The Board of Directors of Anchor Resources is responsible for corporate governance and strives for high standards in this regard. The Board monitors the business and affairs of Anchor Resources on behalf of the Shareholders by whom they are elected and to whom they are accountable. The Board draws on relevant best practice principles particularly those issued by the ASX Corporate Governance Council in March 2003. At a number of its meetings the Board examined the Anchor Resources corporate governance practices and the progress towards a review of its practice compared to the best practice principles proposed by the ASX Corporate Governance Council. While Anchor Resources is attempting to adhere to the principles proposed by ASX, it is mindful that there may be some instances where compliance is not practicable for a company of Anchor Resources’ size.

The March 2003 ASX Corporate Governance Council publication “Principles of Good Corporate Governance and Best Practice Recommendations” is for guidance purposes, however all listed companies are required to disclose the extent to which they have followed the recommendations; to identify any recommendations that have not been followed; and reasons for not doing so. The Company’s Board of Directors has reviewed the recommendations. In many cases the Company was already achieving the standard required. In other cases the Company will have to consider new arrangements to enable compliance. In a limited number of instances, the Company may determine not to meet the standard set out in the recommendations, largely due to the recommendation being considered by the Board to be unduly onerous for a company of this size.

The ASX issued Revised Principles in August 2007, and Anchor Resources has attempted to adhere to principles by reporting against the eight revised principles. However, it is mindful that there may be some instances where compliance is not practicable for a company of Anchor Resources’ size.

The following paragraphs set out the Company’s position relative to each of the 8 principles contained in the ASX Corporate Governance Council’s report.

Principle 1: Lay solid foundations for management and oversight
The Company formalised and disclosed the functions reserved to the Board and those delegated to management. The Company has a small Board of four Directors (two Non-Executive Directors plus the Managing Director and an Executive Director) and a small team of people, so roles and functions have to be flexible to meet specific requirements.

Principle 2: Structure the Board to add value
The Company complies with most of the recommendations within this area as the Chairman is independent; separate from the Managing Director. The Company does not comply with the recommendation that a majority of Directors are independent, because one is Managing Director and another is an Executive Director. Mr Gary Fallon, although a Non-Executive Director, is a substantial shareholder. The Company has a Remuneration and Board Nomination Committee.

One of the Company’s four Directors is the Non-Executive Chairman of Directors and he has not undertaken “material” consultancy work for the Company within the past three years. Each Director of the Company has the right to seek independent professional advice at the expense of the Company. Prior approval of the Chairman is required, but this will not be unreasonably withheld.

Principle 3: Promote ethical and responsible decision-making
The Company has a policy concerning trading in its securities by Directors, management, staff and significant consultants which is set out below. The Company has formally adopted a code of conduct which establishes principles and standards in relation to the interaction of directors, employees and consultants within the Company, and externally with customers, shareholders, and the broader community. These principles demonstrate the high standards of conduct expected of directors, employees, consultants and all other people when they represent the Company and its subsidiaries.

Principle 4: Safeguard integrity in financial reporting
The Company periodically reviews its procedures to ensure compliance with the recommendations set out under this principle.

Senior management will confirm that the financial reports represent a true and fair view and are in accordance with relevant accounting standards. The Managing Director and the Company Secretary will state in writing to the Board that the Company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the Company and are in accordance with relevant accounting standards.

The Company has an Audit and Risk Management Committee and has a written charter which has been approved by the Board.

The Audit and Risk Management Committee consists of the Non-Executive Director Mr Anderson and the Executive Director Mr Craighead (as Committee Chairman). These Directors have applicable expertise and skills for the Audit and Risk Management Committee. This structure does not meet the ASX’s guidance regarding independence, in that it should have a majority of independent Directors and have at least three members and the Committee Chairman should not be the Chairman of the Board. The Audit and Risk Management Committee reports to the Board after each Committee meeting. In conjunction with the full Board, the Committee reviews the performance of the external auditors (including scope and quality of the audit).

Principle 5: Make timely and balanced disclosure
The Company, its Directors and staff are very aware of the ASX’s continuous disclosure requirements and operate in an environment where strong emphasis is placed on full and appropriate disclosure to the market. The Company has formal written policies regarding disclosure and it uses strong informal systems underpinned by experienced individuals.

Principle 6: Respect the rights of shareholders
All significant information disclosed to the ASX will be posted on the Company’s website as soon as it is disclosed to the ASX. When analysts are briefed on aspects of the Company’s operations, the material used in the presentation will be released to the ASX and posted on the Company’s website. Procedures have also been established for reviewing whether any price sensitive information has been inadvertently disclosed, and if so, this information is also immediately released to the market.

Whilst the Company does not have a communications strategy to promote effective communication with shareholders, as it believes this is excessive for small companies, the Company does communicate regularly with shareholders. The Company will request the external auditor to attend general meetings.

Principle 7: Recognise and manage risk
The Company is a small, exploration company and does not believe that there is significant need for formal policies on risk oversight and management of risk. Risk management arrangements are the responsibility of the Board of Directors, the Audit and Risk Management Committee and senior management collectively and Risk Factors is a standing agenda item at Board meetings.

Principle 8: Remunerate fairly and responsibly
Directors believe that the size of the Company makes individual salary and contractor negotiation more appropriate than formal remuneration policies. The Remuneration and Board Nomination Committee will seek independent external advice and market comparisons as necessary. In accordance with Corporations Act requirements, the Company will disclose the fees or salaries paid to all Directors, plus the five highest paid officers. The Company has an Employee Share Option Plan that was introduced in February 2007.

Ethical Standards
The Board’s policy is for the Directors and management to conduct themselves with the highest ethical standards. All Directors and employees will be expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

Securities Trading and Trading Windows
Directors, employees and key consultants must consult with the Chairman of the Board or the Managing Director before dealing in shares of the Company. Purchases or sales in the Company’s shares by Directors, employees and key consultants may not be carried out other than in the “window”, being the period commencing one day following the date of an ASX announcement leading, in the opinion of the Board, to an informed market. However, Directors, employees and key consultants are prohibited from buying or selling Anchor Resources shares at any time if they are aware of price sensitive information that has not been made public.