses                        26,206,640                           -        26,206,640

 22.     SEGMENT INFORMATION (Cont’d)

 2007
Primary Reporting                                     Australia                Africa             Consolidated
- Geographical Segments
                                                           $                       $                      $
Unallocated revenue                                                                                     391,536
Segment results (loss)                                (1,515,524)             (244,085)             (1,759,609)
Segment assets                                        12,106,996             24,433,229             36,540,225
Segment liabilities                                       749,280                 2,455                 751,735
Acquisitions of plant and equipment, exploration
and evaluation, and other non-current segment            493,568               3,022,191              3,515,759
assets.
                                                                                                                    69
Annual Financial Report 2008                                 Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008


23.       EVENTS SUBSEQUENT TO REPORTING DATE

Other than as set out below, no matters or circumstances have arisen since the end of the financial
period which significantly affected or may significantly affect the operations of the Company and
Consolidated Entity, the results of those operations, or the state of affairs of the Company and
Consolidated Entity in future financial years.

At a General Meeting of Shareholders held on 17 September 2008, the shareholders approved the
following:

      •    The maximum aggregate remuneration payable by the Company to non-executive directors as
           director’s fees was increased by $600,000 from $150,000 per annum to $750,000 per annum.
      •    The Company is authorised to issue and allot up to 500,000 Options to Mr David Tucker
      •    The Company is authorised to issue and allot up to 2,000,000 Options to Mr Geoff Stanley

24.       RELATED PARTY INFORMATION

Transactions between related parties are on commercial terms and conditions, no more favourable than
those available to other parties unless otherwise stated.

Transactions with related entities:

Remuneration (excluding the reimbursement of costs) received or receivable by the directors of the
Company and aggregate amounts paid to superannuation plans in connection with the retirement of
directors are disclosed in Note 5 to the accounts.

These transactions were made on commercial terms and conditions and at market rates.

On 18 August 2006, shareholders approved the terms of the Heads of Agreement to acquire 80%
interest in Bannerman Mining Resources Namibia (Pty) Ltd (formerly Turgi Investments Pty Ltd). Mr
Nathan McMahon and Mr Clive Jones have a beneficial interest in Bannerman Mining Resources
Namibia (Pty) Ltd. The consideration payable included 7,000,000 options over ordinary shares to be
issued in two tranches (“Tranche 1” and “Tranche 2”). 5,775,000 Trache 1 options were exercised
during the 2007 financial year and 5,775,000 Tranche 2 options were issued.

Another 4,725,000 Trache 1 options were exercised during the 2008 financial year and 4,725,000
Tranche 2 options were issued during the 2008 financial year (Fair value of $18,284,091).

The 4,725,000 Tranche 2 options issued during the 2008 financial year were valued using the Black-
Scholes valuation method using the following inputs:

Dividend yield                                          -
Expected volatility                                    85.00%
Risk-free interest rate                                6.66%
Expected life of option                                2.45 years
Option exercise price                                  $0.20
Share price at measurement date                        $4.03

The following Tranche 2 Options are outstanding at year end:
   • 4,725,000 options exercisable at $0.20, expiring 13 December 2010 and
   • 4,612,500 options exercisable at $0.20 expiring 28 May 2010.



                                                                                                               70
Annual Financial Report 2008                                   Bannerman Resources Limited and Controlled Entities
                               NOTES TO THE FINANCIAL STATEMENTS
                                      FOR THE YEAR ENDED
                                          30 JUNE 2008

25.     CONTINGENCIES – LEGAL CLAIM

In respect of the proceedings being brought by Savanna against the Minister of Mines and Energy and
the Company in Namibia, the Company has taken advice from Senior Counsel in Namibia and the
Company's Australian lawyers on the basis of the affidavit material filed to date. In summary:

On 14 December 2007, Savanna Marble Close Corporation (Savanna) filed a Notice of Motion in the
High Court of Namibia together with a founding affidavit in support naming the Minister for Mines and
Energy (MME) as first defendant, Bannerman Mining Resources (Namibia) (Proprietary) Limited (the
Company) as second defendant and Robert D. Wirtz as third defendant seeking a review of the MME's
decision to grant EPL 3345 to the Company or declaring that decision null and void.

The basis for the claim was that the MME did not notify Savanna of the Company's application for EPL
3345 as was arguably required pursuant to section 69(2)(g)(ii) of the Minerals Act 1992 (Namibia) (the
Act).

On 14 April 2008, Savanna filed an amended Notice of Motion in the High Court of Namibia together
with a supplementary affidavit in support. The basis of the amended claim is that once the MME
refused to grant EPL 3345 to the Company, the MME was not entitled in law to reconsider, vary or
amend the original decision because he was "functus officio".

Broadly speaking, the doctrine of functus officio means that a decision maker is unable to remake a
decision once it has been made so that arguably any decision made subsequent to the original decision
which varies, revokes or reopens the original decision will be null and void.

The Minister for Mines and Energy and the Company have vigorously opposed the application.
Additionally, both the Company and the Minister are of the view that Savanna's claim should be
rejected prior to any substantive hearing of the case on the grounds that Savanna is guilty of serious and
unacceptable delay in waiting nearly 2 years to bring proceedings when it was been aware of the
Company's activities on EPL 3345 during that period.

The Company has approached the Judge President of the High Court of Namibia for a hearing date. The
Company is awaiting a response from the Judge President.

The Company has obtained legal advice from solicitors in both Australia and Namibia and from Senior
Counsel in Namibia. The Company is not able to disclose that legal advice on the basis that it is
privileged and confidential. The Company is confident in its view that Savanna's application will fail.




                                                                                                                 71
Annual Financial Report 2008                                     Bannerman Resources Limited and Controlled Entities
                                NOTES TO THE FINANCIAL STATEMENTS
                                       FOR THE YEAR ENDED
                                           30 JUNE 2008



26.     CONTROLLED ENTITIES

Parent Entity
Bannerman Resources Limited

                                                                           % Equity Interest
Controlled Entities                                                        2008          2007

Elfort Nominees Pty Ltd                                                       100               100
Bannerman Mining Resources (Namibia) (Pty) Ltd                                 80                80

                                                Consolidated                              Company
                                         2008                  2007               2008                  2007

                                          $                     $                   $                     $

Shares in controlled entities                        -                 -       28,493,879            20,891,870

27.     MINORITY EQUITY INTEREST

                                                                                  Economic Entity
                                                                               2008                   2007
                                                                                 $                      $
Minority equity interest comprises:
Share capital                                                                             4                      4
Accumulated losses                                                                      (4)                    (4)
Outside Equity Interests                                                                  -                      -




                                                                                                                     72
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities


                               ADDITIONAL SHAREHOLDER INFORMATION
Shareholding

The distribution of members and their holdings of equity securities in the company as at 25 September 2008
was as follows:
                                                                     Class of Equity Securities

Number Held as at 28 September 2008                  Fully Paid Ordinary
                                                            Shares

1-1,000                                                                768
1,001 - 5,000                                                        1,730
5,001 – 10,000                                                         775
10,001 - 100,000                                                     1,022
100,001 and over                                                       157

TOTALS                                                               4,452


Substantial Shareholders

The names of the substantial shareholders listed in the Company’s register as at 22 September 2008

Shareholder                                                                                    Number
Widerange Corporation Pty Ltd                                                                    12,587,500
ANZ Nominees Limited                                                                             10,868,591
HSBC Custody Nominees (Australia) Ltd                                                             7,783,015
Peter Batten                                                                                      7,500,000
Commerce Pty Ltd                                                                                  6,883,440


Voting Rights

Ordinary Shares

In accordance with the Company's Constitution, on a show of hands every member present in person or by
proxy or attorney or duly authorised representative has one vote. On a poll every member present in person
or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share
held.
Annual Financial Report 2008                                       Bannerman Resources Limited and Controlled Entities


                       ADDITIONAL SHAREHOLDER INFORMATION (CONT’D.)

Twenty Largest Shareholders

The names of the twenty largest ordinary fully paid shareholders as at 25 September 2008 are as follows:

                                                           Number of Ordinary Fully            % Held of
 Name                                                         Paid Shares Held                  Issued
                                                                                               Ordinary
                                                                                                Capital
 Widerange Corporation Pty Ltd                                               12,587,500              8.349
 Canadian Control A/C                                                        10,591,383              7.025
 National Nominees Limited                                                    7,808,745              5.179
 Peter Batten                                                                 7,500,000              4.974
 Resource Capital Fund IV LP                                                  6,600,000              4.377
 HSBC Custody nominees (Australia) Limited                                    4,470,696              2.965
 Brewin Nominees (Channel Islands) Limited                                    3,800,000              2.520
 Commerce Pty Ltd                                                             3,285,000              2.179
 J P Morgan Nominees Australia Limited                                        2,689,584              1.784
 Mr Geoffrey Robert Tarrant                                                   2,250,000              1.492
 Geraldton Agricultural Services Pty Ltd                                      2,158,449              1.432
 Cleland Projects Pty Ltd                                                     2,000,000              1.326
 Annette Joy Batten                                                           1,943,055              1.289
 RBC Dexia Investor Services Australia Nominees Pty                           1,632,367              1.083
 Limited
 ANZ Nominees Limited                                                          1,444,666                0.958
 Citicorp Nominees Pty Limited                                                 1,135,368                0.753
 Woodross Nominees Pty Ltd                                                     1,011,612                0.671
 Ms Nicole Calleja                                                             1,007,924                0.668
 Dacin Nominees Pty Ltd                                                          920,000                0.610
 Cogent Nominees Pty Ltd                                                         868,049                0.576


 TOTAL                                                                       75,704,398                50.210
    Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities


CORPORATE GOVERNANCE

The Board of Directors of Resources Limited is responsible for corporate governance of the Company. The Board
guides and monitors the business and affairs of Bannerman Resources Limited on behalf of the shareholders by whom
they are elected and to whom they are accountable.


Shareholders are reminded that Bannerman operates with a tri listing in Australia on the Australian Securities Exchange
(ASX), in Canada on the Toronto Stock Exchange (TSX) and in Namibia on the Namibian Stock Exchange (NSX). The
Company is committed to implementing the highest 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 Recommendation and the Ontario Securities Commission’s corporate
governance requirements as set out in National Instrument 58-101. The Company is pleased to advise that the
Company’s practices are largely consistent with these guidelines.

Where the Company’s corporate governance practices do not correlate with the practices recommended, the Company is
working towards compliance or it does not consider that all the practices are appropriate for the Company due to the
size and scale of Company operations. The Company reviews and amends its corporate governance policies as
appropriate to reflect the growth of the Company, current legislation and good practice.

For further information on corporate governance policies adopted by Bannerman Resources Limited, refer to our
website: www.bannermanresources.com.au/s/CorporateGovernance.asp

Board Objectives
The Board will develop strategies for the Company, review strategic objectives, and monitor the performance against
those objectives. The overall goals of the corporate governance process are to:

•      drive shareholders value;
•      assure a prudential and ethical base to the Company’s conduct and activities; and
•      ensure compliance with the Company’s legal and regulatory obligations.


The board has adopted a Charter that sets out the roles and responsibilities of the board. This may be viewed on the
Company’s website. The Charter includes, amongst other things that the Board will:

•      developing initiatives for profit and assets growth;
•      reviewing the corporate, commercial and financial performance of the Company on a regular basis;
•      acting on behalf of, and being accountable to, the Shareholders;
•      identifying business risks and implementing actions to manage those risks; and
•      developing and effecting management and corporate systems to assure quality
•      reviewing the Company’s systems of risk management and internal compliance and control, codes of conduct
       and legal compliance
•      ensuring that policies and procedures are in place consistent with the Company’s objectives, and ensuring the
       Company and its officers act legally, ethically and responsibly in all matters

The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate
Directors’ participation in Board discussions on a fully informed basis.

Composition
The board currently consists of four non-executive directors, including the chairman and one executive director
(Managing Director). Details of their experience, qualifications and committee memberships are set in the director’s
report. All directors below were in office at the date of this report:
    Annual Financial Report 2008                                        Bannerman Resources Limited and Controlled Entities


CORPORATE GOVERNANCE

Geoff Stanley – Chairman

Independent Non-Executive Chairman since May 2008

Term in office – 4 months

Clive Jones – Managing Director

Executive Director since August 2008
Non-Executive Director from January 2007 to August 2008

Term in office - 21 months

Nathan McMahon

Non-executive director since June 2007

Term in office – 18 months

Alastair Clayton

Independent Non-executive director since May 2006

Term in office – 29 months

David Tucker

Independent non-executive Director since March 2008

Term in office – 6 months


Appointment
Election of Board members is substantially the province of the Shareholders in general meeting. However, the
Company commits to the following principles:

•       the Board to comprise of Directors with a blend of skills, experience and attributes appropriate for the Company
        and its business;
•       the principal criterion for the appointment of new Directors being their ability to add value to the Company and
        its business.

Board Independence
The Board has accepted the ASX Corporate Governance Council and the Ontario Securities Commission’s definition of
an Independent Director.

All of the Non-Executive Directors were assessed in relation to their Independence, and it was found that Mr Stanley,
Mr Clayton and Mr Tucker are considered Independent Directors. In reaching that determination, the Board has taken
into account:

    •    The specific disclosures made in accordance with the Corporations Act, but each such director in respect of
         any material contract or relationship
    •    That no such director is, or is associated directly with, a substantial shareholder of the company
    •    Where applicable, the related party dealings referable to each such Director, noting that those dealings are not
         material under accounting standar5ds. Full details of related party dealings are set out in the notes to the
         financial statements
   Annual Financial Report 2008                                            Bannerman Resources Limited and Controlled Entities


CORPORATE GOVERNANCE

    •    That no such non-executive Director has within the last three years been employed in an executive capacity by
         the company
    •    That no such non-executive Director is , or is associate with a supplier or customer of the company which is
         material under accounting standards
    •    That such non-executive Director’s are free from any interest and any business or other relationship which
         could, or could reasonable be perceived to, materially interfere with the director’s ability to act in the best
         interests of the Company.

Under the accounting standards, a matter is considered to be material if it is equal to or greater than 10% of the
appropriate base amount.

Mr McMahon and Mr Jones do not meet the Company’s criteria for Independence. However Mr Jones & Mr
McMahon’s experience and knowledge of the Company and make their contribution to the Board such that it is
appropriate for them to remain on the Board.

Given the size of the company and the industry in which is operates, the current Board structure is considered to best
serve the Company in meeting its objectives, given its small capitalisation, limited resources and existing operations.
The composition of the Board is reviewed on an annual basis to ensure that the Board has the appropriate mix of
expertise and experience.

Independent professional advice
There are procedures in place, as agreed by the board, to enable directors to seek independent professional advice on
issues arising in the course of their duties at the company’s expense.

Remuneration and Nomination Committee
Given the size and scope of the operations of the Company, the full board has assumed those responsibilities that are
ordinarily assigned to a remuneration and nomination committee.

Where appropriate, independent consultants are engaged to identify possible new candidates for the Board.

Nomination Arrangements
Where a vacancy is considered to exist, the Committee will select an appropriate candidate through consultation with
external parties and consideration of the needs of shareholders and the Company. Such appointments will be referred to
shareholders for re-election at the next annual general meeting. All Directors, except the Managing Director, are
subject to re-election by shareholders at least every three years.

When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the
services of a new director with particular skills, the Board will determine the selection criteria for the position based on
the skills deemed necessary for the Board to best carry out its responsibilities. The Board will then appoint the most
suitable candidate (assuming one is available) who must stand for election at the next annual general meeting.

Performance
Improvement in Board processes and effectiveness is a continuing objective and the primary purpose of Board
evaluation is to identify ways to improve performance. During the reporting year the Company did not conduct a
formal evaluation of Directors and Executives. The Board strives to undertake an annual review of its own performance
with external advice as appropriate.

Code of Conduct
The Directors, officers and employees of the Company are required to conduct themselves in accordance with the
Company’s Code of Conduct which can be viewed at the Company’s website.

Share Trading Policy
The Company also has policies concerning trading in the Company’s securities by directors, officers and employees.
This policy can be viewed at the Company’s website.
     Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities


CORPORATE GOVERNANCE

Audit Committee
The Board first established an audit committee in February 2006, which operates under a charter of the Board and can
be viewed on the Company’s website.

It is the Board’s responsibility to ensure that an effective internal control framework exists within the Company. This
includes both internal controls to deal with both the effectiveness and efficiency of significant business processes, the
safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial and non
information. The Board has delegated the responsibility for the establishment and maintenance of a framework of
internal control of the Company to the audit committee.

The audit committee was re-structured in May 2008 in order to comply regulatory requirements in both Australia and
Canada. The Committee comprises three members, all of whom are independent Non-executive directors. For details on
member qualifications refer to the Directors’ Report. The members of the audit committee at the end of the year and at
the date of this report were:

G Stanley
D Tucker
A Clayton

Appointment of auditor
The shareholders in a general meeting are responsible for the appointment of the external auditors of the Company, and
the Board from time to time will review the scope, performance and fees of those external auditors.

Disclosure
The Board has designated the Managing Director as the person responsible for overseeing and coordinating disclosure
of information to the markets as well as communicating with the market regulators. The Company has a Continuous
Disclosure Policy available for viewing on the Company’s website.

Shareholder Communication
The Board of Bannerman is committed to open and effective communication, ensuring all shareholders is informed of
all significant development concerning the Company. The Company has in place an effective Shareholder
Communications Policy. This policy can be viewed at the Company’s website.

Identification and Management of Risk
The Board’s Charter clearly establishes that it is responsible for ensuring there is a good sound system for overseeing
and managing risk. Due to the size and scale of operations, risk management issues are considered by the Board as a
whole.

The Board’s collective experience will enable accurate identification of the principal risks which may affect the
Company’s business. Management of these risks will be discussed by the Board at periodic (at least annual) strategic
planning meetings. In addition, key operational risks and their management, will be recurring items for deliberation at
Board meetings.

A copy of the Company’s risk management policy can be viewed on the Company’s website.

CEO and CFO Sign-Offs
The Board has received assurance from the Financial Controller and Managing Director that the declarations made in
accordance with section 295A of the Corporation Act 2001 are:

1.   founded on a sound system of risk management and internal compliance and control which implements the policies
     adopted by the board;
2.   the Company’s risk management and internal compliance and control system is operating efficiently and
     effectively in all material respects.
    Annual Financial Report 2008                                         Bannerman Resources Limited and Controlled Entities


CORPORATE GOVERNANCE

Remuneration Arrangements
A Remuneration and Nomination Committee has been established to assess and make Given the size and scope of the
operations of the Company, the full board has assumed those responsibilities that are ordinarily assigned to a
remuneration and nomination committee.

Where appropriate, independent consultants are engaged to identify possible new candidates for the Board.
.
It is the company’s objective to provide maximum stakeholder benefit from the retention of a high quality board by
remunerating directors fairly and appropriately with reference to relevant employment market conditions. To assist in
achieving the objective the Board links the nature and amount of executive directors’ emoluments to the company’s
financial and operational performance. The expected outcomes of this remuneration structure are:

•      Retention and motivation of Directors
•      Performance rewards to allow Directors to share the rewards of the success of Bannerman Resources Limited

The remuneration of an executive director will be decided by the Remuneration and Nomination Committee. In
determining competitive remuneration rates the Committee reviews local and international trends among comparative
companies and the industry generally. It also examines terms and conditions for the employee share option plan.

Where applicable, the Company is committed to remunerating its senior executives in a manner that is market-
competitive and consistent with best practice as well as supporting the interests of shareholders. Consequently, under
the Senior Executive Remuneration Policy the remuneration of senior executive may be comprised of the following:
     • fixed salary that is determined from a review of the market and reflects core performance requirements and
         expectations;
     • a performance bonus designed to reward actual achievement by the individual of performance objectives and
         for materially improved Company performance;
     • participation in any share/option scheme with thresholds approved by shareholders;
     • statutory superannuation.

By remunerating senior executives through performance and long-term incentive plans in addition to their fixed
remuneration the Company aims to align the interests of senior executives with those of shareholders and increase
Company performance. During the year there were no Non-Director Executives.

The objective behind using this remuneration structure is to drive improved Company performance and thereby increase
shareholder value as well as aligning the interests of executives and shareholders.

The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive payments.

The maximum remuneration of non-executive Directors is the subject of shareholder resolution in accordance with the
Company’s Constitution, and the Corporations Act 2001 as applicable. The appointment of non-executive Director
remuneration within that maximum will be made by the Board having regard to the inputs and value of the Company of
the respective contributions by each non-executive Director. Usually Non-Executive Directors do not receive
performance based bonuses and but may participate in equity schemes of the Company.

Full details regarding the remuneration of Directors, is included in the Directors’ Report.

The Board may award additional remuneration to non-executive Directors called upon to perform extra services or make
special exertions on behalf of the Company.

CORPORATE GOVERNANCE

There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors.

All remuneration paid to directors and executives is valued at the cost to the company and expensed. Options are
valued using the Black-Scholes methodology.

Details of the remuneration policies and practices of the Company and the remuneration paid to Directors and Senior
Executives are set out in the Remuneration Report included in the Directors’ Report. Shareholders will be invited to
consider and to approve the Remuneration Report at the Annual General Meeting in November 2008.
   Annual Financial Report 2008                                           Bannerman Resources Limited and Controlled Entities



Code of conduct
The Board is committed to the establishment and maintenance of appropriate ethical standards to underpin the
Company’s operations and corporate practices. The Directors, officers and employees of the Company are required to
conduct themselves in accordance with the Company’s Code of Conduct which can be viewed on the Company’s
website


CORPORATE GOVERNANCE

Explanation of departure

During the financial year Bannerman has complied with each of the 10 Essential ASX Corporate Governance Principles
and the corresponding Best Practice Recommendations, other than in relation to the matters specified below:

 ASX Best Practice          Notification of     Explanation of Departure
 Recommendation             Departure

 2.4   The     board       The     Company    The Board continues to strive to meet the principles of Good Corporate
 should establish a        has         not    Governance and Best Practice Recommendations published by the ASX
 nomination                established   a    or other such principles and guidance as the Board may consider
 committee                 formal             appropriate form time to time, however the Board also recognises that
                           nomination         complying the ASX Corporate Governance Council Recommendation
                           committee          2.4.is impractical given the size of the company and the industry in
                                              which it operates. The Directors believe, it is sufficient for the full board
                                              to assume those responsibilities that are ordinarily assigned to a
                                              remuneration and nomination committee.

 9.2   The     board       The     Company    The Board continues to strive to meet the principles of Good Corporate
 should establish a        has          not   Governance and Best Practice Recommendations published by the ASX
 remuneration              established    a   or other such principles and guidance as the Board may consider
                           formal             appropriate form time to time, however the Board also recognises that
                           remuneration       complying the ASX Corporate Governance Council Recommendation
                           committee          9.2 .is impractical given the size of the company and the industry in
                                              which it operates. The Directors believe, it is sufficient for the full board
                                              to assume those responsibilities that are ordinarily assigned to a
                                              remuneration and nomination committee.

 9.3           Clearly     Non-executive      The Board continues to strive to meet the Principles of Good Corporate
 distinguish        the    directors          Governance and Best Practice Recommendations published by the ASX
 structure of non-         received options   or other such principles and guidance as the Board may consider
 executive directors’                         appropriate from time to time, however during the reporting period, the
 remuneration from                            Company issued options to Non-Executive Directors. Non-Executive
 that of executives                           Directors typically do not participate in equity or option schemes,
                                              however the Board has determined that, consistent with the size of the
                                              Company and the activities focused nature of business and shareholding
                                              structure, the Company will seek shareholder approval for the issue of
                                              share options to Non-Executive Directors from time to time. The Board
                                              believes the options issued to Non-Executive Directors provide them
                                              with a mechanism to participate in the future development of the
                                              Company and act as an incentive for their future involvement with and
                                              commitment to the Company. The Directors believe that the success of
                                              the Company in the future will depend in large part upon the skills of the
                                              people engaged to manage the Company's operations. Accordingly, it is
                                              important that the Company is able to attract and retain people of the
                                              highest calibre. The Directors consider that the most appropriate means
                                              of achieving this is to provide Directors with an opportunity to
                                              participate in the Company's future growth and an incentive to contribute
                                              to that growth and thus to enhance overall shareholder wealth creation.
Annual Financial Report 2008                            Bannerman Resources Limited and Controlled Entities


                               SCHEDULE OF MINERAL TENEMENTS
                                    AS AT 25 SEPTEMBER 2008

     Project                         Tenement      Interest held by Bannerman Resources Limited
     Peterson Well                    E29/0590                          65%
     White Ring                       E08/1559                          65%
     Botswana – Serule North         P 131/2005                        100%
     Botswana – Serule South         P 131/2005                        100%
     Botswana – Dukwe                P 131/2005                        100%
     Namibia – Goanikontes            EPL 3345                          80%
     Namibia – Swakop River           EPL 3346                          80%




P    Prospecting Licence
E    Exploration Licence
M    Mining Licence