The ASX Corporate Governance Council requires that the Company must disclose the extent to which it has followed its recommendations, identify which recommendations have not been followed and the reason for not adopting the recommendations.

The ASX Corporate Governance Council recognises that not all recommendations are appropriate for all companies and concedes that companies should only adopt those recommendations that are suitable in each individual case.

The following is a summary of policies adopted by the Company and where appropriate, explanations of where the recommendations have not been applied. The various policies and procedures were followed throughout the entire financial year.

Board Composition and Functions

Under the Company's Constitution, the Board is required to consist of at least 3 and no more than 10 directors. If the Company has 3 or more directors, one third of the directors, with the exception of the Managing Director, must retire and seek re-election at the Annual General Meeting each year.

The Board of the Company currently consists of 2 executive directors and 4 independent non-executive directors. The Board includes the Managing Director (executive) and the Chairman (non-executive). Directors of the Company during the financial year and information pertaining to individual directors are included in the Directors' Report.

The Board composition complies with ASX recommendations, in that a majority of directors are independent. The roles of Chairman and Chief Executive Officer (or Managing Director) are not exercised by the same person, and the Board is considered to be comprised of directors with the experience and qualifications best suited to the Company's size and range of activities.

The Company has an independent Chairman (Oscar Aamodt). The Company has followed ASX recommendations in the assessment of whether a director is considered to be "Independent". The other independent directors are Rod Marston, John Christie and Peter Bilbe.

The Board is responsible for corporate strategy, implementation of business plans, allocation of resources, approval of budgets and capital expenditure, and the adherence to Company policies. The Board is also responsible for compliance with the Code of Conduct, overseeing risk management and internal controls, and the assessment, appointment and removal of the Managing Director, Company Secretary and other senior management.

The Board delegates other responsibilities to committees, executive directors and senior management. The matters reserved to the Board are in the Board Charter in the Corporate Governance section of the Company's website. The roles of and matters reserved to senior executives are considered internal matters and are not publicly available.

The process for evaluating the performance of the Board and individual directors and senior executives is detailed in the Remuneration Policy which is in the Corporate Governance section of the Company's website. Executive directors and senior executives' performance was last evaluated in November 2009. Performance of non-executive directors was last evaluated in September 2010. The process for evaluating performance was in accordance with the Company's Remuneration Policy.

Board members have the right to seek independent professional advice in the furtherance of their duties as directors at the Company's expense.

Director Independence

The Company has established guidelines for testing the independence of directors.

A director is considered to be independent if they satisfy certain criteria, the most significant being as follows:

• The director must be in a non-executive role where any fees payable by the Company could not be considered to make the director reliant on such remuneration. The director must have no other material contractual relationship with the Company other than as a director of the Company;
• The director is not a substantial shareholder of the Company;
• The director has not been employed in an executive capacity by the Company and has not been a principal of a material adviser or consultant to the Company within the last 3 years; and
• review the external audit arrangements, including ensuring that any non-audit services provided do not impair auditor independence.

The Audit Committee reports to the Board and meets as required, but in any case at least twice each year. Current members are Rod Marston, John Christie and Oscar Aamodt. Rod Marston is a geologist with corporate experience. John Christie is a qualified accountant/chartered secretary and Oscar Aamodt is a chartered secretary, both having considerable financial and managerial experience. The Committee has authority to seek any pertinent information it requires from any employee or external party. Qualifications held by the individuals on the Audit Committee are included in the Directors' Report. The chairman of the Committee is John Christie.

The Audit Committee follows ASX recommendations as the members are all independent non-executive directors.

Any member of the Committee is able, and obliged, to bring any matter to the attention of the Board where the member believes the matter has not been adequately dealt with by the Committee, or is of significant importance that the Board should be informed.

The Managing Director and Company Secretary are required to state in writing to the Board that the Company's financial reports present a true and fair view of the Company's financial condition and that operational results are reported in accordance with relevant accounting standards. The Auditor is required to attend the Company's annual general meeting. Providing the external auditor performs to the satisfaction of the Audit Committee and audit independence is not considered to be impaired, there is no requirement for a rotation of external audit partners, other than as required by lawand to comply with accounting standards and interpretations.

The Audit Committee Charter is available on the Company's website.

Hedging Committee

The Company has established a Hedging Committee to make recommendations to the Board on hedging policies and to maintain the hedging portfolio. The members of the Hedging Committee at the date
of this report are Oscar Aamodt, John Christie and Kelly Ross.

Procedure for the Selection of New Directors

The Company believes it is not of a size to justify having a Nomination Committee. If any vacancies arise on the Board, all directors are involved in the search and recruitment of a replacement. Incumbent directors due to retire by rotation are automatically nominated for re-election, subject to the willingness of the director to continue on the Board and providing there are no objections raised by other Board members.

Corporate performance is enhanced when the Board has an appropriate mix of skills and experience. The Board is evaluated before a candidate is selected to join the Board. Candidates are nominated by existing Board members and independent search consultants are also utilised if necessary. Where a director nominates a candidate for the Board, the director must disclose any pre- existing relationship with the nominee.

New directors are provided with a letter of appointment setting out their responsibilities and rights, and are provided with a copy of the Company's Constitution and corporate governance policies.

The full policy for nomination of directors is available on the Company's website.

The Company is currently finalising its Gender Diversity Policy which will be adopted during 2010/11.

Compensation of Board Members

The Company's policies and procedures relating to the remuneration of board members and senior management are contained in the Remuneration Report which forms part of the Directors' Report.

Conflicts of Interest

The Board has implemented Code of Conduct and Share Trading Policies which have been designed to ensure that all directors and employees of the Company act ethically and do not use confidential information for personal gain.

These policies are available on the Company's website.

Code of Conduct

The Board is responsible for setting the tone of legal, ethical and moral conduct to ensure that the Company is considered reputable by the industry and other outside entities. This involves considering the impact of the Company's decisions on the industry, colleagues and the general community. The Code of Conduct adopted by the Company requires that all employees abide by the laws, regulations and business practices wherever the Company operates. The Board maintains an approach that preserves the integrity of any laws or regulations under which the Company operates. The Company has also put in place various internal policies which provide internal controls to ensure employees only act within the authority given to them by the Board. This is to ensure that the Board has responsibility for any material transactions and dealings with outside parties, and that any legal, environmental and social consequences of such dealings will be properly considered before any action is taken.

Environmental Policy

The Company has an Environmental Policy which requires that all employees comply with the environmental regulations in force in the region in which work is undertaken. The Company is committed to dealing fairly and equitably with interested parties relating to environmental issues, such as landholders, governmental agencies and native title claimants.

Sustainability Report

The Company purchased and commenced operations at the Long Nickel Mine in the last quarter of 2002. This mine had been operating for over 20 years before being placed on care and maintenance about 3 years before being purchased by the Company.

At the time of the acquisition the Company was cognizant of the difficulty of re-opening what was historically a challenging mining operation. The primary focus of management was ensuring that the operations could be conducted with safety as a priority, with operating procedures and production targets that did not jeopardize that objective. As a result the safety record of the Company has been of a high standard. The details are provided in the Operations Report section of this Annual Report.

The Company has also aimed to employ as many of its people from the local community as possible, as without this ongoing employment the community in which we operate will diminish and local facilities will be neglected due to lower population numbers. The Company also assists the local community by contributing to the development of facilities needed to encourage people to remain in the area and has spent $516 thousand on community activities and facilities since commencing operations in 2002.

The Company has secured the services of an experienced consultant who is providing recommendations relating to providing targeted educational assistance to the indigenous and other regional or disadvantaged communities.

The first program adopted by the Company is to provide financial assistance to the Challis Early Childhood Education Centre ("CECEC"). The Company has made a 3 year commitment to the CECEC which is designed to foster parent participation in the early years of a child's education. This is considered vital in creating a supportive and encouraging environment for children when they first enter the school system. The Company will monitor the program and if successful will assist the introduction of the CECEC model in other regional schools.

The second program adopted by the Company is the Kambalda West District High School Youth Leadership Program ("KWYLP"). The Company is providing the funding required to support various programs specifically designed to promote personal development and leadership skills amongst selected senior students at the school.

The Company is currently investigating the merit of several other programs proposed by regional schools which they have designed to target specific areas of need in their communities, and will assist those programs where the Company believes support is warranted and will benefit the community.

The Company had limited scope to change the mine's environmental footprint due to historical mining at the site and the arrangements that were imposed pursuant to the purchase agreement. However, as reported last year, by carrying out reviews of the consumption of key inputs to the mine, the quantity of water and electricity used declined over the previous two financial years by approximately 43% and 7% respectively. Although total power consumption did not decrease in 2010 due to an intensive capital development period, the amount of power consumed per tonne of ore mined did decline throughout the year.

In the mine, the underground water is recycled a number of times prior to being unusable and discharged out of the system. The mine has also budgeted funds in 2010/11 to facilitate the harvesting of surface run-off water which will be used to substitute some of the potable water currently used on site.

In addition the Company has been using material from the surrounding tailings storage dams as backfill in the mine. This is assisting with the reduction in the potential environmental impact in the area.

The Company also commissioned independent consultants during 2009/10 to undertake two environmental audits at the mine. The audits focus on all areas of environmental responsibility, and the information gathered will be used to evaluate the mine's performance and to enable environmental improvements to be made on site.

The reporting requirements under The National Greenhouse and Energy Reporting Act 2007 became effective from 1 July 2008. As the Company is an energy consumer it has registered under the Act and is reporting its emissions as a result of power and diesel fuel usage on an annual basis.

The Company has developed specific policies and procedures to ensure that we are able to comply with the laws and regulations that affect the mining and exploration activities being conducted by the Company. These are reviewed as part of the Company's risk management procedures and varied as necessary to ensure compliance in all jurisdictions in which we operate.

Disclosure of Information to ASX and Investors

The Company has established policies and procedures relating to the disclosure of information to interested parties. The Company Secretary is responsible for ensuring the Company complies with ASX Listing Rules and general continuous disclosure obligations. The following policies and procedures are contained in the Corporate Governance section of the Company's website:

• Code of Conduct
• Director Independence
• Legal, Environmental & Social Responsibilities
• Remuneration Policy
• Risk Management & Internal Control Procedures
• Audit Committee
• Board and Management Responsibilities
• Compliance with ASX Disclosure Requirements
• Nomination of Directors
• Directors' and Officers' Trading in Securities
• Communication with Shareholders
• Investor Relations and Media Interaction