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					    Contents
    Item	 	     	       	    	          	        	        	         Page

    CORPORATE DIRECTORY                                                   1

    CHAIRMAN’S REPORT                                                     3

    REVIEW AND RESULTS OF OPERATION                                       4

    DIRECTORS REPORT                                                  17

    AUDITORS INDEPENDENCE DECLARATION                                 28

    CORPORATE GOVERNANCE                                              29

    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                    34

    CONSOLIDATED STATEMENT OF FINANCIAL POSITION                      35

    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                       36

    CONSOLIDATED STATEMENT OF CASHFLOWS                               37

    NOTES TO THE FINANCIAL STATEMENTS                                 38

    DIRECTORS DECLARATION                                             74

    INDEPENDENT AUDITORS REPORT                                       75

    ADDITIONAL STOCK EXCHANGE INFORMATION                             76




2                                Annual Report 2011 - Fortis Mining Ltd
Corporate Information
	
DIRECTORS                                                COMPANY	SECRETARY
Mr.Jitto Arulampalam                                     Mr Justyn Stedwell
(Executive Chairman - appointed 3 May 2010 )             (Appointed 20 September 2010)

Mr. Frank Cannavo
(Executive Director - appointed 3 May 2010)              PRINCIPAL	PLACE	OF	BUSINESS
                                                         Level 5
Mr. Paul Bitetto                                         15-19 Claremont Street,
(Non-Executive Director - appointed                      South Yarra, VIC 3141, Australia
14 September 2010)                                       Telephone: + 61 3 9020 0105 / 9020 0106
                                                         Facsimile: + 61 3 9015 6468
Mr. Terry Grammer                                        E-mail: info@fortismining.com.au
(Non-Executive Director - appointed 16 September 2010)   Webpage: www.fortismining.com.au

Mr. Terence Wong
(Non-Executive Director - appointed 23 February 2011)    LEGAL	ADVISORS
                                                         Prosperity Legal
                                                         52, Little Ryrie Street
REGISTERED	OFFICE                                        Geelong
Level 5,                                                 VIC 3220
15-19 Claremont Street
South Yarra VIC 3141
	                                                        INDEPENDENT	ACCOUNTANT
                                                         PKF Corporate Advisory (East Coast) Pty Ltd
SOLICITORS                                               Level 14
Pointon Partners                                         140 William Street
Level 2,                                                 Melbourne
640 Bourke Street                                        Victoria 3000
Melbourne VIC 3000

                                                         INDEPENDENT	GEOLOGIST																																	
AUDITORS                                                 Ravensgate Minerals Industry Consultants
PKF                                                      49 Ord Street
Chartered Accountants & Business Advisors                West Perth WA 6005
Level 14
140 Williams Street
Melbourne                                                CONSULTANT	GEOLOGIST
Victoria 3000                                            Mr. Nick Marshall
                                                         Marshall Geosciences Pty Ltd
	                                                        2 Conjola Place
                                                         Gymea N Gymea Bay NSW 2227




                                                                                                                  1
    STOCK	EXCHANGE	LISTING                        SHARE	REGISTER
    The Company was listed on the Australian      Computershare
    Securities Exchange on 13 December 2010 and   452 Johnston Street
    commenced trading on 15 December 2010.        Abbotsford VIC 3067
                                                  Telephone: +61 3 9415 5000
    Codes:                                        Facsimile: +61 3 9473 2500
    ASX:FMJ
    ASX:FMJOOA	(Options)


    BANKERS
    Westpac Banking Corporation
    Glen Waverly Shopping Centre
    Shop 2/73-74 Glen Waverly Shopping Centre
    VIC 3150




2
Chairman’s Report

Dear Fortis Mining Shareholders,

It is a great pleasure to speak with you again about our vision, our progress and the company’s outlook
into the future.

Since our listing on the ASX in December last year, Fortis Mining has had an extremely successful start
to its history. Early landmarks included entering into a strategic partnership with Hong Kong investment
company, Grand Concord Investments. The partnership was pivotal, with the owner, Madam Cheung,
having a substantial network of clients and mining related relationships throughout Central and South
East Asia. Fortis soon entered into a pioneering transaction in the execution of a heads of agreement for
two world-class potash deposits in Kazakhstan.

The estimated mineralised targets for the two potash deposits derived from the recent independent
geological report prepared by Ercosplan will, if the resources are confirmed in line with the targets,
secure Fortis’ future as one the top 5 potash producers in the world. Importantly, the full terms of the
transaction are extremely favourable to shareholders, with a major portion of the transaction price to be
paid via convertible notes, the value and number of which are calculated based on final JORC results.

Our future prospects have subsequently generated tremendous investor interest with Fortis Mining
being awarded “2011 IPO of the Year”. We thank and appreciate investor patience, during challenging
external market pressures, whilst we continue to hit the milestones necessary for such a large
transaction to take effect.

The location of the potash deposits, in Central Asian success story Kazakhstan, is another key to our
outlook. Kazakhstan enjoys both a favourable mining investment atmosphere and political stability that
has attracted the interest of major global mining conglomerates into the country. In addition, Kazakhstan
shares a border with major potash importer, China, who are continuously strengthening economic ties
and improving the already established transport infrastructure between the two countries.

As the world population continues to grow strongly and puts pressure on food resources, the demand
for potash, one of only three primary nutrients required for healthy plant growth and high yields and use
as a fertiliser, is expected to continue to grow exponentially into the future.

Through the acquisition of the Kazakhstan potash assets Fortis Mining is on the verge of a new era as it
emerges as a global force in the potash industry.

On behalf of the Board, we would like to welcome our new shareholders to the Company and thank our
existing shareholders for their continued support through this exciting chapter in our history.

Yours faithfully,




Mr Jitto Arulampalam
Chairman

                                                                                                            3
    Review and Results of Operations

    The principal activities of the Entity during the period from incorporation consisted of the identification,
    acquisition, exploration and development of resource projects both internationally and within Australia
    with the focus on bulk fertiliser products as well as gold and base metals.

    The loss after income tax attributed to members of the entity for the period ended 30 June 2011 was
    $2,358,739.

    Operational	Update	

    During the period ended 30 June 2011, the management team focused on listing the entity on the ASX,
    commissioning Ravensgate Minerals Industry Consultants to complete an Independent Geologist’s
    Report on the five mineral projects acquired by Fortis in Western Australia and completing a strategic
    review of the appropriate operational structure. Following the initial listing, the directors identified an
    opportunity to acquire potash assets in Kazakhstan.

    Completion	of	a	successful	capital	raising	and	listing	on	ASX

    The company successfully completed the required capital raising and listed Fortis Mining Limited on
    the ASX on 13 Dec 2010. This was a significant achievement and confirmed investor confidence in the
    board and management of the Company. The funds raised will be used for exploration activities and for
    working capital.

    Summary	of	projects

    During the Financial Period ended 30 June 2011 the Company entered into an agreement to acquire
    Ji’an Resources Limited, a company that owns the rights to acquire Batys Kalii LLP a Kazakhstan
    registered company that holds sub soil licences to two potentially world class potash deposits in
    north western Kazakhstan. Both deposits are at an advanced state of exploration and close to existing
    infrastructure which would allow for their rapid development. The company has engaged Ercosplan
    Geotechnik und Bergbau mbH (“Ercosplan”) a German based consultancy specialising in potash
    exploration and mining to undertake the technical due diligence on the project as well as recalculating
    the geological resources present. In addition the company engaged with a number of institutional
    investors and financiers to arrange the necessary financing package to acquire the projects and finance
    their development.

    The company has also maintained its portfolio of advanced projects within the highly prospective
    North Eastern and Central Goldfields of Western Australia. During the period the company completed
    compilation of all historical exploration data into a Geographic Information System (GIS) database,
    completed acquisition and reprocessing of aeromagnetic data over the projects and completed soil
    and auger geochemical surveys on the Gidgee and New England Well Projects. All the projects are
    located within greenstone belts where multi-million ounce gold camps have been discovered within the
    last 20 or so years. In addition three of the projects have potential for nickel sulphide or base metal
    mineralisation.




4
Acquisition	of	Batys	Kalii	LLP

Batys Kalii LLP is a private company registered in the Republic of Kazakhstan that holds sub soil
licences (the equivalent of mining licences in Australia) to explore and mine potash mineralisation in the
north western area of the Republic of Kazakhstan.




                                                                                                             

Figure	1	Location	Plan	of	the	Kazakhstan	Potash	Deposits

Both projects were subject to aggressive exploration for potash mineralisation by the former Soviet
Union during the 1950s and 1960s. Work on both projects included geophysical surveys, extensive
drilling and chemical analysis of samples as well, as resource calculations. The company’s consultants
have been able to review all the Soviet technical reports on the projects and have created digital
databases of the drilling and analytical data. Whilst the work was done to a high standard for the time
and is internally consistent it does not comply with the current reporting guidelines under JORC code.

Zhilyanskoe	Deposit		

The Zhilyanskoe Deposit is located between 7 and 15 km south east of the city of Aktobe. The city has
a population of 350,000 people with the region supporting a population of 719,000. Aktobe supports
oil, gas and metals processing industries. The city is linked into the national rail grid and has access
to high voltage power. The deposit is situated on a sub soil licence covering an area of 88 sq km held
in the name of Batys Kalii LLP (“Batys”). Batys holds a 95% interest in the licence with the remainder
owned by local interests.
Two different types of potash salt have been identified in the deposit

•   Polyhalite
•   Sylvite and Carnallite –Sylvite



                                                                                                                 5
    Review and Results of Operations

    Each type of potash salt occurs in multiple horizons within the sequence. The potash bearing salts are
    separated by thick layers of rock salt with lenses of argillite, anhydrite, marl and sandstone.

    Detailed interpretation of the drill cross sections through the deposit (figure 2) has identified three lenses
    of polyhalite and three lenses of Sylvite and Carnallite Sylvite mineralisation. The horizons were initially
    regularly layered but latter deformation including folding and thrust faulting has resulted in irregular
    thickening of the lenses in the cores of the folds and thinning on the flanks. This has led to the irregular
    distribution of potash mineralisation within the deposit.




    Figure	2	Geological	plan	of	Zhilyanskoe                                                                          


    Figure 3 shows a typical cross section through the deposit showing the distribution of Polyhalite and
    Sylvinite/ Carnallite horizons. The Sylvinite /Carnallite horizons are on the flanks of the main anticlinal
    structure and have been separately modelled for eastern and western horizons.

    Resources	

    Geologists from the former Soviet Union calculated resources for the deposit in the 1960’s.
    The resources were classified under the COMECON classification system used throughout the eastern
    bloc at that time. Ercosplan have thoroughly reviewed the historical drill data, reinterpreted the deposit
    and recalculated the resources using modern industry best practice. However, as the data used to
    calculate the resources is historical the resources cannot be quoted under the JORC reporting code.
    In determining resource blocks Ercosplan applied particular attention to the mining potential of the
    horizons using existing technology.




6
                   East Flank                                                  West Flank




                                                                                                           

Figure	3	Drill	cross	section	XV

The following table gives a breakdown of the tonnage and grade for each of the individual lenses
identified in the deposit. The grades for the Carnallite /Sylvite lenses have been expressed in terms of
%K2O rather than KCl to allow correlation with the polyhalite mineralisation.


                                                            Tonnage of
                Area    Thickness Volume          Density   Mineralised               K2 O
  Horizon                                                                  K2O%
                Km2         m     millionm3       g/cm3      material               Tonnage
                                                             Million t
 Slyv1East      1.49       19.4        28.95       2.08        60.13       19.75      11.9
 Slyv2 East     1.46      20.54        29.97       2.03        60.23       14.39       9.0
 Sylv3 East      0.3      16.89        5.06        2.02        10.01       11.64       1.2
Slyv1 West      0.79      54.03        42.41       20.3        87.96       16.11      14.2
Slyv2 West      0.45       5.34        2.38        1.84         4.49       15.47       0.7
Polyhalite 1    2.44      36.28        88.54       2.47       217.94       9.06       19.7
Polyhalite2     3.46      42.05       145.30       2.48       358.56       8.56       30.7

Polyhaliter3    2.87      33.67        96.69       2.48       239.35       7.97       19.4

Estimated	Inferred	Resources	for	the	Zhilyanskoe	Deposit	by	ore	lens	




                                                                                                               7
    Review and Results of Operations

    Future	Works

    The company’s immediate intention is to complete a program of check drilling (twinning) of
    approximately eight of the Soviet drill holes to confirm the geological and analytical results using
    modern analytical procedures. Provided the results of the new drilling conform to the earlier work
    Ercosplan believe the data will provide sufficient confidence in the historical drilling to allow the
    resources to be classified under the JORC reporting code.

    Following validation of the geological resources, the company will complete a prefeasibility study to
    determine project economics and viability. Following a successful outcome to this work the company
    will commence a feasibility study on the project which will involve 2D seismic and further drilling as
    necessary as well as detailed mine and plant design, and infrastructure and marketing studies.

    Chelkar	Deposit

    The Chelkar Deposit is located approximately 98 km south of the administrative centre of Uralsk City
    which has a population base of approximately 300,000 people. The deposit is secured by a sub soil
    licence covering an area of 779 sq km which is held by Batys (95%) and local interests (5%). The
    licence extends immediately south from the shores of Lake Chelkar.

    The Chelkar region represents a large scale salt dome structure of the broken through type. Based on
    geophysical, and drilling, the crest of the structure covers an area of approximately 700 sq km which is
    covered by the sub soil licence.

    The evaporate sequence in the Chelkar deposits is up to a maximum thickness of approximately 670m,
    and comprises a upper and lower halite horizon with a Potash bearing horizon sandwiched between.
    The potash horizon has been further subdivided into an upper Carnallite and Sylvite member, middle
    Sylvite Bishofite and Carnallite member and a lower Carnallite Sylvite member.

    The sequence most likely represented a series of dislocated salt deposits that during compaction and
    salt tectonics formed a series of steeply dipping strata comprising lenses and domes. Potentially
    the deposit could be larger than the Zhilyanskoe Deposit. However due to the complex geology and
    structural history the current drill density is not sufficient to generate a geological model suitable for
    resource calculations except over a small area of the total licence area (figure 4).
    Applying the same parameters as applied to the Zhilyanskoe Deposit but restricting the radius of
    influence to 150 metres around drill holes to reflect the reduced level of confidence, Ercosplan have
    been able to calculate a non JORC inferred resource for the licence area given in the table below.

                                                                          Tonnage of
                            Area    Thickness    Volume       Density     Mineralised                K2O
          Horizon                                                                        K2O%
                            Km2         m        millionm3    g/cm3        material                Tonnage
                                                                           Million t
    Sylvinite-Carnallite-
                            3.87       9.86         38.2       73.10        16.44        12.02       1.25
           Kainite



8
   
                                                                 #
         "                                                $
  %                                  "%
                                     #
                                                                                                        Chelkar
                                                                                                        Licence area
                 "

                     "                    $                      #
                                                                                                        

                                 #
                                                                                                               

                     !                                    $



                                              &



                         $




                                      !                                                                                

             "                                                            !"#$
                             %
        "                                                                        !"#$$%&$'()#*%(+,-.'"
                 !
                                     $#                                          &/(0&*12%(.'1"#34(5&"#6&32
                 $
   $
                         $                        "
                                                                                 71"31$$#*'(8(91#3#*'

                                 "                                               :;$<#3'

                                                                                 71"31$$#*'
             #
                                                                 $%&%'(   =3(712'(&/(2'<'"1$(5&"#6&32(
                                                      !       "#!!!
                                                                          *%'("1"'2*(>#3'"1$&4;(#2(2%&)3?



Figure	4	Plan	showing	Chelkar	drilling	(right)	and	area	used	in	resource	calculation	(left)	
Future	Plans

Batys Kalii commenced a program of eleven inclined diamond holes during 2011 in the area of the
current resource estimate, but suspended the program after completing only one hole with a further two
suspended for technical reasons and one was abandoned due to excessive hole deviation. Samples
from the program were placed in storage for several months but have recently been sent to a laboratory
for analysis. The company intends to complete a further program of drilling in the area of the current
resource estimate in order to improve the geological confidence of the model and provide sufficient data
to calculate an inferred JORC resource for the area.

In addition the company intends to commence a broader regional program to evaluate occurrences of
potash mineralisation indicated by wide spaced historical drilling in other areas of the sub soil licence
that has not been followed up.

West	Australian	Projects

The company holds tenure to a number of advanced projects within the highly prospective North
Eastern Gold Fields of Western Australia. The projects are prospective for gold, nickel, base metal and
iron ore mineralisation. Since listing the company has spent considerable time reviewing the historical
drill data and defining targets for follow up exploration.




                                                                                                                           9
     Review and Results of Operations




                                                                                             

     Figure	5	Location	Plans	of	Projects	in	the	North	Eastern	Goldfields

     Gidgee	Project	-	Gold,	Nickel	and	Base	metals	(FMJ	80%)

     The Gidgee Project is located 640 kilometres north east of Perth, and comprises a contiguous block of
     three exploration licences and six prospecting licences covering approximately 348 sq kilometres. The
     project covers parts of the Gum Tree Greenstone belt west of the Montague Range. The greenstone belt
     hosts a number of significant gold deposits including Kingfisher, Wilsons, Swan Bitter. These deposits


10
were mined via a series of open cuts and underground opening and treated at the nearby Gidgee Mill. To
date the deposits have produced in excess of one million ounces. Recently the gold camp was purchased
by Panoramic Resources for $15.5 m. The company’s project is directly to the east of the old Gidgee
mine area.

The area has undergone significant exploration for gold in the past. Since listing the company has
compiled all the historical drilling and soil sampling data over the project area into a GIS database. A
review of the work has shown that the majority of the past drilling has been RAB which has an average
depth of only 35m. Due to the complex weathering and regolith in the area it is likely that much of the
area has not been effectively tested. The drilling has, however, identified a number of advanced targets
including Barrel maker, Legendre, Crater, and Kingston where broad zones of gold mineralisation including
GRB619	13m	at	2.1g/t,	Au,	GRB660	20	m	at	2.5g/t	Au,	and	GRB	699	10m	at	3.22g/t	Au have been
intersected in relatively shallow drill holes with little effective testing of the fresh rock.

These targets provide the company with walk up drill targets over wide intervals. The company recently
completed an auger soil sampling program targeting the extensions of the Legendre/Barrel Maker prospects
in an area that has been poorly tested by previous exploration, as well as a potentially mineralised granite
greenstone contact in the southern part of the project area. In addition the company has applied for a
Program of Works (POW) to complete a program of deep drilling on the Legendre Prospect.

The majority of exploration on the Gidgee Project has been focused on gold, however the earliest work in the
area during the 1970’s by Consolidated Goldfields focused on copper zinc exploration, and more recently
Legend Mining and Gateway Mining targeted the project for channel hosted nickel sulphide mineralisation.
Legend completed drilling and ground EM and identified a number of ultramafic units with anomalous nickel
values up to 0.7% Ni in what is thought to be komatiite ultramafic facies. The company intends to conduct
further systematic exploration on the base metal and nickel potential of the project area.

Jundee	Project	-	Gold	and	Base	Metals	(FMJ	100%)

The Jundee Project is located 650 km north east of Perth, and comprises a contiguous block of five
exploration licences totalling 593 sq km. To date two of the titles has been granted with all necessary
native title agreements in place the remaining titles are expected to be granted shortly

The project lays within the Yandal Greenstone Belt a North West striking sequence of Achaean
greenstones comprising ultramafic to Felsic volcanic and related sediments with minor Banded iron
formation on the western side of the project area. A number of small younger aged granite plutons
intrude the sequence. The belt hosts a number of major gold deposits including the Jundee gold camp
(5Mill oz) approximately 5km NE of the project area and the Bronzewing Deposit to the south as well
as a number of smaller deposits including Flushing Meadows, and Julious.

The project area has been extensively drilled by RAB and Aircore techniques exclusively for gold on a
650 m X 100m pattern with infill drilling over areas of anomalous results. This work has generated a
number of targets that require further drill testing. Aside from the gold potential the company believes
that the Felsic sequences within the project area are prospective for VMS deposits similar to the
Teutonic Bore –Jaguar camp outside Leonora and the Golden Grove Deposits near Yalgoo.


                                                                                                               11
     Review and Results of Operations

     Compilation of the historical drilling and assay results has shown that only a small percentage of the
     previous drilling has been tested for base metal mineralisation. A number of anomalous zones of
     copper in drill holes have been identified in the south eastern part of the project area within the felsic
     volcanic’s that will require follow up once the tenements are granted.

     New	England	Well	Project	-	Gold	(FMJ	80%)

     The New England Well Project comprises two granted prospecting licences totalling 4 sq km located
     approximately 20km south of the Jundee Project, within the same greenstone belt. Within P53/1441
     there is a series of old shafts and prosecting pits along a quartz reef within sheared mafic rocks over
     a strike of approximately 500 m. Previous rock chip sampling of the workings has returned results up
     to 14.6g/t Au from the quartz, and 4.3g/t Au from the mafic host rocks. The project area has been
     subjected to several generations of broad spaced RAB drill testing as well as two inclined RC drill
     holes testing less than one of the old workings. One whole NEEC2 returned several anomalous zones
     including 8m	at	0.53g/t	Au	from	53m,	.3m	at	0.25g/t	Au	from	63m.	and	2m	at	0.22g/t	Au from
     68m. The company recently completed a systematic soil sampling program over the entire project
     area analysing the samples for gold as well as a suite of base metal indicator minerals. At the time of
     preparation of the report the samples were still in the laboratory being analysed.

     Darlot	Project	-	Gold	(FMJ80%)

     The Darlot project consists of a single exploration licence covering an area of approximately 19sq km.
     The tenement is located approximately 100km north east of Leonora. The tenement flanks ground held
     by Barrack Australia Pty which hosts the Darlot/ Century gold camp that has produced an estimated 3
     million ounces of gold.
     The tenement is covered by extensive transported regolith cover making surface sampling ineffective
     in most areas. Past exploration on the tenement is restricted to approximately 60 shallow RAB holes
     drilled on a 400m X200m grid pattern. The drilling intersected a number of anomalous results including
     WOOB10	4m	at	0.23g/t	Au within a gabbro /dolerite unit. The company has recently purchased
     multiclient aeromagnetic data as well as accessed open file data to prepare detailed structural maps
     over the area to assist in further targeting.

     Breamore	Project	-Gold	Base	metals	(FMJ	80%)

     The Breamore project is located approximately 5 km east of the township of Leonora in the North
     Eastern Goldfields. The project comprises six granted prosecting licences and two ungranted licences
     totalling an area of 13 sq kilometres.

     The project covers a sequence of north east trending mafic to felsic volcanic’s and sediments.
     Previous exploration on the tenements has comprised RAB and RC drilling principally around three
     advanced gold targets on the western side of the project area. At Sophia and Natasha on a sheared
     felsic volcanic sediment contact anomalous results including 4m	at	17.6g/t	Au,	12m	at	7.1	g/t	Au	
     and		3m	at	6.87	g/t	Au have been identified over a strike of approximately 1km. At the Rabbit Warren
     Prospect to the east on a sheared felsic volcanic and mafic contact drill results up to 2m at 2.09 g/t
     Au have been returned from shallow drilling. Further targets including Pink Pig 4m at 1.80g/t Au, and
     Shylock 8m at 1.23	g/t	Au also require follow up work.

12
In addition to gold the project area is also prospective for VMS style base metal mineralisation similar
to the Teutonic bore Jaguar camp located approximately 25 km to the NE and within what appears to
be the same sequence of felsic rocks that run through the project area.

The company has compiled all the historical drill and soil sampling data on the project area and is in the
process of holding discussions with native title parties to allow access for further exploration.

Ironstone	Well	Joint	Venture	-Iron	ore			(FMJ	20%	Free	carried)

The company has a joint venture over several tenements within the Jundee Project prospective for iron
ore with newly listed company Nemex Resources Limited. Under the terms of the joint venture NEMEX
are required to spend $250,000 per annum over four years to earn an 80% interest in the iron ore rights
on the tenements. Fortis’s gold and base metal exploration at all times takes precedence over iron ore
exploration and mining.

Approximately 22 km of Banded Iron Formation (BIF) is exposed on the tenements in the joint venture.
Rock chip sampling completed in 2010 averaged around 57%. Nemex believes the project area has the
potential to general a resource of Direct shipping Ore and intends NEMEX have indicated they intend to
commence drilling activities on the targets shortly.

The	Statement	below	should	be	read	in	conjunction	with	the	non	JORC	compliant	drilling	and	
analytical	data	for	the	Kazakhstan	Potash	Projects.

1.	Qualifying	Statement

It should be noted that the resources estimates shown in this announcement have been prepared based
on drilling and analytical data that are historical. Original records of the data are not available, nor are
there quality assurance checks, and the results cannot be independently verified. There can be no
assurances given that resources calculated based on this data can be relied upon.

2.	Sources	of	Data

The data available for this report consist of:

Sachno et al, (1958): The report of prospecting works of the Zhilianskoe deposit of potash salts for the
1952-1958., Vol I, TGF, Aktjubinsk, 508 p.

Sachno et al, (1958): Geological map of the Zhilianskoe deposit M 1:50,000.

Sachno et al, (1958): Geological cross-section, Zhilianskoe deposit M 1:5,000. Cross-sections: 0-0, I-I,
II-II, III-III, IV-IV, V-V, VI-VI, VII-VII, VIII-VIII, IX-IX, X-X, XI-XI, XII-XII, XIII-XIII, XIV-XIV, XV-XV, XVI-XVI.

Sachno et al, (1958): Profiles of the bore holes of the Zhilianskoe deposit. Bore holes: 1-75, 77, 79, 81,
83-113, 115-116, 119, 123, 125, 128, 131, 135.



                                                                                                                         13
     Review and Results of Operations

     Batys Kalii (2010): Data base of the Zhilianskoe potash deposit, containing coordinates, elevation,
     depth and thickness of identified potash horizons and (partial) assay data for potash horizons: 1E (from
     10 drill holes), 2E (from 11 drill holes), 3E (from 3 drill holes),1W (from 5 drill holes), 2W (from 3
     drill holes), 3W (from 4 drill holes),Polyhalite 1 (from 14 drill holes), Polyhalite 2 (from 23 drill holes),
     Polyhalite 3 (from 24 drill holes).

     Gorjunov J.S., Rjakin B.S., Gerasimova J.A., Schchalachov Z.J., Zherebjatev V.N. (1965): The summary
     geological report about works of Uralo-Embenskoj (GRP) on the Chelkar salt dome from 1955 to1964.
     507 p., Chelkar, 1965.

     Sokolova - Kochegarova A.A., (1968): Geological map of the USSR (with removed of Pliocene and
     Quaternary deposits) M 1:200,000, near-Caspian series, M-39-XVI, Moscow, 1967.

     Gorjunov J.S., Rjakin B.S., Gerasimova J.A., Schchalachov Z.J., Zherebjatev V.N. (1965): Profiles of the
     bore holes of the Chelkar deposit. Bore holes: 26, 27, 29, 33, 57, 60, 112-122, 125-127, 151-151a,
     161, 229-230, 239, 249, 262-272, 274, 280, 282-285, 287-288, 290-294, 311, 338-341,346, 461a-
     577, 579-681, 686-697, 702-722.

     Batys Kalii (2010): Data base of the Chelkar potash deposit, containing coordinates, elevation, depth
     and thickness of identified potash horizons and (partial) assay data for potash horizons.

     3.	Reference	to	Table	1	of	the	JORC	Code	effective	17	December	2004,	checklist	of	assessment	and	
     reporting	criteria.			

     The original work was carried out in accordance with the government regulations of the former Soviet
     Union which stipulated the drilling patterns and drill density reflecting the levels of confidence in the
     resource categories, full coring of potash intervals was stipulated and widespread assaying by experienced
     laboratories of the drill samples was completed. All the reports are written in Russian. The company’s
     consultants Ercosplan employ a geoscientist with Russian language skills who reviewed the data.

     Surface	Sampling	Techniques:
     There was no surface sampling or trenching completed on the property

     Drilling	Techniques:
     No details are available as to the type of drilling rigs or core diameters. All holes were vertical. The
     collar positions were determined by surveys referenced to the national grid. Drill collar elevations where
     determined by levelling using points of the national grid for reference.

     Down	hole	surveying	Techniques:	
     No down hole survey data is available for the drilling. All drilling was vertical. Due to the wide spacing
     between drill holes it is unlikely that hole deviations would significantly affect the correlation of the
     geological horizon between holes..

     Drill	Core	Recovery:	
     No information of drill sample recovery are provided in the historical reports.


14
Geological	Logging:
Geological logs of the drill holes are provided in the reports. The work appears to have been done to a
high standard with detailed descriptions of the geology and mineralisation.

Sampling	Techniques	and	Sample	Preparation:
No information regarding the sampling method could be found in the report. Based on Ercosplan’s
experience from similar projects in the CIS States samples were probably taken by boring a hole
through the centre of the core and using the fine material from the drilling as the sample. This method
has the advantage of reducing the contamination effects of drilling fluids if the fluids are not in
equilibrium with the potash salts. The disadvantage is that the sample size is small and may not be
representative, especially in coarse grained mineralisation.

Quality	of	Assay	Data	and	Laboratory	Tests:	
The reports give no information about sample analysis and security. Based on Ercosplan’s experience with similar
projects, the quality of the analytical procedures in the former Soviet Union is satisfactory, with usually good
comparisons between mineralogy estimated from chemical analysis and mineralogy estimated form drill core.

For the Zhilyanskoe deposit a total of 4,755 drill core samples were analysed. 1204 samples were analysed
for insoluble content, K, Mg, Na, Ca, Cl, and SO4. 3331 were analysed for insoluble and K, a sub set of 20
samples were also analysed for Mg.. Two hundred samples were analysed only for insoluble content.

The Chelkar deposit contains a number of commercially valuable mineral salts including boron, potassium,
and magnesium and bromine salts. Samples were analysed firstly by field tests to determine boron content
by an acids solution quinalizarin. This was followed by powder tests for insoluble content, B, K, Mg, Br, SO4.
Only approximately 130 samples from the Chelkar deposit had complete analyses undertaken.

Quality	Control	of	Analysis:	
The historical reports do not mention quality assurance procedures completed during the initial work. Ercosplan
have completed cross checks using the original data by firstly, the ion balance, and secondly, comparing
mineralogy calculated from the chemistry with reported mineralogy. Over 90% of the samples passed these
tests which suggest that the historical analysis is of a reasonable quality, however the number of samples with
the full suite of analysis is relatively small relative to the total number of samples in the data set.

Density	Measurements:	
Density values were not provided in the original reports. But for samples analysed for the full suite of
elements density values were estimated from the mineralogy. For horizons with only partial analysis the
density was estimated by correlating the K content with the density calculated for similar horizons with
complete analysis. This introduces potential error in the estimated tonnage of the mineralised material.

Orientation	of	Data	in	Relation	to	Geological	Structure	:
TAll the historical drilling into both deposits was vertical. For the Zhilyanskoe deposit drilling was
undertaken on a grid pattern perpendicular to the strike of the anticlinal structure on drill sections
between 1000m and 500m apart with holes spaced between 200m to 50 m apart along the sections.
This is considered suitable drill spacing for this type of deposit. In assigning areas of influence around
the drill holes for resource calculations Ercosplan restricted the radius to 300m. For the Chelkar deposit


                                                                                                                   15
     Review and Results of Operations

     the geological structure is more complex and poorly understood. The current interpretation is that the
     strata are tightly folded and steeply dipping. Drilling is on NW-SE orientated drill lines spaced 1000m
     apart, with holes spaced 1000m apart along the lines. In three areas the drill density has increased to
     1000m X 200m and 500m X 500m. There is potential for significant error in the geological interpretation
     to be introduced by relying solely on drill information for resource calculations from the Chelkar Deposit.
     Ercosplan have recognised this, and limited resource modelling to the areas of higher density drilling and
     also restricted the radius of influence of the drill holes to 150 m, which is half that of Zhilyanskoe.

     Resource	Estimates:	
     The resource estimates in this announcement have been prepared by Ercosplan, a German based geological
     and engineering consultancy specialising in potash salt deposits. They have employed current best industry
     practice in the understanding the geological setting and interpretation of the potash mineralisation as well as
     selecting the appropriate techniques to estimate tonnage and grade for the deposits.

     In selecting mineralised blocks to be included in the resource model, the following parameters were applied.
     An operation using conventional mining in combination with hot leaching could handle Sylvinite material
     as well as Carnallite material and would have following cut off criteria:

         Thickness                     >2m
         Depth                         < 1,200 m
         Grade                         > 10% KCl
         Insoluble Content             <40%

     For a conventional mining operation combined finally with calcination of Polyhalite to SOP following cut
     off criteria have been applied:

         Thickness                     >2m
         Depth                         < 1,200 m
         Grade                         > 5% K2O
         Insoluble Content             <30%

     A polygonal area of influence method was used. For the Zhilyanskoe deposit a maximum area of influence
     of 300m around the was applied and for the Chelkar a maximum area of influence of 150m was applied. It
     was assumed that the grade and thickness of the mineralised intercept was constant over the polygon.

     The volume of each polygon was calculated by multiplying the area of the polygon by the thickness
     along the drill hole, which is not necessarily the true thickness of the deposit. Also because of this
     simplification, only a relatively small radius of influence was used. The tonnage was calculated by
     multiplying the volume by the density calculated factor.

     Total resources for each horizon was calculated by summation of the resources for the polygons for
     each horizon Polygons outside the ranges listed above were given no resources.

     Note 1
     Calculation of K2O equilvents for different Potash Materials
     KCl = 0.632 K2O, K2SO4 = 0.541K2O

16
Directors’ Report

Your directors present their report together with      gold and nickel exploration company and Motopia
the consolidated Annual financial report of Fortis     Ltd (ASX: MOT), which specialises in mobile
Mining Limited (“Fortis”) for the period ended 30      marketing, platforms and distribution.
June 2011.                                             Directorships held in other listed entities in the past
                                                       three years: ATOS Wellness Limited (ASX: ATW)
This report covers the period from 03 May 2010,
the date of incorporation, until 30 June 2011,         Mr	Frank	Cannavo
the balance date. The Entity’s functional and          (Executive Director)
presentation currency is AUD ($).
                                                       Mr Cannavo is an experienced public company
Descriptions of the Entity’s operations and of its     director with significant business and investment
principal activities are included in the review of     experience with many exploration companies in
operations and activities section of this report.      the mining industry. He has been instrumental in
                                                       assisting companies achieve their growth strategies.
DIRECTORS
                                                       Mr Cannavo has extensive experience in creating
The following persons were directors of Fortis         solid, workable business strategies, capital
Mining Limited during the period and up to the         raisings, investment, acquisitions and IPOs. He is
date of this report.                                   also a non-executive director of ASX-listed company
                                                       Great Western Exploration Ltd (ASX: GTE).
Mr	Jitto	Arulampalam                                   Directorships held in other listed entities in the
(Executive Chairman)                                   past three years: Motopia Limited (ASX: MOT),
                                                       Hannans Reward Limited (ASX: HNR) and ATOS
Mr. Arulampalam has extensive corporate                Wellness (ASX: ATW)
restructuring skills gained in several turnaround
situations. Having spent more than eight years         Mr.	Paul	Bitetto		
with Westpac Banking Corporation in several key        (Non-Executive Director)
operational and strategic roles, he was hired by
Newsnet Ltd as its CEO in 2005 to assist in the        Mr Bitetto has experience in a range of industries
successful restructuring of the Company and to         including process and electronics engineering,
position it for IPO. He successfully repositioned      medical devices, renewable energy and finance.
Newsnet as a leading innovator in the messaging/       Mr Bitetto is also a director of Smart Capital
telco space, to be recognised by the Australian        Funds Pty Ltd, a partner in a family of funds
Financial Review MIS magazine as one of the “Top       merchant banking platform in Europe, which is a
25 global rising stars” in 2006. Mr. Arulampalam       global network of independent entrepreneurs and
is a charter member of The Industry Entrepreneur       structured asset finance professionals that focus
(TIE), the largest entrepreneurial network in the      on Development and Project Finance Investment
world and is a member of the Australian Institute of   across a number of sectors.
Company Directors.
Mr. Arulampalam has solid commercial                   Mr.	Terry	Grammer		
experience and has extensive experience as             (Non-Executive Director)
a board member of a number of successful
companies. He is currently a non-executive             Mr Grammer is a Geologist with over 35 years’
Chairman of two further ASX-listed companies;          experience in mining and mineral exploration with
Great Western Exploration Ltd (ASX: GTE), a            extensive experience in Australia, Africa, East
                                                       Asia & New Zealand.

                                                                                                                 17
     Directors’ Report

     He has extensive professional experience in             years’ experience in management in Hong Kong
     exploration of gold, base metals and some               and the People’s Republic of China.
     industrial minerals. He was a founder and               Directorships held in other listed entities in the
     promoter in 1999 of the successful nickel miner         past three years: Motopia Limited (ASX: MOT)
     Western Areas NL, and was exploration manager
     of the company from 2000 until retiring in 2004.        Company	secretary
     Since his retirement from active geology in 2004,
     he has been involved in company promotion,              Justyn Stedwell has completed a Bachelor
     company financing and project acquisition.              of Business & Commerce (Management &
                                                             Economics) at Monash University, a Graduate
     He currently serves as executive Chairman of            Diploma of Accounting at Deakin University
     ASX-listed company South Boulder Mines Ltd              and a Graduate Diploma in Applied Corporate
     (ASX: STB), an exploration company focused on           Governance with Chartered Secretaries Australia.
     gold, nickel and fertiliser prospects.                  Justyn has five years’ experience acting as
                                                             a Company Secretary of various ASX listed
     Mr.	Terence	Wong		                                      companies in a wide range of industries.
     (Non-Executive Director)
                                                             He is currently also Company Secretary of
     Mr Wong’s background and past experience                ASX listed companies Anittel Group Limited
     includes being a director of a Hong Kong Stock          (ASX:AYG), Solagran Limited (ASX:SLA), Motopia
     Exchange listed company. Terence has over 18            Limited (ASX: MOT) and Helicon Group Limited
                                                             (ASX:HCG).

     Directors’	Interest
     ______________________________________________________________________________

     The relevant interest of each director in shares and options issued by the companies within the consolidated
     entity, as notified by the directors to the Australian Securities Exchange in accordance with S205G(1) of
     the Corporations Act 2001, at the date of this report is as follows:

                                                  Full Paid Shares              Options
     Mr Jitto Arulampalam                                3,020,000              3,000,000
     Mr Frank Cannavo                                    3,200,000              3,000,000
     Mr Paul Bitetto                                        50,000                500,000
     Mr Terry Grammer                                           Nil               500,000
     Mr Terrence Wong                                           Nil                    Nil

     Dividends
     ______________________________________________________________________________

     The Directors did not pay any dividends during the financial period. The Directors do not recommend
     the payment of a dividend in respect of the 2011 financial period.

     Principal	Activities
     ______________________________________________________________________________	
     The principal activities of the Entity during the period from incorporation consisted of the identification,
     acquisition, exploration and development of resource projects with the focus on gold and base metals,
     including nickel and copper and obtaining listing on the Australian Securities Exchange (“ASX”).
                                                            Audit Committee          Remuneration
18                              Board Meetings                   Meetings         Committee Meetings
Subsequent to the listing opportunity to participate in an international project focused on bulk fertiliser
products has arisen. The Directors have positioned the company to put the opportunity to members
and, if approved, to complete an acquisition of potash assets in Kazakhstan.

Review	and	Results	of	Operations		
______________________________________________________________________________

The review of the company’s results and operations are included in the report preceding the Directors’
Report.

Significant	Changes	in	the	state	of	Affairs		
______________________________________________________________________________	

Fortis Mining Limited was admitted to the Official List of the ASX on 13 December 2010. During the
financial period the company raised equity of $6.5 million after costs to pursue exploration activities and
acquisition opportunities to further the economic entity’s resource assets and activities.

During the financial period there were no other significant changes in the state of affairs the
consolidated entity other than that referred to in the financial statements or notes thereto.

Subsequent	Events				
______________________________________________________________________________

As disclosed in Note 27 the following significant events occurred subsequent to the period end.

    • In August 3 million shares were issued in consideration for corporate advisory services
      provided in relation to the renegotiation of terms for the acquisition of Ji’an and the Kazakhstan
      Potash transaction.

    • On 19 July 2011 600,000 30c options were exercised and on 31 August 2011 a further
      175,000 30c options were exercised. This raised a total of $232,500 for working capital.

    • The final $1,681,051 (refer note 14) was received in respect of the convertible note agreement.
      12 Million Convertible notes have been issued in August 2011 with a $1 face value.
      The notes have a conversion rate of $2, meaning two notes can be converted to one ordinary
      share. Additionally, four options will be issued to the note holder on conversion, subject to
      shareholder approval.

    • In July 2 million shares were issued to settle a liability recorded in the 30 June 2011 financial
      report for corporate advisory services of $620,000.

    • In July, the Company renegotiated the terms relating to the eventual acquisition of the
      Kazakhstan assets.

No other events have occurred subsequent to balance date that would require adjustment to, or disclosure
in, the financial report.




                                                                                                              19
     Directors’ Report

     Likely	Future	Developments,	Prospects	and	Business	Strategies					
     ______________________________________________________________________________

     It is the Board’s current intention that the Entity will focus on exploration for mineral resources. The
     Entity will also continue to identify and evaluate other mineral resource opportunities, including potential
     acquisitions, joint ventures, or investments.

     All of these activities are inherently risky and the Board is unable to provide certainty that any or all of
     these activities will be able to be achieved. In the opinion of the Directors, any further disclosure of
     information regarding likely developments in the operations of the Consolidated Entity and the expected
     results of these operations in subsequent financial years may prejudice the interests of the Group and
     accordingly, has not been disclosed.

     The likely developments in the economic entity’s operations, to the extent that such matters can be
     commented upon, are covered in the Review of Operations.

     Environmental	Issues						
     ______________________________________________________________________________

     The Entity’s operations are subject to various environmental laws and regulations under the relevant
     government’s legislation. Full compliance with these laws and regulations is regarded as a minimum
     standard for all operations to achieve.

     Instances of environmental non-compliance by an operation are identified either by external compliance
     audits or inspections by relevant government authorities.

     To the best of the directors’ knowledge, the Group has adequate systems in place to ensure compliance
     with the requirements of all environmental legislation and is not aware of any breach of those
     requirements during the financial period and up to the date of the directors’ report.

     Share	Options					
     ______________________________________________________________________________

     Unissued	Shares
     As at the date of this report there were 24,175,000 unissued ordinary shares under option. The details
     are as follows: -

           Grant Date                   Expiry Date          Exercise Price ($)        No.

           27 October 2010              27/10/2013                 $0.30             7,000,000
           7 September 2010             07/09/2012                 $0.30                75,000
           1 February 2011              01/02/2014                 $0.40               100,000
           30 June 2011                 30/06/2016                 $2.00           17,000,000

     Option holders do not have any right, by virtue of the option, to participate in any share issue of the
     Company or any related body corporate.



20
Shares	Issued	as	a	result	of	the	Exercise	of	Options
During the financial period, no options were exercised.

Subsequent to the balance date, 775,000 shares were issued on exercise of options at $0.30

Meetings	of	Directors				
______________________________________________________________________________

The following tables set out the number of Directors’ Meetings (including meetings of committees of
Directors) held during the financial period and the number of meetings attended by each Director (while
they were a Director or Committee Member).


                                         Board Meetings
                                       Number
                                      Eligible to   Number
Directors:                             Attend       Attended


Mr. Jitto Arulampalam                     3             3
Mr. Frank Cannavo                         3             3
Mr. Paul Bitetto                          3             2
Mr. Terry Grammer                         3             -
Mr. Terence Wong                          2             2


Indemnification	and	Insurance	of	Officers	and	Auditors				
______________________________________________________________________________

The Company has not paid an insurance premium in respect of a contract insuring each of the directors
of the company named earlier in this report, as well as the secretary and officers of the consolidated
entity, against liabilities and expenses, to the extent permitted by law, arising from claims made against
them in their capacity as directors and officers. Other than to the extent permitted by law, the Company
has not, during or since the financial period, indemnified or agreed to indemnify an auditor of the
company or any related body corporate against a liability incurred as an auditor.

Proceedings	on	behalf	of	the	company				
______________________________________________________________________________

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the company, or to intervene in any proceedings to which the company is a
party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

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




                                                                                                                 21
     Directors’ Report

     Auditor				
     ______________________________________________________________________________

     In accordance with the provisions of the Corporations Act 2001, the Company’s auditors, PKF
     Chartered Accountants, continue in office.

     Non-audit Services

     During the period, PKF, the Company’s auditor provided an Investigating Accountants Report for
     inclusion in the company prospectus. PKF received $15,000 for these non-audit services. The directors
     are satisfied that the provision of these is compatible with the general standard of independence for
     auditors imposed by the Corporations Act 2001 and did not undermine the general principles relating to
     auditor independence as set out in APES 110 Code of Ethics for Professional Accountants as they did
     not involve reviewing or auditing the auditor’s own work, acting in a management or decision making
     capacity for the company acting as an advocate for the Company or jointly sharing risks and rewards.

     The following fees were paid/ payable to the external auditors.

     Audit Services 2011

     Review                                                  8,000
     Audit                                                  23,000
     Investigating Accountants Report                       15,000


     Auditor’s	Independence	Declaration			
     ______________________________________________________________________________

     The auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is
     included on page 30 of the financial report.

     Remuneration	Report	(audited)		
     ______________________________________________________________________________

     This Remuneration Report outlines the director and executive remuneration arrangements of the
     company and the group 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 group are defined
     as those persons having authority and responsibility for planning, directing and controlling the major
     activities of the company and the group, directly or indirectly, including any director (whether executive
     or otherwise) of the parent company.

     For the purposes of this report, the term ‘executive’ encompasses the Chief Executive, senior executives
     and secretaries of the parent and the group Companies




22
           Remuneration	Policy		
           ______________________________________________________________________________

           The remuneration of all Executives and Non-executive Directors, Officers and Employees of the
           Company is determined by the Board.

            Directors

            Mr.Jitto Arulampalam         Executive Chairman (appointed 3 May 2010)
            Mr. Frank Cannova            Executive Director (appointed 3 May 2010)
            Mr.Paul Bitetto              Non – Executive Director (appointed 14 September 2010)
            Mr.Terry Grammer             Non-Executive Director (appointed 16 September 2010)
            Mr.Terence Wong              Non-Executive Director (appointed 23 February 2011)

            Executives
            Mr Justyn Stedwel            Company Secretary (appointed 20 September 2010)
            Mr James Guy                 Geologist (appointed 21 February 2011)


           The Company is committed to remunerating Senior Executives and Executive Directors in a manner that
           is market-competitive and consistent with best practice including the interests of shareholders. Where
           possible/relevant remuneration packages are based on fixed and variable components determined by the
           Executives’ position, experience and performance and may be satisfied via cash or equity.

          Non-executive Directors are remunerated out of the maximum aggregated amount approved by
          shareholders and at a level that is consistent with industry standards. Non-executive Directors do not
                                                                                                       %
          receive performance based bonuses and prior Shareholder approval is required to participate in any
                                                                                                   remuner
          issue of equity. No retirement benefits are payable, other than statutory superannuation, if applicable.
                                                                                                     ation
                                                                                                  consisting
          The aim of the Directors is to increase shareholder wealth through successfully achieving its primary
                                                                                                  of options
          objectives. During exploration these objectives are not linked to company earnings. Instead the
                                         Exercise
          successful completion of agreements securing the rights to significant potash resourcesand discovery
                                                                                                       and
                                          price                 First      Last                     shares have
          of other resources through exploration are expected to drive shareholder wealth. The directors
                Granted                            Expiry    Exercise Exercise          Vested
          participated in capital raisings,per received elements of their remuneration in share options. Thus
                                            and                                                     for the
                  No.      Grant Date option        Date        Date       Date           No.        year
Directors an increase in shareholder wealth will give rise to an increase in total director remuneration. No other
          remuneration is linked to performance conditions
Mr Jitto
Arulampalam 3,000,000 27/10/10             0.3    27/10/13 27/10/11 27/10/13                -           -

Mr Frank
Cannavo         3,000,000     27/10/10     0.3    27/10/13 27/10/11    27/10/13          -          -

Terry
Grammer          500,000      27/10/10     0.3    27/10/13 27/10/11    27/10/13          -          -

                                                                                                                     23
Mr Paul
     Directors’ Report

     Remuneration				
     ______________________________________________________________________________

     The remuneration for each Director and each of the executive officers of the consolidated entity
     receiving the highest remuneration during the period was as follows

                                                          Post Employment                 Share- based

                                      Salary or            Superannuation
                                      Base Fees             Contributions              Equity         Total
     Directors                           $                        $                      $             $

     Mr Jitto Arulampalam              113,394                   6,605                 44,476      164,475
     Mr Frank Cannavo                  113,394                   6,605                 44,476      164,475
     Mr. Terry Grammer                  20,000                                          7,412        27,412
     Mr. Paul Bitetto                   20,000                        -                 7,412        27,412

     Mr. Terrence Wong                  10,000                        -                       -      10,000

     Mr. Justyn Stedwel                 16,000                        -                 7,410        23,410

     Mr. James Guy                      70,535                   6,348                        -      76,883
                                       363,323                  19,558               111,186       494,067

          1. Jitto Arulampalam paid $20,000 relating to Directors’ fees through Pakaya Pty Ltd
          2. Frank Cannavo paid $20,000 relating to Directors’ fees through Frank Cannavo Investment Trust Pty Ltd

     Bonuses	and	share	based	payments	granted	as	remuneration	in	the	current	financial	period

     Bonuses
     No bonuses were granted during the period.

     Employee	Share	Option	Plan

     Fortis Mining Limited operates an Employee Share Option Plan, as published on 13 December 2010.
     Under the terms of the Plan the Board may declare employees eligible for participation and employees
     may be awarded share options in accordance with the Plan rules. The main provisions of the Employee
     Share Option Plan are as follows: -
           - Total number of Shares which are subject of unexercised Options granted under the Plan, when
              aggregated with the Shares which have been issued on exercise of the Options granted under the
              Plan, during the 3 years preceding the date on which an Option is issued, may not exceed 15%
              of the total number of issued Shares in the capital of the Company.
           - The Board has absolute discretion over eligibility of employees and executives to participate in
              the Plan. Non-executive Directors may be declared eligible for participation by the Board.
           - The Board has absolute discretion over the number of Share Options to be offered to an eligible employee.


24
     -   The Board has absolute discretion over the stipulation of performance criteria to be met be
         eligible employees for the share options to vest. None have been stipulated in relation to the
         share options granted to date.
     -   The Board must advise each person who is made an offer under the Plan specific information
         about the offer, namely
     -   (a) the exercise price;
     -   (b) the designated exercise price;
     -   (c) the number of Shares for whish the Participant will be entitled to subscribe upon exercise
         of the Option;
     -   (d) the closing date;
     -   (e) the expiry date
     -   (f) any designated exercise condition; and
     -   (g) any vesting conditions provided by the Board.
     -   An eligible employee will only be eligible to exercise the Option whilst in employment of the Company.
     -   Options may be exercised in the following time periods: -
     -   (a) 33.3% at any time after the end of 12 months from the admission date;
     -   (b) 33.3% at any time after the end of 2 years from the admission date; and
     -   (c) the remaining 33.3% at the end of 3 years from the admission date.
     -   Adjustments will be made for Rights Issue and Bonus Issues made by the Company following
         admission.
     -   Where the eligible employee’s employment is terminated after admission date through retirement,
         redundancy, permanent disability or death, the options may be exercised by the Participant or the
         Participant’s legal personal representatives within 6 months of the termination.
     -   Where termination for any other reason occurs, the Options will lapse unless the termination
         occurs within the exercise period and any exercise conditions have been met and the
         Participant exercises the Option within 3 months.

During the financial year the following share-based payments were in existence.

Option Series     Grant Date      Expiry Date     Grant Date fair Vesting Conditions
                                                      value
(1) ESOP          27/10/2010      27/10/2013           $0.022         Vests in accordance
                                                                      with the terms and
                                                                      conditions of the
                                                                      ESOP
(2) Issued 15     01/02/2011      01/02/2014           $0.074         Vests upon Grant
April 2011                                                            date

Option	Compensation,	Granted	and	Vested	during	the	Period

Details of vesting profile of the options granted as remuneration to Key Management Personnel.

Options	Granted	as	part	of	Remuneration
The following grants of share-based payment compensation to directors and senior management relate
to the current financial period:

                                                                                                                  25
     Directors’ Report

                                                                                                     %age of
                                                                                                   Compensation
                                                          Value of                 %age    %age for the period
                                               No.         options     No.        Granted Granted consisting
     Directors         Option series         Granted      Granted     vested      Vested forfeited of options
     Mr Jitto
     Arulampalam     17 October 2010         3,000,000      66,715        -         0%          0%            27%
     Mr Frank
     Cannavo         17 October 2010         3,000,000      66,715        -         0%          0%            27%
     Terry
     Grammer         17 October 2010          500,000       11,119        -         0%          0%            27%
     Mr Paul
     Bitetto         17 October 2010          500,000       11,119        -         0%          0%            27%
     Justyn
     Stedwell             15 April 2011       100,000        7,410 100,000         100%         0%         31.6%
                                             7,100,000 163,078 100,000

     The options were issued to establish long term goal congruence between the company and directors.

     During the reporting period, no shares were issued on the exercise of options previously granted as remuneration

     Employment	Contracts	of	Directors	and	Senior	Executives

     The following Directors and Senior Officers were under contract at 30 June 2011.

       Directors                  Duration               Notice Required      Remuneration

       Mr Jitto Arulampalam       No fixed term          4 Month              Salary and Director’s fees of
                                                                              $150,000 per annum
       Mr Frank Cannavo           No fixed term          4 Month              Salary and Director’s fees of
                                                                              $150,000 per annum
       Mr Paul Bitettto           No fixed term          3 Months             Director’s fees of $30,000 per
                                                                              annum
       Mr Terry Grammer           No fixed term          3 Months             Director’s fees of $30,000 per
                                                                              annum
       Mr Terrence Wong           No fixed term          3 Months             Director’s fees of $30,000 per
                                                                              annum
       Executives
       Mr. Justyn Stedwell        No fixed term          1 Month              Company Secretary fees of
                                                                              $18,000
       Mr James Guy               No fixed term          1 Month              Salary of $200,000 per annum
                                                                              plus super to be reviewed annually

26
No termination payments are stipulated in the executive contract arrangements, other than in lieu of notice
periods.

End of remuneration report (audited)

Signed in accordance with the resolution of the Board of Directors




Jitto	Arulampalam	
Executive Chairman

2 October 2011




                                                                                                              27
28
Corporate Governance Statement

Fortis Mining Limited (“Fortis” or “the Company”) is committed to principles of best practice in
corporate governance.

The Board will conduct itself in accordance with the ASX Corporate Governance Principles and
Recommendations, 2nd Edition (2007) (“Recommendations”) as issued by the ASX Corporate
Governance Council (“the Council”), to the extent that such principles and recommendations are
applicable to an entity of the size and structure of the Company.

The ASX Recommendations are not prescriptions, they are guidelines. The Council recognise that
the range in size and diversity of companies is significant and that smaller companies from the outset
may face particular issues in following all the Recommendations. If a company considers that a
recommendation is inappropriate to its particular circumstances, it has the flexibility not to adopt it.

The Board has adopted the best practice recommendations as outlined by the Council to the extent that
is deemed appropriate considering the current size and operations of Fortis. Therefore, where the Board
considers that the cost of implementing a recommendation outweighs any potential benefits; those
recommendations have not been adopted.

The Board will review on an ongoing basis the corporate governance policies and structures that the
Company has in place to ensure that these are appropriate for the size of the Company and nature of its
activities, and that these policies and structures continue to meet the corporate governance standards
that the Board is committed to.

Summary of Company’s position in relation to ASX Principles and Recommendations:

ASX	PRINCIPLE	AND	                                      COMPANY’S	POSITION:
RECOMMENDATION
Principle	1	–                The Role of the Board
Lay solid foundations
for management and           The Board is responsible for, and has the authority to determine, all matters
oversight                    relating to strategic direction, policies, practices, management goals and the
                             operations of the Company.

                             The Role of Management

                             It is the role of senior management to manage the Company in accordance
                             with the direction and delegations of the Board and the responsibility of the
                             Board to oversee the activities of management in carrying out these delegated
                             duties.

                             The Company’s officers and management have all entered into service
                             contracts which outline the responsibilities of each of the company’s officers
                             and of management personnel when performing their roles for the Company.

                             The Board has established and adopted a Board Charter which can be viewed
                             on the Company’s website (www.fortisminng.com.au).


                                                                                                              29
     Corporate Governance

     Principle	2	–            The Company has two executive directors and three independent non-
     Structure the Board to   executive directors. The Board is an appropriate size to effectively and
     add value                efficiently oversee the management and operations of the Company, based
                              on the present size of the Company’s activities. The Board does consist of a
                              majority of independent directors.

                              The Board is Chaired by Jitto Arulampalam who is not an independent
                              Director. Given Mr. Arulampalam’s significant experience as a Chairman of
                              ASX listed companies, he is seen as the most appropriate Chairman at this
                              critical stage of the Company’s development. The position of Chairman and
                              CEO are not exercised by the same individual.

                              The Board is responsible for the nomination and selection of directors. Given
                              the size of the Company and the nature of its operations, the Board does not
                              believe it to be appropriate to establish a nomination committee at this time.

                              The composition of the Board, its performance and the appointment of new
                              Directors will be reviewed periodically by the Board, taking advice from
                              external advisers where considered appropriate.

                              The Board has agreed the process by which an evaluation will be conducted,
                              by an internal self-assessment based on a questionnaire and analysis of
                              answers from the directors and the company secretary, followed by round
                              table discussion.

                              No formal performance evaluation of the Board and individual directors was
                              carried out during the 2011 year.

     Principle	3	–            Code of Conduct
     Promote ethical and
     responsible decision     The Board has established a Code of Conduct for the Board and Management
     making                   which can be viewed on the Company’s website.

                              The Board is committed to meeting their responsibilities under the
                              Constitution and Corporations Act 2001 (Cth) when carrying out their
                              functions as company officers.

                              Securities Trading Policy

                              The Company has adopted a Securities Trading Policy for directors,
                              officers and employees. The Securities Trading Policy can be viewed on
                              the Company’s website and was released as an ASX announcement on 24
                              December 2010.

                              The purpose of the Securities Trading Policy is to reduce the risk of insider
                              trading and ensure that the Company’s directors, officers and employees
                              are aware of the legal restrictions on trading shares in the Company whilst in
                              possession of undisclosed information concerning the Company.


30
                         The Securities Trading Policy sets out when trading in the Company’s
                         shares by directors, officers and employees is not permitted. Restrictions
                         on trading are imposed by the Company to reduce the risk of insider trading
                         and to minimise the chance that misunderstandings or suspicions arise
                         that the Company’s directors, officers, or employees are trading while in
                         possession of undisclosed information concerning the Company

                         Reporting Unethical or Illegal Practices

                         Company policy requires employees who are aware of unethical or illegal
                         practices to report these practices to management. Any reports of
                         unethical or illegal practices are investigated by the Board. Reporters of
                         unethical practices may remain anonymous.

Principle	4	–            Due to the size of the Company and the nature of its activities, the Board
Safeguard integrity in   has adopted the functions of the Company’s Audit Committee. The Board
financial reporting      is responsible for monitoring and reviewing financial reporting by the
                         Company and carrying out the functions of the Audit and Risk Committee.

                         The Company has adopted a Charter for the Audit and Risk Committee
                         which sets out the committee’s responsibilities, procedures, guidelines and
                         composition. The Audit and Risk Committee Charter can be viewed on the
                         Company’s website.

Principle	5	–            The Company has adopted a Communication and Disclosure Policy to ensure
Make timely and          compliance with the ASX Listing Rules disclosure requirements.
balanced disclosure
                         To comply with the ASX Listing Rules, the Company intends to immediately
                         notify the ASX of information:

                         •     concerning the Company that a reasonable person would expect to have
                               a material effect on the price or value of the Company’s securities;

                         •     that would, or would be likely to, influence persons who commonly
                               invest in securities.

                         The Communication and Disclosure Policy includes processes designed to
                         ensure that Company information:

                         •     is disclosed in a timely manner;
                         •     is factual;
                         •     does not omit material information; and
                         •     is expressed in a clear and objective manner that allows the input of
                               the information when making investment decisions

                         The Company is committed to ensuring all investors have equal and timely
                         access to material information concerning the Company. The Communication
                         and Disclosure Policy can be viewed on the Company’s website.


                                                                                                       31
     Corporate Governance

     Principle	6	–           The Board is committed to ensuring that the Company’s shareholders receive
     Respect the rights of   information relating to the Company on a timely basis and shall endeavour to
     Shareholders            keep shareholders well informed of all material developments of the Company.

                             The Board has adopted a Communications and Disclosure Policy, and as part
                             of this policy, will ensure that all relevant announcements and documents are
                             published on the Company’s website in a prompt fashion.

                             The Company will respect the rights and entitlements of the Company’s
                             shareholders under the Constitution and the Corporations Act 2001 (Cth).

     Principle	7	–           The Board of the Fortis Mining takes a proactive approach to the
     Recognise and           Company’s risk management and internal compliance and control
     manage risk             system. The Board of Fortis Mining is responsible for ensuring that risks
                             and mitigation of these risks are identified on a timely basis and that
                             the Company’s objectives and activities are aligned with the risks and
                             opportunities identified by the Board of Directors.

                             The Board has adopted the functions of the Audit and Risk Committee and
                             is responsible for monitoring, identifying and managing risks, and ensuring
                             that these risk identification and management procedures are implemented
                             and followed.

                             The Company has an Audit and Risk Committee Charter which can be
                             viewed on the Company’s website.

                             The Company has also adopted a Risk Management Policy designed to
                             ensure:

                             •     all major sources of potential opportunity for and harm to the
                                   company (both existing and potential) are identified, analysed and
                                   treated appropriately;
                             •     business decisions throughout the Company appropriately balance
                                   the risk and reward trade off;
                             •     regulatory compliance and integrity in reporting is achieved; and
                             •     the Company’s continued good standing with its stakeholders.

                             The Company intends to establish a Technical Committee in the future that
                             shall be responsible for oversight of, and reporting to the Board on, the
                             status of the Company’s exploration and mining activities from a technical
                             perspective.

                             The Board has received assurance from the CEO and CFO equivalent that
                             the S 259A declaration is founded on a sound system of financial risk
                             management and internal control and the system is operating effectively in
                             all material respects in relation to financial risks.



32
Principle	8	–           The Board is responsible for the Company’s remuneration policy and
Remunerate fairly and   has adopted a Remuneration Policy which outlines the processes by
responsibly             which the Board shall review officer and management remuneration. The
                        Remuneration Policy can be viewed on the Company’s website.

                        Due the size of the Company, the minimal number of Company employees
                        and nature of the Company’s operations, the Board has not established a
                        separate Remuneration Committee.

                        The Company is committed to remunerating its officers and executives
                        fairly and to a level which is commensurate with their skills and experience
                        and which is reflective of their performance.

                        Payment of equity-based remuneration is made in accordance with
                        thresholds set in plans approved by shareholders.

                        There is no scheme to provide retirement benefits other than statutory
                        superannuation to non-executive directors. For details of the amount of
                        remuneration, and all monetary and non-monetary components, for each of
                        the five highest-paid executives during the year and for all directors, refer to
                        the Directors’ report.




                                                                                                           33
     Consolidated Statement Of Comprehensive Income

     for	The	Year	Ended	30	June	2011

                                                            Note                      2011
                                                                                         $

     REVENUE FROM CONTINUING OPERATIONS
     Finance revenue                                          4                    214,804

     TOTAL REVENUE                                                                 214,804

     Employee expenses                                       5a                   (514,663)
     Depreciation and amortisation                           5b                     (2,108)
     Consulting fees                                                              (684,602)
     Legal and other professional fees                                            (206,486)
     Marketing and promotion expense                                               (11,053)
     Regulatory listing fees                                                       (42,717)
     Occupancy expenses                                                            (25,902)
     Telecommunication                                                             (22,477)
     Travel expense                                                               (369,776)
     Finance costs                                                                 (29,034)
     Other expenses                                          5c                   (129,609)
     Realised foreign exchange loss                                                 (3,947)
     Unrealised foreign exchange loss                                             (531,169)
     (Loss) before Income Tax from continuing
     operations                                                                 (2,358,739)
     Income Tax Expense                                       6                           -

     (Loss) after income tax expense for the period                             (2,358,739)

     Other comprehensive loss                                                              -

     Total comprehensive loss for the period                                    (2,358,739)


     Basic (loss) per share (Cents per share)                 7                      (5.45)
     Diluted (loss) per share (Cents per share)               7                      (5.45)


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




34
      Consolidated Statement of Financial Position

      	As	at	30	June	2011	

                                                                            Consolidated Group
                                                           Note                           2011
                                                                                             $

Ass
      Current assets
      Cash and cash equivalents                              8                          85,099
      Other financial assets                                 9                      16,141,023
      Other assets                                          10                      12,851,200

      Total current assets                                                          29,077,322


      Property, plant and equipment                         11                           19,883
      Exploration and evaluation expenditure                12                          880,331

      Total non-current assets                                                          900,214

      Total assets                                                                  29,977,536

      Current liabilities
      Trade and other payables                              13                       2,370,941
      Financial Liabilities                                 14                      11,517,289
      Provision for annual leave.                           15                          28,578
      Total current liabilities                                                     13,916,808

      Non-current liabilities
      Deferred Tax Liability                                                            112,500

      Total non-current liabilities                                                     112,500
      Total liabilities                                                             14,029,308

      Net assets                                                                    15,948,228

      Equity
      Issued capital                                        16                        6,733,525
      Reserves                                              16                      11,573,442
      Accumulated losses                                                            (2,358,739)

      Total equity                                                                  15,948,228
                                                                                                      

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


                                                                                                          35
     Consolidated Statement Of Changes In Equity

     For	the	period	ended	30	June	2011

                                                    Foreign          Share
                                      Contributed Currency           option Accumulated
                                        Equity    Translation       reserve   Losses        Total Equity
                                           $        reserve                      $               $

     Balance as at 3 May 2010                  -          -              -             -              -

     Loss after income tax expenses            -          -              -   (2,358,739)    (2,358,739)


     Total Comprehensive Loss for              -          -              -   (2,358,739)    (2,358,739)
     the period

     Transactions with owners in
     their capacity as owners;
     Seed Capital                       698,300           -              -             -        698,300
     Issue of shares to Vendors         526,700           -              -             -        526,700
     Issue of shares - IPO            3,496,300           -              -             -      3,496,300
     Additional Issue of Shares to                        -              -
     Grand Concord Investments        2,400,000                                               2,400,000
     Limited
     Less: Capital raising costs      (387,775)           -             -              -      (387,775)
     Options issued to settle                 -           -        11,056                        11,056
     liabilities
     Share based payments                      -          -        111,186             -        111,186
     Share Reserve                             -          -     11,451,200             -     11,451,200

     Balance as at 30 June 2011       6,733,525           - 11,573,442       (2,358,739)     15,948,228



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




36
Consolidated Statement Of Cash Flows

For	the	period	ended	30	June	2011

                                                                           Consolidated
                                                                                 Group
                                                             Note                 2011
                                                                                      $

CASH FLOWS FROM OPERATING ACTIVITIES
Interest received                                                                 55,998
Payments to suppliers and employees                                            (948,594)
Net cash used in operating activities                         28               (892,596)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment                                       (21,991)
Purchase of tenements and exploration expenditure                              (219,275)
Loan received                                                                  3,870,475
Loans to other parties                                                       (8,852,339)

Net cash used in investing activities                                        (5,223,130)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares                                                 6,588,600

Capital raising costs                                                          (387,775)
Net cash provided by financing activities                                     6,200,825

Net increase in cash held                                                         85,099

Cash at beginning of financial period                                                  -
Cash at end of financial period                                8                  85,099


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




                                                                                           37
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     Note	1.	Corporate	Information

     The financial report of Fortis Mining Limited (the Company) for the period ended 30 June 2011 was
     authorised for issue in accordance with a resolution of the directors on 2 October 2011. This financial
     report covers the period from 3 May 2010, the date of incorporation, to 30 June 2011, the balance date.

     Fortis Mining Limited is a company limited by shares incorporated in Australia whose shares are
     publicly traded on the Australian stock exchange.

     The nature of the operations and principal activities of the Group are described in the directors’ report.

     Note	2:	Statements	of	Significant	Accounting	Policies

     Basis	of	preparation

           The financial report is a general purpose financial report, which has been prepared in accordance
           with the requirements of the Corporations Act 2001 and applicable Australian Accounting Standards.
           The financial report has also been prepared on a historical cost basis, except for derivative financial
           instruments and available for sale financial assets, which have been measured at fair value.
           During the financial year ended 30 June 2010, the Federal Government introduced amendments to
           the Corporations Act 2001, removing the requirement for consolidated groups to include full parent
           entity financial statements when preparing consolidated financial statements. Royal Assent for
           these amendments was received on 28 June 2010. The Group has adopted these amendments
           for the consolidated financial statements for the period ended 30 June 2011.

           The financial report is presented in Australian dollars.

     a.	   Going	concern	

           For the period ended 30 June 2011 the consolidated entity incurred a loss of
           $2,358,739 from continuing operations, and had net cash outflows from operating activities
           amounting to $892,596. At 30 June 2011 the company has net current assets of $15,160,514,
           including other non-financial assets of $12,851,200. The loans to Ji’an Resources Investment
           Limited have been used to complete the Kazakhstan Potash transaction. If shareholder approval
           is not received for this transaction, the recoverability of the deposits paid by Ji’an and therefore
           Ji’an’s ability to repay the loans to Fortis may be compromised. These conditions indicate a
           material uncertainty that may cast significant doubt about the consolidated entity’s ability to
           continue as a going concern.

           The ability of the consolidated entity to continue as a going concern is dependent either upon the
           successful completion of its strategic acquisition and rights to Potash projects in Kazakhstan and
           the continued availability of funds to enable this to occur or raising sufficient equity or loan funds
           to allow it to meet its obligations. The financial statements have been prepared on the basis that
           the consolidated entity is a going concern, which contemplates the continuity of normal business
           activity, realisation of assets and the settlement of liabilities in the normal course of business.


38
      To this end, the consolidated entity is expecting to fund ongoing obligations as follows

      -   A prospectus is being prepared to raise up to $30 million for ongoing working capital and to
          assist in the final payments due in respect of the Potash acquisition and to enable repayment
          of current loan liabilities. This prospectus is anticipated to be lodged with ASIC in November 2011.
      -   Since balance date the company has raised capital of $13.9 million through equity placement.
          This capital has largely be utilised in further meeting the requirements of the Potash deal.
      -   $12 million of convertible notes have been issued to settle financial liabilities at balance date
          of $10,318,949.
      -   Long term equity facility in place:
          Agreement was reached in April 2011 with US based CITIC-GEM Ltd (“GEM”), to provide long
          term funding for working capital of up to $140 million. The terms of the agreement require
          the company to comply with a number of conditions to ensure ongoing availability of this
          facility. In case of any non-compliance, GEM may provide written notice to the company to
          terminate the facility. As at the date of this report there has been no termination of this facility.
      -   Expected cash flows from strategic acquisition and rights to Potash projects. The future
          strategic direction of Fortis is to acquire the rights of Potash projects. The Board is confident
          this strategic direction will ensure Fortis’s long term success.

Cash flow forecasts prepared by management demonstrate that on the basis of successful capital
raisings and the availability of the GEM facility the consolidated entity has sufficient cash flows to meet
its commitments over the next twelve months. Based on the above factors the financial statements
have been prepared on the basis that the consolidated entity is a going concern, which contemplates
the continuity of normal business activity, realisation of assets and the settlement of liabilities in the
normal course of business.

Should the consolidated entity be unable to continue as a going concern, it may be required to realise
its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts
that differ from those stated in the financial statements. The financial report does not include any
adjustments relating to the recoverability and classification of recorded asset amounts or to the
amounts and classification of liabilities that might be necessarily incurred should the consolidated entity
not continue as a going concern.

b.	   Statement	of	compliance

      The financial report complies with Australian Accounting Standards, which include International
      Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).

c.	   New	Accounting	Standards	and	Interpretations

      The accounting standards that have not been early adopted for the period ended 30 June 2011,
      but will be applicable to the Fortis Mining Ltd in future reporting periods, are detailed below. Apart
      from these standards, we have considered other accounting standards that will be applicable in
      future periods, however they have been considered insignificant to Fortis.



                                                                                                                  39
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     (i)    Transfer of Financial Assets Disclosures
            AASB 2010-6: “Amendments to Australian Accounting Standards - Disclosures on Transfers
            of Financial Assets” was issued in November 2010. AASB 2010-6 adds and amends existing
            disclosure requirements for transfers of financial assets in AASB 7: “Financial Instruments:
            Disclosures”.

            The amendments increase the disclosure requirements for financial assets that are either (legally)
            transferred but no derecognised (due to not meeting the accounting requirements) or derecognised
            but the transferor retains some level of continuing involvement in the financial assets.

            The amendments to AASB 7 are applicable to annual reporting periods beginning on or after 1 July
            2011, with early adoption permitted. It is anticipated that these amendments will have minimal
            impact on the Group as the Group do not have complex financial assets.


     (ii)   Financial Instruments - Classification, measurement and Derecognition
            AASB 9: “Financial Instruments” was re-issued in December 2010 to include the accounting
            requirements for classifying and measuring financial liabilities and the derecognition requirements
            for financial assets and liabilities. Two related omnibus standards AASB 2010-7 ; “Amendments
            to Australian Accounting Standards arising from AASB-9 (December 2010)” and AASB 2009-
            11: “Amendments to Australian Accounting Standards arising from AASB 9” make a number of
            amendments to other accounting standards as a result of the amendments to AASB 9 and must be
            adopted at the same time.

            Most of the added requirements on the classification and measurement of financial liabilities and
            all of the added requirements on derecognition of financial instruments have been carried forward
            unchanged from the existing standard AASB 139: “Financial Instruments - Classification and
            Measurement”. The only change made relates to the requirements for the fair value option for
            financial liabilities, to address the issue of own credit risk. For financial liabilities designated at fair
            value due to changes in own credit risk now generally must be presented in other comprehensive
            income, rather than within profit or loss.

            The amendments to AASB 9 are applicable to annual reporting periods beginning on or after 1
            January 2013, with early adoption permitted. It is anticipated that this change will have minimal
            impact on the Group.

     (iii) Consolidated Financial Statements
           AASB 10: “Consolidated Financial Statements” was issued by the AASB in August 2011 and
           replaces the existing AASB 27: “Consolidated and Separate Financial Statements”. This new
           standard revises the definition of control and related application guidance so that a single control
           model can be applied to all entities. This standard will apply to the Group from 1 July 2013 and
           the Group is currently assessing the impact. Early adoption is permitted.

            There have also been consequential amendments to AASB 27: “Consolidated and Separate Financial
            Statements” resulting from the issuance of AASB 10. These amendments are applicable from 1 July
            2013 and will have no impact on the Group as the Group already comply with the amendments.

40
(iv) Joint Arrangements
     AASB 11: “Joint Arrangements” was also issued by the AASB in August 2011 and provides for
     a more realistic reflection of joint arrangements by focussing on the rights and obligations of the
     arrangement, rather than its legal form. The standard addresses inconsistencies in the reporting
     of joint arrangements by requiring a single method to account for interests in jointly controlled
     entities. This standard will apply to the Group from 1 July 2013 and the Group is currently
     assessing the impact. Early adoption is permitted.

(v)   Disclosure of Interests in Other Entities
      AASB 12: “Disclosure of Interests in other Entities” was issued by AASB in August 2011 and is
      a new and comprehensive standard on disclosure requirements for all forms of interests in other
      entities, including subsidiaries, joint arrangements, associates, special purpose vehicles and other
      off balance sheet vehicles. This standard is applicable from 1 July 2013 and management is
      currently assessing the impacts of the standard, which will be limited to disclosure impacts only.

      There have also been consequential amendments to AASB 128: “Investment in Associates” as a
      result of the above new standard. These amendments are applicable from 1 July 2013 and will
      have no impact on the Group as the Group already comply with the amendments.

(vi) Fair Value Measurement
     AASB 13: “Fair Value Measurement” was issued by AASB in August 2011 and provides a precise
     definition of a fair value is a single source of fair value measurement and prescribes disclosure
     requirements for use across IFRSs. The requirements do not extend the use of fair value
     accounting, but provide guidance on how it should be applied where its use is already required
     or permitted by other standards within IFRS. The standard will apply to Fortis from 1 July 2013,
     although early adoption is permitted. The Group is currently assessing the impact.

(vii) Presentation of Items of Other Comprehensive Income (OCI)
      AS 1: “Presentation of Financial Statements” was amended by the IASB in June 2011 and
      provides improvements to the presentation of items of OCI. The main change is the requirement
      to group items within OCI that will be reclassified to the profit or loss in subsequent periods
      separately, from items of OCI that will not. The amendments also reaffirm existing requirements
      that items of OCI and profit or loss can be presented as either a single statement or two
      consecutive statements. The revised IAS 1 will apply to the Group from 1 July 2012 however,
      early adoption is permitted. These amendments will have no financial impact on Group as these
      changes impact disclosure requirements only.

(viii) Benefits
       IAS 19: “Employee Benefits” was issued by the IASB in June 2011 to replace the existing
       employee benefits standard. The changes in the standard relate to Defined Benefit schemes and
       therefore will not impact Fortis.




                                                                                                             41
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     (ix) Other

          In addition to the above recently issued accounting standards that are applicable in future years,
          Fortis note the following new accounting standards are applicable in future years:

          • AASB 124: “Related Party Disclosures”;
          • AASB 2009-12: “Amendments to Australian Accounting Standards”;
          • AASB 2009-14: “Amendments to Australian Interpretation - Prepayments of a Minimum
            Funding Requirement”;
          • AASB 2010-4: “Further Amendments to Australian Accounting Standards arising from the
            Annual Improvements Project”;
          • AASB 2010-5: “Amendments to Australian Accounting Standards”;
          • AASB 2010-8: “Amendments to Australian Accounting Standards - Deferred Tax: Recovery of
            Underlying Assets”;
          • AASB 2010-9 “Amendments to Australian Accounting Standards - Severe Hyperinflation and
            Removal of Fixed Dates for First-time Adopters”; and
          • AASB 2011-4 “Amendments to Australian Accounting Standards to Remove Individual Key
            Management Personnel Disclosure Requirements”.

          Fortis do not expect these accounting standards to materially impact our financial results upon adoption.

     d)		 Basis	of	consolidation

          The consolidated financial statements comprise the financial statements of Fortis and its
          controlled entities. The financial statements of controlled entities are prepared for the same
          reporting period as the parent company, using consistent accounting policies.

          Adjustments are made to bring into line any dissimilar accounting policies that may exist. All intercompany
          balances and transactions, including unrealised profits arising from intra-group transactions have been
          eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

          Controlled entities are consolidated from the date on which control is transferred to the Group and
          cease to be consolidated from the date on which control is transferred out of the Group.

          Where there is loss of control of a subsidiary, the consolidated financial statements include the
          results for the part of the reporting period during which Fortis had control.

     e)		 Segment	reporting

          During the period principal business of the group has been the development of its tenements
          in Australia, and positioning the entity with relation to raising finance for investment in potash
          resources in Kazakhstan. Management has determined the operating segment based upon
          reports reviewed by the Board and the management that are used to make strategic decisions.
          Management and the Board consider the business from the tenements operational perspective and
          the investment in Kazakhstan. See note 30 for segment disclosures.


42
f)	Foreign	currency	translation

i.    Functional and presentation currency
      Both the functional and presentation currency of Fortis Mining Limited and its Australian
      subsidiaries are Australian dollars ($).

      The functional currency of the foreign subsidiary Fortis Mining (Hong Kong) Limited is Hong Kong
      Dollars. As at reporting date the assets and liabilities of these subsidiaries are translated into the
      presentation currency of Fortis Mining Limited at the rate of exchange ruling at the balance date and
      the profit and loss items are translated at the weighted average exchange rates for the period. The
      exchange differences arising on the retranslation are taken directly to a separate component of equity.

ii.   Transactions & balances
      Transactions in foreign currencies are initially recorded in the functional currency by applying the
      exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in
      foreign currencies are retranslated at the rate of exchange ruling at the balance date.

      Non-monetary items that are measured in terms of historical cost in a foreign currency are
      translated using the exchange rate as at the date of the initial transaction.

      Non-monetary items measured at fair value in a foreign currency are translated using the
      exchange rates at the date when the fair value was determined.

g.	   Cash	and	cash	equivalents

      Cash and short-term deposits in the statement of financial position comprise cash at bank and in
      hand and short-term deposits with an original maturity of three months or less.

      For the purposes of the Statement of cash flows, cash and cash equivalents consist of cash
      and cash equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are
      included within interest-bearing loans and borrowings in current liabilities on the Statement of
      Financial Position.

h.	   Trade	and	other	receivables

      Trade receivables, which generally have 30-90 day terms, are recognised at amortised cost less
      adjustments for impairment or uncollectible amounts. An estimate for doubtful debt is made when
      collection of the full amount is no longer probable. Bad debts are written off when identified.

i.	   Investments	and	other	financial	assets

      Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement
      are classified as either financial assets at fair value through profit or loss, loans and receivables,
      held-to-maturity investments, or available-for-sale investments, as appropriate. When financial
      assets are recognised initially, they are measured at fair value, plus, in the case of investments not


                                                                                                                43
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

         at fair value through profit or loss, directly attributable transactions costs. The Group determines
         the classification of its financial assets after initial recognition and, when allowed and appropriate,
         re-evaluates this designation at each financial period-end.

         All regular way purchases and sales of financial assets are recognised on the trade date i.e.
         the date that the Group commits to purchase the asset. Regular way purchases or sales are
         purchases or sales of financial assets under contracts that require delivery of the assets within the
         period established generally by regulation or convention in the marketplace.


         a. Financial assets at fair value through profit or loss
            Financial assets classified as held for trading are included in the category ‘financial assets
            at fair value through profit or loss’. Financial assets are classified as held for trading if they
            are acquired for the purpose of selling in the near term. Derivatives are also classified as
            held for trading unless they are designated as effective hedging instruments. Gains or losses
            on investments held for trading are recognised in profit or loss.

         b. Held-to-maturity investments
            Non-derivative financial assets with fixed or determinable payments and fixed maturity
            are classified as held-to-maturity when the Group has the positive intention and ability
            to hold to maturity. Investments intended to be held for an undefined period are not included
            in this classification. Investments that are intended to be held-to-maturity, such as bonds,
            are subsequently measured at amortised cost. This cost is computed as the amount initially
            recognised minus principal repayments, plus or minus the cumulative amortisation using
            the effective interest method of any difference between the initially recognised amount and
            the maturity amount. This calculation includes all fees and points paid or received between
            parties to the contract that are an integral part of the effective interest rate, transaction costs
            and all other premiums and discounts. For investments carried at amortised cost, gains and
            losses are recognised in profit or loss when the investments are derecognised or impaired, as
             well as through the amortisation process.

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

         d.    Available-for-sale investments
              Available-for-sale investments are those non-derivative financial assets that are designated
              as available-for-sale or are not classified as any of the three preceding categories. After initial
              recognition available-for-sale investments are measured at fair value with gains or losses
              being recognised as a separate component of equity until the investment is derecognised
              or until the investment is determined to be impaired, at which time the cumulative gain or loss
              previously reported in equity is recognised in profit or loss.



44
j.	   Property,	plant	and	equipment

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

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset.


The depreciation rates used are as follows:
Class	of	Fixed	Asset	 	          Depreciation	Rate
Computer Equipment                       30%
Furniture and Fittings                   10%
Plant and Equipment                      10%


      a. Impairment
         The carrying values of plant and equipment are reviewed for impairment at each reporting
         date, with recoverable amount being estimated when events or changes in circumstances
         indicate that the carrying value may be impaired.

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

          For an asset that does not generate largely independent cash inflows, recoverable amount is
          determined for the cash-generating unit to which the asset belongs, unless the asset’s value in
          use can be estimated to be close to its fair value.

          An impairment exists when the carrying value of an asset or cash-generating units exceeds its
          estimated recoverable amount. The asset or cash-generating unit is then written down to its
          recoverable amount. For plant and equipment, impairment losses are recognised in the income
          statement in the depreciation and amortisation expenses.

      b. De-recognition and disposal
         An item of property, plant and equipment is derecognised upon disposal or when no further
         future economic benefits are expected from its use or disposal.
         Any gain or loss arising on de-recognition of the asset (calculated as the difference between
         the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in
         the period the asset is derecognised.



                                                                                                               45
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     k)	   Trade	and	other	payables

           Trade and other payables are stated at amortised cost. Trade payables and other accounts
           payable are recognised when Fortis Mining becomes obliged to make future payments resulting
           from the purchase of goods and services.

     l)	   Interest-	bearing	loans	and	borrowings

           AAll loans and borrowings are initially recognised at cost, being the fair value of the consideration
           received net of issue costs associated with the borrowing.

           After initial recognition, interest-bearing loans and borrowings are subsequently measured at
           amortised cost using the effective interest method. Amortised cost is calculated by taking into
           account any issue costs, and any discount or premium on settlement.

           Gains and losses are recognised in the income statement when the liabilities are derecognised and
           as well as through the amortisation process.

     m)	 Provisions	and	employee	leave	benefits

           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 outflow of resources embodying economic benefits
           will be required to settle the obligation and a reliable estimate can be made of the amount of the
           obligation.

           When 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 the
           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. 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.

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

           a. Wages, salaries, annual leave and sick leave
              Liabilities for wages and salaries, including non-monetary benefits, annual leave and
              accumulating sick leave expected to be settled within 12 months of the reporting date are
              recognised in short terms provisions in respect of employees’ services up to the reporting
              date. They are measured at the amounts expected to be paid when the liabilities are settled.
              Liabilities for non-accumulating sick leave are recognised when the leave is taken and are
              measured at the rates paid or payable.


46
      b. Long service leave
         The liability for long service leave is recognised in the provision for employee benefits
         and measured as the present value of expected future payments to be made in respect of
         services provided by employees up to the reporting date using the projected unit credit
         method. Consideration is given to expected future wage and salary levels, experience of
         employee departures, and periods of service. Expected future payments are discounted using
         market yields at the reporting date on national government bonds with terms to maturity and
         currencies that match, as closely as possible, the estimated future cash outflows.

      c. Superannuation
         Payments are made to employee defined contribution superannuation plans and is charged as
         expenses when incurred. The Group and its controlled entities have no legal obligation to cover
         any shortfall in the plan’s obligation to provide benefits to employees on retirement.

n.	   Share-based	payment	transactions
      Goods or services received or acquired in a share-based payment transaction are recognised
      as an increase in equity if the goods or services were received in an equity-settled share-based
      payment transaction or as a liability if the goods and services were acquired in a cash settled
      share-based payment transaction.

      For equity-settled share-based transactions, goods or services received are measured directly at
      the fair value, measured at a market price, of the goods or services received provided this can
      be estimated reliably. If a reliable estimate cannot be made the value of the goods or services is
      determined indirectly by reference to the fair value of the equity instrument granted.

o.	   Contributed	Equity

      Ordinary share capital is recognised at the fair value of the consideration received by the company.
      Any transaction costs arising on the issue of ordinary shares are recognised directly in equity
      as a reduction of the share proceeds received. Ordinary share capital bears no special terms or
      conditions affecting income or capital entitlements of the shareholders.

p.	   Revenue	Recognition

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

      a. Sale of Goods
         Revenue is recognised when the significant risks and rewards of ownership of the goods have
         passed to the buyer and the costs incurred or to be incurred in respect of the transaction can
         be measured reliably. Risks and rewards of ownership are considered passed to the buyer at
         the time of delivery of the goods to the customer.




                                                                                                             47
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

           b.   Rendering of Services
                Revenue for the services delivered by the Group such as outsourcing management services.
                These services are recognised on completion of the delivery of the service.

           c.   Commission
                Revenue is recognised upon the sale of goods at the time of sale.

           d.   Interest income
                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.

     q.	    Income	tax

            Deferred income tax is provided using the balance sheet liability method, providing for 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 the 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 can be controlled and it is probable that 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 associated 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.




48
       The carrying amount of deferred income tax assets is reviewed at each balance date and reduced
       to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
       part of the deferred income tax asset to be utilised.

       Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
       to the period 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 balance date.

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

r.		   Other	taxes

       Revenues, expenses and assets are recognised net of the amount of GST except:

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

       • Receivables and payables are stated with the amount of GST included.

       The net amount of GST recoverable from, or payable to, the taxation authority is included as part
       of receivables or payables in the statement of financial position

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

s.	    Earnings	per	share

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

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

       • Costs of servicing equity (other than dividends) and preference share dividends;

       • The after tax effect of dividends and interest associated with dilutive potential ordinary shares
         that have been recognised as expenses; and

       • other non-discretionary changes in revenues or expenses during the period that would result
         from the dilution of potential ordinary shares; divided by the weighted average number of
         ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.



                                                                                                                      49
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011
     t.	   Significant	judgments	and	key	assumptions

           In applying accounting policies, management is required to make judgments, estimates and
           assumptions about carrying values of assets and liabilities that are not readily apparent from
           other sources. The estimates and associated assumptions are based on historical experience and
           various other factors that are believed to be reasonable under the circumstances, the results of
           which form the basis of making the judgments. Actual results may differ from these estimates.

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

           Judgments made in applying accounting policies that have the most significant effect on the
           amounts recognised in the financial statements are in relation to management’s review of the
           carrying value of exploration and evaluation assets.

           There have been no other significant judgments made in applying accounting policies that the Directors
           consider would have a significant effect on the amounts recognised in the financial statements.

     u.	   Impairment	of	assets

           At each reporting date, Fortis Mining assesses whether there is any indication that an asset may
           be impaired. Where an indicator of impairment exists, Fortis Mining makes a formal estimate of
           recoverable amount. Where the carrying amount of an asset exceeds its 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 groups of 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.

           An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable
           amount. Impairment losses are recognised in the statement of comprehensive income, unless an
           asset has previously been revalue, in which case the impairment loss is recognised as a reversal to
           the extent of that previous revaluation with any excess recognised though profit or loss.

           Impairment losses are reversed when there is an indication that the impairment loss may no longer
           exist and there has been a change in the estimate used to determine the recoverable amount. An
           impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
           the carrying amount that would have been determined, net of depreciation or amortisation, if no
           impairment loss had been recognised.

50
v.	   Exploration	and	evaluation	expenditure

      Exploration and evaluation expenditures in relation to separate areas of interest, for which rights of
      tenure are current, are capitalised in the period in which they are incurred and are carried at cost
      less accumulated impairment losses where the following conditions are satisfied:

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

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

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

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

      Capitalised exploration costs are reviewed each reporting date as to whether an indication of
      impairment exists. If any such indication exists, the recoverable amount of the capitalised
      exploration costs is estimated to determine the extent of the impairment loss (if any). Where
      an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
      revised estimate of its recoverable amount, but only to the extent that the increased carrying
      amount does not exceed the carrying amount that would have been determined had no impairment
      loss been recognised for the asset in previous years.

      Where a decision is made to proceed with development, accumulated expenditure will be tested
      for impairment, transferred to development properties, and then amortised over the life of the
      reserves associated with the area of interest once mining operations have commenced.

      Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation
      activities are provided for as part of the cost of those activities. Costs are estimated on the basis
      of current legal requirements, anticipated technology and future costs. Estimates of future costs
      are re-assessed at each reporting date.

Note	3	.Financial	risk	management	objectives	and	policies

The Group’s principle financial instruments comprise financial assets – loans receivable, receivables,
payables and cash and short term deposits.

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

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency
risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different

                                                                                                               51
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011
     types of risk to which it is exposed. These include monitoring levels of exposure to interest rate and
     foreign exchange risk and assessments of market forecasts for interest rate, foreign exchange and
     commodity prices. Aging analyses and monitoring of specific credit allowances are undertaken to
     manage credit risk, liquidity risk is monitored through the development of future rolling cash flow
     forecasts.

     The Board reviews and agrees policies for managing each of these risks as summarised below.
     Primary responsibility for identification and control of financial risks rests with the Chief Executive Officer under
     the authority of the Board. The Board reviews and agrees policies for managing each of the risks identified below,
     including the setting of limits for credit allowances, and future cash flow forecast projections.

     Risk	Exposures	and	Responses

     Interest	rate	Risk

     The Group’s exposure to market interest rate related primarily to the Group’s cash deposits.

     At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian
     Variable interest rate risk that are not designated in cash flow hedges.

     	     	   	      	        	        	        Consolidated
     	     	   	      	        	        	        							2011	
     	     	   	      	        	        	        									$	
     Financial Assets
     Cash & cash equivalents                         85,099
     Net                                             85,099

     The company’s financial liabilities include interest bearing loans. However, these loans are short term
     facilities and are at fixed interest rates, and are accordingly not considered subject to interest rate risk.

     The directors have reviewed the Groups exposure to interest rate risk and do not consider it to be
     significantly impacted by sensitivity to interest rate movements.

     Foreign	Currency	Risk

     At 30 June, the Group had the following exposure to foreign currency that is not designated in cash flow hedges:

     	     	 	    	            	        	        	        	        	        Consolidated
     	     	 	    	            	        	        	        	        	        							2011	
           	 Assets
     	Financial 	 	            	        	        	        	        	        									$


     Cash & cash equivalents – HKD                                                6,093

     Loans advanced – US$6,000,000                                           5,820,673


52
The directors have reviewed the Groups exposure to foreign exchange currency risk and consider
that there is only significant exposure to movements in USD exchange rates. Given the volatility in the
exchange rates over the last 3 months, a variance of 15% is considered an appropriate measure of
sensitivity to exchange risk. A variation of the exchange rate of 15% would impact the net assets of the
entity as follows:-

                                                                    Consolidated      !
                                                                           2011       !
                                                                              AU$     !

Impact on loss before tax of the economic entity
15% improvement in AUD/USD exchange rate                               873,101
15% fall in AUD/USD exchange rate                                     (873,101)
Impact on net assets/equity of the economic entity
15% improvement in AUD/USD exchange rate                               873,101
15% fall in AUD/USD exchange rate                                     (873,101)


The group has exposure to foreign currency risk through its operations in Asia. It also has exposure
to foreign exchange risk through acquisition of investors that is denominated in foreign currency. The
group mitigate the risk by completing the foreign currency transactions on a timely basis to reduce
exposure to movements in exchange rates.

Liquidity	Risk

The consolidated entity financial liabilities at 30 June 2011 are all current liabilities that are repayable in
the normal course of business in the short term.

The company monitors its cash flows on an ongoing basis to ensure it can meet its liabilities.

Price	Risk

The Group had no significant price risk at either 30 June 2011.

Credit	Risk

Credit risk arises from the financial assets of the group, which comprise cash and cash equivalents,
and other financial assets. The Group’s exposure to credit risk arises from potential default of the
counter party, with maximum exposure equal to the carrying amount of these instruments. Exposure at
balance date is as follows: -




                                                                                                                  53
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

                                                          Carrying
                                                          Amount
                                                           2011
                                                             AU$

     Financial Assets
     Cash and cash equivalents                               85,099
     Loans advanced                                      16,141,023

     Total Financial Assets                              16,226,122

     Loans provided have been provided to Ji’an Resources Pty Ltd and is detailed further in Note 9.
     The loans advanced are neither past due or considered to be impaired.

     Fair	value

          (i) The following methods and assumptions are used to determine the net fair values of
              financial assets and liabilities:

               Cash, cash equivalents and financial liabilities: The carrying amount approximates fair
               value because of their short term to maturity.

               Trade receivables and payables: The carrying amount approximates fair value because of
               their short term to settlement.

          (ii) Aggregate net fair values and carrying amounts of financial assets and financial liabilities at
               the balance date are:
                                                    Carrying Amount        Fair Value
                                                          2011               2011
                                                          AU$                 AU$

     Financial Assets
     Cash and cash equivalents                          85,099                 85,099
     Loans advanced                                 16,141,023             16,141,023


     Total Financial Assets                         16,226,122             16,226,122
     Financial Liabilities
     Accounts payable and sundry creditors            2,370,941             2,370,941
     Loans received
                                                    11,517,289             11,517,289

     Total Financial Assets                         13,888,230             13,888,230

     Net Financial Assets                             2,337,892             2,337,892



54
     Total Financial Assets                            8,738,163       8,738,163
     Financial Liabilities
     Accounts payable and sundry creditors             5,780,271       5,780,271

     Total Financial Liabilities                       5,780,271       5,780,271

    Note	4.	Revenue

                                             Consolidated
                                             Group 2011
                                                  $

4   Finance revenue
    Interest income                             214,804
                                                214,804

    Interest income was derived from bank deposits and accrued on the balance outstanding from Ji’an
    Resources Investments Limited, as disclosed in note 9.


    Note	5	Expenses




                                                             Consolidated
                                                                Group
                                                                2011
                                                                  $

    a)     Employee benefits expense
           Salaries and Directors Fees                           351,782
           Superannuation                                         23,117
           Share based payments                                  111,186
           Leave Provisions                                       28,578
                                                                 514,663

    b)     Depreciation, amortisation &
           impairment
           Depreciation –Computer                                   2,009
           Depreciation – Furniture                                    99
                                                                    2,108

    c)     Other expenses
           FBT                                                     21,242
           Translation fee                                         64,575
           Printing & Stationary                                   13,586
           Other expenses                                          30,206

                                                                129,609

                                                                                                       55
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     d)      Included in consulting fees is $620,000 of accrued fees in relation to consultancy services
             provided by Grand Concord Investment Limited for services in assisting in making a strategic
             acquisition in Asia. The agreement for the acquisition of Ji’an Resources Investment Limited
             satisfied this consultancy service and thus the fee is payable. The expense is valued in relation
             to the number of shares contracted to be issued as payment for the services provided. As per
             the service agreement dated 31 January 2011, Fortis is required to issue 2 million shares to
             Grand Concord for consulting services provided. The 2 million shares were issued subsequent
             to the year end in settlement of this expense.

     Note	6		Income	Tax	expenses


                                                                                 Consolidate
                                                                                   Group
                                                                                    2011
                                                                                      $

     (a)   Income tax expense comprises:
           Current tax expense                                                               -
           Deferred tax expense                                                              -

           Income tax expense                                                                -

     (b) Reconciliation between prima facie tax on loss from ordinary
         activities to statutory income tax expense

           Prima facie tax (benefit) on loss from ordinary activities
           before income tax at 30%                                                (707,621)
           Add tax effect of:
           Non-deductible items                                                      973,694

                                                                                   (266,073)

           Less tax effect of:
           Losses Carried Forward Not Recognised                                   (266,073)
           Income tax expense                                                                -


     (c) Deferred Tax Assets and Liabilities


           Deferred tax liabilities                                                  112,500

     Deferred tax liabilities arise on the acquisition of the Jal1 Pty Ltd in October 2010. Jal1 Pty Limited is no
     deferred tax assets that can be offset against this liability at the reporting date.




56
The consolidated entity and parent have not recognised any deferred tax assets in respect to the current period.

There are unrecognised deferred tax assets arising from tax losses amounting to an estimated $266,073. The
benefit of losses is not brought to account as realisation is not currently regarded as probable. These losses
will only be available for recoupment if:

     (i) The Group derives future assessable income of a nature and of an amount sufficient to enable
           the benefits from the deduction for the losses to be realised;
     (ii) the Group continues to comply with the conditions for deductibility imposed by the law; and
     (iii) No changes in tax legislation adversely affect the Group in realising the benefit from the
           deductions for the losses.

Note	7	Earnings	per	Share

Basic earnings or loss per share is calculated by dividing net profit or loss for the period attributable to
ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding
during the period.

Diluted earnings or loss per share amounts are calculated by dividing the net profit or loss attributable
to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding
during the period plus the weighted average number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares into ordinary shares.

!
Weighted average number of ordinary shares has been calculated from the date of listing on the ASX.

                                                                          Consolidated
                                                                                Group
                                                                                 2011
                                                                                     $
The following reflects the income and share data used in the
basic and diluted earnings per share computations:



Net loss attributable to ordinary equity holders of the parent              (2,358,739)

                                                                                     No.

Weighted average number of ordinary shares outstanding
during the year used in the calculation of basic and diluted EPS            43,332,768

Potential changes from share options are excluded from the
calculation of diluted EPS because they are anti-dilutive.




                                                                                                                   57
     Weighted average number of ordinary shares outstanding during
     the year used in the calculation of basic and diluted EPS

                                                                                        29,438,082
     Notes To The Financial Statements
     Potential changes from share options
     for	The	Period	Ended	30	June	2011 are excluded from the
     calculation of diluted EPS because they are anti-dilutive.
     Note	8			Cash	and	Cash	Equivalents

                                                                     Consolidated
                                                                      Group 2011
                                                                          $

     Cash at bank and in hand                                           85,099


     Reconciliation to Statement of Cash flows
     Cash at the end of the financial year as shown in
     the statement of cash flows is reconciled to
     items in the balance sheet as follows:

     Cash and cash equivalents in statement of cash flows               85,099

     Note	9			Other	Financial	Assets

                                                                       Consolidated
                                                                             Group
                                                                              2011
                                                                                  $
     Loans advanced – secured (i)                                        5,820,723
     Loans advanced – unsecured (ii)                                    10,320,300
     Loan advanced                                                      16,141,023
     
                                                                            

          (i) The Economic Entity has loaned funds to Ji’an Resources Investment Limited under an
              agreement dated 17 March 2011. The loan provides funds to be applied by Ji’an Resources
              Investments Limited to complete the Kazakhstan Potash transaction Documents, being (i)
              the Share Sale and Purchase Agreement, dated 29 July 2010, between Ji’an Resources
              Investment Limited, Goldquest Services Inc. and others as amended in the Additional
              Agreement #1 dated 7 March 2011, and (ii) the Consultancy Services Contract between Ji’an
              Resources Investment Limited and Celeric Continental Limited, dated 7 March 2011.

     The terms of the loan are as follows: -

     Loan facility                                   US$6,000,000
     Interest Rate                                   10%
     Termination Date                                30 October 2011

     The loan is secured by a personal guarantee from a director of Ji’an.

          (ii) The loan represents further funds loaned to Ji’an Resources Investments Limited to be applied
               to complete the Kazakhstan Potash transaction Documents, as noted in (i) above. These loan
               funds represent the funds raised under the convertible note agreements (refer note 14).

58
Note	10	Other	Assets

                                                            Consolidated
                                                               Group
                                                                 2011
                                                                    $

Financing fees paid in advance                             12,851,200

                                                           12,851,200
The Economic Entity has entered into a finance agreement, the details of which are outlined in note 25.
As part of the agreement, Fortis must pay a commitment fee of $1.4 million and issued 17,000,000
options, valued at $11,451,200, to secure the facility. As this facility is an equity facility, these amounts
will be debited to share capital if a draw down occurs. If the agreement is terminated before any
drawdown occurs, then $8,083,200 (12 million options) will be debited to share capital and $3,368,000
(5 million options) and the $1.4 million commitment fee will be expensed.

Note	11	Properties,	Plant	and	Equipment


                                                          Computer       Fixtures &
                                                         Equipment          Fittings            Total
                                                                 $                 $               $

Cost
At beginning of the period                                        -               -                -
Additions                                                    12,565           9,426           21,991

At 30 June 2011                                              12,565           9,426           21,991

Accumulated depreciation
At beginning of the period                                          -              -                 -

Charge for the year                                            2,009              99            2,108

At 30 June 2011                                                2,009              99            2,108
Net Book Value                                               10,556           9,327           19,883




                                                                                                                59
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     Note	12	Explorations	and	Evaluation	Expenditure

                                                                 Consolidated
                                                                 Group 2011
                                                                      $
      Opening Balance                                                      -
      Acquisition of Tenements                                      826,532
                                                                Consolidated
      Expenditure Incurred                                           53,799
                                                                Group 2011
      Amount Written off                                             $     -
     Opening Balance                                                       -
      Closing Balance                                                880,331
     Acquisition of Tenements                                       826,532
     Expenditure Incurred                                            53,799
     (a)	
     Amount Recoverability	of	costs
              Written off                                                  -
                                                                Consolidated
             Recoverability of the carrying amount of the exploration and evaluation assets disclosed above
                                                                 Group 2011
     Closing Balance                                                880,331
             is dependent upon the successful development and commercial exploitation, or alternatively,
                                                                       $
             sale of the respective areas of interest.
      CURRENT
     (b)	    Fair	value	of	exploration	and	evaluation	assets Consolidated
                                                                   Group 2011
             All of the Group’s exploration and evaluation assets are recognised at historical cost.
      Short-Term Employee Entitlements                                  $
              Annual Leave                                              28,578
     CURRENT
     (c)	    Restrictions	on	title	and	exploration	and	evaluation	assets	pledged	as	security
             None of the Group’s exploration and evaluation assets have been pledged as security and there
             are currently no restrictions on the Group’s title to these assets.
     Short-Term Employee Entitlements
     (d)	    Annual Leave
             Leased	assets                                             28,578
             None of the Group’s exploration and evaluation assets are subject to contractual finance lease
             commitments.                                           Consolidated
                                                                    Group 2011
     Note	13			Trade	and	Other	Payables                                  $
      CURRENT
                                                               Consolidated
      Trade & Other payables                                     2,370,941
                                                               Group 2011
                                                                    $
                                                                 2,370,941
     CURRENT

     Trade & Other payables                                     2,370,941

                                                                  2,370,941
             Included in other payables are: -
             -       accrued consultant’s fees of$620,000 that were settled subsequent to the balance date
                     by the issue of shares to the consulting firm.

             -       $1.4 million accrued commitment fee under the equity line of credit (refer note 25).




60
Note	14	Financial	Liabilities

                                                           Consolidated
                                                                 Group
                                                                  2011
                                                                      $

CURRENT
Related party loans                                           1,198,340
Convertible note facility                                    10,318,949

                                                             11,517,289

The related party loan is from EURO Petroleum Limited, and the details are disclosed in Note 26

On 28 April 2011 the Company entered into a convertible note deed pole under which 12 million 6%
convertible notes were to be issued for $12 million. The notes were convertible into Ordinary Shares
of Fortis, at the option of the holder, at any time after the Fortis General Meeting approving them until
26 April 2012, at which time the notes are redeemable. The meeting was held on 30 June 2011. The
conversion rate is one share for every two notes held, with four options over shares in Fortis. The
options are exercisable at $2 and expire six months from the date of grant.

The funds were raised and credited directly by the investor to settle payments due by Ji’an Resources
Investment Limited to meet the requirements of the Kazakhstan Potash transactions. The final
$1,681,051 to be raised under the convertible notes and appropriate confirmation of receipt of by the
parties to the Kazakhstan Potash transactions and the formal application of the notes were not received
until 11 August 2011 and the notes were issued on 12 August 2011. The notes will earn interest from
this date.

These funds are treated as loan funds until 12 August 2011 at which time the $12 million convertible
note will be recognised and in accordance with Australian Accounting Standards the note will be
separated between its equity and liability components.

Note	15	Provisions	for	Employee	Benefits

                                                                  Consolidated
                                                                  Group 2011
                                                                        $

 CURRENT
 Short-Term Employee Entitlements
          Annual Leave                                                28,578




                                                                                                            61
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     Note	16	Issue	Capital

     EQUITY
     Ordinary Shares                                                           2011             2011
                                                                        No of Shares               $
     Shares issued                                                        45,612,165      6,393,525
     Shares to be issued                                                     100,000          40,000

                                                                          45,712,165      6,733,525


     Ordinary Shares                                                           2011             2011
                                                                        No of Shares               $
     At the beginning of the reporting period                                        -              -

     Issues of ordinary shares during the period
     Seed capital                                                         15,230,665        698,300
     Shares issued to creditors in lieu of settlement                        300,000          22,500
     Shares issued to tenement venders                                     1,700,000        129,200
     Shares to acquire Jal1 Pty Ltd                                        5,000,000        375,000
     Capital raising share issue                                          17,481,500      3,496,300
     Issue of Shares to Grand Concord Investments Limited                  5,900,000      2,360,000
     Transaction costs related to share issue                                -             (387,775)

     At Reporting Date (ASX)                                              45,612,165      6,693,525
     
                                                                              
              

     Fully paid ordinary shares carry one vote per share and carry rights to dividends.

     At 30 June 2011 there were no partly paid shares outstanding.

     Ordinary shareholders are entitled to participate in dividends and the proceeds on winding up of the company
     in proportion to the number of and amounts paid on the shares held. This is subject to the prior entitlements
     of the cumulative redeemable preference shares which are classified as liabilities. Every ordinary shareholder
     present at a meeting in person or by proxy is entitled to one vote on a show of hands or by poll.

     Shares	to	be	issued
                                                                                 2011           2011
     Ordinary Shares
                                                                        No of Shares                $

     Final issue of shares to be issued to Grand Concord
     Investments Limited                                                     100,000          40,000


62
Shareholder approval was provided for the issue of these shares on 30 June 2011, and the shares were
issued on 5 July 2011.


Share Option Reserve                                                     2011            2011
At the beginning of the period                                   No of Options              $

Unlisted options to tenement vendors (expiry date 7                    850,000         11,056
September 2012)
Unlisted options to the company directors (exercisable               7,000,000        103,776
between 27 October 2011 and 27 October 2013)
Unlisted Option to Grand Concord Investments Limited                   100,000          7,410
(expiry date 01st February 2014)
Unlisted options to CITI-GEM Funding Management                    17,000,000 11,451,200
(expiry date 30 June 2016)


At Reporting Date                                                  24,950,000 11,573,442


Full details and exercise of options during the financial period are contained in Note 29 – Share Based
Payments.

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

Note	17	Acquisition	of	Jal1	Pty	Ltd
On 14 October 2010, Fortis Mining Ltd entered into a Share Acquisition Agreement to acquire all of the
issued capital of Jal1 Pty Ltd (Jal1). Acquisition by Fortis of 100% of the issued share capital of Jal1
owning all beneficial interests in five tenements in North Yandal, Western Australia. Jal1 was previously
owned by Faurex Pty Ltd (Faurex).

In consideration for the acquisition, Fortis has issued 5,000,000 fully paid ordinary shares to Faurex,
fair valued at 7.5 cents by the Company. As at the settlement of the acquisition, Jal1 owed $ 35,000 to
Faurex, of which $10,000 has been paid on acquisition and the balance payable at the time of the listing
of the Company on ASX.
                                                                               Recognised on
                                                                                acquisition
                                                                                    $

Net Assets Acquired (at fair value)
Exploration and evaluation expenditure                                                522,500
Trade and other payables                                                             (35,000)
Deferred tax liabilities                                                            (112,500)

                                                                                      375,000


Acquisition consideration:                                                                                  63
         Net Assets Acquired (at fair value)
         Exploration and evaluation expenditure                                                    522,500
         Trade and other payables                                                                 (35,000)
         Deferred tax liabilities                                                                (112,500)
     Notes To The Financial Statements
                                                                                                  375,000
     for	The	Period	Ended	30	June	2011

         Acquisition consideration:

         Shares issued
         5 million fully paid ordinary shares in Fortis at a fair value of 7.5 cents per
         share determined by the Board                                                            375,000


     Note	18	Subsidiaries	

     The consolidated financial statements incorporate the assets, liabilities and results of the following
     subsidiaries in accordance with the accounting policy described in Note 2.


     Name	of	entity						      																							Country	of	Incorporation	    Equity	holding
                                                                                        	2011
     	          	        	     	        	        	        	        	         	     	       %
     Fortis Mining (Hong Kong) Limited                 Hong Kong                           100
     Jal 1 Pty Ltd                                     Australia                           100


     Note	19	Parent	Entity

     As at, and throughout, the financial period ending 30 June 2011 the parent company of the Group was
     Fortis mining Ltd. The results and financial position of the parent entity are detailed below.
                                                                                      Parent
                                                                                       2011
                                                                                           $

     RESULT OF THE PARENT ENTITY
     Loss for the period                                                          (2,356,822)
     Other comprehensive Income                                                             -

     TOTAL COMPREHENSIVE INCOME FOR THE PERIOD                                    (2,356,822)

     FINANCIAL POSITION OF THE PARENT ENTITY AT
     PERIOD END

     Total Current assets                                                         26,242,289
     Non-current assets                                                              900,214

     Total assets                                                                 27,142,503

     Current liabilities                                                          11,079,858
     Non-current liabilities                                                         112,500

     Total liabilities                                                            11,192,358

64   Total equity of the parent entity comprising of:
     Share capital                                                                 6,733,525
FINANCIAL POSITION OF THE PARENT ENTITY AT
PERIOD END

Total Current assets                                                    26,242,289
Non-current assets                                                         900,214

Total assets                                                            27,142,503

Current liabilities                                                     11,079,858
Non-current liabilities                                                    112,500

Total liabilities                                                       11,192,358

Total equity of the parent entity comprising of:
Share capital                                                             6,733,525
Reserves                                                                11,573,442
Accumulated losses                                                      (2,356,822)

Total equity                                                            15,950,145


The parent company has not entered into any guarantees in respect to its controlled entities or
associates.

The accounting policies of the parent entity are consistent with those of the consolidated entity, as
disclosed in note 2(d).

Capital	Commitments
There are no commitments for the acquisition of plant and equipment contracted for at the reporting date.

Contingent	Liabilities
The parent entity is not subject to any liabilities that are considered contingent upon events known at
balance date

Note	20	Contingent	Liabilities

As part of the financing agreement outlined in note 10 and note 25, if the company draws down on it
equity share agreement a further $1.4million will be incurred and is payable within 12 months of the
date of the agreement.

Note	21	Capital	commitments	–	Property,	plant	and	equipment

There are no commitments for the acquisition of plant and equipment contracted for at the reporting date.

Note	22	Expenditure	Commitments

                                               Consolidated
                                               Group 2011
                                                      $

Exploration Expenditure – Western Australia        415,200

                                                   415,200


                                                                                                            65
                                                               $

       Exploration Expenditure – Western Australia       415,200

                                                         415,200
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     Note	23	Capital	and	Leasing	Commitments


                                                     Consolidated
                                                      Group2011
                                                          $

       Operating Lease Commitments
       Non-cancellable operating leases
       contracted for but not capitalised in the
       financial statements
       Payable – minimum lease payments
       – not later than 12 months                          38,792
       – between 12 months and 5 years                     65,170

                                                          103,962


     Payments	recognised	as	an	expense

     Minimum Lease payments – rental lease                    $23,870

     Note	24	Capital	Management

     When managing capital, management’s objective is to ensure the entity continues as a going concern
     as well as to maintain 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 entity.

     Management are constantly adjusting the capital structure to take advantage of favourable costs of
     capital or high returns on assets. As the market is constantly changing, management may change the
     amount of dividends to be paid to shareholders, return capital to shareholders, issue new shares or sell
     assets to reduce debt.

     During 2011, management did not pay any dividends. Management is reviewing plans to issue further
     shares on the market.
     There has been no change to the strategy adopted by management to control the capital of the entity.

     Note	25	Finance	facility	arrangements

     At 30 June 2011, the company had access to $140 million equity facility with CITIC GEM Limited (the
     Financier). The equity facility may be drawn at any time before the date 3 years from the date of the
     equity facility agreement, 18 April 2011. For the company to drawdown on the facility, the company
     must notify the Financier the amount the company wishes to drawdown, the Financier must (a) give the
     company notice of the number of drawdown shares it will subscribe for and the price per drawdown
     share, (b) subscribe for the drawdown shares at the purchase price, and (c) pay the company draw-
     down amount. The company must allot and issue the drawdown shares to the Financier or its nominee


66
and lodge with ASX the Listing Application in respect of the drawdown shares and pay any fees or costs
associated with it.

The financier will have the right to terminate the agreement for events including a material change in
ownership, insolvency, and other material events in the company. The agreement may be terminated by
the company by notice in writing to the Financier on or before the date 6 months from the date of the
agreement, 18 April 2011. As consideration for the facility, the company issued 17 million options at a
fixed exercise price of $2 per option with an exercise period of 5 years. On issue the 17 million options
were valued at $11,452,200. In addition, the Financier will receive a commitment fee of $2.8 million
which is payable by the company in two tranches of $1.4 million each, payable in six months and 12
months’ time. If the company terminates the agreement by 18 October 2011, the first tranche of the
commitment becomes immediately payable and 12 million options may be cancelled immediately by
the company without additional payment.

At reporting date, Fortis was committed to pay $1.4 million as the first instalment of the commitment
fee, and had issued 17 million options in respect of the this facility. These amounts have been recorded
as other assets in note 10.

Note	26	Related	Party	disclosures

a.      Loan Disclosures

EURO Petroleum Limited Loan - $1,198,340

Jitto Arulampalam and Frank Cannavo, have a financial interest in EURO Petroleum Limited and are
directors of the Company.
The loan advanced by EURO Petroleum Limited is a short term loan repayable on 26 August 2011, and is
loaned at an interest rate of 10% per annum.

The ultimate parent entity in the wholly-owned group is Fortis Mining Limited.


b. Key Management Personnel Remuneration                                Consolidated
                                                                              Group
                                                                               2011
                                                                                   $
Short-term Benefits
Cash Salary, Fees and Short-term Compensation Absences                       363,323
Post-Employment Benefits
Superannuation                                                                19,558
Share-based Payments                                                         111,186

                                                                             494,067




                                                                                                            67
     a. Short-term Benefits
     Cash Salary, Fees and Short-term
     Compensation Absences                        Consolidated
                                                 276,788
     Post Employment Benefits                     Group 2011
     Superannuation                                    $
                                                   13,210
     Notes To The Financial Statements
     Share-based Payments
     a. Short-term Benefits                      103,776
     for	The	Period	Ended	30	June	2011
     Cash Salary, Fees and Short-term            393,774
     Compensation Absences
     c. Shareholdings                            276,788
     Post Employment Benefits
     Superannuation                                13,210
     Number of Shares held by Key Management Personnel – 2011
     Share-based Payments                        103,776
                                                      393,774          Granted as
                                                                          Shares
                                                            Opening     during the       Closing
     Directors                                              Balance   the Period No.     balance

     Mr Jitto Arulampalam                                      -       3,020,000 3,020,000
                                                                       Granted as
     Mr Frank Cannavo                                          -       3,140,000 3,140,000
                                                                          Shares
     Mr Paul Bitetto                                           -
                                                            Opening       50,000
                                                                        during the    50,000
                                                                                     Closing
     Directors                                              Balance   the Period No. balance
                                                               -       6,210,000 6,210,000
     Mr Jitto Arulampalam                               -        3,020,000
                                                                 Granted as            3,020,000
     d. Frank holdings
     Mr OptionCannavo                                   -        3,140,000
                                                                 Stock option          3,140,000
     Mr Paul Bitetto                                    -
                                                    Opening       during the
                                                                    50,000                50,000
                                                                                          Closing
     Number of Share Options held by Key Management Personnel – the Period No.
                                                    Balance 2011                          balance
                                                        -        6,210,000             6,210,000
     Jitto Arulampalam                                  -        3,000,000             3,000,000
     Frank Cannova                                      -        Granted as
                                                                 3,000,000             3,000,000
     Paul Bitetto                                       -        Stock option
                                                                   500,000               500,000
     Terry Grammer                                  Opening       during the
                                                                   500,000                Closing
                                                                                         500,000
                                                    Balance the Period No.                balance
                                                        -        7,000,000             7,000,000
     Jitto Arulampalam                                  -        3,000,000             3,000,000
     Frank Cannova                                      -        3,000,000             3,000,000
     Paul Bitetto                                       -          500,000               500,000
     Terry Grammer                                                 500,000               500,000
                                                               -       7,000,000       7,000,000


     Note	27	Events	occurring	after	the	balance	sheet	date

     After the year end, the following events occurred: -

             •     The company completed a share placement raising $13.9 million on 28 September
                   2011. $1.9 million of the capital raised was placed under the Company’s 15% placement
                   pursuant to Listing Rules. The remaining $12 million is subject to shareholder approval.
                   Proceeds have been received from subscribers and used to fund further loans to Ji’an
                   Resources Investment Limited to enable it to make additional deposits due in respect of
                   the Kazakhstan Potash transaction.

             •     In August 3 million shares were issued in consideration for corporate advisory services
                   provided in relation to the renegotiation of terms for the acquisition of Ji’an and the
                   Kazakhstan Potash transaction.



68
        •     On 19 July 2011 600,000 30c options were exercised and on 31 August 2011 a further
              175,000 30c options were exercised. This raised a total of $232,500 for working capital.

        •     The final $1,681,051 (refer note 14) was received in respect of the convertible note
              agreement. 12 Million Convertible notes have been issued in August 2011 with a $1 face
              value. The notes have a conversion rate of $2, meaning two notes can be converted
              to one ordinary share. Additionally, four options will be issued to the note holder on
              conversion, subject to shareholder approval.

              The convertible notes were issued to Team Lucky Limited, a Hong Kong investment
              company on 12 August 2011. The notes are convertible by the note holder prior to the
              maturity date. The funds raised from the convertible notes have been loaned to Ji’an and
              are to be applied in the acquisition by Ji’an of the Kazakhstan Potash assets.

        •     In July 2 million shares were issued to settle a liability recorded in the 30 June 2011
              financial report for corporate advisory services of $620,000.

        •     In July, the Company renegotiated the terms relating to the eventual acquisition of the
              Kazakhstan assets.

              Fortis Mining Limited is now set to acquire 100% of the share capital of Ji’an Resources
              Investment Limited. The price will be US$1 million in cash and up to 55 million
              shares dependent on the JORC results. This is subject to conditions precedent and
              shareholders’ approval. 5,000,000 shares are issued upon completion of the acquisition.
              The issue of the remaining shares is dependent on the JORC results as follows: -


JORC Report results                                                    No of shares issued
Less than 500 million tonnes                                                               0
More than 500 million tonnes but less than 1 billion tonnes                     15,000,000
More than 1 billion tonnes but less than 1.5 billion tonnes                     31,000,000

More than 1.5 billion tonnes but less than 2 billion tonnes                     38,000,000

More than 2 billion tonnes but less than 3 billion tonnes                       45,000,000

More than 3 billion tonnes                                                      50,000,000
The Zhilyanskoe and Chelkar acquisition (Wiyot transaction) has been restructured, with the total
consideration remaining US$260 million, but split between $30 million in cash and US$230 million in
convertible notes to be paid/issued as follows: -

(i)      30 million in cash (already paid by Ji’an Resources via loans advanced from Fortis)
(ii)     107.5 million notes (US$230 million) which may be converted into ordinary shares in the
         Company subject to JORC results as follows: -


                                                                                                         69
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     JORC Report results                                                  No of shares issued

     Less than 500 million tonnes                                                            0
     More than 500 million tonnes but less than 1 billion tonnes                    40,000,000
     More than 1 billion tonnes but less than 1.5 billion tonnes                    55,000,000
     More than 1.5 billion tonnes but less than 2 billion tonnes                    70,000,000
     More than 2 billion tonnes but less than 2.5 billion tonnes                    80,500,000
     More than 2.5 billion tonnes but less than 3 billion tonnes                    90,750,000
     More than 3 billion tonnes but less than 3.5 billion tonnes                    97,500,000
     More than 3.5 billion tonnes but less than 4 billion tonnes                104,000,000
     More than 4 billion tonnes                                                 107,500,000


     Note	28	Reconciliation	of	operating	cash	flows	to	operating	profit


                                                                    Consolidated
                                                                          Group
                                                                           2011
                                                                               $

     Reconciliation of Cash Flow from Operations with Loss
     After Income Tax

     Loss after Income Tax                                           (2,358,739)
     Cash flows excluded from loss attributable to operating
     activities
     Non-cash Flows in Loss
     Depreciation                                                           2,108
     Option – Others                                                       74,090
     Share based payments                                                 111,186
     Non-cash Income /Expenses                                            531,168
     Changes in assets and liabilities:
     (Increase)/decrease in trade and term receivables
     (Increase)/decrease other current assets                              39,467
     Increase/(decrease) in trade payables and accruals                   679,546
     (Increase)/(decrease) in provisions                                   28,578

     Cash used in operations                                              892,596




70
Note	29	Share	based	payments

During the reporting period the economic entity entered into a number of arrangements that required
the issue of equity in consideration for services or settlement of obligations. The share options reserve
is used to record the value of options issued or committed in these arrangements. This reserve can be
transferred to retained earnings if options lapse and subsequently be declared as a dividend.

         (a)    Shares
                -      5 million shares were issued to Faurex Pty Ltd for the share capital of Jal1 Pty
                       Ltd in October 2010. The fair value of the shares issued was $375,000;
                -      300,000 shares were issued to settle outstanding vendor liabilities. The value of
                       the shares issued was $22,500, being referenced to the value of the invoices
                       settled.
                -      1,700,000 shares were issued to settle outstanding tenement liabilities. The
                       value of the shares issued was $129,500, being referenced to the value of the
                       invoices settled.
                -      80,000 shares were issued to Jitto Arampaulum and Frank Cannavo to
                       reimburse each of the Directors for expenses incurred prior to the Company
                       listing. The value of the shares was $6,000 referenced to the expenses incurred.

         (b)    Options
                The following options were outstanding at the balance date: -

                -       7,000,000 options issued with an exercise price of 30c, issued to key
                                                                              .
                        management personnel of the company under the ESOP The value of
                        these options was $155,668 based on a Black Scholes options valuation model.

                        The amount is being amortised over a period as that is the vesting period. An
                        expense of $103,776 was recorded during the reporting period.

                -       100,000 options issued with an exercise price of 40c, issued to employees
                        of the company. The value of these options was $7,410 based on a Black
                        Scholes options valuation model. The amount was fully amortised during the
                        period as they fully vested immediately.

                -       850,000 options issued with an exercise price of 30c, issued to vendors, the
                        value being referenced to the balance of vendor invoices settled with the
                        options. No expense relating to these options arose.

                -       17,000,000 options issued with an exercise price of $2, issued to CitiGem
                        as part of the financing arrangement agreed during the period. The value of
                        these options was $11,451,000 based on a Black Scholes options valuation
                        model. The amount has been capitalised as a prepaid financing fee.

                        The Company operates a share option plan for employees and executives.
                        During the period options were granted to eligible employees during the period.

                                                                                                            71
     Notes To The Financial Statements
     for	The	Period	Ended	30	June	2011

     Share based payments to directors and employees are measured at fair value at the date of grant. The
     fair value has been determined by using a Black Scholes options valuation


                                                                                         2011
                                                                      Number of                  Weighted Average
                                                                       Options                    Exercise Price
                                                                                                        $
     Outstanding at beginning of the period                                     -                            -
     Granted under ESOP                                                 7,100,000                          0.30
     Issued to tenement vendors                                           850,000                          0.30
     Issued for finance facility                                       17,000,000                          2.00
     Exercised                                                                  -                            -
     Lapsed                                                                     -                            -

     Outstanding at period end                                         24,950,000                          1.46

     Exercisable at period end                                         17,950,000                          1.91

                 The options outstanding at 30 June 2011 had a weighted average exercise price of $1.46 and
                 a weighted average remaining contractual life of 4.2 years.

     Share based payments to directors and employees, and the issue of shares under the finance
     agreement, were valued using a Black Scholes Option Valuation Model applying the following inputs

     Option
Series
                                     Series
1
                  Series
2
                   Gem
Financing

     Grant
date
                                        27/10/2010
                01/02/2011
                 30/06/2011

     Number
of
options
issued
                          7,000,000
                 100,000
                    17,000,000

     
                                                  
                          
                           

     Weighted
average
exercise
price
                   $0.30
                     $0.40
                      $2.00

     Weighted
average
life
of
option
                   3
years
                   3
years
                    5
years

     Underlying
share
price
                            $0.08
                     $0.31
                      $1.35

     Expected
share
price
volatility
                   90%
                       40%
                        65%

     Risk
free
interest
rate
                           5.1%
                      5.5%
                       5.0%

     Weighted
average
fair
value
                       $0.022
                    $0.741
                     $0.674

     
                                                  
                          
                           

     Value
of
options
expensed
                         $103,776
                  $7,410
                     *

                                                        

     * Options issued to financing company valued at $11,451,200. See note 10 and note 25 for details of treatment in financial report




72
          Historical volatility for companies comparable to Fortis has been the basis for determining
          expected share price volatility as it is assumed that this is indicative of future tender, which
          may not eventuate.

          The life of the options is based on the historical exercise patterns, which may not eventuate in
          the future


Note	30	Segment	Reporting

Management has determined the operating segments based upon the information that it uses when
making decisions on how to allocate financial resources and fund those allocations. The Group currently
operates solely within Australia, with exploration activities currently in Western Australia, and is pursuing
investment opportunities in Kazakhstan, via partners in Hong Kong. Management therefore focuses on
tenements in Australia and investments in Hong Kong for exploration and investment activities.

Segment Disclosures

                                        Australia     Hong Kong          Corporate             Total
                                                $             $                  $                $

Interest revenue                                 -               -         214,804         214,804


Depreciation expense                             -               -            2,108           2,108


Loss before and after tax                        -               -       2,358,739       2,358,739


Current Assets                                -      16,141,023        12,936,299       29,077,322
Non-current Assets                      880,331               -            19,883          900,214


Current Liabilities                           -      13,565,867            350,941      13,916,808
Non-current Liabilities                 112,500               -                  -         112,500




                                                                                                                73
     Directors’ Declaration

         In the directors’ opinion:

              •      The attached financial statements and notes thereto comply with the Corporations Act
                     2001, the Accounting Standards, the Corporations Regulations 2001 and other
                     mandatory professional reporting requirements.

              •      The attached financial statements and notes thereto comply with International Financial
                     Reporting Standards as issued by the International Accounting Standards Board as
                     described in note 2(b) to the financial statements.

              •      The attached financial statements and notes thereto give a true and fair view of the
                     consolidated entity’s financial position as at 30 June 2011 and of its performance for
                     the financial period ended on that date.

              •      Remuneration disclosures contained in the Remuneration Report comply with the
                     Accounting Standards and the Corporations Act 2001.

              •      There are reasonable grounds to believe that the company will be able to pay its debts
                     as and when they become due and payable;


                     The directors have been given the declarations required by section 295A of the
                     Corporations Act 2001.

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


                     On behalf of the Board




     	        	      Jitto	Arulampalam
                     Executive Director

                     2 October 2011




74
Independent Auditors Report




                              75
     Additional Stock Exchange Information

     Additional information required by Australian Stock Exchange Limited and not shown elsewhere in the
     Annual Report is as follows. The information is at 31 August 2011.

     Number	of	Holders	of	Equity	Securities

     Ordinary Shares 51,487,165; fully paid ordinary shares are held by 1,223 individual shareholders.
     All ordinary shares carry one vote per share.

     Unlisted	Options
     There are 175,000 unlisted options exercisable at various prices with various exercise dates.


     Distribution of
     Shareholders                        Ordinary          Options
     Category (size of holding)
                                                13
     1 – 1,000                                                    0
                                               205
     1,001 – 5,000                                                0
                                               660
     5,001 – 10,000                                               0
                                               292
     10,001 – 100,000                                             1
     100,001 – and over                        53                 6

                                            1223                  7
     Unmarketable parcels          84




76
Shareholder Information

Shareholder Information
20 Largest Shareholders – Ordinary Shares


                                                  Number of              % Held
                                               Ordinary Fully         of Issued
                      Name                  Paid Shares Held    Ordinary Capital

       JP MORGAN NOMINEES AUSTRALIA
                                                 11,624,719               22.58
 1.    LIMITED <CASH INCOME A/C>

 2.    MR JORDAN LUCKETT                          5,000,000                9.71

       FRANK CANNAVO INVESTMENTS PTY LTD          3,000,000                5.83
 3.
       PAKAYA GROUP PTY LTD <KERSHON
                                                  3,000,000                5.83
 4.    A/C>
 5.    ROGUE INVESTMENTS PTY LTD                  1,620,000                3.15
       GIANLIMITED PTY LTD <GIANLIMITED
                                                  1,562,500                3.03
 6.    A/C>
       MR BRUCE ROBERT LEGENDRE                     907,000                1.76
 7.
       SAMLISA NOMINEES PTY LTD                     850,000                1.65
 8.
 9.  MR NORMAN SURTEES                              750,000                1.46
     A & A CANNAVO NOMINEES PTY LTD
                                                    625,000                1.21
 10. <ANTHONY MEATS SUPERFUND A/C>
     HOLDREY PTY LTD <THE DON
                                                    563,297                1.09
 11. MATHIESON FAMILY A/C>
     VERTIGO NIGHT PTY LTD <M & S FAMILY
                                                    534,792                1.04
 12. SUPER FUND A/C>

 13. SNAPDRAGON INVESTMENTS PTY LTD                 520,875                1.01

       CITICORP NOMINEES PTY LIMITED                457,212                0.89
 14.
     GIANLIMITED PTY LTD <GIANLIMITED
                                                    452,379                0.88
 15. A/C>
 16. CGV GROUP PTY LTD                              418,750                0.81
     F & E CANNAVO PTY LTD <FRANCESCO
                                                    418,750                0.81
 17. CANNAVO S/FUND A/C>

 18. CORE BUSINESS HOLDINGS PTY LTD                 416,666                0.81

 19. MINSK PTY LTD                                  393,757                0.76
     AAAS PTY LTD <SRITHARAN FAMILY
                                                    300,000                0.58
 20. A/C>
                                                 33,415,697               64.90
 



                                                                                   77
     Shareholder Information

     7 Largest Option Holders – Listed Options                    % Held
                                                   Number of    of Issued
                                 Name            Options Held    Options

      1.     CITIC-GEM LIMITED                    17,000,000       70.32
      2.     FRANK CANNAVO INVESTMENTS PTY LTD     3,000,000       12.41
             PAKAYA GROUP PTY LTD
      3.                                           3,000,000       12.41

      4.     SRI NUR INVESTMENTS PTY LTD             500,000        2.07
      5.     TERRENCE RONALD GRAMMER                 500,000        2.07
      6.     JUSTYN PETER STEDWELL                   100,000        0.41
      7.     LEGEND RESOURCES PTY LTD                 75,000        0.31

                                                  24,175,000      100.00




78
Mining tenement summary

Set out below is a listing of the Group’s current mining tenements.

         Area         Tenement        Application     Grant Date      Expiry Date     Required
                                         Date                                       Expenditure

Gidgee                E57/674          6/10/2006      13/9/2007       12/9/2012        $30,000
                      E57/812         14/12/2009      20/9/2010       19/9/2015        $36,000
                      E57/836           4/6/2010      22/3/2011       21/3/2016        $64,000
                      P57/1183         23/1/2007      12/3/2008       11/3/2012         $8,000
                      P57/1257        21/12/2009      18/3/2011       17/3/2015         $2,000
                      P57/1259         11/3/2010      30/6/2011       29/6/2015         $2,000
                      P57/1069         22/9/2005      17/4/2008       16/4/2012         $7,800
                      P57/1070         22/9/2005      17/4/2008       16/4/2012         $5,680

Braemore              P37/7041        10/11/2006       4/7/2008        3/7/2012         $6,960
                      P37/7042        10/11/2006       4/7/2008        3/7/2012         $6,720
                      P37/7055         4/12/2006      20/6/2008       19/6/2012         $7,200
                      P37/7056         4/12/2006      20/6/2008       19/6/2012         $7,640
                      P37/7057         4/12/2006      20/6/2008       19/6/2012         $7,760
                      P37/7589        11/12/2007      30/1/2009       29/1/2013         $4,800
                      P37/7951          2/7/2010      12/5/2011       11/5/2015         $8,000
                      P37/7952          2/7/2010      12/5/2011       11/5/2015         $8,000

Darlot                E37/1011        22/4/2009       11/2/2010       10/2/2015        $20,000

New England Well      P53/1441         1/6/2007       29/7/2008       28/7/2012         $8,000
                      P53/1442         1/6/2007       29/7/2008       28/7/2012         $8,000

Jundee                E53/1518        17/11/2009       4/4/2011        3/4/2016        $20,000
                      E53/1519        18/11/2009          N/A             N/A              N/A
                      E53/1521-I      20/11/2009       4/4/2011        3/4/2016        $70,000
                      E53/1522        20/11/2009      16/8/2011       15/8/2016        $70,000
                      E53/1523        20/11/2009          N/A             N/A              N/A




                                                                                                  79
     Shareholder	Enquiries

     Shareholders with enquiries about their shareholdings should contact the share registry:

              Computershare Investor Services Pty Ltd
              Yarra Falls
              452 Johnston Street
              Abbotsford, VIC 3067
              Telephone: 1300 364 826 (within Australia)
                            +61 3 9415 4610 (outside Australia)
              www.computershare.com.au

     Change of Address, Change of Name, and Consolidation of Shareholdings Shareholders should contact
     the Share Registry to obtain details of the procedure required for any of these changes.




80
Notes




        81
     Notes




82
Notes




        83

				
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