New Millennium - Diamonds, exploration and mining

Final Results

RNS Number:9214V
New Millennium Resources Ltd
20 December 2005




New Millennium Resources Ltd and
Controlled Entities
ABN 31 075 830 938
Annual Financial Report
30 June 2005

New Millennium Resources Ltd and Controlled Entities
ABN 31 075 830 938
Annual Financial Report
Contents

Corporate governance statement 3 - 4
Directors' report 5 - 10
Statement of financial performance 11
Statement of financial position 12
Statement of cash flows 13
Notes to the financial statements 14 - 45
Directors' declaration 46
Independent audit report 47 - 48
Auditor's Independence Declaration 49



CORPORATE GOVERNANCE STATEMENT

Corporate Governance
Unless disclosed below, all the best practice recommendations of the ASX
Corporate Governance Council have been applied for the entire financial year
ended 30 June 2005.


Board Composition
The skills, experience and expertise relevant to the position of each director
who is in office at the date of the annual report and their term of office are
detailed in the directors' report.

The names of independent directors of the Company are:
Senator David Johnston
Dato Azizi Yom Ahmad

When determining whether a non-executive director is independent the director
must not fail any of the following materiality thresholds:

less than 10% of Company shares are held by the director and any entities
or individual directly or indirectly associated with the director;

no sales are made to or purchases made from any entities or individual
directly or indirectly associated with the director; and

none of the directors income or the income of an individual or entities
directly or indirectly associated with the director is derived from a
contract with any member of the economic entities other than income
derived as a director of the entities.

Independent directors have the right to seek independent professional advice in
the furtherance of their duties as directors at the Company's expense. Written
approval must be obtained from the chairman prior to incurring any expense on
behalf of the Company.

The names of the members of the nomination committee and their attendance at
meetings of the committee are detailed in the directors' report.

Trading Policy
The Company's policy regarding directors and employees trading in its
securities, is set by the finance committee. The policy restricts directors and
employees from acting on material information until it has been released to the
market and adequate time has been given for this to be reflected in the
security's price.

Audit Committee
The names and qualifications of those appointed to the audit committee and their
attendance at meetings of the committee are included in the directors' report.

Datuk Fung-Chee Lim, from Malaysia, attended Harvard Business School in the
U.S.A., Monash Mount Eliza Business School in Australia, and the Association for
Overseas Technical Scholarships in Japan.

Dato Azizi Yom Ahmad, from Malaysia, obtained his Bachelor of Economics degree
from Monash University, Australia and is a member of the Institute of Chartered
Accountants in Australia.

Mr Chong-Kiat Lim, from Singapore, but now based in Australia, graduated from
Cambridge University in 1978 with a Bachelors degree in Engineering and obtained
his Masters degree from Cambridge University in 1981.

Performance Evaluation
An annual performance evaluation of the board and all board members was
conducted by the board and facilitated by an independent consultant from New
Millennium Resources Limited for the financial year ended 30 June 2005. The
consultant developed a questionnaire for all board members and members of the
senior management team to provide feedback on how they thought the board had
performed. The chairman also speaks to each director individually regarding
their role as director. The results from the questionnaire were collated and
developed into a series of recommendations to improve performance. This was
presented to the board at which time an action plan was developed to implement
the recommendations and set the performance criteria and goals for the next
year.

CORPORATE GOVERNANCE STATEMENT

Remuneration Policies
The remuneration policy, which sets the terms and conditions for the chief
executive officer and other senior executives, was developed by the remuneration
committee after seeking professional advice from independent consultants and was
approved by the board. All executives receive a base salary, superannuation,
fringe benefits, performance incentives and retirement benefits. The
remuneration committee reviews executive packages annually by reference to
Company performance, executive performance, comparable information from industry
sectors and other listed companies and independent advice. The performance of
executives is measured against criteria agreed half yearly which is based on the
forecast growth of the Company's profits and shareholders value. The policy is
designed to attract the highest calibre executives and reward them for
performance which results in long-term growth in shareholder value.

Directors and executives are also entitled to participate in the employee share
and option arrangements.

The amount of remuneration for all directors and executives, including all
monetary and non-monetary components, are detailed in the Note 25 to the
financial report. All remuneration paid to executives is valued at the cost to
the Company and expensed. Shares given to directors and executives are valued as
the difference between the market price of those shares and the amount paid by
the director and executive. Options are valued using the Black-Scholes
methodology.

The board expects that the remuneration structure implemented will result in the
Company being able to attract and retain the best directors and executives to
run the economic entities. It will also provide directors and executives with
the necessary incentives to work to grow long-term shareholder value. The policy
complies with the four key principles of IFSA Guidance Note 02-16.

The payment of bonuses, stock options and other incentive payments are reviewed
by the remuneration committee annually as part of the review of directors and
executive remuneration and a recommendation is put to the board for approval.
All bonuses, options and incentives must be linked to predetermined performance
criteria. The board can exercise its discretion in relation to approving
incentives, bonuses and options and can recommend changes to the committee's
recommendations. Any changes must be justified by reference to measurable
performance criteria. Included therein are two executive directors. Other than
these two executive directors, no other executives serve within the economic
entities.

Remuneration Committee
The names of the members of the remuneration committee and their attendance at
meetings of the committee are as follows:

Senator David Johnston Chairman
Datuk Fung-Chee Lim
Chong-Kiat Lim
John M Cross (resigned 7th October 2005)


Other Information
Further information relating to the Company's corporate governance practices and
policies has been made publicly available on the Company's web site at
.


DIRECTORS' REPORT

Your directors present their report on the Company and its controlled entities
for the financial year ended 30 June 2005.

Directors
The names of directors in office at any time during or since the end of the year
are:

Senator David Johnston Chairman - Non-Executive
Datuk Fung-Chee Lim Director - Non-Executive
Dato' Azizi Yom Ahmad Director - Non-Executive
Chong-Kiat Lim Director - Non-Executive
Nikolajs Zuks (ceased 29 November 2004) Director - Non-Executive
John M Cross (resigned 7 October 2005) Director - Executive
Shane M Healy Director - Executive

Directors have been in office since the start of the financial year to the date
of this report unless otherwise stated.

Principal Activities
The principal activities of the economic entity during the financial year were:

diamond exploration via the controlled entity, Angola Resources Pty Ltd, in
Angola and diamond exploration via the controlled entity Greenland Minerals Pty
Ltd in Greenland in JV with Hudson Resources Inc.

There were no significant changes in the nature of the economic entity's
principal activities during the financial year.


Operating Results
The consolidated loss of the economic entity after providing for income tax and
eliminating outside equity interests amounted to $7,545,785 (2004:$
7,818,723).

Dividends Paid or Recommended
No dividends have been paid or declared by the Company to members during or
since the end of the financial year.

Review of Operations

Diamond Mining
Exploration activities continued in Angola for diamonds in a joint venture with
Endiama (51%) the Angolan Government owned diamond monopoly and Mombo Lda (15%),
the local partner and Angola Resources Pty Ltd ("Angola"), a wholly owned
subsidiary of the Company. The Company has focused its resources on diamond
exploration in Angola and has supported Hudson Resources in its JV exploration
on diamonds in Greenland. The Company is seeking further diamond licenses in
Africa in particular kimberlite diamond exploration licenses.

Significant Changes in State of Affairs

The following significant changes in the state of affairs of the parent entity
occurred during the financial year:

4 August The company issued 5,040,000 ordinary shares valued at $710,640 for the
2004 acquisition of mining equipment from the Badenhorst Brothers.

11 The company issued 7,352,267 ordinary shares to raise $704,000 in
August working capital before costs.
2004

5 The company issued 16,500,000 ordinary shares to raise $1,550,000 in
October working capital before costs.
2004

3 The Company announced its Annual General Meeting to be held on 29
November November 2004 and proposed to grant options of 8,400,000 to John Cross
2004 and 6,600,000 to Shane Healy.

4 The Company announced testing of equipment has begun on its C9 license
November area in Angola.
2004

16 The Chairman announced that non-executive Director Nik Zuks will not be
November offering himself for re-election as director at the Annual General
2004 Meeting on 29 November 2004.

22 The Company announced the appointment of Daniel Stewart & Company Plc
November as Nominated Adviser and Broker to the Company with immediate effect.
2004

29 The Company announced that all resolutions were passed at the AGM in
November Kuala Lumpur. Managing Director announced that from grab pit sampling
2004 of 2 tons of gravel concentrate on Lapi C9 concession in Angola have
yielded 40 diamonds of gem stone quality, the largest diamond is 5.71
cts with the aggregate weight of the 40 diamonds found totaling 47.62
cts.

20 The Company announced that further exploration of sector 1/5 has
December yielded continuous diamond finds of various carats including two large
2004 diamonds of 11.67 and 19.83 carats.

29 The Company announced the issue of 12,118,270 fully paid ordinary
December shares.
2004
A total of 8,253,000 of these ordinary shares have been issued to the
Badenhorst Brothers. As a show of confidence the Badenhorst Brothers
agreed to convert an outstanding amount owing to them of US$630,000
into these ordinary shares.
The balance of the ordinary shares of 3,865,270 were issued to the
directors of NML, who opted to convert outstanding directors fees owing
of A$386,857 and accrued since November 2001 into shares at $0.10 (4p)
per share.
A total of 1,445,929 options exercisable at 8p were issued.

20 The Company announced the change of Company type from a No Liability
January company to a Limited company.
2005

20 The Company announced a second shipment of plant and equipment is due
January to depart Capetown on 24 January 2005 enroute to the Rio Lapi mine site
2005 in Lunda Norte. The company announced on 5 October 2004 that it had
arranged a standby finance facility of up to US$1.25 million by way of
a convertible note, convertible into NML shares at 4p within 12 months
of draw down. The loan notes will bear interest at 6% per annum. The
board confirms that it has activated this facility of US$1.25m to
provide capital. Admission of issue of 16,666,667 shares at US$0.075
(4p) is expected to occur 24 January 2005.

25 The Company joint venture partner Hudson Resources Inc of Canada
January announced it has entered an agreement with Cartwright Drilling Inc of
2005 Goose Bay, Labrador, to conduct a drill program on the Company's
diamond exploration properties near Kangerlussuaq, West Greenland. This
program is to confirm at least one large body of kimberlite on the
licence area said president of Hudson, James Tuer.

31 March The Company announced its half-yearly report for the six months ending
2005 31 December 2004.

4 April The Company announced that diamond mining production has commenced on
2005 its Rio Lapi mine in Lunda Sul province of Angola. The second and final
shipment of plant and equipment arrived and has been assembled,
serviced and is in good working order. The mine is now fully supplied
with bulk fuel and provision with mine infrastructure such as satellite
telephones, email and fax communications. Total staff engaged on Rio
Lapi is 52 people.

11 April The Company announced that following its successful progress to
2005 alluvial diamond production the Company was in a position to make
application for a Kimberlite mining licence on its Rio Lapi C9
concession in Lunda Sul Angola. There are a number of stages the
kimberlite application must go through before a kimberlite mining
licence is granted.

17 May The Company announced its joint venture partner Hudson Resources Inc of
2005 Canada is pleased to announce that Kimberlite was intersected at 18 of
the 19 holes drilled in the spring drilling programme on its Garnet
Lake kimberlite in Greenland.

1 June The Company announced that it is issuing equity for cash in order to
2005 bring forward its exploration program on the kimberlite prospect at its
Rio Lapi concession in Angola. It announced that 12,500,000 ordinary
shares at a placing price of 4p per share raising GBP500,000 before
expenses. As at 30 June 2005 a total of 7,075,000 ordinary shares been
issued.

Changes in Controlled Entities
Greenland Minerals Pty Ltd, a wholly owned controlled entity, was
incorporated and acquired on 28 July 2004. This entity carries out all of
the group's operations in Greenland.


After Balance Date Events

1 July 2005 The Company announced that on 1 June 2005 it had become
necessary to move its planned kimberlite exploration
forward six months. The company is in the process of
obtaining extra equipment to devote to the kimberlite
project.
6 July 2005 The Company announced its joint venture partner Hudson
Resources Inc has announced that it confirms
significant diamond counts from its spring drilling
programme and is initiating its summer drilling
programme.
10 October Endiama, the Angolan government owned diamond monopoly
2005 has requested that the Company cease mining operations
and return to grab pit sampling on C9 to prevent any
violation of possible kimberlite areas or interference
with kimberlite exploration. The Company has acquiesced
to Endiama's requests in the interest of a greater gain
in the kimberlite prospect. In the interim, the
concession will be fully explored to enable systematic
co-ordination between the alluvial and possible
kimberlite operations.
John Cross resigned as Managing Director and Chief
Executive Officer.
Shane Healy, the current CFO has been appointed
Managing Director and Chief Executive Officer
1 November The Company announced that is is in advanced stages of
2005 negotiations to acquire a kimberlite asset in Angola
through a joint venture or partial acquisition.
It announced that it has placed 48,608,331 shares to
raise GBP662,000 (41 million shares @ 1.1p and
7,608,331 million @ 2.77p) to provide working capital
for its exploration programme in Angola. Shares will be
admitted to AIM on 4 November 2005. It further
announced that it has issued 13,874,865 shares for
services rendered to the Company in the form of
consultancy, commissions and brokerage.

Future Developments

7 November The Company announced it is in advanced stages of
2005 negotiations to acquire a stake in Kassai Plc, a mining
exploration company which owns lease interests in
Angola. Deal is subject to due diligence by NML.

Environmental Issues
The economic entity's operations are not subject to environmental
regulation under Commonwealth and State legislation as its tenements are
located in Greenland and Angola.

Directors' Interests
The relevant interest of each director in the shares, debentures, interest
in registered schemes and rights, or options over such instruments issued
by the Company, or notified by the directors to the Alternative Investment
Market ("AIM") in accordance with AIM Listing Rules 12 and 15, at the date
of the report, is as follows


Ordinary Shares Options over Ordinary Shares
Direct Indirect Direct Indirect
Senator David
Johnston 1,883,080 - 2,000,000 -
Datuk
Fung-Chee Lim 15,365,000 13,333,333 2,000,000 -
Dato' Azizi
Yom Ahmad 6,919,630 - 2,000,000 -
Chong-Kiat Lim 2,932,630 1,260,000 2,000,000 -
Nikolajs Zuks
(as at 29 Nov
04) 6,000,000 - 5,350,000 -
John M Cross
(as at 7 Oct
05) 169,520 - 8,400,000 -
Shane M Healy 169,520 - 6,600,000 -


Information on Directors

Chairman and Non-executive Director - Senator David Johnston

Senator David Johnston, from Australia, has a law degree from the University of
Western Australia. He is admitted to practice in the Supreme Court of Western
Australia and the High Court of Australia, and has been a barrister and solicitor
since 1981. From 1985 to 1999 he was a member of the Australian Mining and
Petroleum Lawyers Association. Senator Johnston has also had extensive experience
in the political business arena. He is a former president of the Kalgoorlie/Boulder
Chamber of Commerce and has been a legal practitioner to the mining industry on the
Eastern Goldfields of Western Australia for the past 20 years. He is a past State
President of the Liberal Party of Western Australia and is currently Senator in the
Australian Senate.

Deputy Chairman and Non-executive Director - Datuk Fung-Chee Lim

Datuk Lim, from Malaysia, attended Harvard Business School in the U.S.A., Monash
Mount Eliza Business School in Australia, and the Association for Overseas
Technical Scholarships in Japan. Datuk Lim is co-founder of the Emas group of
companies, a public listed company with diversified interests mainly in
engineering, real estate development, construction and education. Prior to that, he
was Group General Manager of Kuala Lumpur Kepong Berhad, one of the largest
plantation groups in Malaysia. He was a member of the First National Economic
Consultative Council, a body established by the Malaysian Government to receive
advice and make recommendations on a 10 year (1990-1999) economic plan and policy
for the country. He also sits on the boards of several companies in Malaysia.

Managing Director and CEO - Mr John M Cross

Mr John M Cross, from South Africa, has held the position of Managing Director in a
number of companies, in both public and private sectors. An accumulation of
experience in alluvial mining operations in Southern Africa includes diamond,
uranium, iron ore and coal mining projects.

As owner and operator of an extensive earthmoving fleet, John achieved and
maintained a number of long term successful operations. His horizons broadened with
his arrival in Australia with oil exploration rigs from Canada to set up and
operate Simmons Cross, a drilling company. A ten deep hole programme was contracted
in Western Australia, after which the rigs were engaged in Indonesia.
Other periphery businesses ventures include satellite communications, and special
products relating to the high end of the security business. John brings with him a
wealth of experience in leadership, responsibility and accountability coupled with
entrepreneurial visionary skills.

Mr Cross has resigned as a director with effect from 7 October 2005.

Non-executive Director - Dato Azizi Yom Ahmad

Dato Azizi, from Malaysia, obtained his Bachelor of Economics degree from Monash
University, Australia and is a member of the Institute of Chartered Accountants in
Australia. In 1991 he became the managing director of RHB Sakura Merchant Bankers
Berhad. In 1993, he ventured into private business becoming a director of several
businesses including fund management, tile manufacturing, freight forwarding,
seaport warehousing and property development. Dato Azizi is the Executive Vice
Chairman of Seacera Tiles Berhad, a public listed company. He also sits on the
boards of several other public listed and private companies.

Non-executive Director - Mr Nikolajs Zuks

Mr Zuks, from Perth, has in excess of 25 years experience in the mineral
exploration and development in Australia, Africa, Malaysia and Indonesia and has a
wide commercial background. Mr Zuks was responsible for the development of the
Midwest Iron and Steel Project in Western Australia, an integrated mining and
processing project. Mr Zuks was also instrumental in the development of the
Mambramo forestry project in Irian Jaya, Indonesia.

Nik ceased to be a director at the close of the AGM on 29th November 2004.

Non-executive Director - Chong-Kiat Lim

Mr Lim, from Singapore, but now based in Australia, graduated from Cambridge
University in 1978 with a Bachelors degree in Engineering and obtained his Masters
degree from Cambridge University in 1981. He served in the Singapore Armed Forces
for 13 years and currently holds the rank of Colonel in the Reserves. He left the
armed forces in 1987 and thereafter served in senior executive management positions
of various multinational corporations in Singapore and overseas, including
Singapore Press Holdings, Bista Corporation and WBL Corporation. Mr Lim invested in
New Millennium in 1997, joined the Board in April 1998.

Finance Director and Company Secretary - Mr Shane M Healy

Mr Shane M Healy, from Australia, is an accountant and holds a Master of
Accountancy degree, a Bachelor of Financial Administration degree and a Diploma in
Practice Management from the University of New England and is professionally
associated with the Australian Society of Certified Practicing Accountants, the
Chartered Institute of Company Secretaries and the Australian Institute of Company
Directors.

He joined the board of New Millennium Resources Ltd in April 2004 prior to which he
had extensive experience in public company environments holding the position of
Director and Company Secretary of a number of ASX listed entities. Shane has also
held senior management and consulting roles with medium to large corporat ions,
including Japanese multi nationals.

Shane lives in Perth Australia having recently moved from Sydney where he has spent
the large proportion of his business life.

REMUNERATION REPORT

* Directors' and Executive Officers' Emoluments

Disclosure relating to directors' and executive officers' emoluments has been
included in Note 25 of the financial report along with the remuneration policies of
the group.

* Meetings of Directors

During the financial year, 10 meetings of directors (including committees of
directors) were held. Attendances by each director during the year were:

DIRECTORS' AUDIT REMUNERATION
MEETINGS COMMITTEE SIGNATURES
Number eligible Number Number eligible Number Number eligible Number
to attend Attended to attend Attended to attend Attended
Senator David Johnston 10 4 1 1 1 1
Datuk Fung-Chee Lim 10 10 1 1 1 1
Dato'Azizi Yom Ahmad 10 10 1 1 1 1
Chong-Kiat Lim 10 9 - - - -
Nikolajs Zuks 4 3 1 1 1 1
John M Cross 10 10 - - - -
Shane M Healy 10 10 - - - -


Directors Options
Details of Directors Options are disclosed in note 25.

Insurance of Directors

During the year the Company paid a premium of $38,970 to insure all the
Directors of the company against a liability in their role as a director of the
Company except where the conduct arises out of conduct involving a wilful breach
of duty or there has been a contravention of Section 232(5) or (6) of the
Corporations Act 2001.

Options

No options have been granted over unissued shares or interest during or since
the financial year by the Company or controlled entities to directors or any of
the five most highly remunerated officers as part of their remuneration.

At the date of this report, the unissued ordinary shares of New Millennium
Resources Ltd under option are as follows:

Grant Date Date of Expiry Exercise Price Number Under Option
12 January 2004 11 January 2007 $0.20 8,000,000
*17 January 2004 11 January 2007 $0.20 10,000,000
29 November 2004 28 February 2006 $0.20 1,445,929
29 November 2004 19 April 2007 $0.10 11,000,000
29 November 2004 19 April 2007 $0.20 4,000,000
29 November 2004 18 November 2006 $0.27 - $0.78 1,500,000
35,945,929

During the year ended 30 June 2005, no ordinary shares of New Millennium
Resources Ltd were issued on the exercise of options. No further shares have
been issued as a result of the exercise of options since that date.

* These options were issued as part of the consideration in acquiring Angola
Resources Pty Ltd.

These options do not entitle the holder to participate in any share issue of the
Company or any other body corporate.

Proceedings on Behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a party for the
purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.

The Company was not a party to any such proceedings during the year.

Auditor's Independence Declaration
A copy of the auditor's independence declaration as required under section 307c
of the Corporations Act 2001 is set out on page 49.

Signed in accordance with a resolution of the Board of Directors.
--------------------
Senator David Johnston
Chairman
--------------------
Director
Dated this day of December 2005.

New Millennium Resources Ltd and controlled entities
Statement of financial performance
For the year ended 30 June 2005


Economic Entity Parent Entity
Note 2005 2004 2005 2004
$ $ $ $
Other revenues
from ordinary
activities 2 91,344 421,371 58,972 421,371
-------- -------- -------- --------
Total revenue
from ordinary
activities 91,344 421,371 58,972 421,371
-------- -------- -------- --------
Administration (526,855) (327,579) (229,263) (320,442)
Borrowing costs (83,784) (7,953) (4,495) (7,953)
Consultancy fees (716,360) (101,724) (39,701) (8,990)
Exploration
expenditure
written off or
provided for (2,812,461) (5,224,502) (288,351) (5,224,502)
Directors fees (482,228) - (482,228) -
Provision for
write-down of
mining equipment - (420,088) - (420,088)
Amortisation and
depreciation (678,345) (101,863) (18,231) (66,446)
Occupancy costs (51,528) (34,463) (51,528) (34,463)
Carrying amount
on disposal of
non current
assets - (407,271) - (407,271)
Travelling (591,343) (273,674) (265,047) (73,589)
Security (306,496) - - -
Write down of
investment - - (192,735) -
Wages and
employee costs (661,932) (775,857) (661,932) (775,857)
Write down of
loans to
controlled
entities - - (6,162,607) -
Write off of
loans provided to
a joint venture
entity (606,428) (493,800) - -
Other expenses
from ordinary
activities (119,369) (71,320) (66,755) (42,639)
-------- -------- -------- --------
Loss from
ordinary
activities before
related income
tax benefit 3 (7,545,785) (7,818,723) (8,403,901) (6,960,869)
Income tax expense 5(a) - - - -
relating to ordinary -------- -------- -------- --------
activities
Loss from
ordinary
activities after
related income
tax benefit (7,545,785) (7,818,723) (8,403,901) (6,960,869)
Net loss
attributable to
members of the
parent entity (7,545,785) (7,818,723) (8,403,901) (6,960,869)
-------- -------- -------- --------
Total changes in
equity other than
those resulting
from transactions
with owners as
owners 19 (7,545,785) (7,818,723) (8,403,901) (6,960,869)
======== ======== ======== ========
Basic loss per
share 6 (0.0535) (0.090) (0.0595) (0.080)
======== ======== ======== ========

Diluted loss per share has not been disclosed as the options over ordinary
shares would not show an inferior view of the basic loss per share and as such
they are not considered dilutive.

The statement of financial performance is to be read in conjunction with the
notes to the financial statements.

New Millennium Resources Ltd and Controlled Entities
Statement of financial position
As at 30 June 2005
Economic Entity Parent Entity
Note 2005 2004 2005 2004
$ $ $ $
Current assets
Cash assets 8 327,941 53,372 290,748 53,302
Receivables 9 775 9,314 - -
Other 10 27,682 34,109 27,682 34,109
--------- --------- --------- --------
Total current
assets 356,398 96,795 318,430 87,411
--------- --------- --------- --------
Non-current assets
--- --- --- ---
Property,
plant and
equipment 12 2,134,710 428,579 34,145 31,199
Receivables 9 - - 5,000 1,617,822
Other
financial
assets 11 - - 1,674,914 1,502,249
Exploration,
evaluation and
development
expenditure 13 - 2,170,984 - 288,351
Other 10 24,584 10,125 24,584 10,125
Intangibles 14 - - - -
--------- --------- --------- --------
Total
non-current
assets 2,159,294 2,609,688 1,738,643 3,449,746
--------- --------- --------- --------
Total assets 2,515,692 2,706,483 2,057,073 3,537,157
--------- --------- --------- --------
Current liabilities

Payables 15 1,445,196 1,055,340 1,024,396 1,028,160
Interest-beari
ng liabilities 16 89,011 28,136 51,454 28,136
Provisions 17 121,506 9,370 121,506 9,370
--------- --------- --------- --------
Total current
liabilities 1,655,713 1,092,846 1,197,356 1,065,666
--------- --------- --------- --------
Total
liabilities 1,655,713 1,092,846 1,197,356 1,065,666
--------- --------- --------- --------
Net assets 859,979 1,613,637 859,717 2,471,491
========= ========= ========= ========

Equity
Contributed
equity 18 20,735,667 14,595,358 20,735,667 14,595,358
Reserves 20 651,818 - 651,818 -
Accumulated
losses 19 (20,527,506) (12,981,721) (20,527,768) (12,123,867)
--------- --------- --------- --------
Total equity 859,979 1,613,637 859,717 2,471,491
========= ========= ========= ========

The statement of financial position is to be read in conjunction with the notes
to the financial statements.

New Millennium Resources Ltd and Controlled Entities
Statement of cash flows
For the year ended 30 June 2005


Economic Entity Parent Entity
Note 2005 2004 2005 2004
$ $ $ $
Cash flows from
operating
activities
Cash receipts in the
course of operations 89,655 - 49,506 -
Cash payments in the
course of operations (1,850,365) (868,584) (1,023,169) (557,813)
Interest received 10,228 16,371 9,466 16,371
Borrowing costs paid (83,784) (7,953) (4,495) (7,953)
-------- -------- -------- --------
Net cash used in
operating activities 24(b) (1,834,266) (860,166) (968,692) (549,395)
-------- -------- -------- --------
Cash flows from
investing
activities
Payments for
property, plant and
equipment (921,977) (466,556) (21,177) (33,759)
Exploration,
evaluation and
development
expenditure (641,477) (484,075) - (103,690)
Payment for
controlled entities - (107,279) - (107,280)
Loan to controlled
entities - - (3,013,845) (1,410,542)
Proceeds from sale of
non-current assets - 405,000 - 405,000
-------- -------- -------- --------
Net cash used in
investing activities (1,563,454) (652,910) (3,035,022) (1,250,271)
-------- -------- -------- --------
Cash flows from
financing
activities
Proceeds from issue
of shares 4,217,842 1,806,129 4,217,842 1,806,129
Loan provided to a
joint venture
entities (606,428) (286,520) - -
Repayment of
borrowings - (266,000) - (266,000)
Proceeds from
borrowings 63,094 - 25,537 -
-------- -------- -------- --------
Net cash provided by
financing activities 3,674,508 1,253,609 4,243,379 1,540,129
-------- -------- -------- --------
Net
increase/(decrease)
in cash held 276,788 (259,467) 239,665 (259,537)
Cash at the beginning
of the financial year 48,265 307,732 48,195 307,732
-------- -------- -------- --------
Cash at the end of
the financial year 24(a) 325,053 48,265 287,860 48,195
======== ======== ======== ========

The statement of cash flows is to be read in conjunction with the notes to the
financial statements.



New Millennium Resources Ltd and Controlled Entities
Notes to the financial statements
For the year ended 30 June 2005


1 Statement of significant accounting policies
The significant accounting policies which have been adopted in the preparation
of this financial report are:

Basis of preparation
The financial report is a general-purpose financial report that has been
prepared in accordance with Accounting Standards, Urgent Issues Group Consensus
Views, other authoritative pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001.

The financial report covers the economic entity of New Millennium Resources Ltd
and its controlled entities - Angola Resources Pty Ltd and Greenland Minerals
Pty Ltd, and New Millennium Resources Ltd as an individual parent entity. New
Millennium Resources Ltd is a public company, incorporated and domiciled in
Australia and listed on the Alternative Investment Market ("AIM") in the United
Kingdom.

The financial report has been prepared on an accruals basis and is based on
historical costs and does not take into account changing money values or, except
where stated, current valuations of non-current assets. Cost is based on the
fair values of the consideration given in exchange for assets.

The ability of the economic entity to continue as a going concern is dependent
upon the Angola and Greenland diamond projects proceeding through to
exploitation. The economic entity is also dependent upon the availability of
adequate funding for existing commitments and ongoing business activities.
The following is a summary of the material accounting policies adopted by the
economic entity in the preparation of the financial report. The accounting
policies have been consistently applied, unless otherwise stated.

Principles of Consolidation
A controlled entity is any entity controlled by New Millennium Resources Ltd.
Control exists where New Millennium Resources Ltd has the capacity to dominate
the decision-making in relation to the financial and operating policies of
another entity so that the other entity operates with New Millennium Resources
Ltd to achieve the objectives of New Millennium Resources Ltd. Details in regard
to the controlled entities are contained in Note 11 to the financial statements.

All inter-company balances and transactions between entities in the economic
entity, including any unrealised profits or losses, have been eliminated on
consolidation.

Where a controlled entity has entered or left the economic entity during the
year, its operating results have been included from the date control was
obtained or until the date control ceased.


New Millennium Resources Ltd and Controlled Entities
Notes to the financial statements
For the year ended 30 June 2005

1 Statement of significant accounting policies (continued)

Revenue recognition
Diamonds and other metal sales are recognised when the title to the product has
passed from the economic entity. Revenues are recognised at fair value of the
consideration received net of the amount of goods and services tax (GST) payable
to the taxation authority.

Interest revenue
Interest revenue is recognised as it accrues, taking into account the effective
yield on the financial asset.

Sale of non-current assets
The gross proceeds of non-current asset sales are included as revenue at the
date control of the asset passes to the buyer, usually when an unconditional
contract of sale is signed.

The gain or loss on disposal is calculated as the difference between the
carrying amount of the asset at the time of disposal and the net proceeds on
disposal (including incidental costs).

Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and
services tax (GST), except where the amount of GST incurred is not recoverable
from the taxation authority. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the ATO is included as a
current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST
components of cash flows arising from investing and financing activities, which
are recoverable from, or payable to, the ATO are classified as operating cash
flows.

Foreign currency

Transactions
Foreign currency transactions are translated to Australian currency at the rates
of exchange ruling at the dates of the transactions. Amounts receivable and
payable in foreign currencies at reporting date are translated at the rates of
exchange ruling on that date. The gains and losses from conversion of assets and
liabilities, whether realised or unrealised, are included in the statement of
financial performance as they arise.



New Millennium Resources Ltd and controlled entities
Notes to the financial statements
For the year ended 30 June 2005

1 Statement of significant accounting policies (continued)

The assets and liabilities of overseas controlled entities, which are
self-sustaining, are translated at year-end rates and operating results are
translated at the rates ruling at the end of each month. Gains and losses
arising on translation are taken directly to a foreign currency translation
reserve.

The financial statements of overseas entities which are deemed not self
sustaining and integrated financial operations are translated at reporting date
using the temporal method and exchange differences are taken to the statement of
financial performance for the period.

Borrowing costs
Borrowing costs include interest, amortisation of discounts or premiums relating
to borrowings, amortisation of ancillary costs incurred in connection with
arrangement of borrowings, foreign exchange differences net of hedged amounts on
borrowings, including trade creditors and lease finance charges.

Ancillary costs incurred in connection with the arrangement of borrowings are
capitalised and amortised over the life of the borrowings.

Borrowing costs are expensed as incurred unless they relate to qualifying
assets. Qualifying assets are assets which take more than 12 months to get ready
for their intended use or sale. In these circumstances, borrowing costs are
capitalised to the cost of the assets. Where funds are borrowed specifically for
the acquisition, construction or production of a qualifying asset, the amount of
borrowing costs capitalised is those incurred in relation to that borrowing, net
of any interest earned on those borrowings. Where funds are borrowed generally,
borrowing costs are capitalised using a weighted average capitalisation rate.

Taxation
The economic entity adopts the liability method of tax-effect accounting whereby
the income tax expense is based on the profit from ordinary activities adjusted
for any permanent differences.

Timing differences which arise due to the different accounting periods in which
items of revenue and expense are included in the determination of accounting
profit and taxable income are brought to account as either a provision for
deferred income tax or as a future income tax benefit at the rate of income tax
applicable to the period in which the benefit will be received or the liability
will become payable.

Future income tax benefits are not brought to account unless realisation of the
asset is assured beyond reasonable doubt. Future income tax benefits in relation
to tax losses are not brought to account unless there is virtual certainty of
realisation of the benefit.

The amount of benefits brought to account or which may be realised in the future
is based on the assumption that no adverse change will occur in income taxation
legislation and the anticipation that the economic entity will derive sufficient
future assessable income to enable the benefit to be realised and comply with
the conditions of deductibility imposed by the law.


New Millennium Resources Ltd and controlled entities
Notes to the financial statements
For the year ended 30 June 2005

1 Statement of significant accounting policies (continued)

New Millennium Resources Ltd and its wholly-owned Australian subsidiaries have
formed an income tax consolidated group under the Tax Consolidation System. New
Millennium Resources Ltd is responsible for recognising the current and deferred
tax assets and liabilities for the tax consolidated group. The group notified
the ATO on 14 October 2004 that it had formed an income tax consolidated group
to apply from 17 January 2005. The tax consolidated group has entered a tax
sharing agreement whereby each company in the group contributes to the income
tax payable in proportion to their contribution to the net profit before tax of
the tax consolidated group.

Earnings per share
Basic earnings per share ("EPS") is calculated by dividing the net profit/loss
attributable to members of the parent entity for the reporting period, after
excluding any costs of servicing equity (other than ordinary shares and
converting preference shares classified as ordinary shares for EPS calculation
purposes), by the weighted average number of ordinary shares of the Company,
adjusted for any bonus issue.

Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the
after tax effect of financing costs associated with dilutive potential ordinary
shares and the effect on revenues and expenses of conversion to ordinary shares
associated with dilutive potential ordinary shares, by the weighted average
number of ordinary shares and dilutive potential ordinary shares adjusted for
any bonus issue.

Acquisitions of assets
All assets acquired, including property, plant and equipment and intangibles
other than goodwill, are initially recorded at their cost of acquisition at the
date of acquisition, being the fair value of the consideration provided plus
incidental costs directly attributable to the acquisition. When equity
instruments are issued as consideration, their market price at the date of
acquisition is used as fair value, except where the notional price at which they
could be placed in the market is a better indication of fair value. Transaction
costs arising on the issue of equity instruments are recognised directly in
equity subject to the extent of proceeds received, otherwise expensed.

Where settlement of any part of cash consideration is deferred, the amounts
payable are recorded at their present value, discounted at the rate applicable
to the economic entities if a similar borrowing were obtained from an
independent financier under comparable terms and conditions. The unwinding of
the discount is treated as interest expense.

Expenditure, including that on internally generated assets other than research
and development costs, is only recognised as an asset when the entity controls
future economic benefits as a result of the costs incurred that are probable and
can be measured reliably. Costs attributable to feasibility and alternative
approach assessments are expensed as incurred.



New Millennium Resources Ltd and controlled entities
Notes to the financial statements
For the year ended 30 June 2005

1 Statement of significant accounting policies (continued)

Subsequent additional costs
Costs incurred on assets subsequent to initial acquisition are capitalised when
it is probable that future economic benefits in excess of the originally
assessed performance of the asset will flow to the economic entity in future
years, otherwise, expensed as incurred.

Receivables
The collectibility of debts is assessed at reporting date and specific provision
is made for any doubtful accounts.

Trade debtors
Trade debtors to be settled within 60 days are carried at amounts due.

Other debtors
Other debtors such as those arising from the sale of mining tenements are
generally settled at the date of transfer of the tenement. Where there is a
deferral the amount is carried at the contract amount.

Investments

Other entities
Investments in other listed entities are measured at fair value, being quoted
market prices at reporting date.

Investments in other unlisted entities are carried at the lower of cost and
recoverable amount.

Exploration and development expenditure
Exploration and development costs are accumulated in respect of each separate
area of interest. These costs are carried forward where right of tenure of the
area of interest is current and they are expected to be recouped through sale or
successful development and exploitation of the area of interest, or, where
exploration and evaluation activities in the area of interest have not yet
reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves.

Development costs related to an area of interest are carried forward to the
extent that they are expected to be recouped either through sale or successful
exploitation of the area of interest.



New Millennium Resources Ltd and controlled entities
Notes to the financial statements
For the year ended 30 June 2005

1 Statement of significant accounting policies (continued)

When an area of interest is abandoned or the directors decide that it is not
commercial, any accumulated costs in respect of that area are written off in the
financial period the decision is made. When production commences, the
accumulated costs of the relevant area of interest are amortised over the life
of the area according to the rate of depletion of the economically recoverable
reserves. A regular review is undertaken of each area of interest to determine
the appropriateness of continuing the carry forward costs in relation to the
area of interest.

Recoverable amount of non-current assets valued on cost basis

The carrying amounts of non-current assets valued on the cost basis, other than
exploration and evaluation expenditure carried forward are reviewed to determine
whether they are in excess of their recoverable amount at reporting date. If the
carrying amount of a non-current asset exceeds its recoverable amount, the asset
is written down to the lower amount. The write-down is expensed in the reporting
period in which it occurs.

Cash

For the purposes of the statements of cash flows, cash includes cash on hand and
at bank and short-term deposits at call, net of outstanding bank overdrafts.

Depreciation and amortisation

All assets, including intangibles, have limited useful lives and are depreciated
/amortised using the straight-line method over their estimated useful lives.
Assets are depreciated or amortised from the date of acquisition.

Depreciation rates and methods are reviewed annually for appropriateness. When
changes are made, adjustments are reflected prospectively in current and future
periods only.

The depreciation/amortisation rates or useful lives used for each class of asset
are as follows:


2005 2004
Property, plant and equipment
Plant and equipment 5-37.5% 5-37.5%
Furniture and fittings 6.67-20% 6.67-20%
Exploration and mining equipment 10 - 33.33% 10 - 33.33%



New Millennium Resources Ltd and controlled entities
Notes to the financial statements
For the year ended 30 June 2005

1. Statement of significant accounting policies (continued)

Payables
Liabilities are recognised for amounts to be paid in the future for goods or
services received. Trade accounts payable are normally settled within 60 days.

Interest bearing liabilities
Bank and other loans are recognised at their principal amount, subject to
set-off arrangements. Interest expense is accrued at the contracted rate and
included in "Other creditors and accruals".

Employee benefits
Wages, salaries, annual leave, sick leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries, annual leave and sick
leave expected to be settled within 12 months of the year-end represent present
obligations resulting from employees' services provided to reporting date,
calculated at undiscounted amounts based on remuneration wage and salary rates
that the economic entity expects to pay as at reporting date including related
on-costs.

Long service leave
The provision for employee benefits to long service leave represents the present
value of the estimated future cash outflows to be made resulting from employees'
services provided to reporting date.

The provision is calculated using expected future increases in wage and salary
rates including related on-costs and expected settlement dates based on turnover
history and is discounted using the rates attaching to national government bonds
at reporting date which most closely match the terms of maturity of the related
liabilities.

Superannuation plan
The economic entity contributes to several defined contribution superannuation
plans. Contributions are recognised as an expense as they are made.

Share Based Compensation
The company operates an options based remuneration scheme for executives. The
company determines the fair value of options issued to executives as
remuneration and recognises the expense in the Statement of Financial
Performance. This policy also extends to other forms of equity based
remuneration.

Comparative Figures
Where required by Accounting Standards comparative figures have been adjusted to
conform with changes in presentation for the current financial year.



New Millennium Resources Ltd and controlled entities
Notes to the financial statements
For the year ended 30 June 2005

1. Statement of significant accounting policies (continued)

Adoption of Australian Equivalents to International Financial Reporting
Standards

The economic entity is preparing and managing the transition to Australian
Equivalents to International Financial Reporting Standards (AIFRS) effective for
the financial years commencing from 1 January 2005. The adoption of AIFRS will
be reflected in the economic entity and the parent entity's financial statements
for the year ending 30 June 2006. On first time adoption of AIFRS, comparatives
for the financial year ended 30 June 2005 are required to be restated. The
majority of the AIFRS transitional adjustments will be made retrospectively
against retained earnings at 1 July 2004. The directors are of the opinion that
the key material differences in the economic entity's accounting policies on
conversion to AIFRS and the financial effect of these differences where known
are as follows. Users of the financial statements should, however, note that the
amounts disclosed could change if there are any amendments by standard-setters
to the current AIFRS, or interpretation of the AIFRS requirements changes from
the continued work of the economic entity's AIFRS committee.

Taxation
Under the Australian equivalent to IAS 12 "Income Taxes", a balance sheet
approach will be adopted for calculating taxation, replacing the "statement of
financial performance approach". This method recognises deferred tax balances
for all temporary differences arising between the carrying value of an asset or
liability and its tax base. Whilst there will be enhanced disclosure of the
composition of the deferred tax assets and liabilities it is not expected that
there will be any significant impact in terms of the statement of financial
position or performance.

Financial Instruments
Under AASB 139 "Financial Instruments: Recognition and Measurement" financial
instruments will be required to be classified into five categories and to be
measured based on the nature of the classification. The five categories and
basis of measurement are:

*Financial asset or financial liability measured at fair value through the
statement of financial performance

*Held to maturity investments measured at amortised cost, subject to impairment

*Loans and receivables measured at amortised cost, subject to impairment

*Available for sale assets measured at fair value with changes in fair value
measured directly in equity

*Financial liability measured at amortised cost

It is not expected that there will be any significant impact in terms of the
statement of financial position or performance.

Impairment of Assets
Under the Australian equivalent to IAS 36 "Impairment of Assets" the recoverable
amount of an asset is determined as the higher of net selling price and value in
use. This will result in a change in the company's current accounting policy
which determines recoverable amount of an asset on the basis of undiscounted
cashflows. Under the new poli