ZAMANCO MINERALS LIMITED ANNUAL REPORT 2013 Annual Report.pdf · Zamanco Minerals Annual Report ......

ZAMAANCO MINERRALS LLIMITEDD ANNUAL R

2013REPORT

3 T

Zamanco Minerals Annual Report 2012

ContentsContents

Page

Corporate Directory 1Revi ew of Operations 2Report of the Directors 19Corporate Governance Statement 27Auditor’s Independence Decl arat ion 33Consol i dated Statement of Prof i t or Loss and OtherComprehensive Income

34

Consol i dated Statement of F inanc ial Posit ion 35Consol i dated Statement of Cash Flows 36Consol i dated Statement of Changes in E quity 37Notes to the Consol i dated Financi al Statements 38Directors’ Dec larat ion 65Independent Audit Repor t 66Addit i onal ASX I nformati on 68Tenement Schedule 70

Zamanco Minerals Annual Report 2013 1

Corporate Directory

Directors Share Registry

Geoffrey Donohue Computershare Investor Services Pty LtdJacques Badenhorst Level 2, Reserve Bank BuildingThomas Hill 45 St George’s TerracePeter McIntyre PERTH WA 6000Peter Ironside

Company Secretary Auditor

Peter Ironside BDO Audit (WA) Pty LtdChartered Accountants38 Station StreetSUBIACO WA 6008

Registered Office Bankers

168 Stirling Highway ANZ BankNEDLANDS WA 6009 32 St Quentins AvenueTelephone: (08) 9287 7625 CLAREMONT WA 6010Facsimile: (08) 9389 1750

Solicitors

Steinepreis PaganinLevel 4, Next Building16 Milligan StreetPERTH WA 6000


Review of Operations

HIGHLIGHTS

Exploration undertaken on several projects using geophysics and trenching, focused on identifyingmanganese drilling targets on several projects;

JV agreement entered into on the prospective Nkundalila license area, further increasing Zamanco’stenement portfolio and resource opportunities; and

Work undertaken on a Bankable Feasibility Study of the proposed Serenje Ferromanganese Project.

SERENJE FERROMANGANESE PROJECT - INTRODUCTION

During the year, the Company continued its focus on the development of a ferromanganese and manganeseoperation at Serenje in Zambia.

The Serenje Ferromanganese Project has developed from an initial concept of developing a downstreammanganese production project to the current position where the Company has commenced a Bankable FeasibilityStudy (“BFS”) on the project.

Key components of the BFS commenced, including smelter design and layout studies, transport studies,environmental impact assessments as well as power requirements for the project. Work on the smelter designand site layout is well advanced with detailed metallurgical information required to complete the final design. TheEnvironmental Impact Assessment was lodged with the relevant authorities at the end of July 2013.

The supply of ore for the proposed plant is to be sourced from Zamanco projects as well as from local producersthat are unable to transport or sell their product. In order to meet the manganese ore requirements for theferromanganese project, the Company commenced exploration activities on a number of projects in Zambia withthe objective of defining sufficient resources to support the project. In addition, it has commenced discussionswith a number of small-scale miners with a view to acquiring ore via ore sales agreements, particularly for lowcost fines material that is currently stockpiled as a non-saleable product.

During the year, exploration activity consisted of geophysical surveys conducted on several projects and follow uptrenching at the Chinsali, Kampumba and Nkundalila projects. Trenching has so far identified manganesemineralisation over 4.5km at Chinsali and 3.0km at Nkundalila. Exploration is expected to increase in the secondhalf of 2013 with drilling planned.



ZAMBIAN MANGANESE PROJECTS

The Company has entered into several Joint Ventures in the Mansa, Milenge, Kabwe, Mkushi, Serenje and Chinsaliareas covering a number of Large Scale and Small Scale Prospecting Licences. These Licences were affected by agovernment suspension on the renewal, issue and transfer of mine licences imposed in October 2011 following itselection to office.

On 30 March 2012, the Zambian Government of President Michael Sata announced that it would phase out thesuspension. The lifting of the suspension has enabled the transfer of those Prospecting Licences to newly formedJV companies and exploration to commence.

A backlog of applications is waiting to be processed and Zamanco applications have been approved on an ad hocbasis during the last two quarters of the year.

Figure 1: Zamanco’s tenements in Zambia



Tenement Details

During the year, the Company expanded its portfolio of tenements in Zambia, and licence transfers werecompleted for a number of tenements to the newly formed JV companies.

TenementName

TenementNumber

Area Registered Holder % Interest Status

Mkushi 15836-HQ-SPP 347ha Zamanfour Minerals Ltd Zamanfour Minerals Ltd -49%

Jack Stuart 51%

Mkushi 17585-HQ-LPL 419ha Zamanfour Minerals Ltd Zamanfour Minerals Ltd -80%

Jack Stuart – 20%

Mansa 15817-HQ-LPL 100,739ha Zamantwo Minerals Ltd Zamantwo Minerals Ltd -80%

Jack Stuart - 20%

Mansa Newapplication

40,158.00ha Evaristo Mutambo Zamanthree Minerals Ltd -80%

Evaristo Mutambo – 20%

Transfer toZamanthreeMinerals Ltdpending approvalof application

Milenge 12897-HQ-LPL 77,704ha Albert Malama Zamanone Mining Ltd - 80%

Albert Malama – 20%

Mutambe

(Chinsali)

14493-HQ-LPL Mutambe RoyalEstablishment

100% interest in MineralRights pursuant to Miningand Exploration Agreementand Security Assignment

Nkundalila 18379-HQ-SPP 880ha Nkundalila Small ScaleMines Limited

Zamanfive Minerals Ltd -70%

Nkundalila Small ScaleMines Limited - 30%

Transfer pending -adjustment oftenementboundaries

Kampumba 14340-HQ-SPP 231.89ha Evaristo Mutambo - Tenement transferdid not proceeddue to poormineralisationfollowingexploration.



ZAMBIA EXPLORATION

The Company has commenced exploration on its tenements with the aim being discovery and delineation ofmanganese resources suitable for the proposed ferromanganese development project. Throughout the year, thevarious projects were assessed and prioritised according to prospectivity.

During the year, the following exploration activities were undertaken on the Zambian projects:Site reconnaissance and mapping;Surface sampling and Niton XRF surveys;Geophysical surveys;Landsat TM data acquisition and interpretation; andTrenching and sampling.

Ongoing exploration activities by the Company are progressing towards the evaluation of manganese targets inorder to prioritise drilling over the Company’s tenements. A programme of geophysical surveys was completedover three areas (Chinsali, Mkushi, and Kampumba) as part of initial assessment. These areas were chosen as theycontained known manganese outcrops and occurrences.

The ground-borne geophysical surveys comprised magnetic, gravity, resistivity and conductivity surveys. Theapplication of geophysical methods to manganese exploration in Zambia is relatively untested, and the variousmethods were employed to both help find and delineate deposits, as well as determine which geophysicalmethods give the best response for the different manganese mineralisation styles known to exist in Zambia.

The geophysical surveys were used to better map the manganiferous ore zones as a precursor to possible futuredrilling.

Follow-up trenching work was completed at Chinsali and Kampumba as well as at the recently acquired Nkundalilatenement. The results at Chinsali and Nkundalila have shown lateral continuity of manganese mineralisation andexcellent geophysical correlation with mineralisation in the case of Chinsali. At Kampumba, the local geology wasfound to be structurally complex which has impacted on the immediate continuity of mineralisation at thetenement.

Over the course of the year, the tenements that have shown the best prospectivity for the possible definition ofmineral resources are Chinsali and Nkundalila. Drilling is planned at Nkundalila for the September 2013 quarter.

The Kampumba and Mkushi projects had their prospectivity downgraded during the year. The downgrade ofthese tenements is largely based on a review of their possible contribution to mineral resources of the Company.Prospectivity is related to the identified strike length of manganiferous mineralisation in the field, and initialindications of grade based on limited grab sampling and portable XRF measurements. The Kampumba andMkushi tenements still show some indications of manganese mineralisation, but they do not rate as highly asChinsali and Nkundalila and therefore exploration on them has been stopped.



Chinsali (13487-HQ-SPP)

Exploration at Chinsali identified a relatively high level of iron associated in the historically identified manganesemineralisation. The manganese occurrences there were expected to have a magnetic signature. This assumptionwas borne out by the total magnetic intensity (TMI) results, which show strong south-west to north-east trendsthat are aligned with the contacts between the different rock types.

The strong positive linear anomaly seen in Figure 2 measures at least 4.5 km in strike and was found to beconcordant with the subsequently mapped manganese mineralisation in the field reconnaissance phase.

Figure 2: TMI image showing linear magnetic anomaly concordant with mapped Mn-mineralisation at Chinsali

Reconnaissance field mapping confirmed the presence of anomalous manganese mineralisation in the licensearea. On the basis of this, a follow-up programme of field mapping and trenching was initiated which hasconfirmed the surficial extent, and morphology of the manganese mineralisation.

Seven trenches were excavated during March and April 2013. Of these trenches, the five excavated along thesouth-eastern linear anomaly in Figure 2, successfully intersected anomalous manganese mineralisation.Manganese mineralisation was confirmed over a strike length of approximately seven kilometres taking the formof one to two sub-vertical to north-westerly dipping veins parallel to layering and either associated with quartzveining or deposition of manganese along bedding planes and pore spaces within the lithologies. The veinsintersected in the five trenches were sampled and 144 samples submitted for analysis. The summarised and



composited results are shown in Figure 5 - it is important to note that grades indicated from assays have beencomposited using a 5% cut-off and samples are largely collected within a weathered zone.

Intersection of vein-type manganese mineralisation in trench at Chinsali

The field mapping successfully extended the known strike extent of the veins thus far identified and identifiedadditional sub-parallel veins and other targets within the license area for future follow-up. On the basis of thework conducted to date, a drill programme is being developed to test the strike and depth extensions and downdip orientation of the veins to provide grade, width and physical characteristic information with a view topotentially defining mineral resources on the project.



Figure 3: Geological plan showing confirmed extent of manganiferous vein and the position of Trenches (1-7)and Proposed Boreholes (A-K) at Chinsali

The manganiferous intersections in the surficial weathered zone intersected were composited and themineralisation and logging used to update the geological plan. Figure 3 indicates the position of mineralisationwithin the trenches at Chinsali with the composites taken along the trenches and therefore representing apparentthicknesses, trenches have been treated as horizontal boreholes.



The best mineralisation visually (and on the basis of the assay results) is located in the central zone of themineralisation trend around Trench 1 (CS01DO in Figure 4).

Figure 4: Surficial mineralisation across veins in trenches 1-5 at Chinsali (composites using a 5% Mn cut-off)

CS01D0

CS02D0

CS03D0

CS04D0

CS05D0

CS06D0

CS07D03920000

3920000

3925000

3925000

3930000

3930000

3935000

3935000

3940000

3940000

3945000

3945000

3950000

3950000

3955000

3955000

8776

0000

8776

0000

8776

5000

8776

5000

8777

0000

8777

0000

8777

5000

8777

5000

8778

0000

8778

0000

8778

5000

8778

5000

8779

0000

8779

0000

8779

5000

8779

5000Chinsali Trenches

Assays Mn% (>5%)

WGS84_UTM36SDRAWN BY:M.J.PHIPPS

Tick mark spacing ontrenches 25 metres

0 250 500 750 1000

BHID FROM TO LENGTH Mn% Fe2O3%

CS01D0CS01D0CS01D0CS01D0CS01D0CS01D0CS01D0CS02D0CS02D0CS02D0CS03D0CS03D0CS04D0CS05D0CS05D0CS05D0

710

315.5319321327359120

124.51486285

1557477

243

811

316.5320322328

360.812213015064.591

159.27680

245

111111

1.82

5.52

2.56

4.2232

6.8610.326.865.025.56

17.8625.357.887.44

12.6814.4010.4510.326.415.976.59

8.1320.0029.9115.1010.3417.5512.4214.5118.1841.1920.5626.6920.4715.3225.5013.21



Utilising soil gridding information collected by a Niton handheld XRF, field mapping data, Landsat images andassociated band interpretations, trench logs and assay results, a 3D geological model (Figure 5) has been createdfrom the available data to plan a drill programme to intersect the mineralised vein at depths of 30m to 100m. Thisdrilling would provide sufficient information to define a mineral resource where possible.

Figure 5: Planned drilling programme for Chinsali



Nkundalila Project (18379-HQ-SPP)

The Nkundalila tenement is located approximately 3km south of the town of Kanona, and 30km ENE of theSerenje smelter site. A comprehensive field programme is currently underway with an extensive phase of bothfield mapping, Landsat image acquisition and interpretation and trenching already completed. This programmeculminated in the identification of approximately 3km of outcropping manganiferous vein and the possibleextensions of this vein for a further 2.5km of strike. The manganiferous vein/s dip towards the north and appearto be sub-parallel to the layering.

Eleven trenches were excavated at Nkundalila during the second half of the period and 485 samples collected.The samples have been submitted for analysis and the collected point and depth data modelled. A target will bedefined with the receipt of assay results for follow-up drilling, planned for the September 2013 quarter.

Figure 6: Nkundalila, mapped Mn-vein, possible extensions and positions of excavated trenches



Kampumba (14340-HQ-SPP)

The Kampumba deposit represents a vein type manganese deposit. The occurrence is marked by an existingartisanal pit centred on the vein. Various phases of geophysical work were undertaken including initial groundmagnetics, followed by gravity and conductivity surveys. The TMI results for Kampumba broadly show west-southwest to east-northeast regional trends with significant magnetic anomalies in the vicinity of the existing pitand outcrop position. There are very prominent magnetic features located to both the south and north of theexisting pit.

Figure 7: Kampumba Magnetics (Total Magnetic Intensity)

Follow-up conductivity and gravity surveys yielded further anomalies close to the existing artisanal pit andresulted in recommendations for trenching by the geophysicists. Twelve trenches were excavated on the licensearea over identified gravity anomalies. The Trenching failed to indicate a clear correlation of manganesemineralisation and the geophysical anomalies.

The trenching exercise provided data on the structural setting and highlighted the complexity of the geology.Structural disturbances may account for the apparent lack of continuity of mineralisation. Based on these results,whilst it appears that there is still good prospects for mineralisation at Kampumba, the project is unlikely togenerate sufficient resources in the near future to sustain the Serenje Ferromanganese Project.



Mkushi (15836-HQ-SPP)

The Mkushi manganese occurrence is tabular and sub-parallel to layering. The manganese at Mkushi appears tohave a relatively low Fe content, with a low magnetic signature anticipated. The overall grade of the manganeseoccurrences in the tenement are comparatively low with an average manganese content of 29.56% Mn based onlimited grab sampling. Initial magnetic results for Mkushi show a strong south-west to north-east trend, whichcorrelates well with the known stratigraphy. The existing occurrence (veins intersected in historically excavatedtrenches) of manganese is located to the south-west part of the permit area and covers a lateral extent ofapproximately 150m. Further geophysical exploration targeted Areas A and B in Figure 8 via gravity, conductivityand resistivity surveys. Some of this work showed a strong correlation with the surface outcrops but owing to thelimited extent of the license area and apparent low grade returned from surface Niton XRF readings, thetenement has been assigned a low priority for later follow-up work.

Figure 8: Mkushi magnetics showing existing trenches and Phase II geophysical follow-up areas

Mkushi (15837-HQ-SPP)

A manganiferous layer has been observed on this site with mineralisation dominantly taking the form of porespace and bedding plane infillings. A strike length of at least 800m and a layer thickness of 1 to 3m is observed,however, similarly to license 15836, the possible lateral extent of this tabular occurrence is low due to therelatively small license area and in addition the observed (by handheld XRF) grades are low, in the region of 5% to20% Mn. The initial reconnaissance work identifies manganese potential, but due to its low grade and smallpossible extent it is also given a low priority for later follow-up.

Phase II Area A

Phase II Area B



Mansa (15817-HQ-LPL) and Milenge (12897-HQ-LPL)

These two permits proximal to the town of Mansa in the Luapula Province in Zambia have only been the subjectof a high level review and reconnaissance trip to the Mansa region. License 15817 spans both basement granites(known to host manganese prospects in the region) with regional transgressive faults and the unconformitybetween the granites and the Katanga Supergroup metasediments. Similarly license 12897 lies at the boundary ofthis unconformity. Structural disturbances provide conduits for mineralising fluids and hence increase theprospectivity of these two license areas. Future planned work includes further analysis of already obtainedsatellite imagery and ground truthing of structures and prospective sites.

OPTIONS ANALYSIS

EPCM consultants, EPS were commissioned by Zamanco to investigate different process routes for thedownstream processing of manganese ore in Zambia. As the Company has already investigated various limitingfactors such as power, haulage and sea transport, the study was based upon the premise of the production of60,000tpa of high carbon ferromanganese and 12,000tpa of manganese metal.

The scope requirement was to investigate the economics of producing HC FeMn as well as looking at the variousother alloys that can be produced from HC FeMn. These included medium carbon FeMn (MC FeMn), low carbonferromanganese (LC FeMn) and SiMn. The scope included the determination of the various plant requirements forthese various options as well as the amounts of consumables required for each option.

An assessment was undertaken of the various furnace technologies that are available and their suitability for aproject of this scale. It reviewed AC vs. DC technology and the environmental, safety and performance issues ofeach technology.

Study Results

The intention of the option study was to evaluate several process routes in order to determine which are morefavourable. These high-level selection criteria will be used to generate the scope for further studies or to definethe constraints for product selection as part of a Bankable Feasibility Study. The option study has identifiedseveral areas where additional work is required to ensure that project and operational risk is mitigated. The mostimportant is complete ore characterisation including beneficiation, calcining (if required) and smelting tests.

In order to produce any other ferromanganese alloy products it is necessary to first install a HC FeMn smelter. Thedesign intent was for three small furnaces to be constructed followed by adding a converter section for theproduction of MC FeMn as well as an additional small smelter for the production of SiMn. Initial start-up willproduce a HC FeMn product allowing other products to follow in the next phases of the project.

The converter route producing a medium carbon ferromanganese (MC FeMn) product shows the most favourableoperating cost value addition. This however must be weighed against the initial capital investment of a converterand associated peripherals to be determined.

The furnace design can be optimised so that it is possible to produce both HC FeMn and SiMn from the samefurnaces, which allows flexibility in the final product depending on market requirements.



The following process routes were investigated:

1. High Carbon Ferromanganese (HC FeMn)

a. The first option includes the use of a high grade ore and addition of iron scrap to supplement the shortageof iron units. Iron units can alternatively be supplemented by iron ore.

b. The second option includes the use of high grade ore together with an iron rich low grade ore to eliminatethe use of iron scrap additions.

2. Medium/Low Carbon Ferromanganese (MC/LC FeMn)

a. The first option is to install a converter and to convert HC FeMn to MC and/or LC FeMn by oxygenblowing.

Figure 9: MC FeMn or LC FeMn production with a converter

b. The second option is to utilise SiMn and the mixing of a lime ore melt in a ladling process called the Perrinprocess.

3. Silicomanganese (SiMn)

a. This option utilises the HC FeMn slag with HG ore addition to produce SiMn.

4. Manganese (Mn)

a. Metallic manganese production by aluminothermic reduction is a licenced process under third partyscope.

For the production of HC FeMn, the study found that it would require 121-141ktpa of ore to produce 60ktpa of HCFeMn, depending if option 1a or 1b was implemented.

For the proposed subsequent conversion of HC FeMn to MC/LC FeMn, the study showed that the 60ktpa of HCFeMn could be converted into 56ktpa of MC FeMn or 52ktpa of LC FeMn. This was shown by the authors to bequite important as although it would result in 7% less product per annum, the MC FeMn price is significantly



higher than that for HC FeMn (currently 60% higher), which would outweigh the loss of volume. The studyindicated that a converter would be required to produce MC FeMn and that further work was required todetermine the cost-benefit analysis of the additional capital required.

For the production of SiMn, it was indicated that it would be possible to produce SiMn using the same furnaces asthe HC FeMn whilst utilising the slag from HC FeMn as the ore feed. EPS estimated that 9.5ktpa of SiMn could beproduced from the waste slag product and the addition of 4,200tpa of high-grade manganese ore.

BANKABLE FEASIBILITY STUDY

Zamanco’s management, in association with its consultants, have been investigating and assessing the processingplant requirements for the Serenje Manganese Project for over a year. At each stage of the process, the proposedconfiguration has been calibrated against the available power, water and resource availability to determine aproject that is economically robust and able to be built using these constraints.

The Bankable Feasibility Study (“BFS”) will involve the assessment of a number of variables from the objective ofminimising risk and maximising project value. During the BFS, several alternative production scenarios will beassessed on the basis of meeting these objectives.

Prior to the commencement of a BFS the following is the single priority of the Company:

Resource Drilling and Estimation –. A drilling program is planned to be conducted at the Nkundalila Project in theSeptember Quarter of 2013. Following the drilling, the trenching and drilling sampling data will be interpreted andused to calculate a maiden JORC-compliant resource estimate, if warranted. Mineral Processing and recovery testwork will be conducted as part of the mineral resource evaluation process to determine the yield and productgrade to be produced from any resource.

Following the definition of sufficient JORC compliant Mineral Resources to underpin the Serenje FerroManganeseProject, the following work will be completed as part of a BFS:

Pyrometallurgical Studies – Following on from the previously completed Option Analysis, this study will look indetail at the requirements for the production of medium-carbon ferromanganese and/or high-carbonferromanganese and silica manganese. The study will assess the alternatives of staging the development of thevarious smelters versus the construction of the plant in one go. Environmental and Process Solutions (“EPS”),based in South Africa, was appointed to manage the smelter and smelter infrastructure components of the BFS.EPS has extensive experience in ferromanganese smelting and processing, including completing a Pre-FeasibilityStudy for Kalahari Resources and the appointment by BHP Billiton for engineering and design of environmentalprojects at its Meyerton works.

At the end of the year, EPS progressed to a 90% completion of the design works for the smelter and its site layout.Geotechnical site drilling was completed during the June quarter for use in the civil design of the smelter complexas well as for use in the EIA submission.

Mining Studies –Mining studies will commence subsequent to the release of a JORC compliant Mineral Resource.The mining study will look at the mining equipment and personnel requirements for an open pit mining operationand beneficiation plant.

Haulage Studies – This study will look at the haulage requirements of ore from the mine to the proposed smeltersite at Serenje, as well as haulage requirements to export MCFeMn and SiMn from Serenje to Beira or Dar esSalaam.



Environmental, Permitting and Social Studies – The environmental and social aspects of the study will commencefor the Serenje component of the project, with the studies relating to the mine areas to commence once themining studies are underway. These studies will look at the environmental impact of the proposed activities, waysof minimising disturbance as well as ways to increase the social participation rate for stakeholders in the vicinityof the project.

All aspects of the environmental study for the smelter were completed during the June 2013 quarter. Subsequentto the year-end, the final disclosure meeting took place with the study report being finalised and submitted forapproval at the end of July 2013.

Economics and Optimal Financing Strategies – It is expected that the BFS will result in at least two differentdevelopment strategies based on either the construction of the project in one go or as a staged approach withsubsequent components financed out of cashflow. In conjunction with project financiers, the Company will assessthe route that maximises the benefits and minimises risks for the Zamanco shareholders.

Figure 10: Proposed Serenje Smelter and Site Layout



OUTLOOK

The Company has made significant progress on the proposed Serenje Ferromanganese Project. The OptionsAnalysis highlighted the robust economics of the potential project and steered the focus towards medium carbonferromanganese and silica manganese production scenarios

The technical and environmental components of project concept are well advanced, with the designs for thesmelters nearly complete. The environmental impact study for the smelter has been submitted to the Zambianauthorities for review.

Following the lifting of the moratorium on the granting and transfer of mineral tenure by the ZambianGovernment, exploration again continued in earnest which has led to the successful positioning of one ofZamanco's prospects for resource drilling programmes.

Exploration drilling is planned for the Nkundalila project, where manganese outcrops of ore grade manganesemineralisation have been identified over several kilometres of strike. The testing of the depth and continuity ofmineralisation is the next step in the process of establishing mineral resources within the Company’s tenementpackage.

The exploration tenement portfolio has expanded and changed throughout the year. It is now recognised that theresources required to sustain the project will likely come from a number of different sources owing to therelatively small average orebody size recognised in the region. The Company has an ongoing process of tenementassessment and investigation aimed at increasing the quality of the portfolio and delivering the resource tonnagerequired.

The Company is confident that it will be able to secure sufficient resources for the proposed SerenjeFerromanganese Project, through exploration success from its projects and/or acquisition of known resources.The publishing of manganese resources will be an important milestone, with the focus to then shift to miningstudies and an analysis of the beneficiation and smelting properties of the resources.

Subject to successful exploration results, financing and regulatory approvals, the Company is planning on thecoming 12 months being a transformation period as it looks to commence formal development of the SerenjeFerromanganese Project.

Certain information in this announcement refers to the intentions of Zamanco Minerals Limited, but these are not intended to be forecasts,forward looking statements, or statements about future matters for the purposes of the Corporations Act or any other applicable law. Theoccurrence of events in the future are subject to risks, uncertainties and other factors that may cause Zamanco Minerals Limited’s actualresults, performance or achievements to differ from those referred to in this announcement.

Competent Person StatementThe information in this report that relates to Exploration Results including exploration data and geological interpretations within Zambia isbased on information compiled by Mr Joshua Hattingh, an independent Consulting Geologist. Mr Hattingh is a member in good standing ofthe South African Council for Natural Scientific Professions which is a “Recognised Overseas Professional Organisation” (ROPO). A ROPO isan accredited organisation to which Competent Persons must belong for the purpose of preparing reports on Exploration Results, MineralResources and Ore Reserves for submission to the ASX. Mr Hattingh has sufficient experience, which is relevant to the style of mineralisationand type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004Edition of The JORC Code. Mr Hattingh consents to the inclusion in the report of the matters based on the information in the form andcontext in which it appears.

The Exploration Targets in this report have been developed based on surface and trenching exploration only at this stage. The potentialquantity and grade is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and that it is uncertain iffurther exploration will result in the determination of a Mineral Resource.


Report of the Directors

Your Director’s submit their report for the year ended 30 June 2013.

DIRECTORSThe Directors in office at the date of this report and at any time during the year are as follows. Directors were in office for theentire period unless otherwise stated.

Geoffrey DonohueJacques BadenhorstThomas HillPeter McIntyrePeter Ironside

INFORMATION ON DIRECTORS

Geoffrey Donohue (B.Com, CPA)Chairman and Non-executive Director

Mr Geoff Donohue has over 28 years experience at both board and senior management level within public companies and thesecurities industry.

Mr Donohue holds a Bachelor of Commerce from James Cook University of North Queensland, Graduate Diploma in FinancialAnalysis from the Securities Institute of Australia and is a Certified Practicing Accountant.

Other Current Directorships of Listed Companies: None.

Former Directorships of Listed Companies in last three yearsEssa Australia Limited – resigned 15 March 2011.

Jacques Badenhorst (NHD Ext. Met, MSAIMM, MMMA,IODSA)Managing Director

Mr Jacques Badenhorst is an Extractive Metallurgical Engineer, who studied at the University of Johannesburg and has 14 yearshands on experience. Jacques was responsible for the design and operational management of various operations, including,platinum, copper, vanadium, diamond, gold and ferrochrome recovery plants in Southern Africa. Jacques held seniormanagement positions with companies including Grinaker LTA and AngloGold. He is a member of SAIMM (South AfricanInstitute for Mining and Metallurgy), MMMA (Mine Metallurgical Managers Association) and the Institute of Directors (IOD) ofSouth Africa.


Former Directorships of Listed Companies in last three years: None.

Thomas Hill (B.Eng, MBL)Executive Director

Mr Thomas Hill has spent the past 13 years as a director of companies listed on the Johannesburg Stock Exchange (JSE). Hisinvolvement was with the initial listing of these companies, funding and management. He holds an Engineering (electronics)degree from the University of Pretoria and a Master's degree in Business Leadership from the University of South Africa, (theirMBA program). Thomas has built his experience around the listing, funding and running of listed companies and has over thepast 18 months focused extensively on the minerals and mining industry in Southern Africa where he works with well-established mining companies and practitioners to bring mining and mineral processing projects to the market.


Former Directorships of Listed Companies in last three years: None.



INFORMATION ON DIRECTORS - continued

Peter McIntyre (BSc, MBA, FIEAust)Non-executive Director

Mr Peter McIntyre has been in the mining industry for over 31 years.

As an engineer, he has been involved with the development of a number of major projects, and at a corporate level he hasestablished and steered various companies through their early stages into significant companies.

As the Managing Director, he established Extract Resources Limited and grew the company from a junior explorer to anASX100 company with a +A$2B market capitalisation at the time of his departure. Extract’s success was founded on thediscovery of the world-class Rossing South uranium project in Namibia, which following development will be ranked as thesecond largest uranium project in the world.

He was a founding director of Kalahari Minerals (AIM-listed) and a non-executive director of Carbon Energy Ltd (an ASX listedcompany).

Mr McIntyre is a chartered Civil Engineer and a Fellow, Institution of Engineers, Australia. He also completed an MBA programat the Massachusetts Institute of Technology in Boston.


Former Directorships of Listed Companies in last three years:Carbon Energy Limited - resigned 11 February 2010.

Peter Ironside (B.Com, CA)Non-executive Director and Company SecretaryMr Peter Ironside is a Chartered Accountant and business consultant with over 19 years experience in the exploration andmining industry. He has been a director and/or company secretary of several ASX listed companies. Mr Ironside is a director ofIronside Pty Ltd, a corporate services company. Mr Ironside brings a significant level of accounting, compliance and corporategovernance experience to the Board, together with support in the areas of corporate initiatives and capital raisings.


Former Directorships of Listed Companies in last three years:Integra Mining Limited - resigned 1 January 2013.

MEETINGS OF THE COMPANY’S DIRECTORS

There were 4 meetings of the Company’s Directors held during the year ended 30 June 2013 and the number of meetingsattended by each Director were:

AttendedMaximumPossible

Geoff Donohue 4 4Jacques Badenhorst 4 4Thomas Hill 4 4Peter McIntyre 4 4Peter Ironside 4 4

Resolutions during the year were passed by a circulating resolution.



DIRECTORS’ SHAREHOLDING INTERESTS

The interest of each Director in the share capital of the Company at the date of this report is as follows:

Fully PaidOrdinary Shares Options

DirectInterest

IndirectInterest

DirectInterest

IndirectInterest

Geoffrey Donohue 1,650,000 7,988,417 - -Jacques Badenhorst - 1,212,500 - -Thomas Hill 9,800 1,212,500 - -Peter McIntyre - 6,237,236 - -Peter Ironside 858,950 6,745,916 - -

EARNINGS PER SHARE

Basic Earnings Per Share was a loss of 5.15 cents (2012: loss of 2.36 cents).

DIVIDENDS

No dividend has been paid or declared by the Company up to the date of this report. The Directors do not recommend thatany amount be paid by way of dividend.

CORPORATE INFORMATION

Corporate StructureZamanco Minerals Limited is a company limited by shares that is incorporated and domiciled in Australia. Zamanco MineralsLimited has prepared a consolidated financial report incorporating the entities that it controlled during the year under reviewas follows:

Zamanco Minerals Limited - parent entityAPG Resources Pty Ltd - 100% ownedZamanco Holdings Limited (Mauritius) - 100% ownedZamanco Minerals Limited (Zambia) - 100% ownedZamanone Mining Limited (Zambia) - 80% ownedZamantwo Mining Limited (Zambia) - 80% ownedZamanthree Mining Limited (Zambia) - 80% ownedZamanfour Mining Limited (Zambia) – 49% ownedZamanfive Mining Limited (Zambia) - 100% ownedZamansix Mining Limited (Zambia) - 100% ownedZamanseven Mining Limited (Zambia) - 100% owned

Nature of Operations and Principal ActivitiesThe principal activities of the Group during the financial year were mineral exploration and associated studies for manganesein Zambia.

Review of OperationsRefer to the Review of Operations preceding this Report of the Directors.



Financial ReviewThe Group reported a loss for the year of $2,954,079 (2012: $755,908).

The net assets of the group were $6,550,284 in 2013 (2012: $3,470,720). The major transactions were:

- Listed options being exercised resulting in 29,400,000 new shares being issued and raising $5,629,250 after expenses;and

- Exploration impairment losses were recognised in respect of the Group’s exploration projects amounting to animpairment expense of $2,035,179 to reflect the recoverable amount of each project.

The group’s working capital, being current assets less current liabilities was $4,609,805 in 2013 (2012: $1,764,039).

During the year, the Company invested in manganese resource assets to increase its asset base. The Directors believe theCompany is in a strong and stable position to expand and grow its current operations.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Significant changes in the state of affairs of the Group during the financial are detailed in the Review of Operations and thefinancial review in this report.

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

The Group intends to focus on manganese exploration and the potential development of a ferromanganese and manganesemetal project in Zambia.

ENVIRONMENTAL ISSUES

The Group’s environmental obligations are regulated by the laws of the countries in which the Group has its operations. TheGroup has a policy to either meet or where possible, exceed its environmental obligations. No environmental breaches havebeen notified by any governmental agency as at the date of this report.

MATTERS SUBSEQUENT TO THE END OF THE YEAR

On 12 August 2013, the Company announced that the first milestone for the Tranche 1 Deferred Consideration Shares to beissued pursuant to the Share Sale Agreement (Agreement) for the acquisition of Zamanco Holdings Limited, was not met by therequired date of 10 August 2013. Therefore the Tranche 1 shares will not be issued. The milestone required the Company todefine a JORC-compliant Indicated Resource of manganese, in excess of 1,000,000 metric tonnes and at a grade of greater than40% Mn, from one of its Zambian projects, within 18 months of settlement pursuant to the Agreement.

There are no other matters or circumstances that have arisen since 30 June 2013 that have or may significantly affect theoperations, results, or state of affairs of the Group in future financial years.



REMUNERATION REPORT (AUDITED)This report details the nature and amount of remuneration for each director and executive of Zamanco Minerals Limited. Theinformation provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act2001.

For the purposes of this report key management personnel of the Group are defined as those persons having authority andresponsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including anydirector (whether executive or otherwise) of the parent company and all key management personnel.

Remuneration CommitteeDue to the limited size of the Group and of its operations and financial affairs, the use of a separate remuneration committee isnot considered appropriate. The Board has adopted the following policies for Directors’ and executives’ remuneration.

A. Remuneration policy

The Board of Directors maintains remuneration policies which are aimed at attracting and retaining a motivated workforce andmanagement team. The intention is to match the outcomes from the remuneration system with the performance of theCompany and ultimately the value received by our shareholders on a long-term basis.

As an overall policy, the Group will remunerate in such a way that it:

motivates Directors and management to pursue the long-term growth and success of the Group; anddemonstrates a clear relationship between key executive performance and remuneration.

B. Remuneration structure

In accordance with best practice corporate governance, the structure of Non-executive Director and executive compensation isseparate and distinct.

Non-executive Directors’ Remuneration:Non-executive Directors’ fees are paid within an aggregate limit which is approved by the shareholders from time to time. Thislimit is currently set at $300,000. Any newly appointed Non-executive Directors will serve in accordance with a standardservice contract, drafted by the Company’s lawyers, which sets out remuneration arrangements. Retirement payments, if any,are agreed to be determined in accordance with the rules set out in the Corporations Act as at the time of the Director’sretirement or termination. Non-executive Directors may be offered options as part of their remuneration, subject toshareholder approval.

Executive Remuneration:Senior executives, including Executive Directors, are engaged under the terms of individual employment contracts. Suchcontracts are based upon standard terms drafted by the Company’s lawyers. Executive Directors do not receive any directors’fees in addition to their remuneration arrangements. Executive Directors may be offered options as part of theirremuneration, subject to shareholder approval. The monetary package is divided between a base salary/consulting fee and,for non-directors, an incentive portion if considered appropriate. Base salary/consulting fees are set to reflect the marketsalary for a position and individual of comparable responsibility and experience. Base salary/consulting fees are regularlycompared with the external market and during recruitment activities generally. It is the policy of the Company to maintain acompetitive salary structure to ensure continued availability of experienced and effective management and staff. There are noexecutives at this stage.

There is no link between the remuneration policy and the Company’s performance.

Details of the nature and amount of each element of each Director, including any related company and each of the officers ofthe Company receiving the highest emoluments are set out in section D of this report.



REMUNERATION REPORT (AUDITED) – continued

C. Service Agreements

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

Remuneration and other terms of employment for the executive directors and the other key management personnel are alsoformalised in service agreements. Other major provisions of the agreements relating to remuneration are set out below.

Name Term of agreement

Base salaryincludingsuper /

consultingfees

(at 30/6/13)Termination

benefit *Geoffrey Donohue - Non-executiveChairman1

Commenced 14 November 2007 -required to retire at the third annualgeneral meeting after election.

$26,160 None

Jacques Badenhorst - Managing Director2 Commenced 1 December 2011 until 30November 2014 extendable by mutualwritten agreement

$224,000 3 months

Peter Ironside - Company Secretary1 Commenced 14 November 2007 -required to retire at the third annualgeneral meeting after election.

$26,160 None

Thomas Hill – Director3 Commenced 1 December 2011 until 30November 2014 extendable by mutualwritten agreement

$224,000 3 months

Peter McIntyre - Non-executive Director1 Commenced 14 November 2007 -required to retire at the third annualgeneral meeting after election.

$26,160 None

* Termination benefits are paid on early termination by the Company, other than for gross misconduct.

1. No fees paid under service agreements for the year (2012: nil).

2. Fees paid to Sable S.A. of which Mr Jacques Badenhorst is a director and shareholder.

3. Fees paid to Basel-Stadt S.A of which Mr Thomas Hill is a director and shareholder.



REMUNERATION REPORT (AUDITED) – continued

D. Details of remuneration

Short Term BenefitsPost

EmploymentBenefits

Year

Salary /consulting fees

$

Directors fees$

Superannuation$

Total$

DirectorsG Donohue1 2013

2012--

--

--

--

J Badenhorst2 20132012

223,272130,669

--

--

223,272130,669

P Ironside1 20132012

--

--

--

--

T Hill3 20132012

223,127130,669

--

--

223,127130,669

P McIntyre1 20132012

--

--

--

--

Total 20132012

446,399261,338

--

--

446,399261,338

1 Each of the above non-executive directors elected to forego remuneration payable under their service agreements in line with the Company’s focus on cash preservation.

2 Fees paid to Sable S.A. of which Mr Jacques Badenhorst is a director and shareholder.

3 Fees paid to Basel-Stadt S.A of which Mr Thomas Hill is a director and shareholder.

There were no performance related payments made during the year.

E. Compensation Options to Key Management Personnel

There were no options granted as remuneration during 2013 or 2012.

F. Use of Remuneration Consultants

During the financial year ended 30 June 2013, the Company did not engage any external remuneration consultants to reviewits existing remuneration policies.

G. Voting and comments made at the Company’s 2012 Annual General Meeting (AGM)

The Company received more than 99% of votes for its remuneration report for the 2012 financial year and no specific feedbackat the AGM or throughout the year on its remuneration policies.

This is the end of the audited remuneration report.



ENVIRONMENTAL REGULATION AND PERFORMANCEThe Company’s environmental obligations are regulated under laws applicable in the relevant jurisdictions. All environmentalperformance obligations are monitored by the Board and may be subjected from time to time to Government agency auditsand site inspections. The Company has a policy of at least complying with, but in most cases exceeding, any statutoryenvironmental performance obligations. No environmental breaches have occurred or have been notified by any Governmentagencies during the year ended 30 June 2013.

SHARES UNDER OPTIONThere are no unissued ordinary shares of the Company under option at the date of this report

INDEMNIFICATION AND INSURANCE OF OFFICERSThere is no insurance in place at the present time.

PROCEEDINGS ON BEHALF OF THE COMPANYThe Company was not a party of any proceedings during the year.

AUDITOR INDEPENDENCEThe auditors’ independence declaration as required by Section 307C of the Corporations Act 2001 for the year ended 30 June2013 has been received and can be found after the Corporate Governance Statement.

AUDITORBDO Audit (WA) Pty Ltd continues in office in accordance with Section 327 of the Corporations Act 2001.

NON-AUDIT SERVICESThe following non-audit services were provided by associated entities of BDO Audit (WA) Pty Ltd. The Directors are satisfiedthat the provision of non-audit services is compatible with the general standard of independence for auditors imposed by theCorporations Act. The nature and scope of each type of non-audit service provided means that auditor’s independence was notcompromised.

Associated entities of BDO Audit (WA) Pty Ltd received or are due to receive the following amounts for the provision of non-audit services:

Tax Compliance Services $13,148 - BDO Corporate Tax (WA) Pty LtdAccounting Services $2,922 - BDO Zambia

Refer to note 15 in the financial statements for details of fees paid / payable to the auditor of the parent entity and itsassociated entities.

CORPORATE GOVERNANCEIn recognising the need for the highest standards of corporate behaviour and accountability, the Directors of ZamancoMinerals Limited support and adhere to the principles of corporate governance. The Company’s Corporate GovernanceStatement is contained in the following section of this report.

Signed in accordance with a resolution of the Directors.

Geoffrey DonohueChairmanPerth, Western Australia20 September 2013


Corporate Governance

This statement outlines the main corporate governance practices that have been formally adopted by the Directors. Thesecorporate governance practices comply with the ASX Corporate Governance Council recommendations unless otherwisestated.

Board of DirectorsThe Board operates in accordance with the broad principles set out in its charter.

Role and Responsibilities of the BoardThe Board is responsible for ensuring that the Company is managed in a manner which protects and enhances the interests ofits shareholders and takes into account the interests of all stakeholders. This includes setting the strategic directions for theCompany, establishing goals for management and monitoring the achievement of these goals.

A summary of the key responsibilities of the Board include:

1. Strategy - Providing strategic guidance to the Group, including contributing to the development of and approving thecorporate strategy, acquisitions and divestures;

2. Financial performance - Approving budgets, monitoring management and financial performance;

3. Financial reporting and audits - Monitoring financial performance including approval of the annual and half-yearfinancial reports and liaison with the external auditors;

4. Leadership selection and performance - Appointment, performance assessment and removal of the Managing Director.Ratifying the appointment and/or removal of other senior management, including the Company Secretary and otherBoard members;

5. Remuneration - Management of the remuneration and reward systems and structures for executive management andstaff;

6. Risk management - Reviewing, ratifying and monitoring risk management systems (including an established code ofconduct and share trading policy), internal controls and legal compliance; and

7. Relationships with the exchanges, regulators and continuous disclosure - Ensuring that the capital markets are keptinformed of all relevant and material matters and ensuring effective communications with shareholders.

Composition of the BoardThe names and details of the Directors of the Company in office at the date of this Statement are set out in the Report of theDirectors.

The composition of the Board is determined using the following principles:

Persons nominated as Non-executive Directors shall be expected to have qualifications, experience and expertise ofbenefit to the Company and to bring an independent view to the Board’s deliberations. Persons nominated asExecutive Directors must be of sufficient stature and security of employment to express independent views on anymatter.

The Chairperson should ideally be independent, but in any case be Non-executive and be elected by the Board basedon his/her suitability for the position.

The roles of Chairperson and Managing Director should not be held by the same individual.

All Non-executive Directors are expected voluntarily to review their membership of the Board from time-to-timetaking into account length of service, age, qualifications and expertise relevant to the Company’s then current policyand programme, together with the other criteria considered desirable for composition of a balanced board and theoverall interests of the Company.



The Company considers that the Board should have at least three Directors (minimum required under the Company'sConstitution) and strives to have a majority of independent Directors but acknowledges that this may not be possibleat all times due to the size of the Company. Currently the Board has five Directors, none of which are independentdirectors. The Board believes that the Directors can make, and do make, quality and independent judgements in thebest interests of the Company on all relevant issues, notwithstanding that they are not independent. The number ofDirectors is maintained at a level which will enable effective spreading of workload and efficient decision making.

The Chairman, Mr Geoff Donohue, is not an independent Director. However, the Board believes Mr Donohue is themost appropriate person for the position of Chairman because of his experience and proven track record as a publiccompany director.

The Board has accepted the following definition of an independent Director:

“An independent Director is a Director who is not a member of management (a Non-executive Director) and who:

is not a substantial shareholder of the Company or an officer of, or otherwise associated, directly or indirectly, with asubstantial shareholder of the Company;has not within the last three years been employed in an executive capacity by the Company or another groupmember, or been a Director after ceasing to hold any such employment;is not a principal of a professional adviser to the Company or another group member;is not a significant consultant, supplier or customer of the Company or another group member, or an officer of orotherwise associated, directly or indirectly, with a significant consultant, supplier or customer;has no significant contractual relationship with the Company or another group member other than as a Director of theCompany;has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere withthe Director’s ability to act in the best interests of the Company; andis free from any interest and any business or other relationship which could, or could reasonably be perceived to,materially interfere with the Director’s ability to act in the best interests of the Company.”

Zamanco considers a significant consultant, supplier or customer to be material if the total of their annual invoices amounts tomore than 5% of the Company’s total expenditure in that category.

Independent Professional Advice and Access to Company InformationEach Director has the right of access to all relevant Company information and to the Company’s executives and, subject toprior consultation with the Chairman, may seek independent professional advice at the Company’s expense. A copy of advicereceived by the Director is made available to all other members of the Board.

Nomination Committee / Appointment of New DirectorsBecause the size of the Company and the size of the Board, the Directors do not believe it is appropriate to establish a separateNomination Committee. The Board has taken a view that the full Board will hold special meetings or sessions as required. TheBoard are confident that this process for selection and review is stringent and full details of all Directors are provided toshareholders in the annual report and on the web.

The composition of the Board is reviewed on an annual basis to ensure the Board has the appropriate mix of expertise andexperience. Where a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from theservices of a new director with particular skills, the Board determines the selection criteria for the position based on the skillsdeemed necessary for the Board to best carry out its responsibilities and then appoints the most suitable candidate who muststand for election at the next general meeting of shareholders.

Term of OfficeUnder the Company's Constitution, the minimum number of Directors is three. At each Annual General Meeting, one third ofthe Directors (excluding the Managing Director) must resign, with Directors resigning by rotation based on the date of theirappointment. Directors resigning by rotation may offer themselves for re-election.



Performance of Directors and Managing DirectorThe performance of all Directors, the Board as a whole and the Managing Director and Company Secretary are reviewedannually.

The Board meets once a year with the specific purpose of conducting a review of its composition and performance. Thisreview includes:

Determining the appropriate balance of skills and experience required to suit the Company’s current and futurestrategies;Comparing the requirements above against the skills and experience of current Directors and executives;Assessing the independence of each Director;Measuring the contribution and performance of each Director;Assessing any education requirements or opportunities; andRecommending any changes to Board procedures, Committees or the Board composition.

A review was undertaken during the year ended 30 June 2013.

The Company currently has no senior executives and therefore no performance evaluation was undertaken during the year bythe Board.

Conflict of InterestIn accordance with the Corporations Act and the Company’s Constitution, Directors must keep the Board advised, on anongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes a significantconflict exists, the Director concerned does not receive the relevant Board papers and is not present at the Board meetingwhilst the item is considered.

DiversityThe Company is committed to workplace diversity and has established a Diversity Policy. Diversity includes, but is not limitedto, gender, age, ethnicity and cultural background.

The Diversity Policy defines the initiatives which assist Zamanco with maintaining and improving the diversity of its workforce.

In accordance with this policy and ASX Corporate Governance Principles, the Board has established the following objectives inrelation to gender diversity. The aim is to achieve these objectives over the next 2 to 3 years as positions become vacant andappropriately skilled candidates are available:

Proportion of WomenActual Objective

Organisation as a whole 25% 40%Executive Management Team Nil 25%Board Nil 25%

RemunerationThe Company’s practice is to remunerate fairly and responsibly and part of the remuneration is to be incentive based asconsidered appropriate by the Board.

The performance of the Company depends upon the quality of its Directors and executives. To prosper, the Company mustattract, motivate and retain highly skilled Directors and executives.



To this end, the Company embodies the following principles in its remuneration framework:

provide competitive rewards to attract high calibre executives;link executive rewards to shareholder value; andestablish appropriate performance hurdles in relation to variable executive remuneration.

A full discussion of the Company’s remuneration philosophy and framework and the remuneration received by Directors in thecurrent year is included in the remuneration report, which is contained within the Report of the Directors.

There are no schemes for retirement benefits for Non-executive directors, other than superannuation.

Board Remuneration CommitteeDue to the limited size of the Company and of its operations and financial affairs, the use of a separate remunerationcommittee is not considered efficient. The Board has taken a view that the full Board will hold special meetings or sessions asrequired. The Board is confident that this process for determining remuneration is stringent and full details of remunerationpolicies and payments are provided to shareholders in the remuneration report in the Report of the Directors and on the web.

Risk Oversight and ManagementThe Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internalcontrol systems. In summary, the Company policies are designed to ensure strategic, operational, legal, reputation andfinancial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of theCompany’s business objectives.

A summary of the risks recognised by the Board can be found in the corporate governance information section of the Companywebsite at www.zamancominerals.com.

Considerable importance is placed on maintaining a strong control environment. The Board actively promotes a culture ofquality and integrity.

Control procedures cover management accounting, financial reporting, compliance and other risk management issues.

The Board encourages management accountability for the Company’s financial reports by ensuring ongoing financial reportingduring the year to the Board. Annually, the Company Secretary (who is responsible for preparing the financial reports) and theCEO (or equivalent) are required to state in writing to the Board that in all material respects:

Declaration required under s295A of the Corporations Act 2001 -the financial records of the Group for the financial year have been properly maintained;the financial statements and notes comply with the accounting standards;the financial statements and notes for the financial year give a true and fair view; andany other matters that are prescribed by the Corporations Act regulations as they relate to the financialstatements and notes for the financial year are satisfied.

Additional declaration required as part of corporate governance -the risk management and internal compliance and control systems in relation to financial risks are sound,appropriate and operating efficiently and effectively.

These declarations were received for the June 2013 financial year.



Audit CommitteeDue to the limited size of the Company and of its operations and financial affairs, the use of a separate audit committee is notconsidered appropriate. In addition to management’s accountability, the Board assures integrity of the financial statementsby:

(a) reviewing the Company's statutory financial statements to ensure the reliability of the financial information presentedand compliance with current laws, relevant regulations and accounting standards;

(b) monitoring compliance of the accounting records and procedures, in conjunction with the Company’s auditor, on mattersoverseen by the Australian Securities and Investments Commission, ASX and Australian Taxation Office;

(c) ensuring that management reporting procedures, and the system of internal control, are of a sufficient standard toprovide timely, accurate and relevant information as a sound basis for management of the Group’s business;

(d) reviewing audit reports and management letters to ensure prompt action is taken by the Company's management; and

(e) when required, nominating the external auditor and at least annually reviewing the external auditor in terms of theirindependence and performance in relation to the adequacy of the scope and quality of the annual statutory audit andhalf-year review and the fees charged.

Code of ConductThe Company has developed a Code of Conduct (the Code) which has been fully endorsed by the Board and applies to allDirectors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standardsof behaviour and professionalism and the practices necessary to maintain confidence in the Company’s integrity.

In summary, the Code requires that at all times all Company personnel act with the utmost integrity, objectivity and incompliance with the letter and the spirit of the law and Company policies.

Share Trading PolicyThe Board has adopted a specific policy in relation to Directors and officers, employees and other potential insiders buying andselling shares.

Directors, officers, consultants, management and other employees are prohibited from trading in the Company’s shares,options and other securities if they are in possession of price-sensitive information.

Under the Company's Security Trading Policy personnel must receive written approval prior to any dealing in Zamanco’ssecurities.

The Directors are satisfied that the Company has complied with its policies on ethical standards, including trading in securities.

Market Disclosure PoliciesThe Board has a Market Disclosure Policy to ensure the compliance of the Company with the various laws and ASX Listing Ruleobligations in relation to disclosure of information to the market. The Managing Director is responsible for ensuring that allemployees are familiar with and comply with the policy.

Zamanco is committed to:

(a) ensuring that shareholders and the market are provided with timely and balanced information about its activities;

(b) complying with the general and continuous disclosure principles contained in the ASX Listing Rules and the CorporationsAct 2001; and

(c) ensuring that all market participants have equal opportunities to receive externally available information issued byZamanco.



Communication with ShareholdersThe Company places significant importance on effective communication with shareholders.

Information is communicated to shareholders through the distribution of the annual and half yearly financial reports, quarterlyreports on activities, announcements through ASX and the media, on the Company’s web site and through the ManagingDirector’s presentation at the annual general meeting.

In addition, news announcements and other information are sent by email to all persons who have requested their name to beadded to the email list. If requested, the Company will provide general information by email, facsimile or post.

The Company will, wherever practicable, take advantage of new technologies that provide greater opportunities for moreeffective communications with shareholders.

Company WebsiteZamanco has made available full details of all its corporate governance principles, which can be found in the corporategovernance information section of the Company website at www.zamancominerals.com.

Tel: +8 6382 4600Fax: +8 6382 4601www.bdo.com.au

38 Station StreetSubiaco, WA 6008PO Box 700 West Perth WA 6872Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limitedby guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional StandardsLegislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

20 September 2013

Board of DirectorsZamanco Minerals LimitedGround Floor168 Stirling HighwayNEDLANDS WA 6009

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PETER TOLL TO THE DIRECTORS OF ZAMANCO MINERALSLIMITED

As lead auditor of Zamanco Minerals Limited for the year ended 30 June 2013, I declare that, to thebest of my knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001 in relation to the audit;and

• any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Zamanco Minerals Limited and the entities it controlled during theperiod.

Peter TollDirector

BDO Audit (WA) Pty LtdPerth, Western Australia


Consolidated Statement of Profit or Lossand Other Comprehensive Income

For the Year Ended 30 June 2013

ConsolidatedYear Ended

30 June 2013Year Ended

30 June 2012

Note $ $RevenuesInterest revenue 96,454 113,684ExpensesCompliance costs (35,090) (36,210)Accommodation & travel costs (92,092) (84,328)Consultants Fees (363,512) (314,821)Depreciation 5 (22,962) -Diminution – Investments 7 (12,000) -Directors Fees - (994)Insurance (6,842) -Legal Fees (72,601) (15,194)Printing and stationery costs (10,057) (4,753)Staff costs (46,690) (7,630)Exploration impairment 6 (2,035,179) (272,443)Other expenses (353,508) (133,219)

Total expenses (3,050,533) (869,592)

Loss before income tax (2,954,079) (755,908)Income tax expense 2 - -

Loss after income tax for the year (2,954,079) (755,908)

Loss is attributable to:Owners of Zamanco Minerals Limited (2,954,079) (755,908)Non-controlling interests - -

(2,954,079) (755,908)

Loss after income tax (2,954,079) (755,908)Other comprehensive expenseExchange difference on translation 404,393 (517)

Total comprehensive loss after income tax for the year (2,549,686) (756,421)

Total comprehensive loss is attributable to:Owners of Zamanco Minerals Limited (2,549,686) (756,421)Non-controlling interests - -

(2,549,686) (756,421)

Cents CentsBasic loss per share attributable to ordinary equity holders 3 (5.15) (2.36)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

For the Year Ended 30 June 2012


Consolidated Statement of Financial PositionAs at 30 June 2013

Consolidated30 June 2013 30 June 2012

Note $ $ASSETSCurrent AssetsCash and cash equivalents 24(a) 4,816,311 1,833,053Trade and other receivables 4 46,815 14,538Other assets 653 653

Total Current Assets 4,863,779 1,848,244

Non-Current AssetsProperty, plant and equipment 5 141,079 8,922Deferred exploration and evaluation costs 6 1,794,400 1,680,759Other financial assets 7 5,000 17,000

Total Non-Current Assets 1,940,479 1,706,681

Total Assets 6,804,258 3,554,925

LIABILITIESCurrent LiabilitiesTrade and other payables 8 253,974 84,205

Total Current Liabilities 253,974 84,205

Total Liabilities 253,974 84,205

Net Assets 6,550,284 3,470,720

EquityIssued capital 9 10,122,974 4,493,724Reserves 10 404,052 (341)Accumulated losses (3,976,742) (1,022,663)Capital and reserves attributable to owners ofZamanco Minerals Limited 6,550,284 3,470,720

Non-controlling interests - -

Total Equity 6,550,284 3,470,720

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


Consolidated Statement of Cash FlowsFor the Year Ended 30 June 2013

ConsolidatedYear Ended

30 June 2013Year Ended

30 June 2012

Note $ $Cash flows from operating activitiesReceipts – GST refunds 29,035 31,703Payments to suppliers and employees (1,015,531) (582,906)Interest received 96,454 113,684

Net cash flows used in operating activities 24(b) (890,042) (437,519)

Cash flows from investing activitiesPayments for Property, plant and equipment (157,452) (8,922)Payments for investments - (258,110)Payments for exploration (1,598,498) (205,712)Net cash flows used in investing activities (1,755,950) (472,744)

Cash flows from financing activitiesProceeds from issue of shares 5,880,000 -Payment of share issue costs (250,750) -Net cash inflows from financing activities 5,629,250 -

Net increase/(decrease) in cash and cash equivalentsheld 2,983,258 (910,263)

Add opening cash and cash equivalents brought forward 1,833,053 2,743,316

Closing cash and cash equivalents carried forward 4,816,311 1,833,053

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


Consolidated Statement of Changes in EquityFor the Year Ended 30 June 2013

IssuedCapital

ForeignCurrency

TranslationReserve

Share BasedPayments

Reserve

AccumulatedLosses

Non-Controlling

Interests

TotalEquity

$ $ $ $ $ $CONSOLIDATED

At 1 July 2011 3,283,724 - - (266,755) - 3,016,969Exchange differences on translation - (517) - - - (517)Loss for the year - - - (755,908) - (755,908)Total comprehensive loss for the year - (517) - (755,908) - (756,425)Transactions with owners in theircapacity as owners:Issue of share capital, net of transactioncosts

1,210,000 - - - - 1,210,000

Share based payments - - 176 - - 176At 30 June 2012 4,493,724 (517) 176 (1,022,663) - 3,470,720

Exchange differences on translation - 404,393 - - - 404,393Loss for the year - - - (2,954,079) - (2,954,079)Total comprehensive loss for the year - 404,393 - (2,954,079) - (2,549,686)Transactions with owners in theircapacity as owners:Issue of share capital, net of transactioncosts

5,629,250 - - - - 5,629,250

Share based payments - - - - - -At 30 June 2013 10,122,974 403,876 176 (3,976,742) - 6,550,284

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


Notes to the Consolidated Financial Statements

1. ACCOUNTING POLICIES

(i) Basis of Accounting

These general purpose financial statements for year ended 30 June 2013 have been prepared in accordance withCorporations Act 2001 and Australian Accounting Standards (including Australian Accounting Interpretations) andauthoritative pronouncements of the Australian Accounting Standards Board. These financial statements have beenprepared in accordance with the historical costs convention with the exception of investments which have beenmeasured at fair value. Zamanco Minerals Limited is a for-profit entity for the purpose of preparing the financialstatements.

The functional currency and presentation currency of Zamanco Minerals Limited is Australian dollars.

(ii) Statement of Compliance

This financial report complies with International Financial Reporting Standards (IFRS) as issued by the InternationalAccounting Standards Board (IASB).

(iii) Adoption of New and Revised Standards

The Group has reviewed all of the Australian Accounting Standards and Interpretations that have recently beenissued or amended but are not yet effective and have not been adopted by the Group for the annual reporting yearending 30 June 2013. These include the following:

AASB 9 Financial Instruments (effective from 1 January 2015)AASB 9 amends the requirements for classification and measurement of financial assets. The standard is notapplicable until 1 January 2015, and the Group does not believe this will have a material impact on the financialstatements.

AASB 10 Consolidated Financial Statements (effective from 1 July 2013)AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated andSeparate Financial Statements dealing with the accounting for consolidated financial statements and UIG-112Consolidation – Special Purpose Entities. The new control model broadens the situations when an entity isconsidered to be controlled by another entity and includes new guidance for applying the model to specificsituations, including when acting as a manager may give control, the impact of potential voting rights and whenholding less than a majority voting rights may give control. Consequential amendments were also made to otherstandards via AASB 2011-7. The adoption of AASB 10 had no effect on the financial position or performance of theGroup.

AASB 11 Joint Arrangements (effective 1 July 2013)AASB 11 replaces AASB 131 Interests in Joint Ventures and UIG-113 Jointly- controlled Entities – NonmonetaryContributions by Venturers. AASB 11 uses the principle of control in AASB 10 to define joint control, and thereforethe determination of whether joint control exists may change. In addition it removes the option to account forjointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement isdependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give theventurers a right to the underlying assets and obligations themselves is accounted for by recognising the share ofthose assets and obligations. Joint ventures that give the venturers a right to the net assets is accounted for usingthe equity method. Consequential amendments were also made to other standards via AASB 2011-7 andamendments to AASB 128. The adoption of AASB 11 had no effect on the financial position or performance of theGroup.



1. ACCOUNTING POLICIES - continued

(iii) Adoption of New and Revised Standards - continued

AASB 12 Disclosure of Interests in Other Entities (effective 1 July 2013)AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates andstructures entities. New disclosures have been introduced regarding the judgments made by management todetermine whether control exists, and to require summarised information about joint arrangements, associates andstructured entities and subsidiaries with non-controlling interests. The adoption of AASB 12 had no material impacton the financial statements of the Group.

AASB 119 Employee Benefits (effective 1 July 2013)The main change introduced by this standard is to revise the accounting for defined benefit plans. The amendmentremoves the options for accounting for the liability, and requires that the liabilities arising from such plans isrecognised in full with actuarial gains and losses being recognised in other comprehensive income. It also revised themethod of calculating the return on plan assets. The revised standard changes the definition of short-term employeebenefits. The distinction between short-term and other long-term employee benefits is now based on whether thebenefits are expected to be settled wholly within 12 months after the reporting date. The adoption of AASB 119 hadno effect on the financial position or the performance of the Group.

AASB 2011-4 Key Management Personnel Disclosure Requirements (effective from 1 July 2013)AASB 2011-4 removes the individual key management personnel (KMP) disclosure requirements from AASB 124 toeliminate duplicated information required under the Corporation Act 2001. When this standard is first adopted forthe year ended 30 June 2014, the Group will show reduced disclosures under the Key Management Personnel noteto the financial statements.

AASB 2012-5 Annual Improvements (effective from 1 July 2013)These amendments are a consequence of the annual improvements process, which provides a vehicle for makingnon-urgent but necessary amendments to Standards. The amendments made are largely of the nature ofclarifications or removals of unintended inconsistencies between Australian Accounting Standards. There will be noeffect on the financial position or the performance of the Group.

AASB 2012-9 Amendment to AASB 1048 arising from the withdrawal of Australian Interpretation 1039 (effectivefrom 1 July 2013)AASB 2012-9 amends AASB 1048 Interpretation of Standards as a consequence of the withdrawal of AustralianInterpretation 1039 Substantive Enactment of Major Tax Bills in Australia. There will be no effect on the financialposition or the performance of the Group.

AASB Interpretation 20 Stripping Costs in the Production Phase of Surface Mining (effective from 1 July 2013)This interpretation clarifies that costs of removing mine waste materials (overburden) to gain access to mineral oredeposits during the production phase of a mine must be capitalised as inventories under AASB 102 Inventories if thebenefits from stripping activity is realised in the form of inventory produced. Otherwise, if stripping activity providesimproved access to the ore, stripping costs must be capitalised as a non-current, stripping activity asset if certainrecognition criteria are met (as an addition to, or enhancement of, an existing asset). There will be no effect on thefinancial position or the performance of the Group as the Group does not yet operate a surface mine.

None of the other amendments or interpretations are expected to affect the accounting policies of Zamanco.




(iv) Significant Accounting Estimates and Judgments

Significant accounting judgmentsIn the process of applying the Group’s accounting policies, management has made the following judgments, apartfrom those involving estimations, which have the most significant effect on the amounts recognised in the financialstatements.

Exploration assetsThe Group’s accounting policy for exploration expenditure is set out at Note 1(v). The application of this policynecessarily requires management to make certain estimates and assumptions as to future events andcircumstances. Any such estimates and assumptions may change as new information becomes available. If, afterhaving capitalised expenditure under the policy, it is concluded that the expenditures are unlikely to be recoveredby future exploitation or sale, then the relevant capitalised amount will be written off to the profit or loss.

Significant accounting estimates and assumptionsThe carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions offuture events. The key estimates and assumptions that have a significant risk of causing a material adjustment tothe carrying amounts of certain assets and liabilities within the next annual reporting year are:

Impairment of assetsIn determining the recoverable amount of assets, in the absence of quoted market prices, estimations are maderegarding the present value of future cash flows using asset-specific discount rates and the recoverable amount ofthe asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate anumber of key estimates.

Commitments - ExplorationThe Group has certain minimum exploration commitments to maintain its right of tenure to exploration permits.These commitments require estimates of the cost to perform exploration work required under these permits.

(v) Summary of Significant Accounting Policies

Basis of consolidationThe consolidated financial statements include the financial statements of Zamanco Minerals Limited (“theCompany”), and its subsidiaries (“the Group” or “Group”). The financial statements of the subsidiaries are preparedfor the same reporting period as the parent company, using consistent accounting policies. Adjustments are made tobring into line any dissimilar accounting policies that may exist. A list of controlled entities is contained in note 16 tothe financial statements.

Where an entity has been acquired during the year, its results are included in consolidated results from the datecontrol commenced.

Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entitiesare eliminated in full on consolidation.

Cash and cash equivalents

Cash and short-term deposits in the statements of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the Statements of Cash Flows,cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.




(v) Summary of Significant Accounting Policies - continued

Foreign currency translation

Functional and presentation currencyItems included in the financial statements of each of the Group's entities are measured using the currency of theprimary economic environment in which the entity operates ('the functional currency'). The consolidated financialstatements are presented in Australian dollars, which is Zamanco Minerals Limited’s functional and presentationcurrency.

Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at thedates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions andfrom the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currenciesare recognised in the statement of profit or loss and other comprehensive income, except when they are deferred inequity as qualifying cash flow hedges and qualifying net investment hedges, or are attributable to part of the netinvestment in a foreign operation.

Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair valuegain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair valuethrough profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences onnon-monetary financial assets, such as equities classified as available-for-sale financial assets are included in the fairvalue reserve in equity.

Group companiesThe results and financial position of all the Group entities (none of which has the currency of a hyperinflationaryeconomy) that have a functional currency different from the presentation currency are translated into thepresentation currency as follows:

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

income and expenses per the profit or loss are translated at average exchange rates (unless this is not areasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in whichcase income and expenses are translated at the dates of the transactions); and

all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and ofborrowings and other financial instruments designated as hedges of such investments, are taken to shareholders'equity.

When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionateshare of such exchange differences is reclassified to profit or loss, as part of the gain or loss on sale whereapplicable.

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





Trade and other receivables

Receivables are initially recognised at fair value and subsequently measured at amortised cost, less allowance fordoubtful debts. Current receivables for GST are due for settlement within 30 days and other current receivableswithin 12 months. They are recognised initially at fair value and subsequently at amortised cost.

Share-based payment transactions

The Group may provide benefits to employees (including directors) and consultants of the Group in the form ofshare-based payment transactions, whereby services are rendered in exchange for shares or rights over shares(‘equity-settled transactions’).

The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they aregranted.

Share-based payments – options with an exercise priceThe fair value of these payments is determined using a Black-Scholes option pricing model that takes into accountthe exercise price, the term of the option, the impact of dilution, the share price at grant date and expected pricevolatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of theoption. The fair value of the options granted is adjusted to reflect market conditions, but excludes the impact of anynon-market vesting conditions. Non-market vesting conditions, if any, are included in assumptions about thenumber of options likely to be exercisable.

Upon exercise of the options, the proceeds received, net of any transaction costs, are credited to issued capital.

Jointly controlled interests

The proportionate interests in the assets, liabilities and expenses of a joint interest activity have been incorporatedin the financial statements under the appropriate headings. Details of the joint operations are set out in Note 20.

Property, plant and equipment

Plant and equipment, including motor vehicles, are stated at cost less accumulated depreciation and anyimpairment.

Depreciation is calculated on a reducing balance basis to write off the net cost of each item of plant and equipmentover its expected useful life, being 2.5 to 5 years.





Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred by or on behalf of the group is accumulated separately for eacharea of interest.

Exploration and evaluation expenditure is recognised in relation to an area of interest when the rights to tenure ofthe area of interest are current and either:

such expenditure is expected to be recovered through successful development and commercial exploitation ofthe area of interest; orthe exploration activities in the area of interest have not yet reached a stage which permits reasonableassessment of the existence of economically recoverable reserves and active and significant operations in, orin relation to, the area of interest are continuing.

Exploration expenditure, which no longer satisfies the above policy, is written off.

Restoration costs expected to be incurred are provided for as part of exploration, evaluation, development orproduction phases that give rise to the need for restoration.

Impairment of assets

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

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individualasset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does notgenerate cash inflows that are largely independent of those from other assets or groups of assets, in which case, therecoverable amount is determined for the cash-generating unit to which the asset belongs. When the carryingamount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit iswritten down to its recoverable amount.

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

Restoration, rehabilitation, and environmental costs

The group recognises any legal restoration obligation as a liability at the time a legal liability exists. The carryingamount of the long lived assets to which the legal obligation relates is increased by the restoration obligation costsand amortised over the producing life of the asset.





Investments and other financial assets

Non-current investments in subsidiaries are carried at their cost of acquisition in the Company’s statement offinancial position. An impairment for investment is made where the Company has assessed the investment as notrecoverable.

Investments in listed entities are categorised as financial assets at fair value through profit or loss. Designation is re-evaluated at each reporting date, but there are restrictions on reclassifying to other categories.

When these financial assets are recognised initially, they are measured at fair value.

At each reporting date, gains or losses on these financial assets are recognised in profit or loss.

Trade and other payables

Trade payables and other payables are recognised initially at fair value and subsequently at amortised cost andrepresent liabilities for goods and services provided to the Group prior to the end of the financial year that areunpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of thesegoods and services. The amounts are unsecured and usually paid within 30 days of recognition.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation anda reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provisionto be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset butonly when the reimbursement is virtually certain. The expense relating to any provision is presented in the profit orloss net of any reimbursement.

If the effect of the time value of money is material, provisions are determined by discounting the expected futurecash flows at a pre-tax rate that reflects current market assessments of the time value of money and, whereappropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to thepassage of time is recognised as a finance cost.

Employee entitlements

Liabilities for wages and salaries, including non-monetary benefits, annual leave, and any other employeeentitlements expected to be settled within twelve months of the reporting date are measured at their nominalamounts based on remuneration rates which are expected to be paid when the liability is settled.

Employee entitlements expenses and revenues arising in respect of wages and salaries, non-monetary benefits,annual leave, long service leave, sick leave and other entitlements are charged against profits on a net basis.

Contributions are made to employee superannuation plans and are charged as expenses when incurred.

Issued capital

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Anytransaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the shareproceeds received.





Revenue Recognition

Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax(GST) or Value Added Tax (VAT) payable to the taxation authority. Exchanges of goods or services of the samenature and value without any cash consideration are not recognised as revenues.

Interest revenue

Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to berecovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount arethose that are enacted or substantively enacted at the reporting date.

Deferred income tax is provided on all temporary differences in the statement of financial position between the taxbases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is recognisedfor all taxable temporary differences, except where the deferred tax arises from the initial recognition of an asset orliability in a transaction that is not a business combination and, at the time of the transaction, affects neither theaccounting profit nor taxable profit or loss.

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

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extentthat it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred incometax asset to be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected toapply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that havebeen enacted or substantively enacted at the reporting date.

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

Income taxes relating to items recognised directly in equity are recognised in equity and not in the profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current taxassets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity andthe same taxation authority.





Other taxes

Revenues, expenses and assets are recognised net of the amount of GST or VAT, except where the amount of GST orVAT incurred is not recoverable from the taxation authority. In these circumstances the GST or VAT is recognised aspart of the cost of acquisition of the asset or as part of an item of the expense as applicable.

Receivables and payables are stated with the amount of GST or VAT included. The net amount of GST or VATrecoverable from, or payable to, the taxation authority is included as part of receivables or payables in thestatement of financial position.

Cash flows are included in Statements of Cash Flows on a gross basis. The GST or VAT components of cash flowsarising from investing and financing activities that are recoverable from, or payable to, the taxation authority areclassified as operating cash flows.

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

Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operatingdecision maker. The chief operating decision maker, who is responsible for allocating resources and assessingperformance of the operating segments, has been identified as the Board of Directors that makes strategicdecisions.

Earnings per share

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

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:costs of servicing equity (other than dividends) and preference share dividends;the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have beenrecognised as expenses; andother non-discretionary changes in revenues or expenses during the year that would result from the dilution ofpotential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potentialordinary shares, adjusted for any bonus element.

Acquisition Accounting

The acquisition method of accounting is used to account for all business combinations. Consideration is measured atthe fair value of the assets transferred, liabilities incurred and equity interests issued by the Group on acquisitiondate. Consideration also includes the acquisition date fair values of any contingent consideration arrangements, anypre-existing equity interests in the acquiree and share-based payment awards of the acquiree that are required tobe replaced in a business combination. The acquisition date is the date on which the Group obtains control of theacquiree.

Where equity instruments are issued as part of the consideration, the value of the equity instruments is theirpublished market price at the acquisition date unless, in rare circumstances it can be demonstrated that thepublished price at acquisition date is not fair value and that other evidence and valuation methods provide a morereasonable measure of fair value.





Identifiable assets acquired and liabilities and contingent liabilities assumed in business combinations are, withlimited exceptions, initially measured at their fair values at acquisition date. Goodwill represents the excess of theconsideration transferred and the amount of the non-controlling interest in the acquiree over fair value of theidentifiable net assets acquired. If the consideration and non-controlling interest of the acquiree is less than the fairvalue of the net identifiable assets acquired, the difference is recognised in profit or loss as a bargain purchase price,but only after a reassessment of the identification and measurement of the net assets acquired.

For each business combination, the Group measures non-controlling interests at either fair value or at the non-controlling interest's proportionate share of the acquiree's identifiable net assets. Acquisition-related costs areexpensed when incurred. Transaction costs arising on the issue of equity instruments are recognised directly inequity.

Where the group obtains control of a subsidiary that was previously accounted for as an equity accountedinvestment in associate or jointly controlled entity, the group remeasures its previously held equity interest in theacquiree at its acquisition date fair value and the resulting gain or loss is recognised in profit or loss. Where theGroup obtains control of a subsidiary that was previously accounted for as an available-for-sale investment, anybalance on the available-for-sale reserve related to that investment is recognised in profit or loss as if the Group haddisposed directly of the previously held interest.

Where settlement of any part of the cash consideration is deferred, the amounts payable in future are discounted topresent value at the date of exchange using the entity's incremental borrowing rate as the discount rate.

Assets and liabilities from business combinations involving entities or businesses under common control areaccounted for at the carrying amounts recognised in the Group's controlling shareholder's consolidated financialstatements.

When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned acarrying amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise inrelation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax underAASB 112 applies. No goodwill will arise on the acquisition and transaction costs of the acquisition will be included inthe capitalised cost of the asset.

ConsolidatedYear ended Year ended

30 June 2013 30 June 2012

2. TAXATION $ $

The reconciliation between tax expense and the product of accounting lossbefore income tax multiplied by the Company’s applicable income tax rate is asfollows:

Loss before income tax (2,954,079) (755,908)

Income tax (benefit) @ 30% (2012: 30%) (886,224) (226,772)Tax effect of amounts which are not deductible in calculating taxable income:Deferred tax assets relating to tax losses not recognised 804,493 639,321Other temporary differences not recognised 81,731 (412,549)Total income tax expense - -



ConsolidatedYear ended Year ended

30 June 2013 30 June 2012

2. TAXATION - continued $ $

Deferred tax assets and liabilities not recognised relate to the following:

Deferred tax assetsTax losses 1,123,265 862,044Other temporary differences 19,050 8,100Deferred tax liabilitiesExploration expenditure capitalised (466,115) (504,228)

Net deferred tax assets not recognised 676,200 365,916

Net deferred tax assets have not been brought to account as it is not probable within the immediate future that taxprofits will be available against which deductible temporary differences and tax losses can be utilised.

The franking account balance at year end was $nil (2012: nil)

Zamanco Minerals Limited and its 100% owned subsidiaries have not formed a tax consolidated group.


3. EARNINGS PER SHARECents Cents

Basic loss per share (5.15) (2.36)

The following reflects the earnings used in basic earnings per share computations:

a) Earnings used in calculating earnings per share Consolidated30 June 2013 30 June 2012

Basic Earnings per share: $ $Total loss after income tax attributable to membersof Zamanco Minerals Limited (2,954,079) (755,908)

b) Weighted average number of shares30 June 2013 30 June 2012

Number NumberWeighted average number of ordinary shares for basicearnings per share 57,318,924 31,998,087

As at 30 June 2013, all options had been exercised or expired.




$ $4. TRADE AND OTHER RECEIVABLES

CurrentGST/VAT refundable 46,815 14,538

Fair Value and Risk Exposures:

(i) Due to the short term nature of these receivables, their carrying value isassumed to approximate their fair value.

(ii) The maximum exposure to credit risk is the fair value of receivables. Collateralis not held as security.

(iii) Details regarding interest rate risk exposure are disclosed in note 21.(iv) Other receivables generally have repayments between 30 and 90 days.

There are no receivables that are past the due date. There are no financialinstruments carried at fair value that require level 1, 2 or 3 disclosures.


$ $5. PROPERTY, PLANT AND EQUIPMENT

Plant and equipment at cost 86,701 7,122Accumulated depreciation (13,881) -

72,820 7,122

Motor vehicles at cost 79,673 1,800Accumulated depreciation (11,414) -

68,259 1,800

141,079 8,922

2013 2013 2013 2012 2012 2012

Reconciliation of plant andequipment:

Plant andequipment

MotorVehicles Total

Plant andequipment

MotorVehicles Total

$ $ $ $ $ $Carrying amount at beginning ofthe year 7,122 1,800 8,922 - - -

Additions 79,579 77,873 157,452 7,122 1,800 8,922Disposals - - - - - -Depreciation charge (12,603) (10,359) (22,962) - - -Foreign exchange translation (1,278) (1,055) (2,333) - - -Carrying amount at end of the year 72,820 68,259 141,079 7,122 1,800 8,922




$ $6. DEFERRED EXPLORATION AND EVALUATION COSTS

Deferred exploration costs brought forward 1,680,759 299,067

Addition through acquisitions (note 18) - 1,468,110

Deferred exploration costs this year 1,908,136 186,025Impairment of exploration costs (2,035,179) (272,443)Foreign currency translation 240,684 -Deferred exploration costs carried forward 1,794,400 1,680,759

Ultimate recoupment of exploration and evaluation expenditure carried forward isdependent on successful development and commercial exploitation or, alternatively,sale of the respective areas. Exploration impairment losses were recognised inrespect of the Group’s exploration projects to reflect the recoverable amount of eachproject.

7. OTHER FINANCIAL ASSETS

Investment in listed entities – at fair value 5,000 17,000

Movements as follows:Shares acquired under an agreement with Crest Minerals 17,000 20,000Fair value loss for the year (12,000) (3,000)

5,000 17,000

8. TRADE AND OTHER PAYABLES

CurrentTrade creditors and accruals 253,974 84,205

Fair Value and Risk Exposures

(i) Due to the short term nature of these payables, their carrying value is assumedto approximate their fair value.

(ii) Trade and other payables are unsecured and usually paid within 60 days ofrecognition.

(iii) All amounts are expected to be paid within 12 months.




$ $9. CONTRIBUTED EQUITY

(a) Issued CapitalOrdinary shares fully paid 9,942,974 4,313,724Deferred Consideration Shares 180,000 180,000

10,122,974 4,493,724

(b) Movements in Ordinary Share Capital

Numberof Shares

Summary of Movements$

30,000,000 Opening balance as at 1 July 2011 3,283,7245,150,000 Issue of Shares for acquisition of Zamanco Minerals Limited (Zambia) 1,030,000

35,150,000 Closing Balance at 30 June 2012 4,313,724

35,150,000 Opening balance as at 1 July 2012 4,313,72460,000 Exercise of Listed Options (ZAMO) 13 August 2012 20¢ 12,000

8,450,000 Exercise of Listed Options (ZAMO) 5 September 2012 20¢ 1,690,0006,165,451 Exercise of Listed Options (ZAMO) 5 October 2012 20¢ 1,233,090

14,724,549 Exercise of Listed Options (ZAMO) 10 October 2012 20¢ 2,944,910- Underwriting costs (250,750)

64,550,000 Closing Balance at 30 June 2013 9,942,974

As at 30 June 2013, the Deferred Consideration Shares had not been issued – refer to note 18 and note 25.

(c) Listed OptionsZamanco Minerals Limited had no listed options on issue as at 30 June 2013 (2012: 29,400,000). During the year,29,400,000 listed options exercised, no listed options were granted or cancelled (2012: nil).

(d) Unlisted OptionsZamanco Minerals Limited had no unlisted options on issue as at 30 June 2013. During the year, 1,000,000 unlisted optionsexpired. No unlisted options were issued, cancelled or exercised (2012: 1,000,000 unlisted options granted, nil cancelled orexercised).

(e) Terms and Conditions of Issued CapitalOrdinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participatein the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

(f) Terms and Conditions of Deferred Consideration SharesThe deferred consideration shares will only be issued upon the achievement of certain milestones. The amount shown forthe deferred consideration shares is the value based on the probability of achieving these milestones, details of which areshown in note 18.



9. CONTRIBUTED EQUITY - continued

(g) Capital ManagementWhen managing capital, management's objective is to ensure the entity continues as a going concern as well as to maintainoptimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structurethat ensures the lowest cost of capital available to the entity.

Management may in the future adjust the capital structure to take advantage of favourable costs of capital and issuefurther shares in the market. Management has no current plans to adjust the capital structure. There are no plans todistribute dividends in the next year.

Total capital is equity as shown in the statement of financial position. The Group is not subject to any externally imposedcapital requirements.


$ $10. RESERVES

Foreign translation reserve 403,876 (517)Option reserve 176 176

404,052 (341)

Movements in reserves during the year:Foreign translation reserveBalance at beginning of period (517) -Foreign translation difference on consolidation 404,393 (517)Balance at period end 403,876 (517)

Share based payment reserveBalance at beginning of period 176 -Options issued to Consultants - 176Balance at period end 176 176

Nature and purpose of reserves

The Share-based payments reserve is used to recognise the fair value of options and performance rights granted.

i. Share based payment reserveThe Share-based payments reserve is used to recognise the fair value of options issued.

ii. Foreign currency translationExchange differences arising on translation of foreign controlled entities are taken to the foreign currencytranslation reserve, as described in note 1(v).




$ $11. COMMITMENTS

Tenement Expenditure Commitments:The Group is required to maintain current rights of tenure to tenements, whichrequire outlays of expenditure in 2012/2013. Under certain circumstancesthese commitments are subject to the possibility of adjustment to the amountand/or timing of such obligations, however, they are expected to be fulfilled inthe normal course of operations. 262,271 99,000

Lease commitmentsWithin one year 51,672 34,298

12. EMPLOYEE INCENTIVE SCHEME AND OTHER SHARE-BASED PAYMENTS

(a) Employee Incentive Scheme

An employee incentive scheme has been established where Zamanco Minerals Limited may, at the discretion ofmanagement, grant options over the ordinary shares in Zamanco Minerals Limited to employees of the group. Theoptions are granted at the discretion of the Directors, who may take into account skills, experience, length of service withthe Company or an Associated Body Corporate, remuneration level and such other criteria as the Directors considerappropriate in the circumstances. Options issued pursuant to the Scheme are issued free of charge. The exercise priceand expiry date of the options, and the date(s) on which the options may be exercised, is determined by the Directors,provided the exercise price shall not be less than the weighted average market price for shares (calculated as the averagesale price for Zamanco shares on ASX over the last 5 business days on which sales of shares were recorded on ASX)immediately preceding the date on which the Directors resolve to grant the said options. The options cannot betransferred and will not be quoted on ASX. There are currently no employees eligible and therefore no options have beenissued to date under the Scheme.

As at 30 June 2013, no options have been granted under this scheme (2012: nil).

(b) Other Share Based Payments

There were no other share based payments made during the year ended 30 June 2013 (2012: nil).

For share based payments for exploration acquisitions, refer to note 18.



13. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Key Management Personnel CompensationConsolidated

30 June 2013 30 June 2012

$ $Short-term employee benefits 446,399 261,338Post-employment benefits - -Share-based payments - -

446,399 261,338

(b) Equity Instrument Disclosures Relating to Key Management Personnel

(i) Options provided as remuneration and shares issued on any exercise of such optionsNo options were provided as remuneration and no shares issued on any exercise of such options to any Director ofZamanco Minerals Limited and any other key management personnel of the Group during the financial year.

(ii) Option holdingsThe number of options over ordinary shares in the Company held during the financial year by each Director ofZamanco Minerals Limited and any other key management personnel of the Group, including their personallyrelated parties, are as follows:

2013Options (held directly and indirectly)

NameBalance at1 July 2012

Optionsgranted as

remunerationduring the

year

Off markettransfer

during theyear

Optionsexercisedduring the

yearBalance at

30 June 2013

Numbervested andexercisable

Geoffrey Donohue 4,525,000 - (200,000) (4,325,000) - -Jacques Badenhorst - - - - - -Thomas Hill - - - - - -Peter McIntyre 2,500,000 - - (2,500,000) - -Peter Ironside 3,075,000 - (200,000) (2,875,000) - -

Total Options 10,100,000 - (400,000) (9,700,000) - -

2012Options (held directly and indirectly)

NameBalance at1 July 2011

Optionsgranted as

remunerationduring the

year

Off markettransfer

during theyear

Optionsexercisedduring the

yearBalance at

30 June 2012

Numbervested andexercisable

Geoffrey Donohue 4,525,000 - - - 4,525,000 4,525,000Jacques Badenhorst - - - - - -Thomas Hill - - - - - -Peter McIntyre 2,500,000 - - - 2,500,000 2,500,000Peter Ironside 3,075,000 - - - 3,075,000 3,075,000

Total Options 10,100,000 - - - 10,100,000 10,100,000

All options were exercisable at 20c on or before 30 September 2012.



13. KEY MANAGEMENT PERSONNEL DISCLOSURES - continued

(b) Equity Instrument Disclosures Relating to Key Management Personnel - continued

(iii) Share holdingsThe number of ordinary shares in the Company held during the financial year by each Director of Zamanco MineralsLimited and any other key management personnel of the Group, including their personally related parties, are asfollows.

There were no shares granted during the year as compensation (2012: nil). There were 9,700,000 shares issued uponexercise of options (2012: nil).

2013Shares (held directly and indirectly)

Balance at1 July 2012

Net changeduring the year

Balance at30 June 2013

Name DirectInterest

IndirectInterest

DirectInterest

IndirectInterest

Geoffrey Donohue 1,650,000 4,251,833 3,736,584 1,650,000 7,988,417Jacques Badenhorst - 1,212,500 - - 1,212,500Thomas Hill - 1,212,500 9,800 9,800 1,212,500Peter McIntyre - 3,387,236 2,850,000 - 6,237,236Peter Ironside 858,950 4,451,833 2,294,083 858,950 6,745,916

Total Shares 2,508,950 14,515,902 8,890,467 2,518,750 23,396,569

2012Shares (held directly and indirectly)

Balance at1 July 2011

Net changeduring the year

Balance at30 June 2012

NameDirect

InterestIndirectInterest

DirectInterest

IndirectInterest

Geoffrey Donohue 1,650,000 4,251,833 - 1,650,000 4,251,833Jacques Badenhorst - - 1,212,500 - 1,212,500Thomas Hill - - 1,212,500 - 1,212,500Peter McIntyre - 2,988,163 399,073 - 3,387,236Peter Ironside 858,950 4,451,833 - 858,950 4,451,833

Total Shares 2,508,950 11,691,829 2,824,073 2,508,950 14,515,902

(c) Other Transactions with Key Management Personnel

Mr Jacques Badenhorst, Director, is a shareholder and director of MRD (Pty) Ltd. During the year an amount of $15,117(2012: $11,327) was paid for office rental and administration/consulting services at normal commercial rates.

Mr Peter Ironside, Director, is a shareholder and director of Ironside Pty Ltd. Ironside Pty Ltd is a shareholder of the 168Stirling Highway Syndicate, the entity which owns the premises Zamanco occupies in Western Australia. Mr GeoffDonohue, Director, is a shareholder and director of Rembu Pty Ltd. Rembu Pty Ltd is also a shareholder of the 168Stirling Highway Syndicate, the entity which owns the premises Zamanco occupies in Western Australia. During the yearan amount of $45,839 (net of GST) (2012: $24,420) was paid for office rental at normal commercial rates.



14. OTHER RELATED PARTY TRANSACTIONS

SubsidiariesDuring the financial year the parent entity provided loan funds to its subsidiaries:

APG Resources, of $6,245 (2012: $590,681). $596,927, being the total amount of this loan was considered impairedand written off as at 30 June 2013 (2012: $235,451);Zamanco Holdings Limited, of $2,505,441 (2012: $380,356); andZamanco Minerals Limited (Zambia), nil (2012: $168,559).


15. AUDITORS’ REMUNERATION $ $

Amount received or due and receivable by BDO Australia:Audit and review of financial statements 34,334 32,784Other services:Taxation Compliance 13,148 12,162

Amount received or due and receivable by network firm of BDO Australia – BDO Zambia:Audit and review of financial statements 17,000 8,857Other services:Accounting Compliance 2,922 -

67,404 53,803



Company16. PARENT ENTITY DISCLOSURES 30 June 2013 30 June 2012

$ $

Summarised Statement of Profit or Loss and Other Comprehensive Income

Profit/(loss) for the year after tax (2,790,305) (758,713)

Other comprehensive income - -

Total comprehensive profit/(loss) for the year (2,790,305) (758,713)

Summarised Statement of Financial Position

Current Assets 4,706,246 2,440,394

Non Current Assets 1,646,315 1,098,110

Total Assets 6,352,561 3,538,504

Current Liabilities 43,187 68,073

Total Liabilities 43,187 68,073

Net Assets 6,309,374 3,470,431

Total equity of the parent entity comprising:

Share Capital 10,122,974 4,493,724

Reserves 176 176

Accumulated losses (3,813,776) (1,023,469)

Total Equity 6,309,374 3,470,431

Details of the investments in the controlled entities are:

Name of Entity Country ofIncorporation

2013% Held

2012% Held

APG Resources Pty Ltd Australia 100% 100%Zamanco Holdings Limited Mauritius 100% 100%Zamanco Minerals Limited Zambia 100% 100%Zamanone Mining Limited Zambia 80% 100%Zamantwo Minerals Limited Zambia 80% 100%Zamanthree Minerals Limited Zambia 80% 100%Zamanfour Minerals Limited Zambia 49% 100%Zamanfive Minerals Limited Zambia 100% -Zamansix Minerals Limited Zambia 100% -Zamanseven Minerals Limited Zambia 100% -

Guarantees, commitments and contingent liabilities of the parent are the same as for the Consolidated Group. Refer note 11and 19.



17. SEGMENT INFORMATION

Management has determined that the Group has two reportable segments, being mineral exploration in twogeographical locations - Western Australia and Zambia. As the Group is focused on mineral exploration, the Boardmonitors the Group based on actual versus budgeted exploration expenditure incurred by area of interest. This internalreporting framework is the most relevant to assist the Board with making decisions regarding the Group and its ongoingexploration activities, while also taking into consideration the results of exploration work that has been performed todate.

Australia ZambiaTotal

Operations

Operating Segments $ $ $2013Revenue and income - - -Segment loss before income tax (126,782) (2,593,128) (2,719,910)Segment assets 20 2,090,388 2,090,408

Segment liabilities (4,000) (206,787) (210,787)

Reconciliation of segment revenue:Segment revenueUnallocated:

- Interest revenue 96,454Total revenue 96,454

Reconciliation of segment loss before income tax:Segment loss before income tax (126,782) (2,593,128) (2,719,910)Unallocated:

- Interest Revenue 96,454- Corporate and administration services (318,623)- Foreign currency losses -- Diminution of Investments (12,000)

Profit/(loss) before income tax (2,954,079)

Reconciliation of total assets:

Segment assets 20 2,090,388 2,090,408

Unallocated:

- Financial assets 4,699,184

- Other 14,666

Total assets 6,804,258

Reconciliation of total liabilities:


Unallocated:

- Financial liabilities (43,187)

Total liabilities (253,974)



17. SEGMENT INFORMATION - continued

Australia ZambiaTotal

Operations

Operating Segments $ $ $2012Revenue and income - - -Segment loss before income tax (276,730) (382,916) (659,646)Segment assets 120,066 1,646,380 1,766,446


Reconciliation of segment revenue:Segment revenueUnallocated:

- Interest revenue 113,684Total revenue 113,684

Reconciliation of segment loss before income tax:Segment loss before income tax (276,730) (382,916) (659,646)Unallocated:

- Interest Revenue 113,456- Corporate and administration services (206,058)- Foreign currency losses (660)- Diminution of Investments (3,000)

Profit/(loss) before income tax (755,908)

Reconciliation of total assets:

Segment assets 120,066 1,646,380 1,766,446

Unallocated:

- Financial assets 1,761,316

- Other 27,163

Total assets 3,554,925

Reconciliation of total liabilities:


Unallocated:

- Financial liabilities (68,073)

Total liabilities (84,205)



18. ASSET ACQUISITION

On 10 February 2012, Zamanco acquired a 100% of the issued capital of Zamanco Holdings Limited (ZHL), a company thathas interests in manganese tenements in Zambia.

The consideration payable to ZHL comprised $106,000 payable in cash (repayment of expenses incurred), 5,150,000 fullypaid ordinary shares in the Company and the issue of deferred consideration of up to 46,350,000 shares based onperformance milestones associated with the development of the Serenje Manganese Project in Zambia (refer note 19).

Details of the fair value of the assets and liabilities acquired as at 10 February 2012 are as follows:

Purchase consideration comprises: Number Price $

Cash paid - reimbursement of expenses incurred 106,000

Shares issued to vendors 5,150,000 $0.20 1,030,000

Tranche 1 Deferred Consideration Shares 5,150,000 66,950



Legal and other costs attributable to assets acquired 152,110

1,468,110

Net assets acquired:Exploration and evaluation assets 1,468,110

None of the deferred consideration shares have been issued as at 30 June 2013. Refer to subsequent events note.

The ordinary and deferred consideration shares outlined above are considered a share-based payment and have beenaccounted for in accordance with AASB2 by valuing the net assets acquired.

19. CONTINGENT ASSETS AND LIABILITIES

On 10 February 2012, Zamanco acquired 100% of the issued capital of Zamanco Holdings Limited (ZHL), a company thathas interests in manganese tenements in Zambia.

The purchase consideration included three contingent Tranches of shares, which are to be issued once certain milestonesare reached, as follows:

First Performance Milestone to be met on or before 10 August 2013 - 5,150,000 shares - if the Company definesa JORC-compliant Indicated Resource of manganese in excess of 1,000,000 metric tonnes and at a grade ofgreater than 40% Mn, from one of its Zambian projects;Second Performance Milestone to be met on or before 9 February 2016 - 15,450,000 shares - if the Companycompletes a bankable feasibility study for the production of ferromanganese from one of its Zambian projects(with a demonstrated capacity to produce at least 60,000 metric tonnes per annum for a minimum of ten (10)years), and the board of the Company approves the development of that project; andThird Performance Milestone to be met on or before 9 February 2017 - 25,750,000 shares - if the Companyachieves 12 months of continuous production from its high carbon ferromanganese smelter.

None of the deferred consideration shares have been issued as at 30 June 2013. Refer to subsequent events note.



20. JOINT ARRANGEMENTS

The Group has the following interests in joint arrangements:

PrincipalActivities

Zamanco Group% Interest

30 June 2013 30 June 2012

ZambiaMkushi – 347ha tenement Exploration 49% Earning 49%Mkushi – 419ha tenement Exploration 80% -Mansa Exploration 80% Earning 80%Milenge Exploration 80% Earning 80%Mutambe (Chinsali) Exploration 100% Earning 49%Nkundalila Exploration 70% -Sernenje/Milenge Exploration - Earning 80%EML Mansa Exploration - Earning 80%Kabwe Exploration - Earning 49%

Australia Yundamindera Exploration - 30%

21. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND INSTRUMENTS

The Group’s principal financial instruments comprise cash and short-term deposits. The main purpose of these financialinstruments is to provide working capital for the Group’s operations.

The Group has various other financial instruments such as trade debtors and trade creditors, which arise directly from itsoperations.

It is, and has been throughout the year under review, the Group’s policy that no trading in financial instruments shall beundertaken.

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, liquidity risk andcredit risk. The Board reviews and agrees on policies for managing each of these risks and they are summarised below.

Liquidity RiskThe Group has no significant exposure to liquidity risk as there is effectively no debt. Trade payables are all expected tobe paid within 30 days. The Group manages liquidity risk by monitoring immediate and forecast cash requirements andensuring adequate cash reserves are maintained.

Commodity Price RiskThe Group’s exposure to price risk is minimal given the Group is still in an exploration phase.



21. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND INSTRUMENTS - continued

Interest Rate RiskAt reporting date the Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s short-term cash deposits. The Group constantly analyses its exposure to interest rates, with consideration given to potentialrenewal of existing positions, the mix of fixed and variable interest rates and the period to which deposits may be fixed.

At reporting date, the Group had the following financial assets exposed to variable interest rates that are not designatedin cash flow hedges:

Consolidated2013 2012

$ $Financial Assets:Cash and cash equivalents(interest-bearing accounts) 4,816,311 1,833,046Net exposure 4,816,311 1,833,046

The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date forvariable interest bearing accounts. The 0.5% sensitivity is based on reasonably possible changes, over a financial year,using an observed range of historical LIBOR movements over the last 3 years.

At 30 June 2013, if interest rates had moved on variable interest bearing accounts, as illustrated in the table below, withall other variables held constant, post tax profit and equity relating to financial assets of the Group would have beenaffected as follows:

Consolidated2013

$2012

$Judgements of reasonably possible movements:Post tax profit - higher / (lower)+ 0.5% 23,124 9,157- 0.5% (23,124) (8,778)Equity - higher / (lower)+ 0.5% 23,124 9,157- 0.5% (23,124) (8,778)

The sensitivity in 2013 is higher than in 2012, due to a higher average cash balance during the year. The Company doesnot expect interest rates to increase in the next year.

Credit RiskCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to theGroup. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateralor other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Groupmeasures credit risk on a fair value basis.

The Company has a credit risk in relation to its cash at bank, short-term deposits and receivables. However, this risk isminimised as the cash is deposited only with AA or greater (Moodys) rated financial institutions. The Group does nothave any other significant credit risk exposure to a single counterparty or any group of counterparties having similarcharacteristics.



21. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND INSTRUMENTS - continued

Impairment losses are recorded against receivables unless the Group is satisfied that no recovery of the amount owingis possible; at that point the amount is considered irrecoverable and is written off against the financial asset directly.

Management believes the reporting date risk exposures are representative of the risk exposure inherent in financialinstruments.

Foreign Exchange RiskThe Group is exposed to currency risk on investments and purchases that are denominated in a currency other than therespective functional currencies of the Group entities, primarily the Australian dollar (AUD), US dollar (USD) andZambian Kwacha (ZMW).

The Group’s investments in its subsidiaries are not hedged as those currency positions are considered to be long term innature.

At 30 June 2013, any movement in exchange rates would not have a material effect on post tax profit and equity forthe Group (2012: no material effect on post tax profit and equity for the Group).

The exposure to foreign currency risk above is recognised in equity under the foreign currency translation as part of thenet investment in foreign operations and these amounts would be recognised in profit or loss upon disposal of theforeign operations.

Fair ValueDisclosure of fair value measurements by level are as follows:

• Level 1 - the fair value is calculated using quoted prices in active markets

• Level 2 - the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable forthe asset or liability, either directly (as prices) or indirectly (derived from prices)

• Level 3 - the fair value is estimated using inputs for the asset or liability that are not based on observable market data.

The following table presents the Group’s assets and liabilities as at year ended 30 June 2012 measured at fair value aswell as the methods used to estimate the fair value.

Quoted Market Price(Level 1)

$

Valuation withObservable Market

Data (Level 2)$

Valuation with noObservable Market

Data (Level 3)$

Total$

Other currentfinancial assets at fairvalue

5,000 - - 5,000

There were no transfers between level 1 and level 2 during the year.




23. NON-CASH INVESTING AND FINANCING ACTIVITIES $ $

Acquisition of subsidiary Zamanco Minerals Limited (Zambia) through equity issue - 1,030,000

24. STATEMENT OF CASH FLOW INFORMATION

(a) Cash and cash equivalents

Cash at bank and in hand 716,311 383,053Short-term deposits 4,100,000 1,450,000

4,816,311 1,833,053The Group’s exposure to interest rate risk is discussed in note 22. The maximumexposure to credit risk at the reporting date is the carrying amount of each class ofcash and cash equivalents mentioned above.

(b) Reconciliation of profit/(loss) after tax to the net cash flows used in operations

Profit/(loss) after income tax (2,954,079) (755,908)Non-Cash Items:

Depreciation 22,962 -Investment write down 12,000 3,000Exploration written off 2,035,179 272,443Reserves - (341)

Change in assets and liabilities:

Increase/(decrease) in payables (6,104) 43,287

Net cash flows (used in)/provided by operating activities (890,042) (437,519)

25. EVENTS SUBSEQUENT TO YEAR END

On 12 August 2013, the Company announced that the first milestone for the Tranche 1 Deferred Consideration Sharesto be issued pursuant to the Share Sale Agreement (Agreement) for the acquisition of Zamanco Holdings Limited, wasnot met by the required date of 10 August 2013. Therefore the Tranche 1 shares will not be issued. The milestonerequired the Company to define a JORC-compliant Indicated Resource of manganese, in excess of 1,000,000 metrictonnes and at a grade of greater than 40% Mn, from one of its Zambian projects, within 18 months of settlementpursuant to the Agreement.

There are no other matters or circumstances that have arisen since 30 June 2013 that have or may significantly affectthe operations, results, or state of affairs of the group in future financial years.


Director’s Declaration

In accordance with a resolution of the Board of Directors, I state that:

In the opinion of the Directors:

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

(i) giving a true and fair view of the Group’s financial position at 30 June 2013 and of its performance forthe year ended on that date; and

(ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatoryprofessional reporting requirements; and

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when theybecome due and payable; and

(c) the financial statements and notes comply with the International Financial Reporting Standards as disclosed inNote 1.

This declaration has been made after receiving the declarations required to be made to the Directors in accordancewith section 295A of the Corporations Act 2001 for the financial year ending 30 June 2013.

On behalf of the Board

Geoffrey DonohueChairmanPerth, Western Australia20 September 2013

38 Station StreetSubiaco, WA 6008PO Box 700 West Perth WA 6872Australia

Tel: +8 6382 4600Fax: +8 6382 4601www.bdo.com.au

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limitedby guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional StandardsLegislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF ZAMANCO MINERALS LTD

Report on the Financial Report

We have audited the accompanying financial report of Zamanco Minerals Ltd, which comprises theconsolidated statement of financial position as at 30 June 2013, the consolidated statement ofprofit or loss and other comprehensive income, the consolidated statement of changes in equity andthe consolidated statement of cash flows for the year then ended, notes comprising a summary ofsignificant accounting policies and other explanatory information, and the directors’ declaration ofthe consolidated entity comprising the company and the entities it controlled at the year’s end orfrom time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives atrue and fair view in accordance with Australian Accounting Standards and the Corporations Act2001 and for such internal control as the directors determine is necessary to enable the preparationof the financial report that gives a true and fair view and is free from material misstatement,whether due to fraud or error. In Note 1, the directors also state, in accordance with AccountingStandard AASB 101 Presentation of Financial Statements, that the financial statements comply withInternational Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conductedour audit in accordance with Australian Auditing Standards. Those standards require that we complywith relevant ethical requirements relating to audit engagements and plan and perform the audit toobtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial report. The procedures selected depend on the auditor’s judgement, including theassessment of the risks of material misstatement of the financial report, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to thecompany’s preparation of the financial report that gives a true and fair view in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the company’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates madeby the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the CorporationsAct 2001. We confirm that the independence declaration required by the Corporations Act 2001,which has been given to the directors of Zamanco Minerals Ltd, would be in the same terms if givento the directors as at the time of this auditor’s report.

Opinion

In our opinion:(a) the financial report of Zamanco Minerals Ltd is in accordance with the Corporations Act 2001,

including:(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June

2013 and of its performance for the year ended on that date; and(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;

and(b) the financial report also complies with International Financial Reporting Standards as disclosed

in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30June 2013. The directors of the company are responsible for the preparation and presentation ofthe Remuneration Report in accordance with section 300A of the Corporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Zamanco Minerals Ltd for the year ended 30 June 2013complies with section 300A of the Corporations Act 2001.

BDO Audit (WA) Pty Ltd

Peter TollDirector

Perth, Western AustraliaDated this 20th day of September 2013


Additional ASX Information

Additional information required by ASX Ltd and not shown elsewhere in this report is as follows. The information is current asat 29 August 2013.

Twenty Largest Holders of Quoted Shares

NameNumber of

Ordinary SharesPercentage ofIssued Capital

1 UBS Wealth Management Australia Nominees Pty Ltd 7,075,240 10.96

2 National Nominees Limited 3,701,000 5.73

3 Rembu Pty Ltd <The Donohue Investment A/C> 3,688,417 5.71

4 Ironside Pty Ltd <Ironside Super Fund A/C> 3,438,416 5.33

5 Rembu Pty Ltd <Donohue Super Fund A/C> 3,025,000 4.69

6 Ironside Pty Ltd <Ironside Super Fund A/C> 3,000,000 4.65

7 Citicorp Nominees Pty Limited 2,844,432 4.41

8 Muirhead Electrical Pty Ltd 1,749,722 2.71

9 Mr Geoffrey Allan Donohue 1,650,000 2.56

10 Equity Trustees Limited <Augusta Investors Inc> 1,434,879 2.22

11 HSBC Custody Nominees (Australia) Limited - A/C 2 1,400,000 2.17

12 Turnstone Trustees (Mauritius) Limited <Boardwalk A/C> 1,212,500 1.88

13 Turnstone Trustees (Mauritius) Limited <JAB A/C> 1,212,500 1.88

14 Turnstone Trustees (Mauritius) Limited <MCR A/C> 1,212,500 1.88

15 Turnstone Trustees (Mauritius) Limited <WHL A/C> 1,212,500 1.88

16 Keiser Shipping & Transport Pty Ltd 1,057,292 1.64

17 S G J Investments Pty Ltd 1,023,301 1.59

18 Ginga Pty Ltd 1,000,000 1.55

19 Mr Peter Ironside 858,950 1.33

20 KSLCorp Pty Ltd 800,000 1.24

42,596,649 65.99

Shares quoted at 29 August 2013 64,550,000

Substantial Shareholders

An extract of the Company’s register of substantial shareholders is as follows:

NameNumber of


Geoff Donohue 8,088,417 18.53%

Peter Reynold Ironside 7,304,886 16.73%

Labonne Enterprises Pty Ltd < McIntyre Family A/c> 5,887,236 13.48%


Additional ASX Information

Distribution of Quoted Shares

Size of HoldingNumber of

ShareholdersNumber of


1 - 1,000 6 121 0.001,001 - 5,000 55 191,348 0.305,001 - 10,000 75 665,481 1.03

10,001 - 100,000 192 7,014,668 10.87100,000 and over 70 56,678,382 87.80

Total Shareholders 398 64,550,000 100%

Number of shareholders holding less than amarketable parcel 30

Voting RightsAll shares carry one vote per share without restriction.

Listed OptionsThere were no listed options on issue as at 29 August 2013. During the year 20,890,000 options had been exercised, nooptions were issued and no options expired.

Unlisted OptionsThere were no listed options on issue as at 29 August 2013. During the year 1,000,000 options expired, no options wereissued and no options exercised.

Use of Cash

During the reporting period, the use of cash has been consistent with the Company’s business objectives.


Tenement Schedule

ZAMBIA

1. MkushiTenement Registered Holder or Applicant Group Interest15836-HQ-SPP Zamanfour Minerals Ltd 49%17585-HQ-LPL Zamanfour Minerals Ltd 80%

2. MansaTenement Registered Holder or Applicant Group Interest15817-HQ-LPL Zamantwo Minerals Limited 80%

3. MilengeTenement Registered Holder or Applicant Group Interest12897-HQ-LPL Zamanone Mining Ltd 80%

4. Mutambe (Chinsali)Tenement Registered Holder or Applicant Group Interest14493-HQ-LPL Mutambe Royal Establishment Ltd 100%

5. NkundalilaTenement Registered Holder or Applicant Group Interest18379-HQ-LPL(tfr to Zamanfive pending)

Nkundalila Small Scale Mines Ltd 70%

Zamanco Minerals Limited

ABN 32 124 782 038

First Floor, 168 Stirling Highway, Nedlands, Western Australia 6009

T: 61 8 9287 7625 F: 61 89389 1750

E: [email protected]

ZAMANCO MINERALS LIMITED ANNUAL REPORT 2013 Annual Report.pdf · Zamanco Minerals Annual Report ......

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