CORPORATE GOVERNANCE
STATEMENT

Corporate Governance Statement (cont...)

FINANCIAL STATEMENTS &
NOTES TO THE FINANCIAL
STATEMENTS

A summary of the Company’s main corporate governance practices, as well as any disclosures required by the Australian Stock Exchange’s “Principles of Good Corporate Governance and Best Practice Recommendations”, is set out below.

Composition of the board

The Board reviews the mix of experience, expertise and other qualities of the Directors. If a vacancy occurs on the Board, or if the Board is to be increased, the Board will identify the experience, expertise and other qualities sought and identify appropriate candidates. The Remuneration and Appointments (REM) Committee considers these matters in concert with the Board.

Directors retiring by rotation do not seek re-election at an Annual General Meeting if they have reached 69 years of age on or before the date of that meeting. In any event, Directors retire from the Board on reaching 70 years of age.

Board responsibilities

The Directors are responsible for protecting the rights and interests of the Shareholders through the development of sound strategies, ensuring their implementation, and by the development of an integrated framework of controls over the Company’s resources, functions and assets.

The Board’s responsibilities include:

• Steering strategic directions and establishing goals for management;
• Monitoring performance against these goals and objectives;
• Ensuring there are adequate business controls and ethical standards of behaviour;
• Appointing the Chief Executive Officer, evaluating performance and determining the remuneration of the Chief Executive Officer and senior executives;
• Ensuring the significant risks facing the business have been identified and the appropriate and adequate control monitoring and reporting mechanisms are in place; and
• Ensuring there are policies and procedures for recruitment, training, remuneration and succession planning.

Committees of the board

The Board of AML has established and continues to operate the following committees:

• Finance, Audit and Compliance Committee; and
• Remuneration and Appointments Committee.

Each Committee is chaired by a Non-Executive Director and is comprised of Non-Executive members. The committee terms of reference outline committee responsibilities and are available on request.

Membership and attendance at Board Committees is detailed in the Directors’ Report.

Independence of directors

It is important to have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties. During the year, the Board comprised of a Non-Executive Chairman, three Non-Executive Directors and a Managing Director (who is the only executive on the Board).

Mr Creagh O’Connor, Non-Executive Director resigned as Director on 20 April 2006 due to other business commitments. Mr O’Connor had been a Director of the Company since October 1996.

Dr Rawlings, Mr Byrne and Mr Williams are Non-Executive Directors and are independent, acting in the Company’s best interests, notwithstanding the following:

• Dr Rawlings, was previously appointed acting Chief Executive Officer on 16 June 2003 , was appointed as Executive Chairman on
  24 November 2003 . This was due to the challenges facing the Group. With the finalisation of the QMAG sale and termination of the Heads of Agreement, Dr Rawlings resigned this position on 8 November 2004, and became Non-Executive Chairman; and
• Mr Williams was a consultant to Newmont Australia , recently a major shareholder, and was also their previous Group Executive - Finance and Business Management until March 2003.

The Non-Executive Directors meet whenever necessary without the Managing Director. The Managing Director is not a member of the FAC or REM Committees and is invited to these meetings where appropriate.

The Company will engage further independent directors (as required).

Internal controls framework and risk
management

The Board is responsible for the overall business control framework, but recognises that cost-effective control systems will not necessarily preclude all errors and irregularities. To assist in discharging this responsibility, the Board has instigated a Business Control Framework designed to safeguard the Group’s assets and interests and to ensure the integrity of reporting. In addition, the Board constantly monitors the operational and financial aspects of the Company’s activities. Through the audit committee, the Board considers the recommendations and advice of external auditors and other external advisors on the operational and financial risks that face the Company.

The Business Control Framework identifies risk management as a key area which is subject to regular reporting to the Board. In addition, the Board investigates ways of enhancing existing risk management strategies, including appropriate segregation of duties, and the employment and training of suitably qualified and experienced personnel.