BLACK RIDGE MINING NL

BLACK RIDGE MINING NL ABN 48 083 274 024

ANNUAL FINANCIAL REPORT for the year ended 30 June 2010

TABLE OF CONTENTS

CORPORATE DIRECTORY 2

DIRECTORS’ REPORT 3

AUDITOR'S INDEPENDENCE DECLARATION 18

STATEMENT OF COMPREHENSIVE INCOME 19

STATEMENT OF FINANCIAL POSITION 20

STATEMENT OF CHANGES IN EQUITY 21

STATEMENT OF CASH FLOWS 22

NOTES TO THE FINANCIAL STATEMENTS 23

DIRECTORS’ DECLARATION 49

INDEPENDENT AUDITOR'S REPORT 50

BLACK RIDGE MINING NL 2010

CORPORATE DIRECTORY

BLACK RIDGE MINING NL ABN 48 083 274 024 Directors

Mr Roger Smith (Non-Executive Chairman)

Mr Gordon Hatch (Managing Director)

Mr Angus Middleton (Non-Executive Director)

Company Secretary Mr David Semmens Registered Office Suite 10, 281 Hay Street SUBIACO Western Australia 6008 Telephone: 08 9381 6922 Facsimile: 08 9381 6060 e-mail: [email protected] Web : www.blackridgemining.com Share Registry Advanced Share Registry Ltd 150 Stirling Highway NEDLANDS Western Australia 6009 Telephone: (08) 9389 8033 Auditors K Westaway & Associates Chartered Accountants Suite 7, 29 Hood Street SUBIACO Western Australia 6008 Solicitors Steinepreis Paganin Level 4, NEXT Building 16 Milligan Street PERTH Western Australia 6000 Bankers Westpac 1257 – 1261 Hay Street WEST PERTH Western Australia 6005 Stock Exchange Listing Australian Securities Exchange Black Ridge Mining NL ASX Code: BRD


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DIRECTORS’ REPORT

Your directors submit their report for the Company and its controlled entities (“the Consolidated Entity”) for the year ended 30 June 2010.

DIRECTORS

The names and details of the Company’s directors in office during the financial year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr Roger Smith Non-executive Chairman

Mr Smith was appointed as a Director on 21 February 2005 and as Chairman on 18 September 2008 and has many years experience in retail trade. He has held a number of proprietary company directorships and has been successful in the operation of a number of wholesale/retail businesses in Australia. Mr Smith is a non-executive director of ASX listed company Multi Channel Solutions Limited.

Mr Gordon Hatch Managing Director Mr Hatch was appointed as a Director on 18 September 2008 and as Managing Director on 31 January 2009. He has in excess of 25 years of practical experience in management, commerce and mining associated with both local and overseas directorships of his own companies. In particular, he has been responsible for negotiating and introducing new systems to various industries with a broad range of clientele including publicly listed national companies and government. He has a proven track record in contract negotiation which will add support to the Board, particularly in its endeavours to source company enhancing projects including resource based opportunities.

Mr Angus Middleton Non-executive Director

Mr Middleton was appointed as a Director on 1 January 2009. He is a director of SA Capital Pty Ltd and the Managing Director of SA Capital Funds Management Limited, the manager of the SACFM No. 1 Fund. Prior to becoming a funds manager he was a stockbroker for 25 years and a member of the Adelaide Stock Exchange and then the Australian Stock Exchange. SA Capital provides corporate advisory services to a range of companies in raising equity in the form of venture capital, seed capital, pre-initial public offerings and initial public offerings and also acts as an underwriter for issues of equity. Mr Middleton is a non-executive director of ASX listed companies Magna Mining NL and Rubianna Resources Limited.

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

Name Company Period of Directorship Mr Gordon Hatch Nil N/A

Mr Angus Middleton Magna Mining NL Rubianna Resources Limited

23/09/08 to current 30/09/09 to current

Mr Roger Smith Multi Channel Solutions Limited June 1988 to current


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DIRECTORS’ REPORT (Cont’d) OTHER OFFICERS Mr David Semmens Company Secretary

Appointed on 14 July 2006, Mr Semmens has experience in providing company secretarial, financial and corporate and other related services to organisations listed on ASX.

PRINCIPAL ACTIVITIES The principal activity during the financial year was mineral exploration including the exploration and evaluation of opportunities located domestically and internationally. OPERATING RESULTS The Consolidated Entity’s operating loss after tax for the year ended 30 June 2010 was $959,330 (2009: loss of $1,014,760). REVIEW OF OPERATIONS

Having established the new direction into the mineral exploration industry during 2009, the company continued to develop the investigation of its exploration area at Unaly Hill as the main priority, given the early indicators from the work undertaken to that time. The directors believe that this new direction was justified with the results of further work completed during the year. In support of the aim to broaden the opportunities for shareholders, the company did undertake several project assessments of both coal and gold deposits overseas. To date these have not been fruitful and whilst deemed to be opportune for the company at the time, will not be undertaken at the expense of the more clearly defined project in Western Australia. The Directors hold an open view however, on future opportunities. With the Unaly Hill acquisition completed prior to 30 June 2009, the company undertook a continuation of the desktop and in-field work commenced with the earlier (brief) RC drilling, mindful of the need to contain expenditure and yet, develop a model forward to get the earliest possible understanding of the potential, that would give confidence to the market for further capital raising. At the same time, the company was proceeding with the Exclusive Dealing Agreement it held with the Shanxi Donghui Group of China over the Unaly Hill tenement, and continued to provide data for assessment by them, to assist with their determination whether to proceed or not with the venture. As subsequently announced to the market on 12 February 2010, the agreement was terminated by mutual consent between all parties. By a resolution passed at a General Meeting held on 21 September 2009, the company voted to change its corporate type from a public company limited by shares to a public no liability company. Once approval was ratified by ASIC the company adopted a new constitution and commenced trading as Black Ridge Mining NL.


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DIRECTORS’ REPORT (Cont’d) Western Australia – E57/420 (Unaly Hill) During the first quarter, further evaluation of the drilling results previously published highlighted that more should be done to expand on the inherent magnetite body contained in the collected data. Various models had been proposed for the future program of works on site including further drilling, 3D imaging and metallurgical analysis. On 26 November 2009 the Company advised of the commencement of a diamond drilling program targeting ferro-vanadium mineralization at the Unaly Hill tenement. The two hole drilling program of approximately 500 metres, was designed to test the presence of magnetite mineralization modeled from detailed geophysical interpretation of airborne magnetics and, 3D modeling prepared by Southern Geoscience Consultants Pty Ltd. The previous RC drilling program of 2008, failed to test the most prospective zone of mineralization as interpreted from geophysical modeling, due to inclement weather restricting access. The first hole of that program was planned to test this location.

On 18 December 2009, the Company announced the results of the diamond drilling program to the south of the tenement in which wide intervals of high grade magnetite, vanadium and titanium were identified. In particular, hole UH4 as identified on plan to the left (schematic cross section below) intersected multiple zones of high grade mineralization through to the down hole depth of 320 metres, at which time, it was decided to complete the hole, even though it was still in mineralization. The widest band of high grade mineralization was 117 metres between 170 and 287 metres down hole which produced an average of 34.56% Fe, 0.66% V2O5 and 9.56% TiO2. The 26 metres prior to completing the hole, still produced almost identical grades on average and further testing under a separate program, will determine the full depth of the ore body. Of major importance to the company, was the high grade nature of the material throughout including 42 intervals between 30 - 40% Fe, and more than 70 intervals above 40%, with 19 intervals above 50% Fe. Significantly, of those high grade zones, there were many in the 1-3 metre intervals, with the following considered to be of special interest to the program.

Between down hole depth 113.00 – 118.05m (5.99 metres) 45.93% Fe ave. 170.02 – 176.00m (5.98 metres) 45.81% Fe ave. 181.33 – 191.00m (9.70 metres) 46.74% Fe ave. 264.70 – 272.00m (8.30 metres) 48.30% Fe ave. 279.55 – 286.30m (6.75 metres) 50.98% Fe ave. 294.04 – 303.00m (8.60 metres) 48.32% Fe ave.


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DIRECTORS’ REPORT (Cont’d)

Cross section of mineralization in diamond hole UH4


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DIRECTORS’ REPORT (Cont’d) The photo below is from the interval at 184 – 185 metres @ 49.70% Fe and is typical of all high grade zones

It was generally agreed that once the drill results were tabled, the clearest way forward was to get an understanding of the metallurgy which would form the basis, of where the priorities should lie for the 2010 development of those results. Accordingly, after consultation with a process engineering office in Perth, Promet Engineers (ProMet), it was recommended that some Davis Tube Recovery (DTR) test work should be undertaken, which was commissioned in the early part of March. The company advised the market on 1 April 2010 of those results, the key points of which were –

• Preliminary Davis Tube Recovery (DTR) test work confirms that a high grade vanadium

concentrate can be produced from Unaly Hill mineralisation

• Concentrate grades of 59% Fe and 1.25% V2O5 at coarse (150 micron) grind

• Favourable comparisons to Windimurra vanadium operations located 30km to west

• Scoping study proposal by independent consultants under review

Test work was completed under the supervision of independent consultants ProMet, and involved the crushing and grinding of core samples to a variety of sizes to give different concentrate grades (Table 1).


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Size

(Micron)

Weight

Recovery Fe SiO2 Al2O3 TiO2 V V2O5

500 62.19 55.28 3.3 3.13 13.6 0.64 1.14

235 57 57.49 2.18 2.35 13.3 0.68 1.21

152 54.98 59.1 1.55 1.88 13.16 0.70 1.25

76 53.03 60.7 1.05 1.41 12.81 0.72 1.28

44 51.12 61.7 0.72 1.04 12.33 0.74 1.33

34 50.79 61.31 0.64 0.94 12 0.74 1.31

33 50.5 61.71 0.64 0.9 11.9 0.74 1.33

28 50.15 61.61 0.62 0.86 11.7 0.75 1.33 Table 1: Davis Tube Recovery concentrate results Vanadium Grade in Concentrate The vanadium grades in concentrate are considered to be particularly encouraging. The criteria for magnetite for a feedstock to a vanadium processing plant – similar to that at Windimurra - is that silica be less than 2% and that the vanadium pentoxide (V2O5) grade be as high as possible. This indicates that a grind of 80% passing 150micron would be suitable when compared with publically available data on the Windimurra plant (Table 2). These initial results indicate that the orebody has the potential to produce a vanadium concentrate by standard metallurgical processes which is suitable as feedstock for a conventional vanadium processing facility, and compares very favorably with the Windimurra operation located 30km to the west.

Table 2: Unaly Hill / Windimurra vanadium in concentrate comparison On 8 April 2010 it was announced that an initial exploration target had been determined for the project indicating the following –

• Initial Exploration Target* of 180 to 200 million tonnes @ 30% – 44% Fe , 0.6% – 0.9% V2O5,

9% -13% TiO2 For the Unaly Hill Project

• Exploration Target based on a 3km portion of strike length out of an identified 11km magnetic

anomaly

• RC drilling program planned to commence in May 2010

Unaly Hill

(20% Fe cutoff)

Windimurra

(0.275% V2 O5 cutoff)

% V2 O5 in sample 0.67 0.46

% V2 O5 yield to Cons 85-90% 68%

Grade in Concentrate

at 80% passing 150

micron 1.25% 1.26%


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Recent exploration programs have been successful in delineating a series of magnetite lenses within a layered metagabbro intrusive. This style of layered intrusive is an important host for vanadium and titanium-bearing magnetite iron deposits such as those at the Speewah Project (NiPlats Australia Ltd) or the Balla-Balla titanomagnetite deposit (Aurox Resources Ltd).

Given the results of the programme to date and to ensure more accurate geophysics to work with in the future, it was decided to commission a new aeromagnetic survey of the target areas including, the northern sections of E57/760 (see separate report below). This work was undertaken and reported to the market on June 1st 2010 confirming that 1,124 line kms had been flown, which when analysed, would assist in the planning of the holes for the follow up RC drilling programme later in the year. Subsequent to the end of the financial year, the Company announced in July 2010 that drilling had commenced on both E57/420 and E57/760 with the results to be reported in the September quarter. Additionally, the area is being evaluated for the prospectivity of gold which to date, has been the subject of discontinuous gold exploration activity in the past. It is considered that the tenement is clearly prospective for gold given that it straddles the regional scale Youanmi Shear Zone. To the north and on the flanks, there is a history of gold in past production, current resources and small scale workings. Further desk top studies are continuing on this aspect of the tenement. Western Australia - Meteoric Resources NL – E57/760 On 19 May 2010 the Company announced it had reached an Agreement in Principle with Meteoric Resources NL (ASX:MEI) on Meteoric’s 100%-owned exploration licence (E57/760) situated adjacent, and to the south of the Company’s Unaly Hill magnetite-vanadium-titanium project (E57/420). The magnetite-vanadium-titanium mineralisation at Unaly Hill is associated with a pronounced aeromagnetic anomaly which can be traced for about 11km in exploration licence (E57/420) This magnetic anomaly extends for at least 2km along strike within the Meteoric tenement, as shown on the attached map below.


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Under the terms of the agreement, the Company has 6 months to spend a minimum of $100,000 on the ground to evaluate their further interest within the Tenement. If the Company chooses not to proceed further with the agreement, it may withdraw at any time with no right or title to the Tenement; such expenditure to form part of the earn-in expenditure.

Should the Company choose to proceed with the Joint Venture, it must spend within three years a minimum of $1,000,000 (inclusive of the initial $100,000) on the Tenement to earn a 60% interest in the project. At that point the Company may elect to remain at 60% and a contributing JV formed, or it may elect to sole fund a further $500,000 within an additional one year, to earn up to a total of 70% interest in the Tenement after which a contributing JV will be formed.


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DIRECTORS’ REPORT (Cont’d) Western Australia - P57/1268 As detailed on the above Meteoric Resources map, a strip of land separating it and the Unaly Hill tenement to the north was created with the re-aligning of the datum. To ensure that continuity of access between the two tenements was guaranteed for the Company should the option to form the JV with Meteoric Resources was exercised, the Company applied for an Exploration Licence in May 2010. This is anticipated to be granted at some time into the future. Overseas Opportunities Throughout the year, the Company has been evaluating varying potential opportunities in both the Philippines and Indonesia for both gold and coal. The Company reported to the market on 7 December 2009, it had entered into an exclusive Dealing Agreement with PT Inmas Abadi (PIA) in relation to PIA’s sub-bituminous coal deposit in Bengkulu Province, Sumatra (Licence No. KP#124.K/2013/DDJP/1996). Under the Agreement, the Company had the exclusive right for a period of 5 months to conduct further legal and geological inquiries and to determine whether it would participate in the development of the deposit under a joint venture or similar arrangement with PIA. The licence had a total area of 7,687 hectares of which preliminary investigation and at depth testing has taken place on 1,000 hectares, with early indications of an extensive resource. As reported in the March Quarterly Report, the legal issues with this agreement were far more challenging than the collection of geological data and ultimately, it was deemed inappropriate for the company to continue whilst these were being addressed by the relevant parties. The directors have taken a view that unless a stand out opportunity presents itself, the Company will concentrate on the domestic projects on hand. Information in this report that relates to exploration results reflects information compiled by Mr Paddy

Reidy, who is a consultant to Black Ridge Mining and a member of the AusIMM. Mr Reidy has sufficient

experience which is relevant to the style of mineralisation and type of deposit under consideration and to the

activity upon which he is reporting on as a Competent Person as defined in the 2004 Edition of “The

Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves.” Mr Reidy

consents to the inclusion in this report of the matters based on the information compiled by him, in the form

and context in which it appears.

* The term "Exploration Target" should not be misunderstood or misconstrued as an estimate of Mineral

Resources and Reserves as defined by the JORC Code (2004), and therefore those terms have not been used

in this context. Exploration Targets are conceptual in nature, and it is uncertain if further exploration will

result in the determination of a Mineral Resource.

Information in this report that relates to exploration targets reflects information compiled by Mr Daniel

Wholley, who is a Director of CSA Global Pty Ltd, a member of the Australian Institute of Geoscientists and

an independent consultant to the Company. Mr Wholley has sufficient experience which is relevant to the

style of mineralisation and type of deposit under consideration and to the activity upon which he is reporting

on as a Competent Person as defined in the 2004 Edition of “The Australasian Code for Reporting of

Exploration Results, Mineral Resources and Ore Reserves.” Mr Wholley consents to the inclusion in this

report of the matters based on the information compiled by him, in the form and context in which it appears.


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Information in this report that relates to metallurgical results reflects information compiled by Mr Brian

Povey, who is a Principal Consulting Metallurgist with ProMet Engineers, a fellow of the AusIMM, and an

independent consultant to the company. Mr Povey has sufficient experience which is relevant to the style of

mineralisation and type of deposit under consideration and to the activity upon which he is reporting on as a

Competent Person as defined in the 2004 Edition of “The Australasian Code for Reporting of Exploration

Results, Mineral Resources and Ore Reserves.” Mr Povey consents to the inclusion in this report of the

matters based on the information compiled by him, in the form and context in which it appears.

FINANCIAL POSITION At the end of the financial year, the Consolidated Entity had $574,790 (2009: $158,671) in cash and on deposit. DIVIDENDS The directors do not recommend the payment of a dividend for this financial year. No dividends have been paid or declared by the Company since the end of the previous financial year (2009: Nil). LIKELY DEVELOPMENTS AND FUTURE RESULTS Other than as referred to in the Review of Operations, further information as to likely developments in the operations of the Consolidated Entity would, in the opinion of the directors, be speculative and may hinder the Consolidated Entity in the achievement of its commercial objectives SIGNIFICANT CHANGE IN STATE OF AFFAIRS Issue of Shares On 23 December 2009 the Company issued 29,420,000 fully paid ordinary shares at $0.01 to raise $294,200 for working capital purposes. This placement of shares was approved by shareholders at a General Meeting of the Company held on 21st September 2009. On 29 April 2010 the Company issued 60,000,000 fully paid ordinary shares at $0.009 to raise $540,000 to fund ongoing exploration, working capital, corporate and administrative activities and the identification of new opportunities. This placement of shares was issued under the 15% capacity available to the company in accordance with the Listing Rules of the ASX. The placement was subsequently ratified at a General Meeting of the Company held on 23 August 2010. Other than the above, there were no significant changes in the state of affairs of the Consolidated Entity during the financial year, not otherwise disclosed in this Directors’ Report or in the Review of Operations. SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE DATE There has not arisen in the interval between the end of the financial year and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect substantially the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years.


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DIRECTORS’ REPORT (Cont’d) OPTIONS Share Options

As at 30 June 2010, there are 116,350,000 (2008: 113,350,000) unissued ordinary shares in respect of which options were outstanding comprising:

Number of Options Exercise Price Expiry Date

101,150,000 listed 0.03 30 November 2010 10,500,000 unlisted 0.10 31 December 2011 1,700,000 1,000,000 1,000,000 1,000,000

unlisted unlisted unlisted unlisted

0.04 0.04 0.07 0.10

31 December 2010 30 November 2012 30 November 2012 30 November 2012

During the year no options were issued and listed on ASX, and at the date of this report the Company had 15,200,000 (2009: 12,200,000) unlisted options on issue.

During, and since the end of the financial year, no (2009: Nil) fully paid ordinary shares were issued by the virtue of the exercise of options.

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate. REMUNERATION REPORT (AUDITED) This remuneration report outlines the remuneration arrangements for the Company’s directors. Remuneration Policy The performance of the Company depends upon the quality of its Directors and Executives. To prosper the Company must attract competent and experienced directors and executives. To ensure this the Company has put in place a remuneration structure:

• For its Managing Director, that has helped attract a high quality experienced candidate;

• Provides a balance of base compensation long term incentive plans;

• Providing market based director fees for its non executive directors. Remuneration Committee The Board elected that the Company was of the size that a Remuneration Committee was not warranted and that these issues would be continually considered by the Board. The full Board is responsible for establishing Black Ridge Mining NL’s remuneration policies and practices and to ensure they match the group’s objectives. The Black Ridge Board proposed the Managing Directors total remuneration package and is responsible for reviewing the non executive remuneration.


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DIRECTORS’ REPORT (Cont’d) Non-Executive Director and Executive Remuneration The remuneration of non executive directors may not exceed in aggregate in any financial year the amount fixed by the Company. Currently the non executive directors are remunerated by way of directors fees which have been set at $36,000 p.a. for the non executive chairman, and $30,000 for the non executive director, amounts considered reasonable for a company of its size and operational activity.

Details of Executives - Employment Contracts Mr Gordon Hatch, Managing Director/CEO is employed under contract and is currently the only executive of the Company and has been remunerated for this role as follows:

(i) Base Salary $150,000 pa; (ii) Statutory Superannuation; (iii) Motor Vehicle allowance of $2,400 pa; (iv) Long Term Incentive package comprising:

1,000,000 unlisted options exercisable at 4 cents each on or before 30 November 2012 1,000,000 unlisted options exercisable at 7 cents each on or before 30 November 2012 1,000,000 unlisted options exercisable at 10 cents each on or before 30 November 2012

Reward for Performance During the year there was no reward for the performance component of any remuneration package. Key Management Personnel Positions R Smith Non Executive Chairman: appointed as a Director on 21 February 2005: appointed as Non

Executive Chairman on 18 September 2008. G Hatch Managing Director (executive): appointed as a Director on 18 September 2008: appointed as

Managing Director on 31 January 2009. A Middleton Director (non-executive): appointed 1 January 2009.


DIRECTORS’ REPORT (Cont’d) Remuneration Report (cont’d) Remuneration of Directors and named Executives

Short-term employee benefits Post-employment

benefits Share-based payment

Salary & Fees $

Profit Share & Bonus

$

Non-monetary

$

Superannuation $

Equity-settled Total

$

Proportion of remuneration -

performance related (%)

Value of options as proportion of

remuneration (%) Shares $

Options $

2010

Gordon Hatch $137,500 - - $12,375 - $13,400 $163,275 - 8.2%

Angus Middleton $30,000 - - $2,700 $32,700 - -

Roger Smith $30,500 - - $2,700 - - $33,200 - -

Total 2010 $198,000 - $17,775 $13,400 $229,175 - 8.2%

2009

Rodger Johnston $6,119 - - - - - $6,119 - -

Donald Valentino $110,630 - $18,417 $79,192 - - $208,239 - -

Gordon Hatch $58,904 - - $4,136 - - $63,040 - -

Angus Middleton $15,000 - - - - - $15,000 - -

Roger Smith $31,667 - - $3,600 - - $35,267 - -

Total 2009 $222,320 $18,417 $86,928 - $327,665 - -


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DIRECTORS’ REPORT (Cont’d) Options granted as part of remuneration During the year, the following options were granted as part of the remuneration of the Managing Director: Value per option at

Grant Date

1,000,000 unlisted options exercisable at 4 cents each on or before 30 November 2012 0.0054



(END OF REMUNERATION REPORT)

DIRECTORS’ INTERESTS As at the date of this report, the interests of the directors in the shares and options of the Company were: DIRECT INDIRECT Ordinary Shares Options Ordinary Shares Options R Smith - 3,000,000 7,490,523 1,375,000 G Hatch 300,000 - 3,987,000 3,250,000 A Middleton - - 41,508,000 6,735,000

Note: Direct holdings are those held in the individuals name, indirect holdings are all other holdings controlled by the individual.

DIRECTORS’ MEETINGS

During the year, directors’ meetings were held. The number of meetings in which directors were in attendance is as follows: Directors’ Meetings

No. of meetings held while in office

Meetings attended

R Smith G Hatch A Middleton

11 11 11

10 11 11

As at the date of this report, the Consolidated Entity did not have an audit committee, as the directors believe the size of the Consolidated Entity and the size of the Board do not currently warrant its existence.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS During the financial year, the Consolidated Entity paid premiums totalling $9,167 in respect of a contract insuring all the directors of Black Ridge Mining NL against a liability incurred in their role as directors of the consolidated entity, except where:

the liability arises out of conduct involving a wilful breach of duty; there has been a contravention of the relevant sections of the Corporations Act; the conduct involves trading whilst insolvent; the conduct involves an operation carried on outside Australia.


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DIRECTORS’ REPORT (Cont’d) CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the directors of the Company support and have adhered to the principles of Corporate Governance. ENVIRONMENTAL REGULATION AND PERFORMANCE The Company’s exploration operations are subject to environmental regulations under Commonwealth and State legislation. The Directors believe that the Company has adequate systems in place for the management of the requirements under those regulations, and are not aware of any breach of such requirements as they apply to the Company. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. AUDITOR INDEPENDENCE A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001, is set out on the following page. NON-AUDIT SERVICES There were no non-audit services provided by the external auditors during the financial year. SIGNED in accordance with a resolution of the directors

Gordon S. Hatch Managing Director 17 September 2010


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BLACK RIDGE MINING NL AND CONTROLLED ENTITIES STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 30 JUNE 2010 Notes Consolidated Black Ridge Mining NL

2010 2009 2010 2010

CONTINUING OPERATIONS $ $ $ $

REVENUES 2 41,622 95,451 41,622 95,451

Depreciation 3 (7,087) (15,805) (7,087) (15,805) Finance costs 3 - (9,009) - (9,009) Share based payment expense 3 (13,400) - (13,400) - Employee benefits expense (251,785) (359,084) (251,785) (359,084) Lease rental payments 3 (27,500) (41,351) (27,500) (41,351) Professional fees 3 (364,867) (334,639) (364,867) (334,639) Insurance (3,973) (35,696) (3,973) (35,696) Exploration expenses (305,942) (114,289) (305,942) (114,289) Writedown listed securities - (64,340) - (64,340) Due diligence, travel and accommodation

(11,686) (29,347) (11,686) (29,347) Other expenses from ordinary activities

(14,712) (106,651) (14,712) (106,651)

LOSS BEFORE INCOME TAX (959,330) (1,014,760) (959,330) (1,014,760)

INCOME TAX EXPENSE 4 - - - -

LOSS ATTRIBUTABLE TO MEMBERS OF BLACK RIDGE MINING NL

(959,330) (1,014,760) (959,330) (1,014,760)

Basic loss per share (cents) 16 (0.24) (0.47) (0.24) (0.47) The company’s potential ordinary shares are not considered dilutive and accordingly basic loss per share is the same as diluted loss per share.

The accompanying notes form part of these financial statements.


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BLACK RIDGE MINING NL AND CONTROLLED ENTITIES STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2010

Notes Consolidated Black Ridge Mining NL

2010 2009 2010 2009

$ $ $ $ CURRENT ASSETS Cash and cash equivalents Financial assets

14 6

574,790 -

158,671 41,660

574,790 -

158,671 41,660

Other 5 30,471 67,174 30,471 67,174

TOTAL CURRENT ASSETS

605,261 267,505 605,261 267,505

NON-CURRENT ASSETS Financial assets

6

-

-

2

1

Property, plant and equipment 7 19,710 18,260 19,710 18,260 Exploration expenditure 8 147,068 140,000 147,068 140,000

TOTAL NON-CURRENT ASSETS 166,778 158,260 166,780 158,261

TOTAL ASSETS

772,039

425,765

772,041

425,766

CURRENT LIABILITIES Trade and other payables 10 43,005 90,774 43,005 90,774 Short term provisions 11 12,363 4,790 12,363 4,790

TOTAL CURRENT LIABILITIES 55,368 95,564 55,368 95,564

TOTAL LIABILITIES 55,368 95,564 55,368 95,564

NET ASSETS 716,671 330,201 716,673 330,202

EQUITY Equity attributable to equity holders of the parent

Issued capital 12 17,900,760 16,568,360 17,900,760 16,568,360 Reserves 12 236,750 223,350 236,750 223,350 Accumulated losses 12 (17,420,839) (16,461,509) (17,420,837) (16,461,508)

TOTAL EQUITY 716,671 330,201 716,673 330,202



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BLACK RIDGE MINING NL AND CONTROLLED ENTITIES STATEMENT OF CHANGES IN EQUITY

YEAR ENDED 30 JUNE 2010

Consolidated Share Capital Accumulated

Losses Reserves Total

$ $ $ $

Balance at 1.7.2009 16,568,360 (16,461,509) 223,350 330,201

Shares issued during the year 1,332,400 - - 1,332,400

Share based payments - - 13,400 13,400

Net loss recognised directly in equity - (959,330) - (959,330)

Balance at 30.06.2010 17,900,760 (17,420,839) 236,750 716,671

Balance at 1.7.2008 16,338,360 (15,458,989) 235,590 1,114,961

Shares issued during the year 230,000 - - 230,000

Share based payments - - - -

Net loss recognised directly in equity - (1,014,760) - (1,014,760)

Transfer from reserves - 12,240 (12,240) -

Balance at 30.06.2009 16,568,360 (16,461,509) 223,350 330,201

Black Ridge Mining NL Share Capital Accumulated

Losses Reserves Total

$ $ $ $

Balance at 1.7.2009 16,568,360 (16,461,508) 223,350 330,202

Shares issued during the year 1,332,400 - - 1,332,400

Share based payments - - 13,400 13,400

Net loss recognised directly in equity - (959,330) - (959,330)

Balance at 30.06.2010 17,900,760 (17,420,837) 236,750 716,673

Balance at 1.7.2008 16,338,360 (15,458,988) 235,590 1,114,962

Shares issued during the year 230,000 - - 230,000

Share based payments - - - -

Net loss recognised directly in equity - (1,014,760) - (1,014,760)

Transfer from reserves - 12,240 (12,240) -

Balance at 30.06.2009 16,568,360 (16,461,508) 223,350 330,202



22

BLACK RIDGE MINING NL AND CONTROLLED ENTITIES STATEMENT OF CASH FLOWS YEAR ENDED 30 JUNE 2010

Notes Consolidated Black Ridge Mining NL

2010 2009 2010 2009

$ $ $ $

CASH FLOWS FROM OPERATING ACTIVITIES

Income received 13,715 73,309 13,715 73,309 Interest received 12,314 29,315 12,314 29,315 Interest paid - (9,009) - (9,009) Payments to suppliers and employees (1,018,938) (1,093,050) (1,018,938) (1,093,050)

NET CASH FLOWS USED IN OPERATING ACTIVITIES

14(c)

(992,909)

(999,435)

(992,909)

(999,435)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment Proceeds on disposal of investments Acquisition of investments

(9,390)

53,177 -

(2,269) -

(50,000)

(9,390)

53,177 -

(2,269) -

(50,000)

NET CASH FLOWS USED IN INVESTING ACTIVITIES

43,787 (52,269) 43,787 (52,269)

CASH FLOWS FROM FINANCING ACTIVITIES

Release of security deposit 32,841 14,617 32,841 14,617 Repayment of borrowings - (18,219) - (18,219) Proceeds from issue of ordinary shares 1,364,200 90,000 1,364,200 90,000 Share issue expenses (31,800) - (31,800) -

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

1,365,241 86,398 1,365,241 86,398

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

416,119 (965,306) 416,119 (965,306) Opening cash brought forward 158,671 1,123,977 158,671 1,123,977

CASH AND CASH EQUIVALENTS AT END OF PERIOD

14(b) 574,790 158,671 574,790 158,671



23

BLACK RIDGE MINING NL AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial report of Black Ridge Mining NL (the Company) for the year ended 30 June 2010 was authorised for issue in accordance with a resolution of the directors on 17 September 2010. The financial report covers the consolidated group of Black Ridge Mining NL and controlled entities and Black Ridge Mining NL as an individual parent entity. Black Ridge Mining NL is a listed public company, incorporated and domiciled in Australia. (a) Basis of Preparation The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report has been prepared on an accrual basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

(b) Statement of Compliance The financial report complies with Australian Accounting Standards, which include Australian equivalents to the International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(c) Principles of Consolidation

A controlled entity is any entity controlled by Black Ridge Mining NL whereby it has the power to control the financial and operating policies of an entity so as to obtain benefits from its activities. A list of controlled entities is contained in Note 9 to the financial statements. All controlled entities have a June financial year end.

All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.


24

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d) NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(d) Income Tax

The charge for current income tax expense is based on profit or loss for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Since the enactment of the Tax Consolidation legislation, the Black Ridge consolidated group has elected not to enter the tax consolidation regime. (e) Financial Instruments Recognition Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. Impairment At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the income statement. (f)Exploration and Evaluation Expenditure

Exploration and evaluation costs represent intangible assets. Exploration and evaluation costs (other than acquisition costs) are expensed as incurred. Acquisition costs related to an area of interest are capitalised and carried forward to the extent that they are expected to be recouped through the successful development of


25


the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and active and significant operations in, or in relation to, the areas of interest are continuing.

Accumulated acquisition costs in relation to an abandoned area are written off in full against profit and loss account in the year in which the decision to abandon the area is made.

Costs of site restoration are provided for once identified. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.

Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed.

(g) Foreign Currency Transactions and Balances Functional and presentation currency The functional currency is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency. Transaction and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Exchange differences arising on the translation of monetary items are recognised in the income statement.

(h) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will results and that outflow can be reliably measured.

(i) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-borrowings in current liabilities on the balance sheet.

(j) Revenue

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

Rental income is recognised upon receipt of rental monies.

All revenue is stated net of the amount of goods and services tax (GST).


26


(k) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(l) Shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in 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.

(m) Other Current Receivables

Other current receivables are carried at the nominal amounts due. The collectability of debts is assessed continually and specific provision is made for any doubtful debts.

(n) Payables

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the company or consolidated entity.

(o) Contributed Equity

Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(p) Employee Benefits

Provision is made for the company’s liability for employee entitlement benefits arising from services rendered by employees to balance date. These benefits include wages and salaries and annual leave.

Employee benefits expected to be settled within twelve months of the reporting date are measured at the amounts expected to be paid when the liability is settled plus related on costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(q) Earnings Per Share

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

Diluted loss per share is calculated as net profit/(loss) attributable to members, adjusted for:


27


• costs of servicing equity (other than dividends);

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

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential shares, adjusted for any bonus element.

(r) Property, Plant and Equipment

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

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are:

Class of Fixed Assets Depreciation Rate

Plant and equipment 7.5-30% Motor vehicles 18.75% Computer equipment 37.5%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by company proceeds with the carrying amount. These gains and losses are included in the income statement.

(s) Leases

Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.


28


(t) Critical Accounting Estimates and Judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key Estimates – Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairments of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

(u) Investments and Other Financial Assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit and loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

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

(i) Financial Assets at Fair Value through Profit or Loss

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

(ii) Held-to-Maturity Investments

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


29


(iii) Loans and Receivables

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

(iv) Available-for-Sale Investments

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

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models.

(v) Impairment of Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at re-valued amount (in which case the impairment loss is treated as a re-valuation decrease). An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at re-valued amount, in which case the reversal is treated as a re-valuation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.


30


(w) Share Based Payments

Equity Settled Transactions:

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions)

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a pricing model which incorporates all market vesting conditions.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Black Ridge Mining NL (market conditions) if applicable.

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

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If any equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expenses not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

(x) New Accounting Standards and Interpretations

The following standards, amendment to standards and interpretations have been identified as those which may impact the entity in the period of initial application. They are available for early adoption at 30 June 2010, but have not been applied in preparing this financial report.

• AASB 9 Financial Instruments includes requirements for the classification and measurement of financial assets resulting from the first part of Phase 1 of the project to replace AASB 139 Financial Instruments: Recognition and Measurement. AASB 9 will become mandatory for the Company’s 30 June 2014 financial statements. Retrospective application is generally required, although there are exceptions, particularly if the entity adopts the standard for the year ended 30 June 2012 or earlier. The Company has not yet determined the potential effect of the standard.

• AASB 124 Related Party Disclosures (revised December 2009) simplifies and clarifies the intended meaning of the definition of a related party and provides a partial exemption from the disclosure requirements for government related entities. The amendments, which will become mandatory for the Company’s 30 June 2012 financial statements, are not expected to have any impact on the financial statements.


31

NOTES TO THE FINANCIAL STATEMENTS

30 JUNE 2010 (Cont’d)

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

• AASB 2009-5 Further amendments to Australian Accounting Standards arising from the Annual Improvement Process affect various AASB’s resulting in minor changes for presentation, disclosure, recognition and measurement purposes. The amendments, which become mandatory for the Company’s 30 June 2011 financial statements, are not expected to have a significant impact on the financial statements.

• AASB 2009-8 Amendments to Australian Accounting Standards – Group Cash settled Share based Payment Transactions resolves diversity in practice regarding the attribution of cash settled share-based payments between different entities within a group. Asa result of the amendments AI 8 Scope of AASB 2 and AI 11 AASB 2 – Group and Treasury share transactions will be withdrawn from the application date. The amendments, which become mandatory for the Company’s 30 June 2011 financial statements, are not expected to have a significant impact on the financial statements.

• AASB 2009-10 Amendments to Australian Accounting Standards – Classification of Rights Issue [AASB 132] (October 2010) clarify that rights, options or warrants to acquire a fixed number of an entity’s own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all existing owners of the same class of its own non derivative equity instruments. The amendments, which become mandatory for the Company’s 30 June 2011 financial statements, are not expected to have any impact on the financial statements.

• AASB 2009-14 Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement – AASB 14 make amendments to Interpretation 14 AASB 119 – The Limit on a Defined Benefit Asset Minimum Funding Requirements removing an unintended consequence arising from the treatment of the prepayments of future contributions in some circumstances when there is a minimum funding requirement. The amendments will become mandatory for the Company’s 30 June 2012 financial statements, with retrospective application required. The amendments are not expected to have any impact on the financial statements.

• IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability. IFRIC 19 will become mandatory for the Company’s 30 June 2011 financial statements, with retrospective application required. The Company has not yet determined the potential effect of the interpretation.

(y) Going Concern

The financial report has been prepared on a going concern basis, which contemplates the continuity of the normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

For the year ended 30 June 2010 the Company incurred an operating loss of $959,330 (2009:$ 1,014,760) and an operating cash outflow of $992,909 (2009:$999,435).

Based upon the Company’s existing cash resources, the ability to modify expenditure outlays if required, and the Directors’ confidence of sourcing additional funds, the Directors consider there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable, and therefore the going concern basis of preparation to be appropriate for the preparation of the Company’s 2010 financial report.


32


In the event that the Company is not able to continue as a going concern, it may be required to realise assets and extinguish liabilities other than in the normal course of business and at amounts different to those stated in its financial report.

NOTE 2. REVENUE

Consolidated Black Ridge Mining NL

2010 2009 2010 2009

$ $ $ $ Revenues Research fees refunded - 60,000 - 60,000 Finance income 12,314 29,315 12,314 29,315 Profit on disposal of equity investments

16,841 - 16,841 -

Other 12,467 6,136 12,467 6,136

Total revenues 41,622 95,451 41,622 95,451

NOTE 3. LOSS FOR THE YEAR

Professional Fees

- Audit fees 15,680 15,000 15,680 15,000

- Company secretarial fees 49,000 49,832 49,000 49,832

- Consulting fees 202,300 216,784 202,300 216,784

- Legal fees 18,420 22,051 18,420 22,051

- Accounting fees 1,097 4,908 1,097 4,908

- ASX/share registry fees 36,928 25,973 36,928 25,973

364,867 334,639 364,867 334,639

Rental expense on operating leases - Minimum lease payments 27,500 41,351 27,500 41,351 Finance costs - External - 9,009 - 9,009 Depreciation 7,087 15,805 7,087 15,805 Share based payment expense 13,400 - 13,400 -


33

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d)

Consolidated Black Ridge Mining NL 2010

$ 2009

$ 2010

$ 2009

$ NOTE 4. INCOME TAX EXPENSE

(a) The prima facie tax on the loss from

ordinary activities before income tax is reconciled to the income tax provided in the financial statements as follows:

Prima facie tax payable on the loss from ordinary activities before income tax at 30% (2009:30%)

(287,799)

(304,428)

(287,799)

(304,428)

Tax effect of: Non deductible depreciation - 1,868 - 1,868 Write down to recoverable amount - 19,302 - 19,302 Other non deductible items 4,200 (2,801) 4,200 (2,801) Section 40-880 deduction (4,932) (3,024) (4,932) (3,024)

Unused tax losses and temporary differences not recognised as deferred tax assets

288,531 289,083 288,531 289,083

Income tax expense attributable to ordinary activities

- - - -

(b) Unrecognised temporary

differences. Deferred Tax Assets (at 30%)

Section 40-880 deductions 13,680 6,048 13,680 6,048 Losses available for offset against future taxable income

3,937,794 3,036,006

3,937,794

3,036,006

Accrued expenses and provisions 3,708 1,437 3,708 1,437

3,955,182 3,043,491 3,955,182 3,043,491

Deferred Tax Liabilities (at 30%) Prepayments 3,195 10,300 3,195 10,300

3,195 10,300 3,195 10,300

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


34


Consolidated Black Ridge Mining NL 2010 2009 2010 2009

$ $ $ $ NOTE 5. OTHER CURRENT ASSETS

Prepayments 10,650 34,333 10,650 34,333 Security deposit in respect of operating lease Other

- 19,821

32,841 -

- 19,821

32,841 -

30,471 67,174 30,471 67,174

NOTE 6. FINANCIAL ASSETS

CURRENT

Available for sale financial assets Held for trading – Australian listed shares

-

41,660

-

41,660

- 41,660 - 41,660

NON CURRENT

Investment in controlled entities (Refer to note 9)

- - 2 1

- - 2 1


35


Consolidated Black Ridge Mining NL 2010 2009 2010 2009 $ $ $ $

NOTE 7. PROPERTY PLANT AND EQUIPMENT

Plant and equipment: At cost 26,297 27,684 26,297 27,684 Accumulated depreciation (16,613) (13,893) (16,613) (13,893)

9,684 13,791 9,684 13,791

Computer equipment: At cost 18,144 15,328 18,144 15,328 Accumulated depreciation (8,118) (10,859) (8,118) (10,859)

10,026 4,469 10,026 4,469

19,710 18,260 19,710 18,260

Movement in carrying amounts: Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the financial year

Plant and equipment: Balance at the beginning of the year 13,791 14,773 13,791 14,773 Additions - 2,063 - 2,063 Disposal (1,003) - (1,003) - Depreciation expense (3,104) (3,045) (3,104) (3,045)

Carrying amount at the end of the year 9,684 13,791 9,684 13,791

Motor vehicle: Balance at the beginning of the year - 96,551 - 96,551 Additions - - - - Disposal - (85,991) - (85,991) Depreciation expense - (10,560) - (10,560)

Carrying amount at the end of the year - - - -

Computer equipment: Balance at the beginning of the year 4,469 6,669 4,469 6,669 Additions 9,539 - 9,539 - Disposal (1,175) - (1,175) - Depreciation expense (2,807) (2,200) (2,807) (2,200)

Carrying amount at the end of the year 10,026 4,469 10,026 4,469

19,710 18,260 19,710 18,260


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NOTE 8. EXPLORATION AND DEVELOPMENT EXPENDITURE


Balance at beginning of year 140,000 - 140,000 - Mining tenement acquired Exploration expenditure incurred

- 313,010

140,000 114,288

- 140,000 114,288

Exploration expenditure expensed to income statement

(305,942) (114,288) (305,942) (114,288)

147,068 140,000 147,068 140,000

Recoverability of the carrying amount of exploration assets is dependent upon the successful development or sale of the mining tenement to which it relates.

NOTE 9. INTERESTS IN CONTROLLED ENTITIES Name Country of

Incorporation Percentage of equity interest held by the consolidated entity

2010 2009 2010 2009 Direct Unaly Hill Pty Ltd Sandstone Holdings Pty Ltd

Australia Australia

100 100

0 0

$ 1 -

$ - -

Genovations Pty Ltd* Australia 100 100 1 1 West Perth Clinic 1 Pty Ltd* Australia 100 100 - - Indirect Smart Chair Systems Pty Ltd* Australia 50 50 - - DBC Australia Pty Ltd* Australia 75 75 - -

2 1

For the year ended 30 June 2010, the entities marked with an * were dormant and held no assets or liabilities. Applications for voluntary deregistration of these entities has been received and approved by ASIC.

Unaly Hill Pty Ltd was incorporated on 6th January 2010 as a wholly owned subsidiary of Black Ridge Mining NL. Sandstone Holdings Pty Ltd was incorporated on 30th June 2010 as a wholly owned subsidiary of Unaly Hill Pty Ltd.


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NOTE 10. PAYABLES Trade payables (i) 17,228 66,656 17,228 66,656 Sundry payables and accrued expenses 25,777 24,118 25,777 24,118

43,005 90,774 43,005 90,774

(i) Trade payables are non-interest bearing and normally

settled in 30 days.

NOTE 11. PROVISIONS Current

Employee leave entitlement 12,363 4,790 12,363 4,790

12,363 4,790 12,363 4,790


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NOTE 12. CAPITAL AND RESERVES Shares Shares $ $ 2010 2009 2010 2009 a) Issued and paid up capital Fully paid ordinary shares

461,578,361

272,158,361

17,900,760

16,568,360

Movement in shares on issue - Issued capital at beginning of financial

year 272,158,361 207,158,361 16,568,360 16,338,360

- Shares issued on 31 March 2009 pursuant to a placement at $0.003 each

- 30,000,000 - 90,000

- Shares issued on 8 June 2009 at a deemed price of $0.004 each for the acquisition of Exploration Licence (E57/420)

- 35,000,000 - 140,000

- Shares issued on 1 July 2009 pursuant to a placement at $0.0053 each

100,000,000 - 530,000 -

- Less expenses of the issue - - (31,800) - - Shares issued on 23 December 2009

pursuant to a placement at $0.01 each - Shares issued on 29 April 2010

pursuant to a placement at $0.009 each

29,420,000

60,000,000

- -

294,200

540,000

- -

Issued capital at the end of the financial year 461,578,361 272,158,361 17,900,760 16,568,360

Share Options As at 30 June 2009, there are 116,350,000 (2009: 113,350,000) unissued ordinary shares in respect of which options were outstanding comprising:

Number of Options Exercise Price Expiry Date 101,150,000 listed 0.03 30 November 2010

10,500,000 unlisted 0.10 31 December 2011 1,700,000 1,000,000 1,000,000 1,000,000

unlisted unlisted unlisted unlisted

0.04 0.04 0.07 0.10

31 December 2010 30 November 2012 30 November 2012 30 November 2012

Terms and conditions of contributed equity Ordinary shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in 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.

Consolidated Black Ridge Mining NL 2010 2009 2010 2009 $ $ $ $ b) Option Premium Reserve Opening balance

223,350

235,590

223,350

235,590

Employee share based payments Transfer to accumulated losses

13,400 -

- (12,240)

13,400 -

- (12,240)

236,750 223,350 236,750 223,350


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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d) 2010 During the year ended 30 June 2010, the following (unlisted) options were issued: 1,000,000 unlisted options exercisable at 4 cents each on or before 30 November 2012 1,000,000 unlisted options exercisable at 7 cents each on or before 30 November 2012 1,000,000 unlisted options exercisable at 10 cents each on or before 30 November 2012 2009 During the year ended 30 June 2009, no options were issued.

c) Accumulated Losses Consolidated Black Ridge Mining NL 2010 2009 2010 2009 $ $ $ $ Accumulated losses at the beginning of the financial year

16,461,509 15,458,989 16,461,509 15,458,989

Net loss attributable to the members of the Parent Entity

959,330 1,014,760 959,330 1,014,760

Transfer to accumulated losses - (12,240) - (12,240)

Accumulated losses at the end of the financial year 17,420,839 16,461,509 17,420,839 16,461,509


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NOTE 13. CASH AND CASH EQUIVALENTS

Consolidated

Black Ridge Mining NL

2010 $

2009 $

2010 $

2009 $

(a) Cash at bank

574,790

158,671

574,790

158,671

574,790 158,671 574,790 158,671

(b) Reconciliation of cash Cash at end of financial year as shown in

the cash flow statement is reconciled to items in the balance sheet as follows:

Cash and cash equivalents 574,790 158,671 574,790 158,671

574,790 158,671 574,790 158,671

(c) Reconciliation of cash flows from operations with operating loss after income tax

Operating loss after income tax (959,330) (1,014,760) (959,330) (1,014,760) Non cash flow items

Depreciation expense 7,087 15,805 7,087 15,805 Write down to recoverable amount - 64,340 - 64,340 Profit on disposal of equity investments (16,841) - (16,841) - Share based payment expense 13,400 - 13,400 - Other (891) - (891) -

Changes in assets and liabilities (Increase) decrease in other assets (19,821) (26,871) (19,821) (26,871) (Increase) decrease in prepayments and deposits

23,683 30,886 23,683 30,886

Increase (decrease) in creditors and accruals

(47,769) (34,838) (47,769) (34,838)

Increase (decrease) in provisions 7,573 (33,997) 7,573 (33,997)

Net cash flows used in operating activities

(992,909) (999,435) (992,909) (999,435)

Non cash financing and investing activities: Nil


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Consolidated

Black Ridge Mining NL

2010 $

2009 $

2010 $

2009 $

NOTE 14. COMMITMENTS AND CONTINGENCIES

(a) The Company is party to an Administration Services Agreement from 1 July 2010 for a fee of $55,000 (excl GST) per quarter payable in advance. The term of the agreement is for a period of three years, with an option by the contractor to extend the term for a further two years. Subject to terms included in the Agreement, should the Company terminate the Agreement without prior notice, it will be liable to pay the contractor the full amount of fees payable for the then remainder of the contract term. These obligations are not provided for in the financial report and are payable: Not later than one year 220,000 - 220,000 -

Later than one year and not later than five years

440,000

-

440,000 -

Total 660,000 - 660,000 -

(b) Exploration Expenditure Commitments In order to maintain current rights of tenure to exploration tenements, the Company is required to outlay tenement lease rentals and perform minimum exploration work to meet minimum expenditure requirements specified by various government authorities. These obligations are subject to renegotiation when application for a mining lease is made and at various other times. These obligations are not provided for in the financial report and are payable: Not later than one year Later than one year but not later than five years

30,000 -

31,000 62,000

30,000 -

31,000 62,000

Total 30,000 93,000 30,000 93,000

(c) The Company has a contingent liability in relation to additional consideration for the acquisition of the Unaly Hill mining tenement (refer note 8): - Upon establishment of an inferred, indicated or measured resource, further payments must be made to the vendor based on mineral ore tonnages identified. 1. Where the resource relates to iron ore, vanadium or phosphate – inferred resource $0.02 per tonne

of ore, indicated resource $0.04 per tonne of ore and measured resource $0.06 per tonne of ore. 2. Where the resource relates to U3O8 or any base metal – inferred resource $0.05 per tonne of ore,

indicated resource $0.08 per tonne of ore and measured resource $0.10 per tonne of ore. 3. Where the resource relates to gold or any other precious metal – inferred resource $0.20 per tonne

of ore, indicated resource $0.30 per tonne of ore and measured resource $0.50 per tonne of ore.

- A royalty equal to 2.25% of gross revenue arising from sale of minerals derived from the tenement.


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NOTE 15. SEGMENT INFORMATION

2010 Segment Analysis

For the year ended 30 June 2010, the Company’s operations were predominantly in the mining exploration sector in Australia.

2010 Segment Analysis Mining & Exploration

Corporate Consolidated

$ $ $ REVENUE Other Revenue - 41,622 41,622

SEGMENT RESULT (305,942) (653,388) (959,330)

ASSETS/ LIABILITIES

Assets Segment assets 147,068 624,971 772,039 Liabilities Segment liabilities (15,610) (39,758) (55,368)

Net Assets 131,459 585,213 716,671

2009 Segment Analysis Biomedical Mining &

Exploration Corporate Consolidated

REVENUE Other Revenue 60,000 - 35,451 95,451

SEGMENT RESULT 60,000 (114,289) (960,471) (1,014,760)

ASSETS/LIABILITIES

Assets Segment assets - 140,000 285,765 425,765 Liabilities Segment liabilities - - (95,564) (95,564)

Net Assets - 140,000 190,201 330,201

During the year ended 30 June 2009, the Company moved from the biomedical research field to dedicated mineral exploration.


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NOTE 16. EARNINGS PER SHARE The following reflects the income and share data used in the calculations of basic and diluted loss per share:

2010 $

2009 $

Earnings used to calculate loss per share (959,330) (1,014,760)

Number of

Shares Number of

Shares

Weighted average number of ordinary shares outstanding during the year used in calculation of basic loss per share

397,829,045 216,747,402

There are options outstanding at the end of the financial year however they have not been included in the loss per share as they are not considered dilutive in nature. NOTE 17. KEY MANAGEMENT PERSONNEL

(a) Details of Key Management Personnel R Smith Non Executive Chairman: appointed as a Director on 21 February 2005: appointed as Non

Executive Chairman on 18 September 2008. G Hatch Managing Director (executive): appointed as a Director on 18 September 2008: appointed as

Managing Director on 31 January 2009. A Middleton Director (non-executive): appointed 1 January 2009.

(b) Share and Option holdings of Key Management Personnel DIRECT INDIRECT Ordinary Shares Options Ordinary Shares Options R Smith - 3,000,000 7,490,523 1,375,000 G Hatch 300,000 - 3,987,000 3,250,000 A Middleton - - 41,508,000 6,735,000 Note: Direct holdings are those held in the individuals name, indirect holdings are all other holdings controlled by the individual. (c) Key Management Personnel Compensation Short term employee benefits $198,000 Post employment benefits $ 17,775 Share based benefits $ 13,400 $229,175 Detailed remuneration disclosures are provided in the Remuneration Report on pages 13 – 16.


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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d) Consolidated Black Ridge Mining NL 2010

$ 2009

$ 2010

$ 2009

$ NOTE 18. AUDITOR’S REMUNERATION Amounts received or due and receivable - Audit and review of the financial report of

the entity and any other entity in the consolidated entity

15,680 15,000 15,680 15,000

- Non audit services - - - -

15,680 15,000 15,680 15,000

NOTE 19. SUBSEQUENT EVENTS There has not arisen in the interval between the end of the financial year and the date of this report, any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect substantially the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years. NOTE 20. FINANCIAL RISK MANAGEMENT Overview This note presents information about the Group’s exposure to credit, liquidity and market risks, its objectives, policies and processes for measuring and managing risk and the management of capital. The Group does not use any form of derivatives as it is not at a level of exposure that requires the use of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Board of Directors of the Company has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the Company and the Group through regular reviews of the risks.


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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d) NOTE 20. FINANCIAL RISK MANAGEMENT (Cont’d) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers and investment securities. Cash and cash equivalents

The Company limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have an acceptable credit rating. Trade and other receivables

As the Company operates primarily in investment and exploration activities, it does not have trade receivables and therefore is not exposed to credit risk in relation to trade receivables. The Company where necessary establishes an allowance for impairment that represents its estimate of incurred losses in respect of other receivables and investments. Management does not expect any counterparty to fail to meet its obligations. Exposure to credit risk The carrying amount of the Company’s financial assets represents the maximum credit exposure. The Company’s maximum exposure to credit risk at the reporting date was: Company Carrying amount 2010 2009

Available-for-sale financial assets - 41,660

Receivables 19,821 32,841

Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by continuously monitoring forecast and actual flows. The Company does not have any external borrowings. The Company anticipates a need to raise additional capital in the next 12 months to meet forecast operational activities. The decision on how the Company will raise future capital will depend on market conditions existing at that time.


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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d) NOTE 20. FINANCIAL RISK MANAGEMENT (Cont’d) The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Group and Company 30 June 2010

Carrying amount

Contractual cash flow

6 mths or less

6-12 mths

1-2 years

2-5 years

Trade and other payables 43,005 43,005 43,005 - - -

Group and Company 30 June 2009

Carrying amount

Contractual cash flow

6 mths or less

6-12 mths

1-2 years

2-5 years

Trade and other payables 90,774 90,774 90,774 - - - Market Risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return. Currency Risk The Group does not have any exposure to foreign currency risk. Interest Rate Risk The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on interest-bearing financial instruments. The Group does not use derivatives to mitigate these exposures.


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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d) NOTE 20. FINANCIAL RISK MANAGEMENT (Cont’d) The Company adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents on short term deposit at best available market interest rates. Profile At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments was: Consolidated and Company

Carrying amount 2010 2009 Variable rate instruments

Financial assets – cash and cash equivalents

574,790

158,671

Fair value sensitivity analysis for variable rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss or through equity, therefore a change in interest rates at the reporting date would not affect profit or loss or equity. Cash flow sensitivity analysis for variable rate instruments

The group has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2009. Profit or loss Equity 100bp

increase 100bp

decrease 100bp

increase 100bp

decrease 30 June 2010

Variable rate instruments

4,117

(4,117)

4,117

(4,117)

30 June 2009

Variable rate instruments 1,586 (1,586) 1,586

(1,586)


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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2010 (Cont’d) NOTE 20. FINANCIAL RISK MANAGEMENT (Cont’d) Fair Values Fair Values versus carrying amounts

The carrying amounts of financial assets and liabilities as described in the balance sheet equate to their estimated net fair value.

Other Market Price Risk Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from rate risk or currency), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. Investments are managed on an individual basis and material buy and sell decisions are approved by the Board of Directors. The primary goal of the Group’s investment strategy is to maximise investment returns. The Group’s investments are solely in equity instruments. These instruments are classified as available-for-sale with fair value changes recognised directly in equity until derecognised. The following table details the breakdown of the investment assets held by the Group:

Note 30 June 2010 30 June 2009

Listed equities – Available-for-sale 6 - 41,660

Capital Management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s focus has been to raise sufficient funds through equity to fund the Company’s activities. The Group monitors capital on the basis of the gearing ratio, however there are no external borrowings as at balance date. There were no changes in the Group’s approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting. The Group is not subject to externally imposed capital requirements.


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DIRECTORS’ DECLARATION In accordance with a resolution of the directors of Black Ridge Mining NL, I state that:

In the opinion of the Directors;

(a) the financial statements and notes set out in this report (and the remuneration disclosures which are the subject of audit and are contained in the Remuneration Report section of the Directors’ Report), are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the financial position of the Company and Consolidated Entity as at 30 June 2010 and of their performance, as represented by the results of their operations and their cash flows, for the year ended on that date; and

(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and

(b) the remuneration disclosures which are the subject of audit and are contained in the Remuneration Report section of the Director’s Report comply with Australian Accounting Standard AASB Related Party Disclosures.

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

The Directors have been given the Declaration by the Managing Director and Chief Financial Officer required by section 295A of the Corporations Act 2001 for the financial year ended 30 June 2010.

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

On behalf of the Board

Gordon S. Hatch Managing Director 17 September 2010

BLACK RIDGE MINING NL

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