Corporate Governance

The Company has established a set of corporate governance policies and procedures. These are based on the Australian Securities Exchange Corporate Governance Council’s (“the Council’s”) “Principles of Good Corporate Governance and Best Practice Recommendations” (“the Recommendations”). A full version of the Company’s Corporate Governance Policy document is available at the Company’s registered offices for viewing.

Board Charter

The Board of Directors is responsible for guiding and monitoring Black Range Minerals Limited (“the Company”) on behalf of shareholders by whom they are elected and to whom they are accountable.

The Board is responsible for, and has the authority to determine all matters relating to the strategic direction, policies, practices, establishing goals for management and the operation of the Company.

The monitoring and ultimate control of the business of the Company is vested in the Board. The Board’s primary responsibility is to oversee the Company’s business activities and management for the benefit of the Company’s shareholders. The specific responsibilities of the Board include:

1. Appointment, evaluation, rewarding and, if necessary, the removal of the Managing Director, Chief Financial Officer (or equivalent) and the Company Secretary;
2. In conjunction with management, development of corporate objectives, strategy and operations plans and approving and appropriately monitoring plans, new investments, major capital and operating expenditures, capital management, acquisitions, divestitures and major funding activities;
3. Establishing appropriate levels of delegation to the Managing Director to allow him to manage the business efficiently;
4. Monitoring actual performance against planned performance expectations and reviewing operating information at a requisite level, to understand at all times the financial and operating conditions of the Company;
5. Monitoring the performance of senior management including the implementation of strategy, and ensuring appropriate resources are available;
6. Via management, an appreciation of areas of significant business risk and ensuring that the Company is appropriately positioned to manage those risks;
7. Overseeing the management of safety, occupational health and environmental matters;
8. Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial performance of the Company for the period under review;
9. Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, and internal control processes are in place and functioning appropriately;
10. To ensure that appropriate internal and external audit arrangements are in place and operating effectively;
11. Having a framework in place to help ensure that the Company acts legally and responsibly on all matters consistent with the code of conduct; and
12. Reporting to shareholders.

Whilst at all times the Board retains full responsibility for guiding and monitoring the Company, in discharging its stewardship it makes use of committees. The Board has not established any committees at this time. Until such time as the Board determines that it is appropriate to establish a separate committees, the function of the:

1. Audit Committee;
2. Nomination Committee; and
3. Remuneration Committee;

as set out in this Charter will be performed by the Board.

Each director has the right to seek independent professional advice on matters relating to his position as a director of the Company at the Company’s expense, subject to the prior approval of the Chairman, which shall not be unreasonably withheld.

In the event of a conflict of interest or where a potential conflict of interest may arise, involved directors will, unless the remaining directors resolve otherwise, withdraw from deliberations concerning the matter. In accordance with the constitution of the Company, directors (other than the Managing Director) must offer themselves for re-election by shareholders at least every 3 years. The Board does not specify a maximum term for which a director may hold office.

The responsibility for the day-to-day operation and administration of the Company is delegated by the Board to the Managing Director. The Board ensures that the Managing Director and the management team is appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the Managing Director and executive directors.

The roles of Chairman and Managing Director are not combined. The Managing Director is accountable to the Board for all authority delegated to the position.

Whilst there is a clear division between the responsibilities of the Board and management, the Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved including:

1. Board approval and monitoring of a strategic plan;
2. Approval of annual and semi-annual budgets and monitoring actual performance against budget; and
3. Procedures are in place to incorporate presentations to each Board meeting by financial, operations, exploration and marketing management.

This policy is reviewed annually.

Structure of the Board

The skills, experience and expertise of each Director in office at the date of the 2010 annual report are included in the Directors’ Report attached to that annual report. Directors of the Company are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgement.

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

“An Independent Director is a Director who is not a member of management, is a Non-Executive Director and who:

• is not a substantial shareholder (under the meaning of Corporations Act 2001) of the Company or an officer of, or otherwise associated, directly or indirectly, with a substantial shareholder of the Company;
• has not within the last three years been employed in an executive capacity by the Company or another Group member, or been a Director after ceasing to hold any such employment;
• is not a principal of a professional adviser to the Company or another Group member;
• is not a significant consultant, supplier or customer of the Company or another Group member, or an officer of or otherwise associated, directly or indirectly, with a significant consultant, supplier or customer;
• has no significant contractual relationship with the Company or another Group member other than as a Director of the Company;
• is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.”

In accordance with the definition of independence above, a majority of Directors are considered not Independent due to the number of shares and share options held by each Director.

There are procedures in place, as agreed by the Board, to enable Directors to seek independent professional advice on issues arising in the course of their duties at the Company’s expense. Such advice is to be shared amongst other Directors.

The term in office held by each Director in office as at 30 September 2010 is as follows:

Name	Term in Office
Alan Scott	4 years
Michael Haynes	5 years 3 months
Duncan Coutts	1 year 4 months

Nomination Committee

The Board has formally adopted a Nomination Committee Charter, but given the present size of the Company, has not formed a separate Committee. Instead, the function will be undertaken by the full Board in accordance with the policies and procedures outlined in the Nomination Committee Charter. At such time when the Company is of sufficient size, a separate Nomination Committee will be formed.

Audit and Risk Management Committee

The Board has formally adopted an Audit and Risk Management Committee Charter, but given the present size of the Company, has not formed a separate Committee. Instead, the function of the Committee will be undertaken by the full Board in accordance with the policies and procedures outlined in the Audit and Risk Management Committee Charter. At such time when the Company is of sufficient size, a separate Audit and Risk Management Committee will be formed.

It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes both internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial and non-financial information. It is the Board’s responsibility for the establishment and maintenance of a framework of internal control.

Performance

The Board of Black Range conducts its performance review of itself on an ongoing basis throughout the year. The small size of the Company and hands-on management style requires an increased level of interaction between Directors and executives throughout the year. Board members meet amongst themselves both formally and informally. The Board considers that the current approach that it has adopted with regard to the review of its performance provides the best guidance and value to the Company.

Remuneration

It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high-quality board by remunerating Directors fairly and appropriately with reference to relevant employment market conditions. The Board does not link the nature and amount of executive and Directors’ emoluments to the Company’s financial and operational performance.

The Board is responsible for determining and reviewing compensation arrangements for Directors and management. The Board has formally adopted a Remuneration Committee Charter; however, given the present size of the Company, has not formed a separate Committee. Instead, the function will be undertaken by the full Board in accordance with the policies and procedures outlined in the Remuneration Committee Charter. At such time when the Company is of sufficient size, a separate Remuneration Committee will be formed.

There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive Directors.

Assurance

The MD and CFO periodically provide formal statements to the Board that in all material aspects:

• the Company’s financial statements present a true and fair view of the Company’s financial condition and operational results; and
• the risk management and internal compliance and control systems are sound, appropriate and operating efficiently and effectively.

This assurance forms part of the process by which the Board determines the effectiveness of its risk management and internal control systems in relation to financial reporting risks.

Corporate Governance Compliance

During the financial year 2010, Black Range has complied with each of the 8 Corporate Governance Principles and the corresponding Best Practice Recommendations, other than in relation to the matters specified below:

Best Practice Recommendation	Notification of Departure	Explanation of Departure
2.1	The Company does not have a majority of independent Directors.	The Directors consider that the current structure and composition of the Board is appropriate to the size and nature of operations of the Company.
2.2	The chairperson is not an Independent Director.	The Directors consider that the current structure and composition of the Board is appropriate to the size and nature of operations of the Company.
2.4	The Company does not have a Nomination Committee.	The role of the Nomination Committee has been assumed by the full Board operating under the Nomination Committee Charter adopted by the Board.
4.1 and 4.2	The Company does not have an Audit and Risk Management Committee.	The role of the Audit and Risk Management Committee has been assumed by the full Board operating under the Audit and Risk Management Committee Charter adopted by the Board.
8.1	The Company does not have a Remuneration Committee.	The role of the Remuneration Committee has been assumed by the full Board operating under the Remuneration Committee Charter adopted by the Board.
8.2	Non-Executive Directors receive options as a part of remuneration.	To attract and retain the independent Non-Executive Director with sufficient skills and experience to the Company, incentive options are required to form part of the remuneration package.

 

Code of Conduct

This code of conduct aims to encourage the appropriate standards of conduct and behaviour of the Directors, officers, employees and contractors (collectively called the employees) of the Company. Employees are expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

The Company views breaches of this code as serious misconduct. Employees who have become aware of any breaches of this code must report the matter immediately to their line manager or the Company Secretary. The line manager or Company Secretary has the responsibility to report the breach to the appropriate senior management and to advise the relevant employee of the outcome and actions implemented.

Any employee who in good faith, reports a breach or a suspected breach will not be subject to any retaliation or recrimination for making that report.

Employees who breach the policies outlined in the Code may be subject to disciplinary action, including in the case of serious breaches, dismissal.

Securities Trading Policy

The Company’s share trading policy regulates dealings by directors, officers and employees in securities issued by the Company. In certain circumstances this policy also applies to contractors and consultants.

This policy imposes basic trading restrictions on all employees of the Company and its related companies who possess inside information and additional trading restrictions on:

1. all directors;
2. all executives reporting directly to the Managing Director; and
3. any other employees of the Company considered appropriate by the Managing Director and Company Secretary from time to time.

General Restrictions when in Possession of Inside Information

Insider trading laws

Insider trading laws cover all directors and employees of the Company. If a person is in possession of any unpublished price-sensitive information, it is a criminal offence to take advantage for personal gain or that of an associate.

Price-sensitive information is any information which if it were generally available, a reasonable person would expect it to have a material effect on the price or value of the Company’s securities, or would be likely to influence a person in deciding whether to buy or sell the Company’s securities.

Confidential information

Employees and directors also have a duty of confidentiality to the Company. A person must not reveal any confidential information concerning the Company, use that information in any way which may cause loss to the Company, or use that information to gain an advantage for themselves or anyone else.

Additional Trading Restrictions for Directors and Some Employees

Additional restrictions on trading in the Company’s securities apply to directors of the Company, all executives reporting directly to the Managing Director and any other employees of the Company considered appropriate by the Managing Director and Company Secretary from time to time (Restricted Persons).

Restricted Persons generally hold positions where it can be assumed that they will have inside information regarding the Company. Accordingly, additional restrictions apply for any proposed trading in shares by Restricted Persons during nominated “closed periods.” The closed periods generally apply to the period immediately preceding periodic and continuous disclosure.

Restricted Persons are prohibited from trading in the Company’s securities during the following designated closed periods:

1. in the ten days immediately preceding the release of the Company’s Quarterly Activities Report and Quarterly Cashflow Report to the Australian Securities Exchange (ASX) (Quarterly Reports) in accordance with the ASX Listing Rules (or, if shorter, the period from the end of the quarter to the time of publication); and
2. in the two days immediately after the release of the Company’s Quarterly Reports.

In exceptional circumstances clearance may be given for a Restricted Person to sell (but not to purchase) securities when they would otherwise be prohibited from doing so but not while there exists any matter which constitutes unpublished price-sensitive information in relation to the Company’s securities. Any application for an exemption allowing the sale of Company securities based on exceptional circumstances must be made and approved in writing.

Requirements before trading

Before trading, or giving instructions for trading in the Company’s securities:

1. a director must notify the Chairman of his intention to trade;
2. confirm that he does not hold any inside information;
3. have been advised by the Chairman that there is no reason to preclude him from trading in the Company’s securities as notified; and
4. complied with any conditions on trading imposed by the Chairman (including, for example, any time limits applicable to the clearance).

In the case of the Chairman intending to trade in the Company’s securities, he must notify and obtain clearance from the Board before trading, or giving instructions for trading.

In the case of any other Restricted Person, he must notify and obtain clearance from the Company Secretary before trading, or giving instructions for trading.

Notification of trading

Directors must notify the Company Secretary of any dealings in the Company’s securities immediately when any such dealings occur.

Breaches of policy

Strict compliance with this policy is a condition of employment.

General

The requirements imposed by this policy are separate from and additional to the legal prohibitions in the Corporations Act on insider trading.

This Securities Trading Policy is reviewed annually.

Continuous Disclosure Policy

This policy outlines the disclosure obligations of the Company as required under the Corporations Act 2001 and the ASX Listing Rules. The policy is designed to ensure that procedures are in place so that the stock market in which the Company’s securities are listed is properly informed of matters which may have a material impact on the price at which the securities are traded.

The Managing Director and the Company Secretary have been appointed as the Company’s disclosure officers responsible for implementing and administering this policy. The disclosure officers are responsible for all communication with ASX and for making decisions on what should be disclosed publicly under this policy. In the absence of the Managing Director and Company Secretary, any matters regarding disclosure issues are to be referred to the Chairman.

In accordance with the ASX Listing Rules, the Company must immediately notify the market (via an announcement to the ASX) of any information concerning the Company which a reasonable person with experience in the industry in which the Company operates would expect to have a material effect on the price or value of the Company’s securities.

The Company is also required to disclose information if asked to do so by the ASX, to correct or prevent a false market.

The Company’s authorised spokespersons are the Managing Director, Chairman, and Company Secretary. In appropriate circumstances, the Managing Director may from time to time authorise other spokespersons on particular issues and those within their area of expertise.

No employees or consultants are permitted to comment publicly on matters confidential to the Company. Any information which is not public must be treated by employees and consultants as confidential until publicly released.

Once the requirement to disclose information has been determined, the disclosure officers are the only persons authorised to release that information to the ASX.

As a guiding principle, the Company has a “no comment” policy on market speculation and rumours, which must be observed by all employees. However, the Company will comply with any request by the ASX to comment upon a market report or rumour.

The Company may, in exceptional circumstances, request a trading halt to maintain orderly trading in the Company’s securities and to manage any disclosure issues. No employee of the Company is authorised to seek a trading halt except for the disclosure officers or the Finance Director.

The Managing Director is primarily responsible for the Company’s relationship with major shareholders, institutional investors and analysts and shall be the primary contacts for those parties.

Any written materials containing new price-sensitive information to be used in briefing media, institutional investors and analysts are lodged with ASX prior to the briefing commencing. Upon confirmation of receipt by ASX, the briefing material is posted to the Company’s website. Briefing materials may also include information that may not strictly be required under continuous disclosure requirements.

The Company will not disclose price sensitive information in any meeting with an investor or stockbroking analyst before formally disclosing it to the market. The Company considers that one-on-one discussions and meetings with investors and stockbroking analysts are an important part of pro-active investor relations. However, the Company will only discuss previously disclosed information in such meetings.

During the time between the end of the financial year or half year and the actual results release, the Company will not discuss financial performance, broker estimates and forecasts and, particularly, any pre-result analysis with stockbroking analysts, investors or the media, unless the information to be discussed has already been disclosed to the ASX.

The Company’s website features discrete sections for shareholders and investors to ensure that such information can be accessed by interested parties. Such information will include:

1. annual reports and results announcements;
2. all other company announcements made to the ASX;
3. speeches and support material given at investor conferences or presentations;
4. company profile and company contact details; and
5. all written information provided to investors or stockbroking analysts.

Announcements lodged with the ASX will be placed on the Company’s website as soon as practicable after ASX confirms receipt of that information. Shareholders may be offered the option of receiving information via email instead of post.

Stockbroking analysts frequently prepare reports on listed companies that typically detail their opinion on strategies, performance and financial forecasts. To avoid inadvertent disclosure of information that may affect the Company’s value or share price. The Company’s comments on analyst reports will be restricted to:

1. information the Company has issued publicly; and
2. other information that is in the public domain.

Given the level of price sensitivity to earnings projections, the Company will only make comment to correct factual errors in relation to information publicly issued by other parties and Company statements.

Shareholders Communication Policy

The Company recognises the value of providing current and relevant information to its shareholders.

The Managing Director and Company Secretary have the primary responsibility for communication with shareholders.

The Company is committed to the promotion of investor confidence by ensuring that trading in the Company’s securities takes place in an efficient, competitive and informed market.