Establish the functions reserved to the board and those delegated to senior executives and disclose those functions.

The first recommendation is that the Company formalise and disclose the functions reserved to the Board and those delegated to management.

There is clear segregation of duties between the Board and management.

The role of the Board of Directors is to set goals and policies for the operation of the Company, to oversee the Company's management, to regularly review performance and to generally monitor the Company's affairs in the best interests of shareholders. The key responsibilities of the Board include:

	ensuring the Company is properly managed;
	appointing and reviewing the performance of any executive staff;
	developing with management and approving strategy, planning, programs and major capital expenditure;
	arranging for effective budgeting, financial supervision and monitoring of financial performance against the strategic plan and budgets;
	ensuring that appropriate audit arrangements are in place;
	ensuring that effective and appropriate reporting systems in place will, in particular, assure the Board that proper financial, operational, compliance and risk management controls function adequately; and
	reporting to shareholders.

The Managing Director is responsible and accountable to the Board. His specific responsibilities include the following:

	day to day running of the business;
	appropriate and cost effective exploration and development of all Alliance projects;
	identification of exploration and business development opportunities;
	managing the operating and financial performance of the Company;
	implementation of effective occupational health and safety policies; and
	stakeholder communications program (including broker tours, attendance at trade shows, shareholder correspondence and advertising).

The General Manager is responsible and accountable to the board. His specific responsibilities include the following:

	management and responsibility for the Maldon Gold Project, including sale process;
	management of all Alliance exploration activity outside of the Joint Venture with Quasar;
	generation of exploration opportunities and review of acquisition opportunities as required;
	responsibility for geological modelling and preparation of mineral resource estimates within the experience range of the employees as required;
	assisting the Managing Director with drafting of ASX releases and briefings, as assigned, including compliance sign-off for copper, gold and base metals;
	tenement management; and
	assisting the Managing Director with all other reasonable tasks assigned.

The other senior executive of the Company is the Manager Finance and Company Secretary. His specific responsibilities include the following:

Disclose the process for evaluating the performance of senior executives.

The Board reviews the performance of executives. The senior executives' performance is assessed against the performance of the company as a whole.

Provide the information indicated in the Guide to reporting on Principle 1.

A performance evaluation has been completed during the latest reporting period.

A majority of the Board should be independent directors.

The current Directors of the Company and details of their skills, experience and qualifications are included in the Directors' and Management section of the Corporate Information. Attendances at meetings are included in the Director's Report of the latest Annual Report.

The company has four directors, three of whom are non-executive directors.

The Company has not complied with this recommendation because none of the directors is considered to be independent in the strict sense (bearing in mind that in determining independence the Company is required to take into account reasonable perceptions as well as actual facts and circumstances).

Independent professional advice
Directors have the right, in connection with the dischage of their duties and responsibilities, to seek independent professional advice at the company's expense. Prior written approval of the Chairperson is required, but this will not be unreasonably withheld. No director sought independent proffesional advice during the reporting period.

Reason for Non-compliance: It is considered that, in the present circumstances of the Company, the Board is of a sufficient size and comprises persons with appropriate qualifications and experience and that the benefits of appointing additional non-executive directors in order to comply with recommendation 2.1 would not outweigh the costs of making such appointments. The Board will consider the appointment of further directors where required by law, if an outstanding candidate is identified or if it is felt that additional expertise is required in specific areas as projects underway evolve.

The chair should be an independent director.

The Company has not complied with this recommendation because the chairperson provides additional services to the Company and is therefore not considered to be independent in the strict sense.

Reason for Non-compliance: Mr. J. Dunlop has been a director of the Company since it originally listed in 1994 and has an intimate knowledge of its affairs. He is an experienced company director and is committed to providing the time necessary to effectively discharge his role as chairperson, taking into account the time commitments associated with the provision of additional services contract and his other roles. The services he provides are limited and he is not the chief executive officer of the Company. The directors consider that Mr. Dunlop continues to be capable of discharging his role as chairperson but are cognisant of Council recommendation 2.2 and will, with Mr. Dunlop, continue to review his position and performance in that capacity in the context of prevailing circumstances.

The roles of chair and chief executive officer (or equivalent) should not be exercised by the same individual.

The Company's chairperson, Mr. J. Dunlop, and Managing Director, Mr. P. Mutz, have separate roles. The chairperson provides limited consulting services and is primarily responsible for leading the Board in the overall discharge of its duties and responsibilities.

The board should establish a nomination committee.

The Company established a nomination Committee on 8 September, 2009.

Disclose the process for evaluating the performance of the board, its committees and individual directors.

The process of evaluation of the Board, it's committees and individual directors can be accessed below in the Nomination Committee Charter.

Provide the information indicated in the Guide to reporting on Principle 2.

All imformation required to be provided has been disclosed above.

Establish a code of conduct and disclose the code or a summary of the code as to:

	the practices necessary to maintain confidence in the Company's integrity;
	the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders;
	the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

The Company, including its Directors and key executives, is committed to maintaining the highest standards of integrity and seeks to ensure that all its activities are undertaken with efficiency, honesty and fairness. The Company also maintains a high level of transparency regarding its actions consistent with the need to maintain the confidentiality of commercial-in-confidence material and, where appropriate, to protect the shareholders' interests.

The Company recognises the need for Directors and employees to observe the highest standards of behaviour and business ethics when engaging in corporate activity and expects all directors, executives, contractors and employees to act in accordance with the law and with the highest standards of propriety.
The Company has adopted a Code of Ethics.

Establish a policy concerning trading in Company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.

The Company has adopted a Securities Trading Policy which applies to all directors, officers, employees and contractors of, or engaged by, the Company or a Joint Venture Party and all advisers, auditors and consultants to the Company (together "Alliance Associates").

It is the responsibility of each Alliance Associate to be aware of, and comply with, the legal prohibitions in the Corporations Act 2001 (Cth) on insider trading.

Any transaction conducted by Directors in shares of the Company is notified to ASX. Each Director agrees to provide information about dealings to the Company Secretary promptly to allow the Company to notify the ASX of any share transaction within five business days.

Subject to not being in possession of inside information, the Directors and other Alliance Associates are free to deal in securities of the Company within the period of 28 days following the announcement of half yearly results, the first announcement of annual results, the publication of a quarterly report and the annual general meeting and during any period when a prospectus relating to equity securities is open (each a "Dealing Window").

The Board may in exceptional circumstances approve an Alliance Associate dealing in the Company's securities outside a Dealing Window, but will not give its approval if the Board considers that price sensitive information is not generally available.

Provide the information indicated in the Guide to reporting on Principle 3.

All information required to be provided has been disclosed above.

The board should establish an audit committee.

The company established an Audit Committee on 29 November 2007.

The audit committee should be structured so that it:

	consists only of non-executive directors;
	consists of a majority of independent directors;
	is chaired by an independent chair, who is not chair of the board;
	has at least three members.

The Audit Committee has two members, consisting of the non-executive director, Mr. Tony Lethlean, and an independent consultant Ms Melanie Leydin.

Ms Leydin is a Chartered Accountant and principal in a chartered accounting firm specializing in audit and company secretarial services. Ms Leydin has over 14 years experience in the accounting profession and is a director and company secretary for a number of junior mining and exploration entities listed on the Australian Stock Exchange.

- The Audit Committee is chaired by Mr. Lethlean.

Reason for Non-compliance: AGS is a small company with a limited number of directors and executives. It is not considered appropriate under these circumstances to seek the assistance of two external consultants to be on the audit committee.

The audit committee should have a formal charter.

The formal charter of the Audit Committee was adopted on 29 November 2007. The Audit Committee Charter can be accessed below.

 Provide the information indicated in the Guide to reporting on Priciple 4.

The external auditor, PKF has a rotation policy such that lead partners are rotated every 5 years and review partners are rotated every 5 years.

All information required to be provided has been disclosed above.

Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.

The Company fully supports the continuous disclosure regime in Australia. In accordance with the continuous disclosure requirements of the ASX Listing Rules, the Company has policies and procedures in place to ensure that price sensitive information is identified, reviewed by management and a Disclosure Committee and disclosed to the ASX in a timely manner and that all information provided to the ASX is posted on the Company?s website as soon as possible after its disclosure to the ASX.  The Company Secretary manages the Company?s compliance with its continuous disclosure obligations and is responsible for communications with the ASX.

Presentations that are made to analysts or investors are posted on the Company's website. If the presentations contain information that has not previously been announced to ASX, and that would or could have a material effect on the share price, the presentation is sent to the ASX prior to the presentation being made.

All managers in the Company receive advice on continuous disclosure and are aware of and accountable for the Company's compliance with regard to continuous disclosure.

The Company has adopted a Disclosure Policy. The board will evaluate this Disclosure Policy on an annual basis to determine whether it remains effective in ensuring accurate and timely disclosure in accordance with the Company?s disclosure obligations.

Provide the information indicated in the Guide to reporting on Principle 5.

All information required to be provided has been disclosed above.

Design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.

Our shareholders own the Company and the Board acknowledges its responsibility to act in their best interests with the objective of increasing the Company's value for all shareholders. The Board maintains active communication with shareholders as owners of the Company.

Communication with shareholders is of critical importance to the Company. The Board of Directors aims to ensure that the shareholders on behalf of whom they act have access to all information necessary to assess the performance and prospects of the Company. Mechanisms used to communicate with shareholders include:

	the annual report which is distributed, or otherwise made available, to all shareholders;
	the quarterly report;
	the half-year report;
	the annual general meeting and other general meetings called to obtain shareholder approval for Board action as appropriate;
	Company announcements; and
	the Company's Website.

In addition the Company seeks to provide opportunities for shareholders to participate through electronic means. The website includes a feedback mechanism and an option for shareholders to register their e-mail address for direct e-mail updates of company matters.

When brokers, analysts, the press or other parties are briefed on the Company's activities, the material used in the presentations may be released to the ASX and in any event is posted on the company's website.

The Board ensure that all price sensitive information is disclosed to the ASX on a timely basis, subject to the permitted exceptions to such disclosure.

The Company welcomes questions from shareholders at any time and these are answered within the confines of information that is not market sensitive or already in the public domain. Also, all announcements made by the Company to the ASX (except disclosures of a compliance nature) are posted on the Company's website.

The external auditor is required by law to attend the annual general meeting to answer any questions with regard to, inter alia, the conduct of the audit and the preparation and content of the auditor's report, and does attend.

Shareholders who are unable to attend meetings of the Company are encouraged to participate in meetings by way of appointment of a proxy. Proxy forms may be lodged by shareholders by way of post, facsimile or transmission to the electronic address specified in the relevant notice of meeting.

Provide the information indicated in the Guide to reporting on Principle 6.

The information has been disclosed in the Annual Report.

Establish policies for the oversight and management of material business risks and disclose a summary of those policies.

Alliance Resources have systems in place for the management of its materials risks. A recent risk assessment has confirmed its risk profile and going forward the Board will receive reports and actively review this profile and the progress with risk treatment at each of its Meetings. Risk Management generally and the effectiveness of risk controls forms a standing item on the Board agenda. The company's Risk Management Policy statement can be accessed below.

This policy outlines the material risks faced by the Company as identified by the Board.

The board should require management to design and implement the risk management and internal control system to manage the Company's material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the Company's management of its material business risks.

Alliance Resources adopts systematic processes for the identification, treatment, monitoring and review of the material risks it faces. Generally risk-specific systems are used, in keeping with best practices in the Mining and Resources sector. These approaches to risk management are generally embedded into strategic and operational management processes.

The Board considers the materials risks the company faces and the means by which these are managed at each of its meetings. Given the size of the company, a separate Risk Management sub-committee of the Board is not justified. Financial and reporting risks are considered by the Audit Committee.

At each of the Board meetings, the Managing Director and Manager Finance & Company Secretary are required to provide assurance to the Board as to the effectiveness of the systems in place for the management of the material risks. Periodically, the Board and Executive undertake a strategic risk assessment to ascertain what are the material risks and whether the current controls are adequate and effective.

The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

The Board receives assurance from the chief Managing Director and the Manager Finance & Company Secretary in the form of a declaration, prior to approving financial statements.

Companies should provide the information indicated in the Guide to reporting on Principle 7.

All information required to be provided has been disclosed above.

The board should establish a remuneration committee.

The Board establish a remuneration committee on 8 September, 2009.

Companies should clearly distinguish the structure of non-executive directors' remuneration from that of executive directors and senior executives.

The structure of non-executive directors' remuneration is clearly distinguished from that of executive directors and senior executives, as described in the Charter for the Remuneration Committee below.

Companies should provide the information indicated in the guide to reporting on Principle 8.

All information required to be provided has been disclosed above.