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The Board of Directors is responsible for the corporate governance of Bounty Mining Limited ("the Company"), and is committed to achieving the highest standards of corporate governance. Given the size and nature of the Company, the Board considers that the Company complies as far as possible with the spirit and intentions of the ASX Corporate Governance Council's Principles and Recommendations. The Company's policies are summarized below.

References to Principles and Recommendations are references to the ASX Corporate Governance Council's revised Corporate Governance Principles and Recommendations as released in August 2008.

PRINCIPLE 1: Lay solid foundations for management and oversight

Role of the Board and Management
The primary role of the Board of Directors of Bounty is the protection and enhancement of shareholder wealth. In circumstances where a company approaches potential insolvency the board also has a duty to protect the rights of creditors. This duty takes precedence over the duty owed towards shareholders but is not inconsistent with the primary role and duty.

The Board is responsible for:

setting strategic direction; and
appointing the chief executive officer or equivalent; and
ensuring that the management team is appropriately qualified and experienced to
discharge its responsibilities; and
establishing goals for management, and monitoring the achievement of these goals; and
ensuring appropriate resources are available to senior executives; and
approving and monitoring financial and other reporting.

The Board meets monthly and holds additional meetings when necessary to address specific matters that arise. In between meetings, decisions may be adopted by way of circular resolution. Day to day management of the Bounty Group affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the Board to the executive director and management of Bounty.

In the event that at any time the position of chief executive officer is vacant, the Board shall delegate the duties of the chief executive officer to an executive of the company and that executive shall perform the duties of the chief executive officer as set out in this Corporate Governance Statement.

The role of the Chairman
The Chairman is responsible for:

leading the Board of Directors;
ensuring directors are properly briefed in all matters relevant to their role and
responsibilities;
facilitating Board discussions;
managing the Board's relationship with shareholders and with the Company's senior
executives.

The role of the Chief Executive Officer ('CEO')
The CEO is responsible for:

implementing Company strategies to achieve objectives;
managing the business of the Company;
complying with Company policies, contractual obligations and regulatory requirements;
forecasting and reporting progress; and
reviewing the performance of senior executives.

Independent Professional Advice and Access to Company Information

Each director has the right of access to all relevant Bounty Group information and Bounty's executives. Directors may seek independent professional advice, subject to agreement by the chairman, at Bounty's expense. A copy of advice received by any director is to be made available to all other members of the Board.

PRINCIPLE 2: Structure the Board to add value

Board Meetings
The Board meets monthly and holds additional meetings when necessary to address specific matters that arise. In between meetings, decisions may be adopted by way of circular resolution. The Board may hold meetings at the operations sites. This adds to the directors, understanding of the operations.

The Chief Executive Officer shall attend scheduled Board meetings and report on safety and environmental matters, business development and operational performance.

The Chief Financial Officer attends scheduled Board meetings, presents the monthly financial report, and answers questions from the directors on financial performance, accounting, risk management and treasury.

Composition of the Board
The Board of Bounty currently comprises four non-executive directors, three of whom are considered independent under the definition set out below, and one executive director. Chairman Gary Cochrane is not considered to be independent because he has a significant shareholding in the Company and is associated with a company with is the main lender to teh Company.

The procedures for election and retirement of directors are governed by the Constitution of Bounty. The composition of the Board is determined using the following principles:

The Board shall comprise a mixture of executive and non-executive directors, and where possible a majority of non executive directors;

Non executive directors should have no management role within Bounty, but particularskills may be utilized from time to time in an advisory capacity;
The Board shall comprise directors with a range of experience encompassing the current and proposed activities of Bounty;
A Nomination and Remuneration Committee was established in September 2009, chaired by Independent Non-Executive director Rob Stewart.
Where a vacancy exists, the Nomination and Remuneration Committee will select an appropriate candidate through consultation with external parties and consideration of the needs of shareholders and the Bounty Group.
Such appointments will be referred to shareholders for re-election at the next annual general meeting; and
All directors are subject to re-election by shareholders at least every three years;

The Directors in office at the date of this statement are:

Gary Cochrane, non-executive director and Chairman;
Natalie Forsyth-Stock, independent non-executive director;
Julie Garland McLellan, independent non-executive director; and
Rob Stewart, independent non-executive director.

Independent Directors
The Board has accepted the following definition of an independent director. An independent director is a non-executive director who is not a member of management, and who:

Is not a substantial shareholder (under the meaning of Corporations Act 2001) of Bounty or an officer of, or otherwise associated, directly or indirectly, with a substantial shareholder of Bounty;
Has not within the last three years been employed in an executive capacity by Bounty or another group member, or been a director after ceasing to hold any such employment;
Is not a principal of a professional adviser to Bounty or another group member;
Is not a significant consultant, supplier or customer of Bounty 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 Bounty or another group member other than as a director of Bounty; and
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 Bounty.

On 30 September 2009, a company associated with Chairman Gary Cochrane, VETL Pty Ltd, became the principal lender to the Company, following the assignment of the Company's loan facility and associated charges from Westpac bank to VETL Pty Ltd with the consent of the Company. Mr Cochrane is also a significant investor in the Company. Mr. Cochrane is therefore no longer considered to be an independent director.

Evaluation and Review of Board Performance
The Chairman is in the process of introducing formal new procedures for evaluating the performance of the board, its committees and directors and will establish a periodic review of the adequacy of such procedures.

PRINCIPLE 3: Promote ethical and responsible decision-making

Code of Conduct
The Board supports the highest standards of corporate governance. Bounty has established a Code of Conduct which requires its members and the staff of Bounty to act with integrity and objectivity in relation to:

Compliance with the law;
Record keeping;
Confidentiality;
Professional conduct;
Dealing with suppliers, advisers and regulators; and
Dealing with the community and employees.

Directors and senior executives are subject to further requirements as follows:

Conflict of Interest
In accordance with the Corporations Act 2001 and Bounty's constitution directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of Bounty. Where the Board believes that a significant conflict exists, the director concerned will not receive the relevant Board papers and will not be present at the meeting whilst the item is considered.

Dealings in Bounty Shares
The Constitution permits directors to acquire shares in Bounty. Company policy prohibits directors, officers and employees from dealing in Bounty shares whilst in possession of price sensitive information or during certain periods of activity. In accordance with the provisions of the Corporations Act 2001 and the Listing Rules of ASX, ASX is advised of any transactions conducted by directors in shares in Bounty.

Directors and officer duties

To act honestly, in good faith and in the best interest of the Company as a whole at all times;
To use due care and diligence in fulfilling the functions of office and exercising the powers attached to that office;
To use the powers of the office for a proper purpose;
To recognise that primary responsibility is to the Company's members as a whole, but where appropriate to have regard for the interests of all stakeholders;
To refrain from making improper use of information acquired as a director;
Not to allow personal interest, or the interest of any associated person, to conflict with the interests of the Company;
To be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board;
To maintain the confidentiality of information received in the course of the exercise of duties;
Not to engage in conduct likely to bring discredit upon the Company; and
To comply, at all times, with the spirit as well as the letter of the law and with the principles of this Code.

PRINCIPLE 4: Safeguard integrity in financial reporting

Audit Committee
The company has a separate audit committee of the board. The committee charter sets out the committee's role and responsibilities, composition, structure and membership requirements, and the procedures for inviting non-committee members to attend meetings. The committee has a schedule of meetings for the year which aligns with scheduled financial reporting requirements, but may also meet form time to time as required

Committee membership is based on the following principles:

The Committee consists of three members, all of them non-executive;
The majority of members are independent;
The Chairman of the committee is independent, and is not the Chairman of the board;
All members are financially literate, and have an understanding of the industry in which the Company operates.

Membership of the committee is currently as follows:

Julie Garland McLellan (Chair) (independent non-executive director)
Gary Cochrane (non-executive director, chairman of Board)
Rob Stewart (independent non-executive director)

Financial Reporting
Monthly actual results are reported and reviewed by the Board. The Bounty Group reports its financial performance to shareholders half-yearly, and reports a statement of cashflows quarterly, via the ASX platform.

Certification of Financial Reports
The Chief Executive Officer and the Chief Financial Officer shall certify to the board, for the purpose of S295A of the Corporations Act, each reporting period that:

The Company's financial records have been maintained in accordance with s286 of the Corporations Act 2001 ('the Act');
The Company's financial reports comply with accounting standards as required by s296 of the Act, and give a true and fair view of the Company's financial position;
The certification is based on a sound system of risk management and internal controls; and;
Those risk management systems and internal controls are operating efficiently and effectively.

External Auditors
The auditors of Bounty have access to the Board of Directors at all times. The nomination of external auditors is the annual responsibility of the Board. The Board maintains an effective internal control framework to safeguard the Bounty Group's assets, maintain proper accounting records and ensure the reliability of financial information
compiled by Bounty.

Audit Independence
The lead auditor's independence declaration under Section 307C of the Corporations Act 2001 is set out on page 29 and forms part of the Directors Report for the year ended 30 June 2009.

PRINCIPLE 5: Make timely and balanced disclosure

The Board aims to ensure that shareholders are at all times fully informed in accordance with the spirit and letter of the Stock Exchange's continuous disclosure requirements.

Continuous Disclosure
In accordance with ASX Listing Rules 3.1, the Company has adopted the following practices and procedures for ensuring continuous disclosure to the market.

All information, including significant events and milestones, that can materially impact the share price of the Company must be brought to the attention of a Director or the Company Secretary.
At the time of induction, all employees and key consultants are informed of the Company's policies and practices and obligations for continuous disclosure.
Once a matter is identified as requiring announcement to ASX, the Company Secretary or delegated party prepares the announcement for the consideration of the full Board.
Once approved by the Board, or if the Board cannot be assembled in time, the Chairman, the announcement is authorised for release to the market.
All announcements are posted on the company's web-site at www.bounty.com.au. Time
is of the essence in respect to these matters.

PRINCIPLE 6: Respect the rights of security holders

The Board of Bounty respects the rights of security holders by:

communicating effectively with them;
giving them ready access to balanced and understandable information about the company and corporate proposals; and
making it easy for them to participate in general meetings.

Information is communicated to shareholders as follows:

Publicly released documents and general information about the Company are made available on the Company's internet website at www.bounty.com.au. The web site is reviewed regularly to ensure information is up to date and accurate.

The annual report is distributed to those shareholders requesting a hard copy. The report is available electronically on the company's web-site. The Board ensures that the annual reportincludes relevant information about the operations of the consolidated entity during the year, changes in the state of affairs of the consolidated entity and details of future developments, in addition to the other disclosures required by the Corporations Act 2001.
The half-year report contains summarised financial information and a review of the operations of the consolidated entity during the period. The half-year financial report is prepared in accordance with the requirements of applicable Accounting Standards and the Corporations Act 2001. It is reviewed by the company's auditors, and is lodged with the Australian Securities and Investments Commission and the ASX. The financial report is sent to any shareholder who requests it.
Proposed major changes in the consolidated entity which may impact on share ownership rights are submitted to a vote of shareholders.

The Board encourages full participation of shareholders at the Annual General Meeting, and any other General Meetings held, to ensure a high level of accountability and identification with the consolidated entity's strategy and goals. The company's auditors are invited to attend each AGM, and shareholders are invited to ask questions of the auditors and directors. Important issues are presented to the shareholders as single resolutions.

The Shareholders are requested to vote on the appointment and aggregate remuneration of Directors, the granting of options and shares to Directors and changes to the Constitution. Copies of the Constitution are available to any shareholder who requests it.

PRINCIPLE 7: Recognise and manage risk

Risk Management and internal control system
The Board has established a system of risk oversight and management and internal control. The Board monitors areas of operational and financial risk, and considers strategies for appropriate risk management arrangements. Where necessary, the Board will draw on the expertise of appropriate external consultants to assist in dealing with or mitigating areas of risk which are identified.

The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. The Company's policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the consolidated entity's business objectives. Control procedures cover management accounting, financial reporting, project appraisal, environment, IT security, compliance and other risk management issues.

The Company's main areas of risk include:

economic risks;
market conditions;
mining success;
contract performance;
general operating risks;
commodity price and exchange rate risks;
environmental risks;
human resources;
political and economic climates in areas of operation; and
ongoing capital requirements

Identification and Management of Risk
The Board's collective experience will enable accurate identification of the principal risks which may affect the Company's business. Management of these risks is discussed by the Board at each Board meeting and strategic planning meetings. In addition, key operational risks and their management, are recurring items for deliberation at Board meetings.

Compliance with customers systems
When mining our customers sites, in addition to complying with its own risk management systems, Bounty may be required to comply with the customer's risk management and safety systems and procedures.

PRINCIPLE 8: Remunerate fairly and responsibly

Nominations & Remuneration Committee
The Board has established a Nomination and Remuneration Committee. This is a committee of the Board, however directors with a material personal interest will be excluded from participation at the appropriate time. For the 2008-2009 financial year the Chairman of this committee was Gary Cochrane, independent non-executive Chairman of the board.

Membership of the committee is currently as follows:

Rob Stewart (chair), independent non-executive director
Julie Garland McLellan, independent non-executive director
NAtalie Forsyth-Stock, independent on-executive director

The remuneration of an executive director will be decided by the Remuneration Committee, without the affected executive director participating in that decision making process. Any equity based remuneration for executive and non executive directors will only be made with the prior approval of shareholders in general meeting.

The maximum remuneration of non-executive Directors is the subject of Shareholder resolution in accordance with the Company's Constitution, and the Corporations Act as applicable. The apportionment of non-executive Director remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director. Total fees for non-executive Directors are currently set at $250,000 per annum. At the next Annual General Meeting, the directors will ask for an increase in the level of fees, which will allow the board to identify and appoint a further independent director.

When setting fees and other compensation for non-executive Directors, the Board will seek independent advice and apply Australian and International benchmarks. The Board may award additional remuneration to non-executive Directors called upon to perform extra services or make special exertions on behalf of the Company. There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors.

In general, non-executive directors are not invited to participate in equity based remuneration schemes.

Summary:
Bounty complies with the ASX Corporate Governance Principles and Recommendations: