Gold production increased by 12% for the year to 258,474 ounces and was sourced from three underground mines and two processing plants.

Production from the Company’s core asset, the Gwalia mine, increased by 20% to 131,133 ounces of gold and is expected to further increase to 175,000-190,000 ounces of gold in FY12.

The King of the Hills satellite mining operation commenced gold production in May 2011, one month ahead of schedule, and is expected to achieve sustainable production of 55,000-60,000 ounces of gold per annum from the current financial year for at least four and a half years.

Southern Cross Operations, with all ore sourced from the Marvel Loch mine, exceeded expectations and produced 120,275 ounces of gold.

LEONORA OPERATIONS

The Leonora Operations comprise the Gwalia and King of the Hills underground mines, and a processing plant at Gwalia.

Gwalia

The Gwalia underground mine is the Company’s cornerstone asset and will continue to increase gold production. It is a long life, high margin gold mine.

The mining method is long hole open stoping with cement paste back fill. Geotechnical stress measurements are amongst the lowest in the surrounding Yilgarn district of Western Australia. As at 30 June 2011, the mine was developed down to 1,358 metres below surface, with vertical advance rates expected of 80 to 100 metres per annum for the next three years.

Cash operating costs of $765 per ounce for the FY11 year included $31 per ounce attributed to the reallocation of corporate support costs from corporate to operations, and approximately $59 per ounce due to exceptionally heavy rainfall in February 2011 that impacted many mining operations in Western Australia.

Mine plans for FY12 are based on sourcing ore almost exclusively from the higher grade South West Branch lode with the average grade mined for the year expected to increase from 6.3 g/t Au in FY11 to 8.0 to 8.5 g/t Au for FY12. The expected increase in grade across FY12 underpins an anticipated significant increase in production to 175,000 to 190,000 ounces of gold and a reduction in cash operating costs to $610 to $640 per ounce (2011: $765 per ounce).

Net of production depletion, Gwalia Ore Reserves increased by 135,000 ounces of contained gold to 6.9 million tonnes at 8.9 g/t Au for 2.0 million ounces of contained gold as at 30 June 2011, and now extend to 1,780 metres below surface. The ore body remains open at depth and with some parallel lodes not yet fully drilled.

King of the Hills

The King of the Hills underground mine is located at the site of the historical Tarmoola open pit. Gold production commenced ahead of schedule in May 2011. The mine is expected to produce at the rate of 55,000 to 60,000 ounces of gold per annum for at least four and a half years.

Ore mined is trucked 42 kilometres to the Gwalia processing plant for treatment to utilise the available processing capacity.

Gold production from King of the Hills is protected by put and call options providing a price collar of between A$1,425 and A$1,615 per ounce, locking in a solid cash margin and return on capital invested.

Gwalia Processing Plant

The processing plant performed above expectations, achieving a 96% recovery rate for the year. A scoping study is underway to consider cost effective means for expanding the through-put capacity of the plant from 1.2 million tonnes per annum (Mtpa) to 1.6 Mtpa or more. Results of the study are expected to be released in the second half of FY12.

Driving value at Leonora Operations

A number of activities are underway at Leonora to leverage further value from the Company’s investment in the region, including a pre-feasibility study on Gwalia haulage optimisation, due for completion in the second half of FY12.

SOUTHERN CROSS OPERATIONS

At Southern Cross Operations, ore was sourced from the Marvel Loch underground mine. FY11 production of 120,275 ounces of gold at a cash operating cost of $890 per ounce was comparable to FY10 (121,870 ounces at $883 per ounce). This was despite a lower grade for the year of 3.4 g/t Au (FY10: 4.0 g/t Au) due to mining a higher proportion of ore from the lower grade Exhibition lode.

Deep drilling has identified the presence of (non-gold bearing) pegmatite in the southern part of the Marvel Loch mine, and diminishing grades in the northern lodes of the mine. Consequently the Marvel Loch mine is due to produce 90,000 to 100,000 ounces of gold in FY12 and cease operations in August 2012, at which time the 2.2 million tonne per annum plant will go onto care and maintenance, unless alternative feed sources can be identified.

The forecast remaining gold production from Marvel Loch is protected by put and call options commenced in August 2011, providing a price collar of between A$1,550 and A$1,610 per ounce.

At current high gold prices, ongoing regional exploration is being considered as well as resource definition drilling at Marvel Loch.

OUTLOOK

Consolidated gold production for FY12 is anticipated to increase by approximately 30% to 320,000 to 350,000 ounces (FY11: 258,474 ounces), underpinned by an expected increase in the Gwalia grade and a full year’s contribution from King of the Hills.

Business improvement and procurement programs will continue through FY12 with the aim of further improving productivity.