Corporate Governance

In fulfilling its obligations and responsibilities to its various stakeholders, the Board of Bullseye Mining Limited are a strong advocate of corporate governance.

This statement outlines the principal corporate governance procedures of Bullseye Mining Limited (“Company or Bullseye”).

The Board of Directors (“Board”) supports a system of corporate governance to ensure that the management of the Company is conducted to maximise shareholder wealth in a proper and ethical manner.

Roles of the Board and Management

The Board is responsible for the overall operation and stewardship of the Company. In particular, it is responsible for charting the direction, strategies and financial objectives for Bullseye and monitoring the implementation of those policies, strategies and financial objectives. It is committed to protecting and enhancing shareholder value and conducting Bullseye’s business ethically and in accordance with the highest standards of corporate governance.

Responsibility for management of the Company’s business is delegated to the Executive Directors, who are accountable to the Board. Additional standout, independent, talented and experienced directors will join the Bullseye Board as the Company advances through construction, Stage 1 mining & processing and beyond. Given the current stage of the Company’s development the Board believes this is the most effective and cost-efficient approach to managing the Company. The key responsibilities of the Board include to:

• Appoint and review the performance of the Executive Directors;
• Develop with management and approve strategy, planning, development programs and major capital expenditure;
• Arrange for effective budgeting and financial supervision;
• Ensure that appropriate audit arrangements are in place;
• Ensure that effective and appropriate reporting systems in place will, in particular, assure the Board that proper financial, operational, compliance and risk management controls function adequately;
• Report to shareholders.

The Board is also responsible for setting the strategic direction of the Company, establishing goals for management and monitoring the achievement of those goals. The Executive Directors are responsible to the Board for the day to day management of the Company.

Board Structure

The composition of the Board shall be determined in accordance with the following principles and guidelines:

• The Board shall comprise at least 3 Directors, increasing where additional expertise is considered desirable in certain areas.
• Directors should bring characteristics which allow a mix of qualifications, skills and experience both nationally and internationally.

The terms and conditions of the appointment and retirement of Directors will be set out in a letter of appointment which covers remuneration, expectations, terms, the procedures for dealing with conflicts of interest and the availability of independent professional advice.

The performance of all Directors will be reviewed by the Chairman each year.

Meetings of the Board

The Board meets regularly (generally monthly) to consider the business of the Company, its financial performance and other operational issues. Weekly meetings of Executive Directors are also held.

Remuneration Arrangements

The Board has not formed a remuneration committee as it considers that the Company is not currently of a size, nor are its affairs of such complexity to justify the formation of a remuneration committee. The Board as a whole is responsible for the remuneration arrangements throughout the Company

The Board reviews the remuneration and policies applicable to all Directors and employees on an annual basis. Remuneration levels are competitively set to attract the most qualified and experienced directors and senior executives. Where necessary the Board obtains independent advice on the appropriateness of remuneration packages.

Retirement and Re-election

The Constitution of the Company requires one third of the directors, other than a Managing Director, to retire from office at each annual general meeting. Directors who have been appointed by the Board are required to retire from office at the next annual general meeting and are not taken into account in determining the number of directors to retire at that annual general meeting. Directors cannot hold office for a period in excess of three years or later than the third annual general meeting following their appointment without submitting themselves for re-election. Retiring directors are eligible for re-election by shareholders.

Re-appointment of directors retiring by rotation or filling a casual vacancy is not automatic. When a vacancy exists, for whatever reason, or where it is considered that the Board would benefit from the services of a new director with particular skills, the Board will select appropriate candidates with relevant qualifications, skills and experience. External advisers may be used to assist in such a process. The Board will then appoint the most suitable candidate who must stand for election at the next annual general meeting of shareholders.

Nomination and Appointment of New Directors

At this point the Board has not established a nomination committee and has decided to retain the responsibility of appointing and recommending candidates for new directors. This position is considered appropriate for the Company’s current stage of development.

Recommendations of candidates for new directors are made by the Directors, or external advisers, for consideration by the Board as a whole.

Review of Performance

The Board reviews its performance and composition on an annual basis to ensure that it has the appropriate mix of expertise and experience.

Board Access to Information

All Directors have unrestricted access to all employees of the group and, subject to the law, access to all company records and information held by group employees and external advisers. The Board receives regular detailed financial and operational reports from senior management to enable it to carry out its duties.

Each Director may, with the prior written approval of the Chairman which may not be unreasonably withheld, obtain independent professional advice to assist the Director in the proper exercise of powers and discharge of duties as a director or as a member of a Board Committee. The Company will reimburse the Director for the reasonable expense of obtaining that advice.

Board Committees

The Board, where appropriate, may establish a number of committees to assist in carrying out its responsibilities in an effective and efficient manner.

The Board, however, considers that the Company is not currently of a size, nor are its affairs of such complexity, to justify the formation of separate or special committees at this time. The Board as a whole is able to address the governance aspects of the full scope of the Company’s activities and to ensure that it adheres to appropriate ethical standards.

The full Board currently holds meetings at such times as may be necessary to address any general or specific matters as required. If the Company’s activities increase in size, scope and nature, the appointment of separate or special committees will be reviewed by the Board and implemented if appropriate.

Audit

The Board has not established an audit committee as it considers that the Company is not of a size, nor are its financial affairs of such complexity to justify the formation of an audit committee. The Board as a whole undertakes the selection and proper application of accounting policies, the identification and management of risk and the review of the operation of the internal control systems.

Role of Auditor

The Company’s policy is to appoint an external auditor who clearly demonstrates quality and independence. The performance of the external auditor is reviewed annually and if deemed appropriate, having regard to the assessment of performance, existing value and costs, applications for tender of external audit services may be requested.

As part of the Company’s commitment to safeguarding integrity in financial reporting, Bullseye has implemented procedures and policies to monitor the independence and competence of its external auditors. The auditor’s independence declaration is included in the Company’s annual financial statements.

Integrity of Financial Reporting

The Executive Directors report to the Board that:

• the consolidated financial statements of the Company and its controlled entities for the full year present a true and fair view, in all material aspects, of the Company’s financial condition and operational results and are in accordance with accounting standards;
• the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and
• the Company’s risk management and internal compliance and control framework is operating efficiently and effectively in all material respects.

Business Risks

The Company is committed to the identification, monitoring and management of risks associated with its business activities and has embedded in its management and reporting systems a number of risk management controls.

The Board is responsible for the oversight of the Company’s risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management within the Company with the Executive Director’s having ultimate responsibility to the Board for the risk management and the control framework.

Areas of significant business risk to the Company are highlighted in Board meetings and any business plans and operating reports presented to the Board. The Board monitors and receives advice on areas of operational and financial risk, and considers strategies for appropriate risk management arrangements. Arrangements put in place by the Board to monitor risk management involve regular reporting to the Board in respect of operations and the financial position of the Company.

The Company’s approach to risk management is based on the identification, assessment, monitoring and management of material risks that the Board and management believe that the Company may encounter. Once the risks have been identified, the risks are then classified in terms of their severity, the probability of occurring and the potential impact or damage they may have if they do occur. Once the risks have been identified the Company can then decide on whether to avoid, manage, insure or transfer these risks.

Specific areas of risk have been identified and are regularly considered at Board meetings including sovereign risk, foreign currency fluctuations, performance of activities, human resources, the environment, statutory compliance and continuous disclosure obligations.

Ethical Standards

All Directors, executives and employees are charged with the responsibility to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

Communications with Shareholders

The Board aims to ensure that shareholders are kept informed of all major developments affecting Bullseye. Information is communicated to shareholders through the distribution of annual reports, newsletters and by presentation to shareholders at the Annual General Meeting which they are encouraged to attend.