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The Board of Directors (the Board) of Marathon Resources Limited (the Company) is committed to achieving and demonstrating the highest standard of Corporate Governance.

The Board guides the affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable. The Board has responsibility for the overall Corporate Governance of the Company including its strategic direction, establishment of goals for its management and monitoring the achievement of these goals.

The individual Directors recognise that their primary responsibility is to the owners of the Company, its shareholders, while simultaneously having regard for the interests of all stakeholders of the company and the broader community.

This statement outlines the Company’s Corporate Governance Practices in place during the financial year. The Company’s statement is made based on the ASX Corporate Governance Councils revised Corporate Governance Principles and recommendations (the revised principles) released on 2 August 2007. The Company has decided on early adoption of the revised principles in the 2008 Annual Report.

Although the ASX Corporate Governance Council’s Best Practice Recommendations are not mandatory, under listing rule 4.10.3 companies are required to provide a statement in their annual report disclosing the extent to which they have followed the recommendations in the reporting period, identifying any principles which have not been followed with reasons for not having done so.

The Board is responsible to the shareholders for the performance of the Company and is focused on:

The role of the Board is covered by the Corporations Act 2001, ASX listing rules and the formal constitution of the Company. Its primary role is the creation of long term shareholder wealth and its protection. In achieving these ends the Board overviews the development of strategies, the setting of objectives, the establishment of policies to be implemented by management and assumes responsibility for ensuring adequate systems or internal control, risk management and financial reporting. The Board also ensures the provision of resources to senior management to achieve the Company’s objectives and undertakes subsequent monitoring of their performance.

The Board Charter is set out on the Company’s website.

Pursuant to their appointment letter Non-Executive Directors have no involvement in the day to day management of the Company. The board has appointed a Chief General Manager, who is not a Director, responsible for the operational and administrative performance of the Company and the provision of relevant information and input to the Board to enable it to discharge its responsibilities.

Senior management are subject to an Annual Performance Evaluation which is undertaken by the Board. The reviews are internal. The use of external facilitators is not warranted as the members of the Board have direct access to Management. The Chairman presides over the review process with input from other Directors. For some job functions a basis of evaluation of performance is measuring an individual’s output against Board agreed KPI’s. With the exception of Management the last review of senior staff performance was on July 2007.

The majority of the Board of Marathon Resources Limited consists of non executive Directors. Those Directors holding shares in the Company either directly or indirectly, are not considered to be substantial shareholders. No non executive Director of the Company has a material contractual relationship with the Company, other than as a Director. No Director is or has been employed in an executive capacity or acts or has acted as a material professional advisor, other than Dr Linley who was appointed to the role of CEO 10 June 2009.

Corporate Governance best practice recommends the majority of the board comprise independent directors, with “independence” in ASX Recommendation 2.1 taken into account for this purpose. Mr Zeng is Managing Director of Citic Australia Pty Ltd a substantial shareholder of Marathon and may be perceived as a non independent Director. Messrs Williams and Schacht are considered independent Directors. Despite this departure from the revised recommendations, the Board considers it presently has an appropriate balance of skills, experience and independence to properly fulfil its role. The role of the Chair is undertaken by a separate dedicated Director.

The Board is cognisant of the need to focus on its renewal from time to time to ensure an appropriate balance of skills and experience relevant to the nature and extent of company operations and its future direction at any given point of time.

The Board does not have a separate nomination committee to oversee the procedure for the selection and appointment of new Directors.

The scope and size of the Company dictates a small independent Board. When a need arises and where it’s considered the Board would benefit from the appointment of a Director with specific skills and experience all members of the Board participate in seeking out appropriate potential candidates. In some instances assistance from external sources if necessary may be sought.

The Board has in the past and may regularly change members and therefore does not undertake a formal performance evaluation of either each of the Directors or the Board as a whole.

The statutory Directors report sets out Relevant experience and expertise on each Director, their period in office and status.

More detailed particulars of each Director are set out in the Company’s website.

Any Director has the right to seek independent professional advice in connection with their duties and responsibilities at the Company’s expense.

Each Director has access to the Company Secretary. The Secretary is accountable to the Board through the Chair on all governance matters. The appointment or removal of the Secretary is a matter of decision for the Board.

The Directors are aware of and subscribe to the Code of Conduct of the Australian Institute of Company Directors.

Additionally the Company has a Code of Conduct built on highest standards of ethical behaviour. Directors and employees are expected to act with the upmost personal integrity, as required by the Company’s Code of Conduct.

The Company’s Code of Conduct is set out on the Company’s website.

To meet these obligations Directors and Senior Management seek to:

• Comply with all legal obligations in a timely manner and promote active compliance within the Company.
• Adopt practices necessary to meet the reasonable expectations of all of the Company’s stakeholders and the wider community.

Specifically Directors and senior management must:

• Use the Company's assets appropriately and efficiently for the Company’s benefit.
• Ensure the securities market is fully informed of all matters requiring disclosure.
• Not misuse information or their position for their own personal gain.
• Avoid or fully disclose conflict of interest events or situations.

Further, conflicts of interest that arise must be disclosed to the Board immediately and addressed by elimination of the conflict, abstaining from participation in decision making, or if in insoluble circumstances by resignation.

The Board policy is strict compliance with the requirements of section 1043A of the Corporations Act 2001 which prohibits individual Directors and senior management from trading in the Company’s securities whilst in possession of inside information.

The Company has no established trading windows and does not otherwise preclude Directors and management trading in the Company’s securities where the Board is formally notified via the Board Chair and permission sought.

Any acquisition or disposal of securities by Directors is reported to the ASX in compliance with the Corporations Act and ASX listing rules.

The Company’s Share Trading Policy is set out on the Company’s website.

Directors have established an Audit and Risk committee comprising three members from a Board of five, all of whom as previously stated are independent. The committee is chaired by a Director who is not the Chair of the Board.

The Statutory Directors Report details the number of meetings held and attendees.

The Audit and Risk committee charter is set out on the Company’s website

The committee’s principle responsibilities are:

• liaise with external auditors on matters arising from conduct of external audits,
• ensure compliance with ASX listing rules,
• review management reporting and financial controls,
• 0verview company policy and procedure development,
• assess and manage the Company’s risk profile.

The Board’s policy is to ensure strict compliance with the continuous disclosure regime to ensure that its obligations to disclose relevant information under the requirements of The Australian Securities Exchange, Australian Securities & Investment Commission are met.

Board processes are structured to ensure all information particularly any that may be considered price sensitive is released in a timely manner, is factual and does not omit material information.

Company announcements to the ASX are simultaneously posted on the Company’s website.

The Company uses external geological services in developing the material for ASX JORC code reporting to ensure balance in reporting of resources.

An external Public Relations Consultant is used to disseminate information released to the market to ensure the widest possible circulation of material to external parties including Stockholders, Analysts, the media and most importantly the Company’s shareholders.

The Board seeks to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs.

In addition to communication through its statutory reporting obligations via:

• The Annual Report
• The Interim Report
• ASX disclosures
• Explanatory memorandum for AGM resolutions.

The Company uses its website and external public relations services to disseminate information as widely as possible.

A Communications Manager is employed by the company to among other things, promote the interests of shareholders. The Company periodically issues a newsletter and uses audio/visual presentations in some media releases.

The statutory annual report is available to shareholders electronically.

The Company requires the attendance of a representative of its external auditors at its annual general meeting and encourages shareholders to attend and raise questions with the auditors representative or Directors.

The Board assumes responsibility for establishing the Company’s risk profile focus and for ensuring management has developed and adequately reports against sound systems of risk control.

The size and nature of the Company’s operations is such that risk is focused on a smaller than normal range of potential adverse events while not impacting potential opportunities.

The Company’s Risk management policy is set out on the Company’s website.

Key areas of risk which are regularly monitored are:

• acquisition of new exploration tenements and their subsequent status,
• land access and native title considerations,
• physical exploration activities
• These matters are regularly reported on to the Board in Managements’ Operation Reports.

The Company acknowledges and accepts the bond and special interests that the indigenous people have over areas where the company carries out operations. The Company proactively seeks to foster a respectful, cooperative and trusting relationship through honest and open communication with them and their advisors.

The Company recognises the legal, social, and economic obligations to develop and sustain relationships with Indigenous Traditional Owners at all times. It recognises that during exploration and mining operational phases, it must comply with State and Commonwealth legal requirements relating to Native title matters.

The Company operates under a health, safety and environment system developed by management. Pursuant to a Board review of the adequacy and effectiveness of the system an upgrading has been mandated for completion in the 08/09 year.

The primary focus in this area is environmental management and compliance.

The Company has always recognised the importance of sound environmental practice and promoted environmental awareness by all of its employees and contractors. Major exploration operations by the Company are conducted in an area of the Flinders Ranges that is considered by many to be highly environmentally sensitive.

This has necessitated a commitment to continuous improvement of practices. The Board following independent appraisal has initiated the development of a full EMS system ultimately leading to 1SO 14001 standard.

Management operate with Board defined limits of authority and a requirement to present monthly financial reports at a detailed level to Directors. These requirements assist in managing the risk of failure to achieve business objectives and protecting the Company’s assets.

In accordance with the requirements of Sec 295A of the Corporations Act 2001 The Board audit committee confirms to the Board that is has received assurance from the General Manager and Chief Financial Officer that:

• Financial statements are in compliance with accounting standards as required by Sec 296 of The Corporations Act.
• Financial statements give a true and fair view of finance performance and position at balance date required by Sec 297 of The Corporations Act.
• Records have been properly maintained and that risk management and internal compliance and control systems are operating efficiently and effectively in all material respects.

Confirmation that the Board has received the assurance is set out in the Statutory Annual Directors Declaration.

The performance in establishing the remuneration of Executive Management and Executive Directors, when such office is held, is reviewed by the Board with the exclusion of the Executive concerned.

The remuneration of Non Executive Directors is set by reference to an aggregate cap approved by shareholders from time to time at the annual general meeting. External advice is sought on remuneration matters when deemed necessary.

The company does not have a remuneration committee, as this role is undertaken by the Board.

The details of remuneration of Directors and Senior Management are set out in the Statutory Director’s Report. The contribution of each Non Executive Director is taken into account in arriving at individual remuneration levels having regard for reasonable and competitive market rates.

In accordance with listing rule 4.10.3 the company summarises its departures from the ASX’s principles of good corporate governance best practice recommendations.

	Best Practice Recommendations	Notification of Departure	Explanation
2.1	Majority of Directors should be independent	Two of the four Directors are independent	The Board considers it presently has an appropriate balance of skills, experience and independence to   properly fulfil its role
2.4	The Board should establish a nomination committee	The Company does not have a nomination committee	The Board is of the opinion that it is not of a sufficient size to warrant a nomination committee at this time
2.5	Companies should disclose the process for evaluating the performance of the Board, its committees and individual Directors	The Company does not have a formal documented process	Changing composition of the Board is indicative of an ongoing process of evaluation
8.1	The Board should establish a remuneration committee	The Company does not have a remuneration committee	The Board is of the opinion that it is not a sufficient size to warrant a remuneration committee at this time This role is undertaken by the Board.

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