For personal use only - ASX · At the present time gold is out of favour with investors and the...

The peop le o f Burk ina Faso a re renowned th roughout Af r i ca fo r be ing upr ight and hones t . Ampe l la Min ing a ims to

re f lec t these va lues by ac t ing wi th hones ty and in tegr i t y in a l l i t s dea l ings . The Company i s commit ted to c rea ing

va lue fo r i t s shareho lder s and the communi t i e s in wh ich we opera te , th rough the deve lopment o f wor ld c la s s mines

in a sa fe and env i ronmenta l l y respons ib le manner.

A N N U A L R E P O R T 2 0 0 8

Ampel la Min ing L im i ted ABN 59121152001

Su i te 1 , 6 R i chardson S t ree t , West Pe r th WA 6005

Ph: +61 (8 ) 9226 5299 Fax : +61 (8 ) 9226 5399 www.ampe l la . com.au

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CORPORATE D iRECTORy

Directors

W il l i am J R yan

Non-execut i ve Cha i rman

Char les Soh

Non-execut i ve D i rec tor

Pe te r W i l l i ams


Grant Mooney


Company Secretary

Grant Mooney

Stock Exchange L is t ing

ASX Code: AMX

Home Off i ce : Pe r th , Weste rn Aus t ra l i a

Website & Emai l

Webs i te : www.ampe l la . com.au

Email: [email protected]

Notice of Annual Genera l Meet ing

The Annua l Genera l Meet ing of Ampe l la Min ing

L im i ted wi l l be he ld a t :

P lace : The Suther land Room,

C i t y West Funct ion Cent re

Date : Monday 24th November 2008

T ime: 2 .00 pm WST

Pr inc ipal Registered Off ice in Austra l ia

Su i te 1

6 R i chardson S t ree t

West Pe r th WA 6005

Ph: 08 9226 5299

Fax : 08 9226 5399

Share Registry

Computer share inves tor Se rv i ces P ty L td

Leve l 2 , Rese rve Bank Bu i ld ing

45 S t Georges Te r race Per th WA 6000

Ph: 08 9323 2000

Fax : 08 9323 2033

Auditors

Stantons in te rnat iona l

Leve l 1

1 Have lock S t ree t

West Pe r th WA 6005

Ph: 08 9481 3188

Fax : 08 9321 1204

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CONTENTS

Cha i rman’s Repor t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Rev iew of Opera t ions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

D i rec tor s ’ Repor t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Aus i to r ’s Independence Dec la ra t ion . . . . . . . . . 23

Corpora te Governance S ta tement . . . . . . . . . . . 24

Income S ta tement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Ba lance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Sta tement o f Changes in Equ i t y . . . . . . . . . . . . . . 30

Cash F low Sta tement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Notes to the F inanc ia l S ta tements . . . . . . . . . . . 32

D i rec tor s ’ Dec la ra t ion . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Independent Aud i to r ’s Repor t . . . . . . . . . . . . . . . . . 52

Add i t iona l In fo rmat ion . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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2 | Ampella Mining Limited Annual Report

ChAIRMAN’S REpORT

Dear Fellow Shareholders,

The past year has been a tumultuous period in world financial markets, in the resource markets, and in the mining

industry generally. From the heights of the resource boom in mid 2007, at about the time that Ampella Mining Limited

listed on the ASX, the sentiment has swung down to the depths of current times.

The result of these mood swings, while undoubtedly a feature of heavy speculative activity, have an all too tangible

effect on the share market and on the price of Ampella’s shares and are a serious concern to the average investor. They

belie, however, the real fundamentals of the resource supply situation.

Ampella Mining Limited is a speculative mineral explorer, with a specific interest in gold, in a very prospective region

of West Africa. It is focused entirely in the country of Burkina Faso; a country surrounded by the well established gold

producing nations of Ghana (formerly known as the Gold Coast) and Mali.

Burkina Faso is very much under-explored for gold and has only had approximately five years of systematic modern day

exploration. It has been compared to Western Australia’s Eastern Goldfields of many years ago.

At the present time gold is out of favour with investors and the gold price has failed to capitalise on its strong rise to

US$1000 per ounce earlier in the year. Behind this price however, there is still a strong belief that, sooner or later,

gold’s fundamental value will come to the fore in these times of highly unstable financial circumstances. The supply

chain for gold is seriously under threat with the costs of many mines being unsustainable at present gold prices and

very few new gold discoveries of significance.

The task for Ampella, its staff and its new Board is to pursue the exploration of its areas within the chosen country

of Burkina Faso for gold and if appropriate, for other minerals, in a prudent and objective manner and to use the

company’s strong, entrenched position within the country to benefit all shareholders.

Your company has built up a portfolio of highly prospective ground within Burkina Faso and is undertaking intensive

exploration programs in the coming twelve months. It has a new Chief Executive, Dr paul Kitto, who has international

expertise and experience in the search for gold under cover using specialised geochemical methods, which were

developed in the Eastern Goldfields of Western Australia. These specialised techniques are ideally suited to the Burkina

Faso landscape and we expect to have some significant advantages over many other competitors.

Ampella has produced some exciting results in gold exploration at the Madougou and Doulnia projects. The recent

trench sampling results at Kollo South have returned strong indications of gold while rock chip sampling at Kollo North

has also returned high-grade gold assays.

The company has recently acquired some new and exciting prospects at Batie West and is pursuing exploration of this

area as rapidly as possible. Rock chip sampling has shown ore grade gold occurrences at surface along a promising,

crustal-scale, shear zone and scout drilling will be an early test of its potential to host significant gold deposits.

While Ampella still retains its interest in base metals, particularly zinc, within Burkina Faso, these have been somewhat

relegated to a lower priority, partly because of a serious decline in the zinc price but principally because they have been

over shadowed by the exciting potential of the company’s gold projects.

You will be aware that there has been a major re-structuring of the Board of your company in September of 2008, with

the net result being an increase in the depth of technical experience on the Board, with Mr Charles Soh, a chemical

engineer with international experience in processing of laterite ores and myself joining the Company Secretary, Mr

Grant Mooney as the new incumbent directors. We thank the outgoing directors for their contribution and particularly

you, the shareholders for your support of these changes.

The strong local technical exploration team, led by Dr Morou Francois Ouedraogo, remains intact in Burkina Faso.

This is testament to the cohesive nature of the team, in these times when staff turnover is very high in competitor

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Ampella Mining Limited Annual Report | 3

ChAIRMAN’S REpORT

companies. There are presently 3 gold mines in production in the country and another 3 progressing to development in

the next 12-18 months, which is unprecedented in the countries history.

I will take this opportunity to thank everybody involved with Ampella over these past months and particularly you, the

shareholders, for your perseverance and patience during what has been a difficult initial year.

We, the new Board of Ampella Mining Limited, are looking forward to making a meaningful contribution to the

company’s progress in the coming year and to meeting all the new challenges that it may bring.

Yours sincerely

William J Ryan

Chairman

23 September 2008

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REv IEW OF OpERAT IONS

Ampella Mining Limited has been operating exploration programs in Burkina Faso, West Africa, for just over 12 months

since listing on the Australian Securities Exchange in August 2007. In June 2008 a new Chief Executive Officer, Dr paul

Kitto, was employed and he has undertaken a thorough review of current exploration programs and consequently made

strategic recommendations to the Board of Directors to take the company forward over the next 12 month period.

The targeted commodities being sort by Ampella in the proterozoic Birimian Greenstones of Burkina Faso, West Africa,

are primarily low cost, large tonnage bulk mining lode gold resources and volcanic hosted massive sulphide (vhMS) zinc

resources. Current projects comprise 10 permits which in total cover an area of almost 2000 square kilometres (Fig. 1).

Figure 1. Ampella Mining Limited’s four project areas in Burkina Faso, West Africa, which cover ten permits over a total area of almost 2000 square kilometres.

BAT IE WEST pROJECT (acqu i r ing 100 per cent th rough Ampe l la Min ing SARL )

In the second quarter of 2008, Ampella Mining Limited, through its Burkina Faso subsidiary company

Ampella Mining SARL, acquired the rights to obtain a 100 per cent interest in five tenements over a three

year period in southwest Burkina Faso called Batie West.

The five Batie West tenements cover an area of 811 square kilometres and occupy a 110 kilometre long gold-bearing

shear zone that occurs along the southwest margin of the Boromo Greenstone Belt in southern Burkina Faso, adjacent

to the country boundaries of Cote d’Ivoire and Ghana (Fig. 2). The region is accessed from the capital Ouagadougou

by sealed highway to Gaoua, a total distance of 290 kilometres in a straight line. From Gaoua all weather gravel roads

provide access to the permit areas. The Batie West tenements occur southwest of both Ampella’s Donko permit, and

the major porphyry copper-gold discoveries of volta Resources at Gongondy and Dienemera. The French exploited

this region in the 1940’s but no modern exploration has been undertaken since. Exploitation for gold along parallel

structures within this wide alteration corridor is however undertaken by several thousand licensed artisanal miners.

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Figure 2. Location diagram for the five Batie West permits, outlined in red, and highlighting the 110 kilometre long gold-bearing shear zone under investigation.

The permit areas of Tiopolo and Danhal required immediate expenditure and Ampella’s aggressive exploration programs

were designed to meet such government requirements by the completion of mapping, regional soil geochemistry

programs and a helicopter-borne magnetics and radiometrics survey. The results from the soil geochemistry and

geophysics surveys are expected to be available shortly, and subsequently a comprehensive target generation program

to identify a series of drill-ready targets leading to resource definition will be planned.

Rock chip samples taken during the first regional soils program over Tiopolo have returned exciting results (see

Fig. 3) with 40 of the 72 samples returning values above 2.0 grams per tonne gold, and with 20 of these samples

actually recording gold values above 5.0 grams per tonne gold (maximum value of 47.9 grams per tonne gold). Gold

mineralisation occurs within an identified sericite-pyrite alteration corridor up to 2.5 kilometres wide associated with

the sheared contact of the southwest margin of the Boromo Greenstone Belt with basin granites. A number of distinct

parallel fault structures are evident in the regional geophysics (Fig. 3) and each of these structures appears to host gold

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Figure 3. Recent rock chip results for the Tiopolo permit illustrating the very high tenor of 40 of the samples.

TIOPOLO ROCKCHIP RESULTS (>2.0 g/t Au)Sample ID Au (ppm) DescriptionE003154 47.87 Quartz vein with FeO boxworksE003027 46.06 Quartz vein with FeO boxworksE003045 13.84 Quartz vein from dumpE003149 10.77 Sericite altered shale & quartz veinletsE003007 10.38 Quartz vein with FeO boxworksE003058 9.41 Smokey quartz vein from dumpE003143 8.16 Quartz vein & pyrite from dumpE003056 7.63 Pinkish quartz vein & pyrite from dumpE003005 7.45 Quartz vein & pyrite from dumpE003152 7.29 Quartz vein with FeO & epidoteE003019 6.62 Dark quartz vein with fresh pyriteE003004 6.54 Sericite altered volcanoclastic & graphitic

shaleE003147 6.49 Quartz vein with pyrite boxworksE003015 6.22 Quartz veinE003077 6.07 Sericite altered mafic with disseminated

pyriteE003105 5.93 Quartz vein from dumpE003098 5.35 Quartz vein with pyrite-sericite-hematite

selvageE003126 5.24 Quartz vein with pyrite boxworkE003003 5.24 Quartz vein in sericite altered shaleE003119 5.00 Quartz vein with pyrite-sericite-hematite

selvageE003148 4.75 Quartz vein with pyrite-hematite from

dumpE003122 4.52 Pink quartz vein with fresh pyriteE003096 4.13 Quartz vein & pyrite from dumpE003116 4.06 Quartz vein with pyrite-sericite-hematite

selvageE003112 3.90 Smokey quartz veinE003017 3.71 Pinkish quartz with pyrite boxworksE003146 3.71 Quartz vein with epidoteE003008 3.63 Folded laminated volcanoclasticE003057 3.52 Smokey quartz veinE003039 3.41 Quartz vein with pyrite boxworksE003042 3.26 Quartz vein in mafic with disseminated

pyrite-sericite-hematiteE003025 3.08 Quartz vein from dumpE003127 3.07 Quartz vein from dumpE003049 3.06 Quartz veinlet in folded saprolite with

pyrite & sericiteE003006 2.90 Laminated volcanoclasticE003001 2.88 Quartz vein from dumpE003124 2.61 Quartz vein in mafic with disseminated

pyrite-sericite-hematiteE003134 2.51 Quartz vein with disseminated pyrite-

sericite-hematite selvageE003123 2.44 Quartz vein with disseminated pyrite-

hematite selvageE003055 2.07 Smokey quartz vein

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DONKO pROJECT (100 per cent Ampe l la Min ing SARL )

The Donko Project covers an area of 225 square kilometres and is located at the southern end of the Boromo

Greenstone Belt in southern Burkina Faso adjacent to the border with Ghana and 10 kilometres northeast of

the Batie West tenements (Fig. 3). The region is accessed from the capital Ouagadougou by sealed highway

to Gaoua, a total distance of 290 kilometres in a straight line. From Gaoua all weather gravel roads provide

access to the permit areas.

Detailed regolith and geological mapping has been completed over the Donko project area and this has highlighted

the extent of transported lateritic cover which will require future auger drilling programs. Geochemical lag sampling

and follow-up soil geochemical surveys have also been undertaken in western and southern areas resulting in the

identification of a significant gold in soil anomaly (greater than 30 parts per billion) trending north east-south west over

a 4 kilometre strike length at the Bator prospect (Fig. 4). Within this anomaly higher grade (greater than 100 parts

per billion) gold in soil anomalism highlights a number of north west-south east trends which parallel fold axes and

associated quartz veins.

A program of close spaced helicopter-borne geophysics will be flown over the Donko project in September 2008 in

conjunction with the Batie West project to greatly assist in interpreting the structural controls on gold mineralization

under cover within this tenement area, and allow targeting for future drill programs. In addition, discussions are well

advanced in acquiring the adjacent tenement south of Donko onto which the Bator prospect gold anomaly is known to

extend.

Figure 4. Gridded soil geochemistry for the Donko project with an enlargement of the Bator prospect area.

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MADOUGOU pROJECT (100 per cent Ampe l la Min ing SARL )

The Madougou Project covers an area of 465 square kilometres over two separate permits, namely Kandy

to the southwest and Madougou to the northeast (Fig. 1). It is accessed from the capital Ouagadougou by

180 kilometres of paved highway to the nearby city of Ouahigouya and thereafter by unsealed all-weather

roads. The area is underlain by Birimian volcanics and sediments of the northeast trending Hounde Belt and

cut by the Ouahigouya Deformation Corridor.

Detailed regolith and geological mapping has been completed over the Madougou and Kandy project area and this

has highlighted the extent of transported lateritic cover which will require future auger drilling programs on top of

the recent soil geochemical surveys (approximately 4,800 Samples; Fig. 5). It is only where significant topographic

relief exists that the majority of the currently known gold prospects have been identified by past explorers and they

highlighted a 10 kilometre long gold in soil anomaly at greater than 25 parts per billion gold. The Dore prospect in the

northwest area of the Madougou project is an exception to the major soil anomalies as it was identified by artisanal

miners working through over 5 metres of transported laterite.

Figure 5. Gridded soil geochemistry across the Madougou permit area highlighting those anomalous gold areas associated with topographic relief. Note the 10 kilometre long gold anomaly along the eastern margin of the permit.

Ampella undertook ground based magnetics and induced polarization surveys over the Dore, Nimbo and Dagabene

prospects which has provided evidence for the structural controls associated with gold mineralisation at each prospect.

At the Dore prospect a total of eighteen reverse circulation drill-holes were used to test the area for gold mineralisation

adjacent to artisanal workings which occur along a 700 metre strike length (Fig. 6). Gold mineralisation is now

considered to be controlled by a south west directed thrust zone associated with quartz-feldspar porphyry intrusions,

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and future reverse circulation drill programs (2000 metres) will target this interpreted gold bearing structure. Auger

geochemistry programs will also be required to identify potential extensions to mineralisation under transported lateritic

cover in this region. Best drill-hole intersections at the Dore prospect are presented in Tables 1 and 2.

Table 1. Summary of the reverse circulation drilling (RC) undertaken over the Madougou project area by Ampella

Mining Limited.

Company Prospect RC Holes Metres

Ampella Dore 18 1381

Dagabene 6 612

Nimbo 7 572

Figure 6. The Dore prospect occurs under more than 5 metres of transported laterite and the current geological interpretation is based on artisanal workings, limited reverse circulation drilling and ground geophysics (Magnetics and Induced polarisation).

Table 2. Significant drill-hole intersections for the Madougou project by Ampella

PROSPECT DRILL HOLE SIGNIFICANT INTERSECTION

Dore DORC002 6 metres at 3.39 g/t Au from 6 metres

DORC002 18 metres at 0.80 g/t Au from 20 metres

DORC003 30 metres at 0.86 g/t Au from 84 metresIncl. 10m at 1.62 g/t Au from 98 metres

DORC010 4 metres at 1.65 g/t Au from 100 metres

Dagabene DARC002 2 metres at 1.43 g/t Au from 3 metres

DARC005 4 metres at 2.10 g/t Au from 54 metres

Nimbo NIRC001 2 metres at 5.42 g/t Au from 46 metres

NIRC005 2 metres at 3.53 g/t Au from 52 metres

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In the eastern region of the Madougou permit from Nimbo to Gousirdou a 10 kilometre strike length of gold anomalism

is considered controlled by a series of west-north-west directed thrusts, and future drill programs will target these gold

bearing structures following additional trenching programs to adequately test the geological and structural controls

on gold mineralisation. Auger geochemistry programs will also be required to identify extensions to mineralisation

under transported lateritic cover. At the Nimbo and Dagabene prospects limited reverse circulation drilling by Ampella

returned disappointing results (Table 2) which failed to match previous drilling by Channel Resources.

The Madougou project exhibits tremendous potential to host a significant gold resource and the next 12 month period

will be used to implement specific well designed exploration programs to answer fundamental questions concerning the

controls on gold mineralisation both at a prospect scale and under cover. Such programs should deliver both economic

intersections and assist in identifying significant gold resources.

DOULNIA pROJECT (100 per cent Ampe l la Min ing SARL )

The Doulnia Project covers an area of 479 square kilometres over two separate permits, called Doulnia in

the south and Kampala in the north (Fig. 1). The Doulnia Project is located in central southern Burkina

Faso, adjacent to the border with Ghana and 150 kilometres south south east of the capital Ouagadougou.

Doulnia can be accessed by an all weather road from Po, 25 kilometres to the west of Doulnia. The project

area was identified due to its potential to host significant gold and base metal mineralization following

work programs completed by the UNDP, BRGM, Incanore and Anmercosa.

Central to the project is a prominent granite dome, called the Tiebele Dome, around which wraps a Birimian volcano-

sedimentary sequence comprising felsic volcanics, clastic and epiclastic sediments, argillites and graphitic shales. Felsic

to mafic intrusives including granite, gabbro, diorite, and pyroxenite-rich stocks have intruded the volcano-sedimentary

sequence. A number of chert and manganese horizons provide marker units and indicate syn-volcanic exhalative

activity typically associated with volcanic hosted massive sulphide (vhMS) zinc-rich mineralisation.

Table 3. Summary of work completed over the Doulnia project in previous 12 month period by Ampella Mining Limited.

PROSPECT WORK COMPLETED

Koubongo West Detailed soil geochemistry on 200 x 50m grid (563 samples)

Koubongo East 1 RC-DD hole (126m)

Kollo South Detailed soil geochemistry on 200 x 50m grid (577 samples)

4 Trenches (325.4m in length)

Nabenia Detailed soil geochemistry on 200 x 50m grid (134 samples)

4 RC holes (380m)

8 RC-DD holes (1637m)

Loubel East 1 RC-DD hole (138m)

The Nabenia Zinc prospect is located on the south east margin of the Tiebele Dome within a sequence of north east

trending, steeply north west dipping mafic volcanics, meta sediments with manganese and graphite horizons, sericitised

felsic lavas and sericite-chlorite-rich schists (Fig. 7). The footwall to mineralisation consists of quartz-rich felsic volcanics

(rhyodacites) which are overlain by volcanoclastics and interbedded shales. The ore position is marked by thinly

developed and inconsistent silica breccias, hydrothermal carbonate and manganese horizons. The silica (chert) horizons

contain overprinting magnetite veinlets. These are not true base metal gossans but they do highlight hydrothermal

seafloor positions. Overlying the ore position (hanging wall) are mafic-rich volcanoclastic and finally coherent mafic

lavas. Cross-cutting the stratigraphy are a series of late mafic dykes (gabbros) which may have intruded along the

original hydrothermal feeder conduits. Future exploration programs will benefit greatly by undertaking structural

architecture investigations (Basin Architecture) of the volcanic succession associated with vhMS mineralisation as this

will highlight the exact location of major hydrothermal conduits associated with vhMS zinc mineralisation.

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NABENIA PROSPECTVHMS ZnNBH13: 14.15m @ 3.1 % Zn from 44.0mNTRC6: 6m @ 2.6% Zn from 30.0mNTRC10: 10m @ 2.7% Zn from 59.0m

Figure 7. Location diagram of the Nabenia Zinc prospect showing the main geological features and drill-hole collars.

Figure 8. Geological cross-section for the Nabenia prospect at 739200E showing the stratigraphic succession from footwall to hanging wall and significant zinc intercepts.

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KOUBONGO EAST PROSPECTKOUBONGO WEST PROSPECT(VHMS ZINC)TRC12: 4m @ 1.1 % Zn from 80.0mTRC13: 5m @ 2.6% Zn from 38.0mKBH3: 1.5m @ 1.3% Zn from 102.5m

LOUBEL – VHMS ZINC PROSPECTTO6: 164m @ 0.47 % Zn from 1.2mIncl. 20.9m @ 1.7 % Zn from 96.7mLODH001*: 5m @ 3.8% Zn from 66.0m

Figure 9. Location diagram for the Koubongo West and Koubongo East prospects

Figure 10. Location diagram for the Loubel Zinc prospects (T06 & T03) and also the nearby Kollo gold prospects.

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At the Nabenia prospect in the previous 12 months Ampella drilled 4 reverse circulation holes for 380 metres and 8

reverse circulation holes with diamond tails for an additional 1637 metres. Re-logging of drilling on cross-section

739200E (Fig. 8) confirmed the presence of volcanic hosted massive sulphide (vhMS) zinc mineralisation. It also

identified the nature of the footwall and hanging wall successions as well as the type of alteration mineralogy

associated with zinc sulphides. Currently the historical drilling at Nabenia is being re-logged to assist in undertaking a

basin analysis reconstruction. Such information will assist targeting and identification of additional sources of vhMS

mineralisation.

The Koubongo zinc anomalies are located on the northern flanks of the Tiebele Dome within east-west trending

sericitised felsic volcanic, mafic volcanic and meta-sediments (Fig. 9). Anmercosa completed soil sampling over

Koubongo West on a 200 by 50 metre grid resulting in an east-west trending 400 parts per million zinc anomaly 3500

metres long by 200 metres wide. peak zinc values were 969 parts per million zinc. This zinc anomaly was repeated in

channel sampling undertaken by Ampella in 2008 over strongly sericite altered felsic volcaniclastics.

At Koubongo East (2 kilometre to the east of Koubongo West) a 200 parts per million zinc anomaly 1500 metres long

had a maximum soil sampling anomaly of 306 parts per million zinc. A single reverse circulation drill-hole with a diamond

tail (KBh004) drilled by Ampella at Koubongo East intersected sub-economic zinc grades of 4 metres at 2.19 per cent

zinc from 43 metres and 3 metres at 1.12 per cent zinc from 22 metres down hole. All past geological, geophysical

and geochemical information for the Koubongo zinc anomalies are being reassessed for integration into a basin analysis

reconstruction. Such information will assist targeting and identification of additional sources of vhMS mineralization.

The Loubel zinc prospects (Fig. 10) are located on the southern side of the Tiebele Dome within altered felsic and mafic

volcanics and volcanoclastics. The east-west zinc anomaly is defined by a 100 parts per million zinc anomaly up to

7000 metres long and 1500 metres wide. Field mapping in the Loubel T03 area confirmed the occurrence of the same

stratigraphic succession as observed at the Nabenia prospect and follow-up drilling by Ampella intersected 5 metres

at 3.8 per cent zinc from 66 metres in LODh001. Field mapping also identified a significant untested vhMS alteration

system to the west of Loubel T03 with a large hydrothermal carbonate apron to the intense talc-carbonate alteration.

The size and nature of the alteration zone suggests that this region warrants further investigation in association with

the basin analysis reconstructions and prospectivity analysis.

The Kollo Gold prospects are located on the southern side of the Tiebele Dome, south of the Loubel prospects

(Fig. 10), and have been exploited to some extent by local artisanal miners. The prospects are located within felsic

volcanoclastics, lavas and shales and gold anomalism was originally identified in soil geochemistry undertaken by

Incanore. Rock chip samples up to 20.0 grammes per tonne gold have been recovered by Ampella at Kollo North, and

trench samples as high as 10 metres at 7.87 grammes per tonne Au obtained at Kollo South.

Field observations suggest that gold mineralization at Kollo is post-vhMS zinc mineralisation and is located within failed

hinge zones of long wavelength open east-west trending folds that have an axial plane dipping moderately steeply

(50-70 degrees) to the north. Soil geochemistry highlighted a 3000 metre long gold anomaly at greater than 50 parts

per billion Au (Fig. 11). At Kollo South four trenches have been completed for a total of 325.4 metres. Significant gold

anomalism was identified in the western most trench, KT03, where the best interval was 10 metres at 7.87 grammes

per tonne gold (Fig. 12). This zone is in line with a rock chip result of 3.2 grammes per tonne gold, 1000 metres further

west. Follow-up channel sampling programs and reverse circulation drilling are planned.

At Kollo North artisanal miners have targeted a faulted fold hinge similar to Kollo South. In the Kollo North region rock

chip results up to 20 grammes per tonne Au have been returned from quartz-pyrite veins within adjacent parallel fault

zones (Fig. 13). Channel sampling and follow-up RC programs are also planned for this region.

The potential of both the Kollo North and Kollo South prospects to host a significant gold resource that could provide

a cash flow for Ampella is thought to be high and warrants immediate follow-up. Such a resource could be toll treated

or sold to the Youga Mine approximately 25 kilometres to the south east from Doulnia.

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Figure 11. Gold in soil anomalism (>50ppb Au) over the Kollo South and Kollo North prospects.

Figure 12. Gold anomalism in trenches and rock chips taken at Kollo South.

Figure 13. Gold anomalism from rock chips taken at Kollo North.

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DIRECTORS’ REpORT

Your directors are pleased to present their report on the Group for the end of the financial year ended 30 June 2008.

D i rec tor s

The names and details of directors in office during the financial year and continuing up to the date of this report, unless

otherwise stated:

William J Ryan Non Executive Chairman (from 3/9/08)

Charles Soh Non Executive Director (from 3/9/08)

Richard Burden Finance Director (full year)

Grant Mooney Non Executive Director (from 1/7/08)

Jan hope Non Executive Director (resigned 3/9/08), Chairman from 22/11/07 until resignation on 3/9/08

peter Williams Director of Exploration (until 16/5/08), Non Executive Director (from 16/5/08, resigned 1/7/08)

paul Wright Non Executive Chairman (resigned 21/11/07)

p r inc ipa l Ac t i v i t i e s

The principal activities of the Group consisted of mineral exploration in Burkina Faso, West Africa.

D iv idends

No dividend has been paid since the beginning of the financial year and no dividend is recommended for the current

year.

Rev iew of Opera t ions

Information on the operations and financial position of the Group and its business strategies and prospects are set out

in the review of operations on pages 4 to 14 of this annual report.

S ign i f i cant changes in S ta te o f Affa i r s

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

On 5 July 2007, Ampella Mining Limited acquired all of the issued shares in West African Gold Reserve pty Ltd, which

holds all of the share capital of Ampella Mining SARL for a total consideration of 25,000,000 shares in Ampella Mining

Limited.

In August 2007, a total of $6,500,000 was successfully raised through a prospectus for 32,500,000 shares. Ampella

Mining Limited was admitted to the Official List of the ASX on 13 August 2007.

Mat te r s subsequent to the end of the f inanc ia l year

On 1 July 2008, Mr peter Williams resigned from position of Non Executive Director and Mr Grant Mooney was

appointed as a Non Executive Director.

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D IRECTORS’ REpORT

On 4 July 2008 Ampella Mining Limited, through its wholly owned subsidiary Ampella Mining SARL signed a binding

Memorandum of Understanding with Savadogo Mamoudou et Associes to acquire a 100% interest in five new gold

tenements totalling 811 square kilometres in the West African country of Burkina Faso. The tenements are located

along the major gold-bearing shear zone that marks the southwestern extension of the Boromo Greenstone Belt.

On 3 September 2008, Ms Jan hope resigned from the position of Non Executive Director. In addition Mr William J

Ryan and Mr Charles Soh have been appointed as directors effective 3 September 2008. Mr Richard Burden will retire

as a Director on 26 September 2008.

No other matters or circumstances have arisen since the end of the financial year in which have significantly affected or

may affect the operations of the Group, the results of its operations or the state of affairs of the Group in subsequent

financial years.

L i ke l y deve lopments and expected resu l t s o f opera t ions

Except as disclosed in the review of operations on pages 4 to 14, disclosure of further information regarding likely

developments in the operations of the Group in future financial periods and the expected results of those operations is likely

to result in unreasonable prejudice of those operations, or the state of affairs of the Group in future financial periods.

Env i ronmenta l regu la t ion

The Group operates in Australia and Burkina Faso. The Directors strive to ensure that regulations are followed and a

review of operations is undertaken at regular intervals.

In fo rmat ion on d i rec tor s

William (Bill) J Ryan

Non Executive Chairman (appointed 3/9/2008)

Bill Ryan is a Chemical Engineering and Master of Engineering graduate of the University of Adelaide with 40 years

experience in mining, metallurgy and management. Mr Ryan has had extensive involvement in mineral exploration,

project development and in the exploitation of new metallurgical technologies. his career has included four years at

metallurgical laboratories, Amdel in Adelaide (1966 – 1970), eleven years at Endeavour Resources Limited in Melbourne

(1970 – 1981) and Bond Resources (1981 – 1982), following which he operated his own consultancy, Rytech pty Ltd,

from 1983 to 1987. he was managing director of Titan Resources NL from 1987 and resigned after 17 years in that

position in May 2004. At Titan Resources, Bill led the company into Ghana, West Africa, in the late 1980’s, where they

discovered the Iduapriem Gold deposit, which was joint ventured with and eventually sold to Golden Shamrock Mines

Limited. he was president of AMEC for five years (1995 – 2000), was a Councillor of the WA Chamber on Minerals

and Energy for two years (1998 – 2000) and an inaugural Councillor of the Australian Gold Council (1999 – 2000).

Bill has a wealth of experience in the development and management of mining operations, has extensive corporate

experience in the role of managing director and maintains a substantive interest in innovation, exploration and project

development within the resource industries generally. he also retains a strong interest in governmental and other

policies which influence the well-being of the mining industry throughout Australia and elsewhere. Bill Ryan, at the

present time, is the Chairman of vital Metals Ltd, Chairman of Brumby Resources Ltd, is a Fellow of the Australasian

Institute of Mining and Metallurgy, a Fellow of the Australian Institute of Company Directors, a Life Member of AMEC

and a Life Member of the Australian prospectors and Miners hall of Fame.

Other current directorships

Chairman of vital Metals Ltd, Chairman of Brumby Resources Ltd, Chairman of Taronga Mines Ltd.

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DIRECTORS’ REpORT

Former directorships in the last 3 years

Gindalbie Metals Ltd, Jupiter Mines Limited

Relevant interests in shares and options

1,000,000 ordinary shares in Ampella Mining Limited.

Charles Soh

Non Executive Director (appointed 3/9/2008)

Mr Charles Soh holds a Bachelor of Applied Science in Chemical Engineering from the University of Adelaide and a

Graduate Diploma in Banking and Finance from Curtin University. Charles has spent the last 38 years in the mining

and mineral processing industry in Australia and countries in North and South America, Caribbean, Europe, China and

Africa. he started his career in the iron ore industry with hamersley Iron and has spent the last 34 years with Alcoa

Ltd in various global roles and disciplines including Chief Engineer of Alcoa at Wagerup WA, Global process Design

Manager of Alcoa and Regional Technical Manager of Atlantic Operations in the United States of America. Charles

has recently retired from Alcoa following his last assignment as Alcoa’s pinjarra refinery manager in WA. Charles was

instrumental in the planning and start up of green and brown-field plant expansions in alumina, iron ore and the Alcoa-

owned hedges gold mine in Boddington WA. he had project leadership and management roles in multi-million dollar

successful brown-field expansions in pinjarra, Wagerup, Jamaica, Brazil and Surinam. Charles held leadership roles in

pre-feasibility and front end engineering studies in various proposed green-field alumina refineries worldwide (Jamaica,

Surinam, Brazil, China, Guinea and Ghana) as Global process Design Manager. he has had leadership roles in reviewing

operations and design of alumina processes globally that include process and engineering trouble shooting, project

evaluation, cost reduction and due diligence in potential acquisition. More recently, Charles initiated and managed a

successful grass root gold discovery, the Nassau multi million ounce gold project, in the Guiana Shield in Surinam for

Alcoa. The project is now in joint venture with Newmont Gold Limited. Charles has support in fundraising experience

with several key investors in the United Kingdom and brings a wealth of experience that would highly complement the

Board of Ampella.


Nil


Nil


600,000 ordinary shares in Ampella Mining Limited.

Richard Burden

Finance Director (full year)

Richard Burden is a founding Director of Ampella Mining and has been closely involved with the Group’s formation and

project acquisition. he holds a Bachelor of Commerce Degree and an MBA from the University of Western Australia

and has over 20 years experience in the mining sector, spanning bulk commodities and base and precious metals. he

was most recently Chief Financial Officer with the international mining group, LionOre Mining International before

setting up his own business development and analysis consultancy. During his career, he has also held senior positions

with major companies including Rio Tinto, Alcoa Australia, Normandy Mining and Griffin Coal. Richard brings his

considerable experience in the acquisition, financing and development of mining assets both in Australia and overseas

to the Board of Ampella.


Nil


Nil

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2,000,000 ordinary shares in Ampella Mining Limited.

Grant Mooney

Non Executive Director (appointed Director 1/7/08), Company Secretary (full year)

Mr Mooney was appointed to the position of Group Secretary on 1 May 2007 and to the position of Non Executive

Director on 1 July 2008 and remains in office as at the date of this report. Mr Mooney is a member of the Institute

of Chartered Accountants and is the principal of perth-based corporate advisory firm Mooney & partners pty Ltd,

specialising in corporate compliance administration to public companies. Currently Mr Mooney acts as Group Secretary

to several ASX listed companies across a variety of industries including technology, resources and energy and has

obtained a depth of experience through his involvement in a diversity of corporate transactions.


Barra Resources Limited, Carnegie Corporation Limited.


Nil


250,000 ordinary shares in Ampella Mining Limited

Former Directors

Jan Hope

Non Executive Director (resigned 3/9/08)


Syndicated Metals Limited.


Nil


285,000 ordinary shares in Ampella Mining Limited

Peter Williams

Director of Exploration (until 16/5/08), Non Executive Director (appointed 16/5/08, resigned 1/7/08)


Nil


Nil


7,700,000 ordinary shares in Ampella Mining Limited

Paul Wright

Non Executive Chairman (resigned 21/11/2007)


Nil


Nil


None

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DIRECTORS’ REpORT

Meet ings o f d i rec tor s

The numbers of meetings of the Group’s board of directors and of each board committee held during the year ended 30

June 2008, and the numbers of meeting attended by each director were:

Number of meetings attended

Number of meetings held during the time

the director held office

Number of audit committee meetings

attended

Number of audit committee meetings held while in office

Ms J Hope 15 15 2 2

Mr P Wright (resigned 21/11/2007)

10 10 2 2

Mr R Burden 15 15 - -

Mr P Williams (resigned 1/7/08)

13 15 - -

Mr Grant Mooney (appointed 1/7/08)

- - - -

Remunerat ion repor t (aud i ted )

Principles used to determine the nature and amount of remuneration (audited)

The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and

appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives

and the creation for value for shareholder, and conforms with market best practice for delivery of reward. The Board

ensures that executive reward satisfies the following key criteria for good reward governance practices:

• competitivenessandreasonableness

• acceptabilitytoshareholders

• transparency

• capitalmanagement.

Non-executive directors

Fees and payments to non-executive directors reflect demands which are made on, and the responsibilities of the

directors. The remuneration of non-executive directors must not exceed in aggregate a maximum annual amount fixed

by the Group in a general meeting for that purpose. The current fixed amount is $500,000, although the Board have

resolved not to exceed an aggregate of $150,000 without further Shareholder approval.

Executive pay

The current base remuneration was last reviewed in June 2008, excluding Executive Finance Director Richard Burden.

Options

Options are issued to directors and senior executives as part of their remuneration package on a case by case basis,

after taking into account market salaries.

The directors and executives received the following amounts as compensation for their services to the Group for the

year ended 30 June 2008:

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For the year ended 30 June 2008 Short term benefits

Share Based Payment

Post employment

benefit Total

Options as percentage of remuneration

Salary & Fees

Non monetary benefits

Options Superannua-tion

Non Executive Directors

Ms J Hope (Non executive Chairman), Ampella Mining Limited

63,333 3,256 - 5,700 72,289 -

Mr P Wright , previous Non Executive Chairman (resigned 21/11/07), Ampella Mining Limited

33,333 3,256 - 3,333 39,922 -

Mr P Williams , Non Executive Director, Ampella Mining Limited

3,750 3,256 - 338 7,344 -

Executive

Mr R Burden, Finance Director, Ampella Mining Limited (paid from 1 August 2007)

126,147 3,256 - 11,353 140,756 -

Mr P Williams , Director of Exploration, Ampella Mining Limited (paid from 1 August 2007)

204,591 - - 18,413 223,004 -

Mr G Mooney, Company Secretary (full year)

60,017 - - - 60,017 -

Mr Morou Francois Ouedraogo, Vice President of Exploration, Ampella Mining SARL

124,416 3,449 - - 127,865 -

Dr Paul Kitto, Chief Executive Officer (commenced 19 May 2008)

29,570 - 16,500 2,661 48,731 33.9

Ms T Gray, Financial Controller, Ampella Mining Limited

57,115 - - 5,140 62,255 -

Total 702,272 16,473 16,500 46,938 782,183 -

The directors and executives received the following amounts as compensation for their services as directors of the

Company for the period ended 30 June 2007:

For the period ended 30 June 2007

– Company only Short term benefitsShare Based

Payment

Post employment

benefit Total

Options as percentage of remuneration

Salary & Fees

Non monetary benefits

Options

Ms J Hope - - - - - -

Mr P Wright - - - - - -

Mr R Burden, Finance Director - - - - - -

Mr P Williams , Director of Exploration

- - - - - -

Ms T Gray, Financial Controller 10,038 - - 903 10,941 -

Although entitled to remuneration for the period ended 30 June 2007, the directors did not receive remuneration until

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DIRECTORS’ REpORT

1 July 2007 in the case of non executive directors, and until Ampella Mining Limited had achieved its ASX listing in the

case of Executive Directors.

Equity instruments - audited

All options refer to options over ordinary shares of Ampella Mining Limited.

Directors’ and executives’ remuneration (Company and Consolidated) – audited (continued)

Options over equity instruments granted as compensation – audited

Details on options over ordinary shares in the Company that were granted to key management personnel during the

year and details of the number of options vested during the reporting period are:

No of options granted Grant Date

Fair value per option at

grant dateExercise price

per option Vesting Date Expiry Date

Dr Paul Kitto, Chief Executive Officer

375,000 30 June 2008 $0.044 $0.077 30 June 2008 30 June 2011


375,000 30 June 2008 $0.040 $0.105 30 Dec 2008 30 June 2011


375,000 30 June 2008 $0.036 $0.14 30 June 2009 30 June 2011


375,000 30 June 2008 $0.030 $0.21 30 Dec 2009 30 June 2011

Value of options granted during the year

$

Value of options exercised during the year

$

Value of options lapsed during the year

$

Dr Paul Kitto, Chief Executive Officer 56,250 - -

Executive employment agreements (audited)

Remuneration and other terms of employment for the Finance Director and Chief Executive Officer are set out in their

respective employment agreements. Major provisions of which are as follows:

Richard Burden – Finance Director

• Termofagreementfrom13August2007to28February2010.

• Possibleextensionoftermforaperiodof3yearsfrom28February2010withtermsandconditionstobe

negotiated.

• Basesalaryof$150,000inclusiveofsuperannuationperannumforaminimumof80hourspermonth,tobe

reviewed annually by the Board on 1st July each year.

• Paymentontermination,exceptforgrossmisconductequivalentto6monthspay.

paul Kitto – Chief Executive Officer

• Basesalaryof$250,000exclusiveofsuperannuationperannum

• Paymentofterminationbenefitonearlyterminationbytheemployer,otherthanforcauseofthreemonths.

• Nofixedterm

• Anoptionpackageof1,500,000optionswithvariousstrikepricesandterms,asapprovedbyshareholdersata

General Meeting on 30 June 2008.

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Unl i s ted Opt ions

The number of unlisted options to purchase shares in Ampella Mining Limited as at 30 June 2008 are as follows:

Date Options Granted Expiry Date Exercise Price Number of Options

30 June 2008 30 June 2011 $0.077 375,000

30 June 2008 30 June 2011 $0.105 375,000

30 June 2008 30 June 2011 $0.140 375,000

30 June 2008 30 June 2011 $0.210 375,000

I n surance of o ff i ce r s

During the financial period, Ampella Mining Limited has paid a premium to insure the directors and officers of the

Group and its Australian-based controlled entities. On 24 June 2008 a premium of $13,923 was paid to cover the

period 15 June 2008 to 31 May 2009.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought

against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities

incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from

conduct involving wilful breach of duty by the officers or improper use by the officers of their position or of information

to gain advantage for themselves or someone else or to cause detriment to the Group. It is not possible to apportion

the premium between amounts relating to insurance against legal costs and those relating to other liabilities.

Non aud i t se rv i ces

During the year, Fidexco SARL, the auditor of Ampella Mining SARL assisted with the preparation of a manual of

procedures. The amount paid for non audit services was $11,155. The directors do not believe this will affect

independence of the auditor.

Aud i to r ’s independence dec la ra t ion

The lead auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 23

and forms part of the Director’s Report for the year ended 30 June 2008.

Signed for and on behalf of the Directors of Ampella Mining Limited.

William J Ryan

Chairman

23 September 2008

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AUDITOR’S INDEpENDENCE DECLARAT ION

23 September 2008

Board of Directors

Ampella Mining Limited

Suite 1, 6 Richardson Street

WEST pERTh WA 6005

Dear Directors

RE: AMpELLA MINING LIMITED

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of

independence to the directors of Ampella Mining Limited.

As Audit Director for the audit of the financial statements of Ampella MIning Limited for the year ended 30 June 2008,

I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

STANTONS INTERNATIONAL

(Authorised Audit Company)

John p van Dieren

Director

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CORpORATE GOvERNANCE STATEMENT

The Board and management are committed to corporate governance and, to the extent they are applicable to

the Group, have adopted the Eight Essential Corporate Governance principles and each of the Best practice

Recommendations as published by ASX Corporate Governance Council (“ASX principles and Recommendations

– 2nd Edition”). The Board has adopted comprehensive systems of control and accountability as the basis for the

administration of corporate governance. These policies and procedures are summarised below. Other information about

the Group’s corporate governance practices were adopted by the Board on 3 September 2007 and are set out on the

Group’s website at www.ampella.com.au.

• BoardandSeniorExecutivesEvaluationPolicy

• CodeofConduct

• SecuritiesTradingPolicy

• AuditCommitteeCharter

• ExternalAuditorSelectionPolicy

• ContinuousDisclosurePolicy

• ShareholderCommunicationPolicy

• RiskManagementPolicy

• Non-executiveDirectorsRemunerationPolicy

• SeniorExecutivesRemunerationPolicy

• SelectionandAppointmentofNewDirectorsPolicy

Board of D i rec tor s

The Board is responsible for the overall Corporate Governance of the consolidated entity including its strategic

direction, establishing goals for management and monitoring the achievement of those goals.

The Board operates in accordance with Ampella Mining Limited’s Constitution, ASX Listing Rules, the Corporations Act,

various Mining Acts and other applicable laws while achieving these goals.

At commencement of the financial period, the Board of Directors comprised one non-executive Director, one non-

executive Director, who was Chairman and two executive Directors.

Full details of the Group’s Directors and their relevant experience and skills are detailed in the Directors’ Report.

The current structure of the Board of Directors includes a majority of independent directors in compliance with the

Australian Securities Exchange - Corporate Governance Council “principles of Good Corporate Governance and Best

practice Recommendations”.

With the exception of an Audit Committee, the consolidated entity is not considered to be of a size, nor is its affairs of

such complexity, to justify the establishment of separate committees. Accordingly all matters, which may be capable of

delegation to a committee, are dealt with by the full Board.

In addition to formal Board meetings, the Board regularly meets informally to retain full and effective control over

the consolidated entity and monitor the executive management. The Board has established a framework for the

management of the consolidated entity including a system of internal controls, a business risk management process and

the establishment of appropriate ethical standards.

The Group’s Constitution and the Listing Rules of Australian Securities Exchange Limited govern the procedures for

election and retirement of Directors.

All Directors have the right to seek independent legal and accounting advice concerning any aspect of the Group’s

operations and undertakings.

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Compos i t ion of the Board

Election of Board members is substantially the province of the Shareholders in general meeting. however, subject

thereto, the Group commits to the following principles:

the Board is to comprise of Directors with a blend of skills, experience and attributes appropriate for the Group and its

business;

the principal criterion for the appointment of new and maintenance of existing Directors is their ability to add value to

the Group and its business.

No formal nomination committee or procedures have been adopted for the identification, appointment and review

of the Board membership, but an informal assessment process, facilitated by the Chairman in consultation with the

Group’s professional advisers, has been committed to by the Board.

Aud i t and R i sk Commit tee

The Board has formed an Audit Committee with an established charter which met twice during the financial year. The

audit committee had insufficient members due to the number of non executive directors from November 2007. Any

issues ordinarily referred to the audit committee since November 2007 were referred instead to the Board.

The Audit Committee comprised Jan hope until her departure in September 2008. Mr Grant Mooney and Mr Charles

Soh were appointed to the audit committee in September 2008. Mr paul Wright was a member of the audit committee

from the beginning of the financial year to the date of his departure on 21 November 2007. The Group’s auditors and

Financial Controller attend upon invitation.

The Shareholders in general meeting are responsible for the appointment of the external auditors of the Group, and the

Board from time to time will review the scope, performance and fees of those external auditors.

The Shareholders have appointed, with the Board’s consent, Stantons International as their external auditors.

In te rna l Cont ro l F ramework

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost

effective internal control system will preclude all errors and irregularities. To assist in discharging this responsibility the

Board relies on several internal controls:

• Thereisacomprehensivemonthlymanagementreportingsystem.Managementreportsdetailingconsolidated

entity expenditure are prepared and presented to Board members monthly. Results are reported against budget

and variations from budget have been discussed with site personnel to ascertain the reasons for the variances each

month for each of the consolidated entity’s operations. Budgets are revised when management has sufficient

historical information to make informed forecasts.

• ProceduresareinplacetoensurethatpricesensitiveinformationisreportedtotheASXinaccordancewiththe

Continuous Disclosure Requirements.

• Theconsolidatedentityconductsareviewoftheabilityandexperienceofpotentialsenioremployeespriorto

appointment. Informal appraisals are conducted regularly together with on the job monitoring and training for all

employees.

• Theexecutivedirectorsareinregularcontactwithseniorsitepersonnelatalltheconsolidatedentity’soperationson

an informal basis. In addition, formal monthly reporting together with periodic site visits by the executive directors

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all contribute to controls in this area.

E th i ca l S tandards

Ampella is committed to the highest standards of ethical business conduct. As part of that commitment, Ampella

established a Code of Conduct to guide executives, management and staff in carrying out their duties and

responsibilities. The Code is subject to ongoing review to ensure that Ampella’s standards of behaviour and corporate

culture reflect best practice in corporate governance. The Code is based on the following key principles:

• actingwithhonestyandintegrity;

• abidingbylawsandregulations;

• respectingconfidentialityandhandlinginformationinapropermanner;

• maintainingthehigheststandardsofprofessionalbehaviour;

• avoidingconflictsofinterest;

• strivingtobeagoodcorporatecitizenandtoachievecommunityrespect.

Ampella also has a number of specific policies that underpin the Code of Conduct and elaborate on various legal and

ethical issues. These policies are designed to foster and maintain ethical business conduct within Ampella, and govern

such things as workplace and human resources practices, handling of confidential information, insider trading, risk

management and legal compliance.

In addition, the Board has guidelines dealing with disclosure of interests by Directors in participating and voting at

Board meetings where any such interests are discussed. In accordance with the Corporations Act 2001, any Director

with a material personal interest in a matter being considered by the Board must not be present when the matter is

being considered, and may not vote on the matter.

Bus iness R i sks

The Board adopts practices to identify significant areas of risk and to effectively manage those risks in accordance with

the consolidated entity’s risk profile.

Where appropriate the Board draws on the expertise of appropriate external consultants to assist in dealing with or

mitigating risk.

The Group’s main areas of risk include:

• exploration,developmentandproduction;

• fluctuatingcommoditypricesandexchangerates;

• financing;and

• titletoassets.

The Board gives regular consideration to all these matters.

Share Trad ing

A formal policy has been adopted which is to ensure compliance with the “insider trading” provisions of the

Corporations Act 2001 by Directors and employees who may be in possession of sensitive information concerning the

Group’s affairs, prior to release to the market.

The policy provides for specific procedures to be followed by any person considered by the Company to be required to

comply with the policy prior to trading in any securities.

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Shareho lder Communica t ions po l i cy

The Company has established a Shareholder Communications policy to ensure that shareholders are informed of all

major developments affecting the Company. All shareholders have the option of receiving the Company’s annual report

in hard copy or electronically, and may also request copies of the Company’s half-yearly and quarterly reports. The

Company also encourages full participation of shareholders at the annual general meeting of the Company.

In addition, the Company maintains a website at www.ampella.com.au, on which the Company makes information

available on a regular and up to date basis.

Exp lanat ion fo r Depar ture f rom Bes t p rac t i ce Recommendat ions

The Group has complied with each of the Eight Essential Corporate Governance principles and the corresponding Best

practice Recommendations as published by ASX Corporate Governance Council (“ASX principles and Recommendations

-2nd Edition”), other than in relation to the matters specified below.

Principle No Best Practice Recommendation Compliance Reason for Non-compliance

2.4 The board should establish a nomination committee

The board does not have a nomination committee

The Board members have concluded that no efficiencies would be achieved by establishing a separate nomination committee. The functions of any nomination committee are normally undertaken by the full board.

4.2 The audit committee should be structured so that it:consists only of non-executive directorsconsists of a majority of independent directorsis chaired by an independent chair, who is not a chair of the Boardhas at least three members

There have been insufficient members to maintain an audit committee; however this was rectified in September 2008 with the appointment of Mr Grant Mooney as Chairman of the audit committee and Mr Charles Soh as members of the audit committee.

The Group seeks to maintain an independent audit function and as such has reduced the membership to only include independent directors.

8.1 The board should establish a remuneration committee

A remuneration committee has not been established.

Given the size and scope of the Group’s operations, and the size of the Board, a remuneration committee is not considered necessary. Accordingly, the Group does not have a remuneration committee.

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Notes

Consolidated Company

2008$

For the period 9/8/06

to 30/6/07$

2008 $


to 30/6/07$

Revenue from continuing operations

Interest Income 8 316,628 - 316,628 4,327

Other income 10,957 - 10,957 13,435

Total Income 327,585 - 327,585 17,762

Employee benefits (956,892) - (303,584) (64,276)

Non executive directors fees (105,704) - (105,704) -

Exploration acquisition costs written off (5,064,598) - (50,000) -

Options issued (16,500) - (16,500) -

Exploration costs (1,573,784) - - (203,320)

Depreciation and amortisation (100,399) - (7,855) (1,056)

Interest expense (979) - (979) (853)

Impairment losses 12,13 - - (7,319,073) (135,000)

Foreign exchange losses (38,190) - - -

Other expenses (188,534) - (225,619) (307,012)

Total Expenses (8,045,580) - (8,029,314) (711,517)

Loss before income tax 8 (7,717,995) - (7,701,729) (693,755)

Income tax expense 9 - - - -

Loss attributable to members (7,717,995) - (7,701,729) (693,755)

Earnings per share for loss attributable to the ordinary equity holders of the Group: Cents Cents

Basic earnings per share 24 (12.11) -

Diluted earnings per share 24 (12.11) -

The above income statements should be read in conjunction with the accompanying notes.

INCOME STATEMENT FOR ThE YEAR ENDED 30 JUNE 2008

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Notes


2008$

2007$

2008 $

2007$

ASSETS

Current Assets

Cash and cash equivalents 26 3,182,137 - 3,157,853 6,479

Other debtors & prepayments 10 49,522 - 47,234 279,890

Total current assets 3,231,659 - 3,205,087 286,369

Non current assets

Plant & equipment 11 155,259 - 9,756 2,798

Loans 12 - - - -

Investments in subsidiaries 13 - - - -

Other non current financial assets 14 50,000 - 50,000 -

Other non current debtors 15 7,302 - 1,750 1,750

Total non current assets 212,561 - 61,506 4,548

Total assets 3,444,220 - 3,266,593 290,917

LIABILITIES

Current Liabilities

Trade and other payables 16 215,520 - 63,379 175,245

Provisions 17 55,063 21,252 1,980

Other current liabilities 18 - - - 120,000

Total current liabilities 270,583 - 84,631 297,225

Non Current Liabilities

Provisions 19 8,541 - - -

Loans from related entities 20 - - 600 -

Total non current liabilities 8,541 - 600 -

Total liabilities 279,124 - 85,231 297,225

Net Assets /(liabilities) 3,165,096 - 3,181,362 (6,308)

EQUITY

Contributed equity 21 11,560,346 - 11,560,346 687,447

Options Reserve 22 16,500 - 16,500 -

Accumulated losses 23 (8,411,750) (8,395,484) (693,755)

Total equity 3,165,096 - 3,181,362 (6,308)

The above balance sheets should be read in conjunction with the accompanying notes.

BALANCE ShEET AS AT 30 JUNE 2008

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2007 Consolidated

ContributedEquity

$

Accumulated Losses

$Options Reserve

$Total

$

Balance on incorporation - - - -

Shares issued - - - -

Share issue costs - - - -

Loss for the period - - - -

Balance as at 30 June 2007 - - - -

2008 Consolidated

Balance 1 July 2007 687,447 (693,755) - (6,308)

Shares issued 21 11,550,000 - - 11,550,000

Share issue costs 21 (677,101) - - (677,101)

Options issued during year 22 - - 16,500 16,500

Loss for the year 23 - (7,717,995) - (7,717,995)

Balance as at 30 June 2008 11,560,346 (8,411,750) 16,500 3,165,096

2007 Company

ContributedEquity

$

Accumulated Losses

$Options Reserve

$Total

$

Balance on incorporation - - - -

Shares issued 687,447 - - 687,447

Loss for the period - (693,755) - (693,755)

Balance as at 30 June 2007 687,447 (693,755) - (6,308)

2008 Company

Balance 1 July 2007 687,447 (693,755) - (6,308)

Shares issued 21 11,550,000 - - 11,550,000

Share issue costs 21 (677,101) - - (677,101)

Options issued during year 22 - - 16,500 16,500

Loss for the year 23 - (7,701,729) - (7,701,729)

Balance as at 30 June 2008 11,560,346 (8,395,484) 16,500 3,181,362

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

STATEMENT OF ChANGES IN EqUITY FOR ThE YEAR ENDED 30 JUNE 2008

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Notes


2008$


to 30/6/07$

2008 $


to 30/6/07$

Cash flows from operating activities

Receipts from customers (inclusive of GST) 8,351 - 8,351 44,015

Payments to suppliers (inclusive of GST) (2,838,503) - (769,146) (310,370)

Sub Total (2,830,152) - (760,795) (265,955)

Interest received 296,937 - 296,937 4,327

Interest paid (979) - (979) (470)

Net cash outflow from operating activities 26 (2,534,194) - (464,837) (262,098)

Cash flows from investing activities

Payments for property, plant and equipment (222,600) - (16,292) (3,854)

Repayment of loans (41,978) - - -

Cash acquired as part of acquisitions 10,587 - - -

Increase in term deposit (50,000) - (50,000) -

Loans to related parties - - (2,331,340) (135,000)

Net cash outflow from investing activities (303,991) - (2,397,632) (138,854)

Cash flows from financing activities

Proceeds from issues of shares and other equity securities 6,500,000 - 6,500,000 598,375

Share raising costs (486,157) - (486,157) (190,944)

Net cash inflow from financing activities 6,013,843 - 6,013,843 407,431

Net increase in cash and cash equivalents 3,175,658 - 3,151,374 6,479

Cash and cash equivalents at the beginning of the financial year 6,479 - 6,479 -

Cash and cash equivalents at the end of the year 26 3,182,137 - 3,157,853 6,479

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

CASh FLOW STATEMENT FOR ThE YEAR ENDED 30 JUNE 2008

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1 Repor t ing Ent i t y

Ampella Mining Limited (the “Group”) and its subsidiaries are a Group domiciled in Australia. The consolidated

financial statements of the Group as at and for the year ended 30 June 2008 comprise the Group and its subsidiaries

(together referred to as the “Group” and individually as “Group Entities”. The group is primarily involved in mineral

exploration in Burkina Faso, West Africa, through its subsidiary Ampella Mining SARL which is incorporated in

Burkina Faso.

2 Bas i s o f p repara t ion and account ing po l i c i e s

Basis of preparation

The financial report is a general purpose financial report which has been prepared in accordance with the requirements

of the Australian Accounting Standards (including Australian Accounting Interpretations), adopted by the Australian

Accounting Standards Board and the Corporations Act 2001.

The financial report has been prepared on a going concern basis, which contemplates continuity of normal business

activities and realisation of assets and settlement of liabilities in the ordinary course of business. The going concern

of the Company is dependant upon it maintaining sufficient funds for its operations and commitments. The directors

continue to monitor the ongoing funding requirements of the Company. The directors are confident that sufficient

funding can be secured if required to enable the Company to continue as a going concern and as such are of the

opinion that the financial report has been appropriately prepared on a going concern basis.

The financial statements were authorised for issue by the directors on 23 September 2008.

a) Compliance with IFRS

Australian Accounting Standards include Australian equivalents to the International Financial Reporting Standings

(AIFRS). Compliance with AIFRS ensures that the financial statements and notes of Ampella Mining Limited comply with

International Financial Reporting Standards (IFRS).

b) New Standards and Interpretations

Since 1 July 2007 the Consolidated Entity has adopted the following Standards and Interpretations, mandatory for

annual periods beginning on or after 1 January 2007. Adoption of these Standards and Interpretations did not have

any effect on the financial position or performance of the Consolidated Entity.

• AASB7FinancialInstruments:Disclosures

• AASB2007-4AmendmentstoAustralianAccountingStandardsarisingfromED151

• AASB2007-7AmendmentstoAustralianAccountingStandards

• Interpretation11AASB2–GroupandTreasuryShareTransactions,AASB2007-1AmendmentstoAustralian

Accounting Standards arising from AASB Interpretation 11

• AASB2008-4AmendmentstoAustralianAccountingStandard–KeyManagementPersonnelDisclosuresby

Disclosing Entities

Standards and Interpretations issued not yet effective

At the date of authorisation of the financial report, a number of standards and Interpretations were in issue but not yet

effective. Initial application of the following Standards is not expected to initially apply until the financial year ending

30 June 2010 and is not expected to have any material impact on the financial report of the Group and the company:

NOTES TO ThE F INANCIAL STATEMENTS FOR ThE YEAR ENDED 30 JUNE 2008

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• AASB101‘PresentationofFinancialStatements’(revisedSeptember2007)

• AASB2007-8‘AmendmentstoAustralianAccountingStandardsarisingfromAASB101’

• AASB3‘BusinessCombinations’(2008)

• AASB127‘ConsolidatedandSeparateFinancialStatements’

• AASB2008-3‘AmendmentstoAustralianAccountingStandardsarisingfromAASB3andAASB127’

• AASB2008-1‘AmendmentstoAustralianAccountingStandard-Share-basedPayments:VestingConditionsand

Cancellations’

• ImprovementstoIFRSs(2008)

• AASB8‘OperatingSegments’

• AASB123‘BorrowingCosts’

c) Basis of Consolidation

The Consolidated Financial Statements comprise the financial statements of Ampella Mining Limited and its subsidiaries

(as set out in note 30).

Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies

so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently

exercisable or convertible are considered when assessing whether a group controls another entity.

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

consistent accounting policies.

d) Historical cost convention & presentation currency

The financial report has been prepared on the basis of historical cost. Cost is based on the fair value of consideration

given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise stated.

e) Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that

affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Actual results may differ from these estimates (refer note 4).

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 and in any future periods affected.

f) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net

of returns, allowances, and amounts collectable on behalf of third parties.

Interest Income

Interest income is recognised as it is earned.

g) Cash and cash equivalents

Cash comprises cash on hand and on demand deposits. Cash equivalents are short term highly liquid investments that

are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.


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h) Financial Assets

Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a

contract whose terms require delivery of the investment within the timeframe established by the market concerned,

and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value

through profit or loss which are initially measured at fair value.

Investments at fair value through profit or loss

An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such upon

initial recognition. Financial instruments are designated at fair value though profit or loss if the Group manages

such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s

documented risk or investment strategy. Upon initial recognition, attributable transaction costs are recognised in profit

or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes

therein are recognised in profit or loss.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an

activemarketareclassifiedas‘loansandreceivables’.Loansandreceivablesaremeasuredatamortisedcostusingthe

effective interest method less impairment.

Interest is recognised by applying the effective interest rate.

Impairment of financial assets

Financial assets, other than those at fair value though profit or loss, are assessed for indicators of impairment at each

balance date. Financial assets are impaired where there is objective evidence that as at result of one or more events

that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have

been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between

the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective

interest rate.

The carrying amount of the financial assets is reduced by the impairment loss directly for all financial assets with the

exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When

a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts

previously written off are credited against the allowance account. Changes in the carrying amount of the allowance

account are recognised in profit or loss.

If, in a subsequent period, the amount of the impairment losses decreases and the decrease can be related objectively

to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed

through profit or loss to the extent the carrying amount of the investment at the date of the impairment is reversed

does not exceed what the amortised cost would have been had the impairment not been recognised.

i) Foreign currency translation

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at

exchange rates at the dates of the transactions. The functional currency of Ampella Mining SARL is Australian Dollars.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional

currency at the foreign exchange rate at that date. Foreign currency differences arising on retranslation are recognised

in profit and loss.

j) Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.


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Cost includes expenditures that are directly attributable to the acquisition of the asset. purchased software that is

integral to the functionality of the related equipment is capitalised as part of that equipment.

Depreciation on assets is calculated using the straight line method to allocate their cost or revalued amounts, net of

their residual values, over their estimated useful lives, as follows:

Computing equipment 3 years

Furniture & equipment 5 years

vehicles 3 years

Fire equipment 10 years

Telephone system 20 years

All assets with a cost of less than $2,000 have been fully depreciated across the group.

k) Provisions

provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is

probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of

the obligation.

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. The discount rate used to determine the present value reflects current

market assessments of the time value of money and the risks specific to be liability. The increase in the provision due to

the passage of time is recognised as interest expense.

l) Employee benefits

A liability is recognised for benefits accruing to employees in respect wages and salaries, annual leave, long service

leave, and sick leave when it is probably that settlement will be required and they are capable of being measured

reliably.

Liabilities are recognised in respect of employee benefits expected to be settled within 12 months, are measured at their

nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months, are

measured as the present value of estimated future cash outflows to be made by the Group in respect of services

provided by employees up to reporting date.

m) Share based payments

Equity settled share based payments with employees and others providing similar services are measured at the fair value

of the equity instrument or underlying service at the grant date. The fair value determined at the grant date of the

equity settled share based payments is expensed on a straight line basis over the vesting period.

The Group also provides benefits to selected suppliers and others in the form of equity settled share based payments,

where shares are issued in exchange for goods or services, the amounts of which are determined by reference to the

value of the underlying good or service exchanged.

n) Income Tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the

extent it relates to items recognised directly in equity, in which case it is recognised in equity.


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Current tax is the expected tax payable on taxable income for the period, using tax rates enacted or substantially

enacted at the report date, and any adjustment to tax payable in respect of previous periods.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between carrying

amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. An exception

is made for certain temporary differences arising from the initial recognition of an asset or liability. No deferred tax

asset or liability is recognised in relation to those timing differences if they arose in a transaction, other than a business

combination, that at the time did not affect either accounting profit or loss or taxable profit or loss.

A deferred tax asset is only recognised to the extent that it is probable that future tax profits will be available against

which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are

reduced to the extent that it is no longer probable that the related tax benefit will be realised.

o) Mineral exploration expenditure

Mineral exploration, evaluation and acquisition expenditure is expensed as incurred.

p) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not

recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as

part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST

recoverable from, or payable to the taxation authority, is included with the operating cash flow.

q) Earnings per share

The Group presents basic and diluted earnings per share (EpS) data for its ordinary shares. Basic EpS is calculated

by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of

ordinary shares outstanding during the period. Diluted EpS is determined by adjusting the profit or loss attributable to

ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive

potential ordinary shares.

r) Foreign currency

The financial statements of the Group are presented in Australian dollars, which is the Group’s functional currency.

In preparing the financial statements, transactions in currencies other than the Group’s functional currency (foreign

currencies) are recorded at the rate of exchange prevailing on the dates of each transaction. At each balance sheet

date, monetary items denominated in foreign currencies are translated at the rates prevailing at the balance sheet

date. Non monetary items carried at fair value that are denominated in foreign currencies are retranslated at the

rates prevailing on the date when the fair value was determined. Non monetary items that are measured in terms of

historical cost in a foreign currency are not retranslated.

3 F inanc ia l r i sk management

The Group’s activities expose it to a variety of financial risks; market risk, credit risk, foreign currency risk, liquidity risk

and cash flow interest risk. The Group’s overall risk management program focuses on the unpredictability of financial

markets and seeks to minimise potential adverse effects on the financial performance of the Group.


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a) Market risk

Currently the Group is not exposed to any significant market risk.

b) Credit risk

The Group has no significant concentrations of credit risk.

c) Foreign currency risk

As a result of some contracts that exist in foreign currencies, the Group is exposed to variations in the West African

CFA Franc (CFA), $US and Euro. The Group does not hedge this risk. The total amount of creditors denominated in a

foreign currency as at 30 June 2008 were as follows:

CFA 45,800,628 AUD equivalent $114,539 various trading creditors

$US 42,863.15 AUD equivalent $44,528 ACME creditors

Euro €40,000 AUD equivalent $65,617 Due under Temfor agreement

d) Liquidity risk

The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is cognisant

of the future demands for liquid finance resources to finance the Group’s current and future operations.

e) Cash flow and fair value interest risk

The Consolidated Group has interest bearing assets in the form of cash on deposit. Therefore the Group’s income and

operating cash flows are now materially exposed to changes in market interest rates. The assets are short term interest

bearing deposits and no financial instruments are employed to manage risk. The following table details the Group’s

interest rate risk exposure as at 30 June 2008:

Consolidated2008

Weighted average interest

rate risk

Variable Interest

$

Non InterestBearing

$Total

$

Financial Assets:

Cash and cash equivalents 7.53% 3,157,753 24,384 3,182,137

Other debtors Interest free - 22,669 22,669

Other non current financial assets 7.50% 50,000 - 50,000

3,207,753 47,053 3,254,806

Financial liabilities:

Trade and other payables Interest free - 215,520 215,520


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Consolidated2007


rate riskVariable Interest

Non InterestBearing Total

Financial Assets:

Cash and cash equivalents - - -


Trade and other payables - - -

Company2008




Financial Assets:

Cash and cash equivalents 7.59% 3,157,753 100 3,157,853

Other debtors Interest free - 20,411 20,411

Other non current financial assets 7.50% 50,000 - 50,000

3,207,753 20,511 3,228,264


Trade and other payables - 63,379 63,379

Company2007




Financial Assets:

Cash and cash equivalents 0% - 6,479 6,479


Trade and other payables - 175,245 175,245

Other current liabilities - 120,000 120,000

4 Cr i t i ca l account ing es t imates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including

expectations of future events that may have a financial impact on the Group and that are believed to reasonable under

the circumstances.

Accounting for share based payments

The Group’s policy is stated at note 2(m). The value of these share payments are based on reasonable estimates at the

time of issue.

Provisions for loan and investments

provisions for non recovery of intercompany loans, and investments in West African Gold Reserve pty Ltd and Ampella

Mining Sarl have been made as there is uncertainty as to whether the amounts will be recoverable.

Valuation of Options

The fair value of options issued is determined by using a Black-Scholes model. Key assumptions used in the inputs of

the model are Risk Free Rate 6.4% and volatility 100%.


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5 Comparat i ves

The comparative figures are for the period from incorporation on 9 August 2006 to 30 June 2007 and are for the

Company only, as the consolidated group was not formed until 4 July 2007.

6 Segment Repor t ing

Business Segments

The Consolidated Entity operated entirely in the mining and exploration industry.

Geographical Segments

The Consolidated Entity currently operates in Australia and West Africa (Burkina Faso).

2008Geographical Segments Australia West Africa Unallocated Consolidated

Revenue outside the consolidated entity 10,957 - 316,628 327,585

Write off of interest in mining projects - (5,014,598) - (5,014,598)

Segment Result (662,231) (7,372,392) 316,628 (7,717,995)

Segment Assets 130,991 177,629 3,135,600 3,444,220

Segment Liabilities (84,631) (194,493) - (279,124)

Depreciation (7,855) (92,544) - (100,399)

Capital expenditure 14,811 244,779 - 259,590

2007Geographical Segments Australia West Africa Unallocated Company

Revenue outside the consolidated entity 17,762 - - 17,762

Write off of interest in mining projects - - - -

Segment Result (693,755) - - (693,755)

Segment Assets 290,917 - - 290,917

Segment Liabilities (297,225) (297,225)

Depreciation (1,056) (1,056)

Capital expenditure 3,854 - - 3,854

7 Acqu i s i t ions o f subs id ia r i e s

On 5 July 2007, Ampella Mining Limited acquired all of the issued shares in West Africa Gold Reserve pty Ltd, which

holds all of the shares in Ampella Mining SARL for a total consideration of 25,000,000 shares in Ampella Mining

Limited.

Details of the net assets acquired and goodwill are as follows:


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2008$

Purchase consideration:

25,000,000 shares issued at deemed cost of $0.20 each 5,000,000

Fair value of net identifiable assets/(liabilities) acquired (refer below) (27,465)

Fair value attributable to interest in mining projects and expensed in accordance with Ampella’s accounting policy 5,027,465

The assets and liabilities arising from the acquisition of West African Gold Reserve pty Ltd and its subsidiary Ampella

Mining SARL are as follows:

Fair Value$

Acquiree’s carrying amount

$

Cash and cash equivalents 10,587 10,587

Other debtors and prepayments 4,370 4,370

Fixed Assets 114,220 114,220

Trade and other payables (74,163) (74,163)

Other current liabilities (82,479) (82,479)

Net identifiable assets/(liabilities) acquired (27,465) (27,465)

On 30 May 2008, the company incorporated a fully owned subsidiary, Ampella Mining Gold pty Ltd with a paid up

capital of $2.

8 Opera t ing los s

The loss before income tax has been determined after:


2008$


to 30/6/07$

2008 $


to 30/6/07$

Charging as expenses

Depreciation of plant & equipment 100,399 - 7,855 1,056

Equity-settled share based payments 50,000 - - 89,072

Options issued 16,500 - 16,500 -

Impairment loss – Ampella Mining SARL loan - - 2,331,938 135,000

Impairment loss – Investment in West African Gold Reserve Pty Ltd - - 4,987,133 -

Interest expense 979 - 979 853

Crediting as income

Interest received 316,628 - 316,628 4,327


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9 Income tax


2008$

2007$

2008 $

2007$

Loss from continuing operations before income tax (7,717,995) - (7,701,729) (693,755)

Prima facie tax benefit on operating loss calculated at 30% (2,315,399) - (2,310,519) (208,126)

Option issue 4,950 - 4,950 -

Provisions and other 2,262,027 - 2,203,003 138,769

Capital raising costs (40,626) - (40,626) (14,818)

Income tax benefit not brought to account 89,048 - 143,192 84,175

Income tax expense - - - -


2008$

2007$

2008$

2007$

Deferred tax

Deferred tax assets

Tax losses 2,783,229 - 225,747 56,159

Provisions and accruals 25,080 - 2,248,597 45,594

Capital raising costs 147,686 - 147,686 59,272

Net deferred tax asset not brought to account 2,955,995 - 2,622,030 161,025

10 Cur rent as se t s - Other debtors & prepayments

Other debtors 22,699 - 20,411 13,170

Prepayments 26,823 - 26,823 19,724

Deferred capital raising costs - - - 246,996

49,522 - 47,234 279,890

The deferred capital raising costs and capital raising costs incurred subsequent to 30 June 2007 were offset against

contributed equity (issued capital) in August 2007 as a result of the capital raising of $6,500,000 completed in August

2007.


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11 Non-cur rent as se t s - p lant & equ ipment


2008$

2007$

2008$

2007$

Cost

Net book value opening balance 1 July - - 2,798 -

Acquisition of subsidiary 3,854 - - -

Additions 259,590 - 14,813 3,854

Depreciation (108,185) - (7,855) 1,056

Net book value 30 June 155,259 - 9,756 2,798

Summary

Cost 263,444 - 18,667 3,854

Accumulated Depreciation (108,185) - (8,911) (1,056)

Net carrying amount 30 June 155,259 - 9,756 2,798

12 Non-cur rent as se t s – loans

Loan to related party (Ampella Mining SARL) - - 2,466,938 135,000

less Provision for write off-loan to Ampella Mining SARL - - (2,466,938) (135,000)

- - - -

An impairment loss of $2,331,938 (2007: $135,000) was recognised during the current year. The ability of Ampella

Mining SARL to repay debts due to Ampella Mining Limited will be dependent on the commercialisation of mining

assets owned by Ampella Mining SARL.

13 Non-cur rent as se t s – Inves tments in subs id ia r i e s

Investment in subsidiaries - - 4,987,135 -

less Provision for investments - - (4,987,135) -

- - - -

14 Non cur rent as se t s – o ther f inanc ia l a s se t s

Term deposit for credit card security 50,000 - 50,000 -

50,000 - 50,000 -


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15 Non cur rent as se t s – o ther debtors


2008$

2007$

2008$

2007$

Other debtors (deposits) 7,302 - 1,750 1,750

7,302 - 1,750 1,750

16 Cur rent l i ab i l i t i e s - Trade and other payab les

Trade creditors and accrued expenses 215,520 - 63,379 119,193

Trade creditors for share raising costs - - - 56,052

215,520 - 63,379 175,245

17 Cur rent l i ab i l i t i e s - p rov i s ions

Employee provisions 55,063 - 21,252 1,980

55,063 - 21,252 1,980

18 Other cur rent l i ab i l i t i e s

Amount owing to Incanore Minerals Inc for acquisition of mining information - - - 120,000

- - - 120,000

19 Non cur rent l i ab i l i t i e s - p rov i s ions

End of Employment allowance 8,541 - - -

8,541 - - -

A labour code in Burkina Faso requires a payment of an end of employment allowance to all employees in the country

of 25% of the gross salary per year. Employees are eligible for this payment when they have been with the company

for a period of greater than 1 year and they leave the company due to resignation, retirement or death.

20 Loans f rom re la ted ent i t i e s


2008$

2007$

2008$

2007$

Loan from related entities - - 600 -

- - 600 -


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21 Cont r ibuted equ i t y


2008$

2007$

2008$

2007$

Promoter share issue of 1,000,000 shares in lieu of Group formation 752 - 752 752

Issue of 2,500,000 shares at $0.02 each in August/September 2006 50,000 - 50,000 50,000

Issue of 900,000 shares at $0.10 each in November 2007 90,000 - 90,000 90,000

Issue of 1,000,000 shares for lease guarantee issue at deemed value 5,000 - 5,000 5,000

Issue of 1,600,000 shares at $0.10 each in December 2006 and January 2007 160,000 - 160,000 160,000

Issue of 1,705,000 shares at $0.175 each in April 2007 298,375 - 298,375 298,375

Issue of 400,000 shares at deemed value of $0.2083 as part consideration for a data purchase for the Doulina licence 83,320 - 83,320 83,320

Issue of 32,500,000 shares under Prospectus at issue price of $0.20 each in August 2007 6,500,000 - 6,500,000 -

Issue of 25,000,000 shares to vendors of Ampella Mining SARL at deemed price of $0.20 each in August 2007 5,000,000 - 5,000,000 -

Issue of 250,000 shares at deemed price of $0.20 each in August 2007 50,000 - 50,000 -

Less: Share issue costs (677,101) - (677,101) -

11,560,346 - 11,560,346 687,447

22 Opt ions Reserve

Opening Balance - - - -

Options Issued 16,500 - 16,500 -

16,500 - 16,500 -

Options Reserve

The options reserve is used to record the value of options issued to employees that have vested, as part of their

remuneration. Refer to note 27 for further details.

23 Accumula ted los ses

Opening Balance (693,755) - (693,755) -

Loss for the year (7,717,995) - (7,701,729) (693,755)

(8,411,750) - (8,395,484) (693,755)


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24 Earn ings per share

a) Basic earnings per share

Consolidated

2008Cents

2007Cents

Loss attributable to ordinary equity holders of the Group (12.11) -

b) Diluted earnings per share

Loss attributable to ordinary equity holders of the Group (12.11) -

c) Loss used in calculating basic and diluted loss per share ($7,717,995) -

Number Number

d) Weighted average number of shares used as the denominator in calculating

basic earnings per share 63,714,290 -

Adjustments for calculation of diluted earnings per share:

Options - -

Weighted average number of ordinary and potential ordinary shares used as the denominator in calculating diluted earnings per share 63,714,290 -

No options are considered potentially dilutive.

25 Leases and commitments


2008$

2007$

2008$

2007$

Commitments in relation to leases contracted for at the reporting date but not recognised as liabilities payable:

Within 1 year 8,750 - 8,750 21,000

Later than 1 year but within 5 years - - - 8,750

Later than 5 years - - - -

8,750 - 8,750 29,750

Commitments in relation to minimum expenditures on mining tenements at the reporting date but not recognised as liabilities payable:

Within 1 year 496,800 - - -

Later than 1 year but within 5 years 385,931 - - -

Later than 5 years - - - -

882,731 - - -


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26 Reconc i l i a t ion of los s a f te r tax to net cash out f low f rom opera t ing ac t i v i t i e s


2008$

2007$

2008$

2007$

Operating loss after tax (7,717,995) - (7,701,729) (693,755)

Depreciation 100,399 - 7,855 1,056

Non cash – share based payments 50,000 - 50,000 89,072

Non cash – options issued 16,500 - 16,500 -

Employee entitlements 61,624 - 19,272 1,980

Exploration costs written off 5,000,000 - - -

Impairment losses on loans/investments - - 7,331,938 135,000

Change in operating assets and liabilities:

Decrease / (Increase) in debtors and prepayments (17,833) - (14,341) (34,644)

Increase in trade and other payables 93,111 - (54,332) 119,193

Increase / (decrease) in other current liabilities (120,000) - (120,000) 120,000

Net cash outflow from operating activities (2,534,194) - (464,837) (262,098)

Cash and cash equivalents comprise:

Cash at bank 46,535 - 22,251 6,436

Deposits at call 3,135,602 - 3,135,602 -

Cash on hand - - - 43

Total cash and cash equivalents 3,182,137 - 3,157,853 6,479

Non Cash Investing and Financing Activities

During the year the company issued 25,000,000 shares at a deemed price of $0.20 each to the vendors of West African

Gold Reserve pty Ltd and 250,000 shares at a deemed price of $0.20 each for the acquisition of mineral tenements.

27 Share based payments

Expenses arising from share based payment transactions:

Shares issued in lieu of Group formation costs - - - 752

Shares issued for providing guarantee over lease - - - 5,000

Shares issued for part consideration of data purchase - - - 83,320

Shares issued to vendors of Ampella Mining SARL 5,000,000 - 5,000,000 -

Share issued to Temfor SARL as part consideration for tenements 50,000 - 50,000 -

Options issued as remuneration 16,500 - 16,500 -

5,066,500 - 5,066,500 89,072


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The options were granted on the terms detailed below and valued using the Black-Scholes model using the assumptions

detailed below:

Tranche 1 Tranche 2 Tranche 3 Tranche 4

Grant Date 30/06/2008 30/06/2008 30/06/2008 30/06/2008

Exercise Price $0.077 $0.105 $0.14 $0.21

Vesting Date 30/06/2008 30/12/2008 30/06/2009 30/12/2009

Expiry Date 30/06/2011 30/06/2011 30/06/2011 30/06/2011

Stock Price at Grant Date $0.07 $0.07 $0.07 $0.07

Risk Free Rate 6.4% 6.4% 6.4% 6.4%

Volatility 100% 100% 100% 100%

Value per Option $0.044 $0.040 $0.036 $0.030

Number of Options 375,000 375,000 375,000 375,000

Total value $16,500 $15,000 $13,500 $11,250

28 Re la ted par ty t ransac t ions

The total number of shares held by the Directors or director related entities as at 30 June 2008 are as follows:

Fully Paid Ordinary SharesNumber of

shares 1/7/07

Number of shares

granted as compensation

Net other change number

of shares

Total number of Shares held 30

June 2008

Jan Hope 285,000 - - 285,000

Richard Burden 2,000,000 - - 2,000,000

Peter Williams 200,000 - 7,500,000 7,700,000

Key management personnel compensation

The name and positions held of consolidated entity and Group key management personnel in office at any time during

the financial year are:

Ms Jan hope Non Executive Chairman

Mr Richard Burden Finance Director

Mr peter Williams Director of Exploration until 16/5/08,

Non Executive Director from 16/5/08 to 1/7/08

Mr paul Wright Non Executive Chairman until 21/11/07

Mr paul Kitto Chief Executive Officer

Mr Morou Francois Ouedraogo vice president Exploration, Burkina Faso

Ms Tamara Gray Financial Controller


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The aggregate compensation made to key management of the Group is set out below:

2008$

2007$

Short term employee benefits 718,745 10,038

Post employment benefits 46,938 903

Other long term benefits - -

Termination benefit - -

Share based payment 16,500 -

782,183 10,941

The total number of shares held by the Key management personnel or related entities as at 30 June 2008 are as follows:

Fully Paid Ordinary Shares

Number of shares

1/7/07

Number of shares granted

as compensation


of shares

Total number of Shares held

30 June 2008

Mr Paul Kitto - - - -

Mr Morou Francois Ouedraogo - - 7,500,000 7,500,000

Ms Tamara Gray - - 20,000 20,000

The total number of options held by the Key management personnel or related entities as at 30 June 2008 are as

follows:

Fully Paid Ordinary Options

Number of options

1/7/07

Number of options granted as compensation


of options

Total number of options held 30 June 2008

Mr Paul Kitto - 1,500,000 - 1,500,000

Mr Morou Francois Ouedraogo - - - -

Ms Tamara Gray - - - -

Subsidiaries

Loans are made by the Company to wholly owned subsidiaries to fund exploration and capital purchases. Loans

between the Company and its subsidiaries have no fixed repayment date and are non interest bearing. The value of the

loan to Ampella Mining SARL as at 30 June 2008 totalled $2,466,938 (2007: $135,000) and has been fully provided for.

Rental of Office, Equipment and Company Secretarial fees

The owner of the office premises at Suite 1, 6 Richardson Street, West perth is Mr Grant Mooney, Company Secretary

(full year) and Non Executive Director appointed 1st July 2008. Total rent and outgoings paid during the year to Mr

Grant Mooney totalled $25,200 (2007: $16,908). A company related to Mr Grant Mooney, Mooney and partners was

paid a total of $66,019 including GST for Company Secretarial fees during the year (2007: Nil).

Mr peter Williams is a related party to Mark 2 Geophysics pty Ltd. During the year, Ampella Mining Sarl rented

magnetometers from Mark 2 Geophysics pty Ltd for a total of $10,500 (2007: $Nil).


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29 Remunerat ion of aud i to r s


2008$

2007$

2008$

2007$

Remuneration of the auditor for:

Auditing or reviewing the financial report by Stantons International 37,012 - 37,012 10,000

Auditing or reviewing subsidiary accounts by Fidexco S.A. 5,918 - - -

Other audit services – manual of procedures by Fidexco S.A. 11,155 - - -

Remuneration of a related practice of the Group auditor:

Other audit services – investigating accountants report - - - 6,983

54,085 - 37,012 16,983

The auditor of the Group is Stantons International. The auditor of the subsidiary Ampella Mining SARL is Fidexco S.A.

30 Subs id ia r i e s

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:

Name of entityCountry of

incorporation Class of shares

2008 Equity Holding

%

2007 Equity Holding

%

West African Gold Reserve Pty Ltd Australia Ordinary 100% 0%

Ampella Mining SARL Burkina Faso Ordinary 100% 0%

Ampella Mining Gold Pty Ltd Australia Ordinary 100% 0%

Ampella Mining Limited acquired 100% of West African Gold Reserve pty Ltd on 4 July 2007. West African Gold

Reserve pty Ltd owns 100% of the issued capital of Ampella Mining Sarl, who holds mining tenements in Burkina Faso,

West Africa. The purchase was satisfied by the issue of 25,000,000 shares in Ampella Mining Limited at an issue price

of $0.20 each.

Details of the net assets acquired and goodwill are as follows:


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2007$

2006$

Purchase consideration:

25,000,000 shares issued at deemed cost of $0.20 each 5,000,000 -

Less $US10,000 deposit paid on asset purchases (12,867)

Assets and liabilities acquired at acquisition date:

Cash and cash equivalents 10,587 -

Other debtors and prepayments 4,370 -

Fixed assets 114,220 -

Trade and other payables (74,163) -

Other current liabilities (82,479) -

Fair value attributable to interest in mining projects and expensed in accordance with Ampella’s accounting policy 5,014,598 -

The assets and liabilities arising from the acquisition are recognised at fair value which are equal to their carrying value

at acquisition date.

Ampella Mining Gold pty Ltd was incorporated on 30 May 2008 with an issued share capital of $2.

31 Events subsequent to Ba lance Date

On 1 July 2008, Mr peter Williams resigned from position of Non Executive Director and Mr Grant Mooney was

appointed in his place.

On 4 July 2008 Ampella Mining Limited, through its wholly owned subsidiary Ampella Mining SARL signed a binding

Memorandum of Understanding with Savadogo Mamoudou et Associes to acquire a 100% interest in five new gold

tenements totalling 811 square kilometres in the West African country of Burkina Faso. The tenements are located

along the major gold-bearing shear zone that marks the southwestern extension of the Boromo Greenstone Belt.

On 11 August 2008 Ampella Mining Limited signed an agreement with NRG Exploration to complete a helicopter

airborne magnetic and radiometric survey for US$308,800 (AUD $346,966), in September 2008.

On 7 August 2008 Ampella Mining Gold SARL was incorporated in Burkina Faso as a fully owned subsidiary of Ampella

Mining Gold pty Ltd.

On 3 September 2008, Ms Jan hope resigned from the position of Non Executive Director. In addition Mr William

J Ryan and Mr Charles Soh have been appointed as directors effective 3 September 2008. Mr Richard Burden has

resigned and will cease employment on 26 September 2008.

No other matters or circumstances have arisen since the end of the financial period which have significantly affected or

may affect the operations of the Group, the results of its operations or the state of affairs of the Group in subsequent

financial years.


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The Directors declare that:

a) The financial statements and notes set out on pages 28 to 50 and the additional disclosures included in the

Directors’ report designated as audited are in accordance with the Corporations Act 2001, including:

i. Complying with Accounting Standards and the Corporations Act 2001 and other mandatory professional

reporting requirements; and

ii. Giving a true and fair view of the financial position of the Consolidated Entity and Company as at 30 June

2008 and their performance ended on that date.

b) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as

and when they become due and payable;

This declaration has been made after receiving the declarations required to be made to the Directors in accordance with

Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2008.

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

On behalf of the Directors

William J Ryan

Director

23 September 2008

D IRECTORS’ DECLARAT IONF

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INDEpENDENT AUDITOR’S REpORT TO ThE MEMBERS OF AMpELLA MIN ING L IMITED

Report on the Financial Report and the AASB 124 remuneration disclosures contained in the Directors’ Report

We have audited the accompanying financial report of Ampella Mining Limited, which comprises the balance sheet as at

30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended

on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration

of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time

during the financial year.

We have also audited the remuneration disclosures contained in the Directors’ Report under the heading “remuneration

report” on pages 19 to 21.

Directors’ responsibility for the Financial Report and the AASB 124 remuneration disclosures contained in the

Directors’ Report

The directors of the Company are responsible for the preparation and fair presentation of the financial report in

accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the

Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant

to the preparation and fair presentation of the financial report that is free from material misstatement, whether due

to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are

reasonable in the circumstances. In note 2, the directors also state, in accordance with Australian Accounting Standard

AASB 101 presentation of Financial Statements, that the financial report of the Group, comprising the financial

statements and notes, complies with International Financial Reporting Standards.

The directors of the Company are also responsible for the remuneration disclosures contained in the Directors’ Report.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in

accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant

ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance

whether the financial report is free from material misstatement. Our responsibility is also to express an opinion on the

remuneration disclosures contained in the Directors’ Report based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

report and the remuneration disclosures contained in the Directors’ Report. The procedures selected depend on the

auditor’s judgement, including the assessment of the risks of material misstatement of the financial report and the

remuneration disclosures contained in the Directors’ Report, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the

financial report and the remuneration disclosures contained in the Directors’ Report in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of

the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the

financial report and the remuneration disclosures contained in the Directors’ Report.

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INDEpENDENT AUDITOR’S REpORT TO ThE MEMBERS OF AMpELLA MIN ING L IMITED

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion on the financial report

In our opinion:

(a) the financial report of Ampella Mining Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2008 and

of their performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the

Corporations Regulations 2001.

(b) the financial report of the Group also complies with International Financial Reporting Standards as disclosed in

note 2.

Auditor’s opinion on the AASB 124 remuneration disclosures contained in the directors’ report

In our opinion the remuneration disclosures that are contained in pages 19 to 21 of the Directors’ Report comply with

section 300 A of the Corporations Act 2001.

Inherent Uncertainty Regarding Going Concern

Without qualification to the opinion expressed above, attention is drawn to the following matters:

As referred to in Note 2 to the financial statements, the financial statements have been prepared on the going concern

basis. At 30 June 2008 the consolidated entity had working capital of $2,961,076 and had incurred a loss for the

year of $7,717,995. The ability of the Company and consolidated entity to continue as going concerns and meet their

planned exploration and administration commitments is dependent upon the Company and its subsidiaries raising

further working capital. In the event that the Board is not successful in recapitalising the Company and in raising further

funds, the Company and consolidated entity may not be able to continue in their present form and may not be able to

meet their planned expenditure commitments.

STANTONS INTERNATIONAL

(An Authorised Audit Company)

J p van Dieren

Director

West perth, Western Australia

23 September 2008

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Twenty largest shareholders

Name

Number of ordinary shares

held

Percentage of capital held

%

Mr Laurent Emmanuel Coulibaly 7,500,000 11.22

Mr Morou Francois Ouedraogo 7,500,000 11.22

Mr Peter Kym Williams 7,500,000 11.22

African Lion 2 Limited 3,000,000 4.49

J P Morgan Nominees Australia Limited 3,000,000 4.49

Kingslane Pty Ltd <The Cranston Super A/C> 2,750,000 4.11

Ms Paula Larking 2,500,000 3.74

Mr Evan Alexander Cranston 2,017,174 3.02

Kingslane Pty Ltd Cranston Super Fund A/C 1,780,500 2.66

AFM Perseus Fund Ltd 1,500,000 2.24

Mr Richard John Burden & Ms Joanne Lee Burden <Burden Family No 2 A/C> 1,500,000 2.24

Mr Martin Francis Hickey 800,000 1.20

Ms Katina Maria Ethel Law & Mr Peter Sigfred Law <Katina Law Family A/C> 750,000 1.12

Mr Larry James Treasure 700,000 1.05

Fortis Clearing Nominees Pty Ltd Settlement A/C 667,461 1.00

Mr Malcolm Haines & Ms Jennifer Haines <Kymdog Superfund A/C> 570,000 0.85

Mr David Williams <David Williams Family A/C> 550,000 0.82

Burden Superannuation Fund 500,000 0.75

Gecko Resources Pty Ltd 450,000 0.67

Martineau Resources Pty Ltd 450,000 0.67

45,985,135 68.78

Distribution of holders of equity securities

Number of fully paid ordinary

shares

Number of holders of fully paid ordinary

shares


%

1 – 1,000 1,372 2 0.00

1,001 – 5,000 29,559 7 0.04

5,001 – 10,000 868,626 90 1.30

10,001 – 100,000 10,588,719 251 15.84

100,001 and over 55,366,724 65 82.82

66,855,000 415 100.00

Holding less than a marketable parcel 18

Restricted Securities

There are 28,485,623 restricted securities which are held in escrow as at 30 June 2008. 250,000 of securities were

released from escrow on 13th August 2008, with the remainder to be released on 13th August 2009.

Company Secretary

The name of the Company Secretary is Grant Jonathan Mooney.

ADDIT IONAL INFORMATION AS AT 19 SEpTEMBER 2008

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Substantial Shareholders

Name

Number of ordinary shares

held


%

Mr Laurent Emmanuel Coulibaly 7,500,000 11.22

Mr Morou Francois Ouedraogo 7,500,000 11.22

Mr Peter Kym Williams 7,500,000 11.22

Kingslane Pty Ltd 4,169,500 6.2

Use of Funds

Since admission to the official list of the ASX, the Company has used its cash and assets in a form readily convertible to

cash in a way that is consistent with its business objectives.

Schedu le o f Min ing Tenements

Name Tenement Number Location Holding

Kandy 2007/07-045/MCE /SG/DGMGC Burkina Faso 100%

Madougou 2005/05-176/MCE/ SG/DGMGC Burkina Faso Option to acquire100%

Doulnia 2007/ 07-041/MCE /SG/DGMGC Burkina Faso 100%

Donko 2007/07-044/MCE/ SG/DGMGC Burkina Faso 100%

Kampala 2008/08-062/MCE/SG/DGMGC Burkina Faso 100%

Tiopolo 2005/153/MCE/SG/DGMGC Burkina Faso Option to acquire100%

Danhal 2005/132/MCE/SG/DGMGC Burkina Faso Option to acquire100%

Mabera 2008-030/MCE/SG/DGMGC Burkina Faso Option to acquire100%

Kpere Batie 2008-139/MCE/SG/DGMGC Burkina Faso Option to acquire100%

Gbingbina 2008-138/MCE/SG/DGMGC Burkina Faso Option to acquire100%

Unquoted Securities

Unlisted Options

Holder Exercise Price Expiry Date No Options

Paul Kitto $0.077 30/06/2011 375,000

Paul Kitto $0.105 30/06/2011 375,000

Paul Kitto $0.140 30/06/2011 375,000

Paul Kitto $0.210 30/06/2011 375,000

Registered Office

Suite 1, 6 Richardson Street

West perth WA 6005

ph: 08 9226 5299, Fax: 08 9226 5399

ADDIT IONAL INFORMATION AS AT 19 SEpTEMBER 2008

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The peop le o f Burk ina Faso a re renowned th roughout Af r i ca fo r be ing upr ight and hones t . Ampe l la Min ing a ims to

re f lec t these va lues by ac t ing wi th hones ty and in tegr i t y in a l l i t s dea l ings . The Company i s commit ted to c rea ing

va lue fo r i t s shareho lder s and the communi t i e s in wh ich we opera te , th rough the deve lopment o f wor ld c la s s mines

in a sa fe and env i ronmenta l l y respons ib le manner.

A N N U A L R E P O R T 2 0 0 8

Ampel la Min ing L im i ted ABN 59121152001

Su i te 1 , 6 R i chardson S t ree t , West Pe r th WA 6005

Ph: +61 (8 ) 9226 5299 Fax : +61 (8 ) 9226 5399 www.ampe l la . com.au

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