STATEMENT OF CORPORATE GOVERNANCE

This statement outlines the main Corporate Governance practices of Midas Resources Limited.

Board Composition

The Board currently comprises three Directors, two of whom are non-executive Directors. John Hopkins has been appointed as the Chairman of the Company and Geoff Balfe as the Managing Director. Under the Constitution, the maximum number of Directors is ten and the minimum number is three. At each Annual General Meeting, one third of the Directors, excluding the Managing Director, must resign, with those Directors who have served longest being subject to rotation first.

Additionally, any Director appointed by Directors in the preceding year must retire, and is eligible for re-election.

Role and responsibilities of the Board

The Board is responsible for the overall corporate governance of the Company including its strategic direction and goals, the management framework of the Company including a system of internal control, business risk management and the establishment of appropriate ethical standards. The Board has delegated responsibility for the day to day running of the Company to the Managing Director.

The Managing Director is responsible for setting the operational direction of the Company and which involves setting budgets, forecasts and exploration programs. All budgets and programs are reviewed by the Board and regular updates and forecast revisions are reported to the Board on a routine basis.

The Board is committed to operating to industry best practice standards in all aspects of the Company's business and is responsible for the overall internal control of the Company. The internal control process derives from direct involvement in management and operations by the Managing Director with close and regular consultation with the Chairman and review between all the Directors and external accountants.

The Board has not conducted a formal independent evaluation of its performance. However, the Board is at all times aware of the need for it and individual Board members to perform to the benefit of all stakeholders.

Policy for remuneration of Directors

All Directors are eligible to receive a fixed directors' fee. The aggregate amount of directors' fees payable by the Company must be presented for approval to the shareholders in general meeting. This was done at the 2001 annual general meeting and has not been changed since.

Directors were issued with options in 2001 in order to create a cost effective incentive for them to build and establish the Company in its early years. These options expired unexercised during the year ended 30 June 2006. Non-executive were granted options in December 2006 as a cost effective incentive. Details of these options are provided in the half and full year Financial Reports.

The Managing Director, Geoff Balfe is employed by the Company on normal commercial terms and is not being paid a director's fee in addition to his salary. Details of his remuneration are described in the Directors’ Report and the notes to the financial statements.

The Managing Director can be further incentivised by the issue of performance based options which become exercisable once the share price has achieved certain threshold levels. Performance and incentive options were granted to the Managing Director in December 2006. Details of these options are disclosed in the half and full year Financial Reports.

Other than these incentive and performance based options there are no items of contingent remuneration of Directors.

Policies

The following policies have been adopted by the Board to assist with the internal procedures of the Company.

Continuous Disclosure

The Company has adopted a continuous disclosure policy so as to comply with its continuous disclosure obligations as an ASX listed company. The aims of this policy are to:

• assess new information and co-ordinate any disclosure or releases to ASX, or any advice required in relation to that information, in a timely manner;
• provide an audit trail of the decisions regarding disclosure to substantiate compliance with the Company's continuous disclosure obligations;
• report to the Board on continuous disclosure matters; and
• ensure that employees, consultants, associated entities and advisers of the Company understand the obligations to bring material information to the attention of the Company Secretary.

This policy is to be reviewed each year by the Audit Committee or the full Board in the absence of an Audit Committee.

Trading in Securities

The Company has adopted a policy that imposes certain restrictions on Directors and employees trading in the securities of the Company. The restrictions have been imposed to prevent trading in contravention of the insider trading provisions of the Corporations Act. The key aspects of the policy are:

• all Directors and employees are to formally notify the Company Secretary of their beneficial shareholdings in the Company and any changes to this within 2 days of such change occurring. The Company Secretary will maintain a register of interests in the Company held by Directors and employees;
• no Director or employee or any entities controlled by them is allowed to trade in the securities of Midas Resources Limited without notifying the Chairman;
• no Director or employee or any entities controlled by them is allowed to engage in the business of active dealing in the Company's securities; and
• a Director, employee or any entities controlled by them must not trade at any time when he or she is in possession of information which if generally available would materially affect the price or value of the Company's securities or at any time for a period of 2 trading days following a public announcement in relation to the matter.

Committees

To assist the Board in fulfilling its responsibilities, it can appoint committees comprising people nominated at the discretion of the Board based on their expertise. ASX best practice recommendations suggest a company constitute Audit, Remuneration and Nomination Committees. The Board has not formally constituted these committees with the matters typically dealt with by these committees addressed by the whole Board.

Conflict of interest

In accordance with the Corporations Act 2001 and the Company's constitution Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists the Director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered.

Independent professional advice and access to Company information

Each Director has the right of access to all relevant company information and to the Company's executives, and subject to prior consultation with the Chairman, may seek independent professional advice at the Company's expense. A copy of the advice received by the Director is made available to all other members of the Board.

Internal control framework and business risk management

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities. To assist in discharging this responsibility the Board has instigated an internal control framework that includes the following.

• Financial reporting - there is a comprehensive budgeting and forecasting system with updates provided to the Board at each Board meeting. Monthly actual results are reported to the Board. Quarterly, half yearly and annual financial reports are prepared in accordance with the Corporations Act and ASX Listing Rules.
• The Company has comprehensive written policies covering;
  • Environmental principles
  • Resource development on or near aboriginal land
  • Health, Safety and the Environment
  • Environmental Management and Monitoring

The Managing Director/CEO and the Company Secretary/CFO are required to confirm in writing that the Company's financial reports present a true and fair view, in all material respects, of the Company's financial condition and operational results and are in accordance with relevant accounting standards.

Ethical standards

The Board adopts a proactive approach to promoting the practice of high ethical standards. All directors and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company, in the following areas;

• professional conduct,
• dealings with suppliers, advisers and regulators,
• dealings with the community, and specifically in dealings with traditional landholders, and
• dealings with other employees.

Communication with shareholders

The Board aims to ensure that shareholders are informed of all major developments affecting the Company's state of affairs. Information is communicated to shareholders as follows.

• The Annual Report, incorporating the annual audited financial statements, and the Half Yearly Report
• Notices of shareholder meetings including comprehensive explanatory statements as required.
• All documents that are publicly released through the ASX company announcements platform, and which contain material or price sensitive information, are immediately made available at the Company's website ; www.midasresoureces.com.au
• Copies of presentations made by the Company are also posted to the Company's website.
• Shareholder update letters and brochures are periodically mailed to all shareholders.

ASX Guidelines on Corporate Governance

The ASX Corporate Governance Council has developed a set of guidelines, Principles of Good Corporate Governance and Best Practice Recommendations. This document articulates 10 core principles that the ASX Corporate Governance Council believes underlie good corporate governance. Each principle is then explained in detail, with implementation guidance in the form of best practice recommendations. ASX states that "the best practice recommendations are not prescriptions. They are guidelines, designed to produce an efficiency, quality or integrity outcome."

This means that under ASX Listing Rule 4.10 the Company must provide a statement disclosing the extent to which the ASX best practice recommendations have been followed in the reporting period. It is only where a best practice recommendation is not met or where a disclosure requirement is specifically identified that a disclosure obligation is triggered. Below, the Company provides explanation of any areas in the ASX best practice recommendations where Midas does not presently comply.

The guidelines also prescribe that the Company should maintain a dedicated corporate governance information section on its website.

ASX corporate governance best practice recommendations with which the Company does not presently comply

1. A majority of the Board of directors is not comprised of independent directors under the ASX definition of independent, and the Chairman is not an independent director. Mr John Hopkins is deemed not to be an independent director by ASX because he has an interest in an entity that is a shareholder.

   The Board strives to ensure that all transactions between the Company and any related party are always conducted on arms length terms.

   Mr Terry Streeter is deemed not to be an independent director by ASX because he has an interest in an entity that is a substantial shareholder.

   Each individual member of the Board is satisfied that whilst the Board may not comply with this particular best practice recommendation, the Board always acts with independence and in accordance with the Statement of Corporate Governance.

2. The Board strives to ensure that any transaction between the Company and any related party are conducted on arms length terms.