RNS Number:8256I
Tianshan Goldfields Ltd
29 November 2007



                          Tianshan Goldfields Limited
                         ("Tianshan" or the "Company")


                 Final Results for the year ended 30 June 2007


CHAIRMAN'S STATEMENT



On behalf of the Board, it is with great pleasure I report the achievements made
by Tianshan Goldfields Limited ("Tianshan or the Company") this year at both
operational and corporate levels.  Tianshan is now well established as a
credible and efficient explorer and emerging developer in China.



The Company's aim is to advance development of the Gold Mountain Project in
north west China ("Gold Mountain"), which has continued to progress over the
last 12 months. The project consists of large tonnage, disseminated style gold
deposits in near surface breccia blankets, potentially associated with high
grade feeder breccias and veins.  These styles of deposits are typically
developed as low cost open pit mining operations, with gold recovery by low
capital intensity heap leaching methods.



Importantly, the 2006 drill programme significantly added to the resource base
at Gold Mountain. The combined total Indicated and Inferred Mineral Resource for
the Yelmand, Jinxi, Lion and Mayituobi deposits is estimated at 95 million
tonnes at 0.9g/t Au for 2.8m oz of gold (at 0.5g/t Au lower cut-off grade).
This new estimate is an increase of just over 1moz from the maiden resource
estimate released in April 2006 of 59.9 million tonnes at 0.9g/t Au for
1,657,000 ounces of gold (at 0.5g/t Au cut off grade). Our discovery cost for
these resources is less than US$6 per ounce of gold.



The success of the drilling programme undertaken in 2006 has encouraged the
company to initiate a pre-feasibility study on three deposits within the current
resource estimate of the Gold Mountain Project including Yelmand, Jinxi and
Mayituobi. Work commenced at the beginning of 2007 on pre-feasibility studies
for a potential open pit and heap leach mining operation.



In parallel Tianshan with the study, work has begun the permitting process for a
mining licence in China. This process involves the completion of geological,
environmental, hydrology and social studies as required by the appropriate
Chinese regulatory bodies.



The 2007 exploration and drilling activities are now well underway with the
first phase of the infill and resource drilling programme complete. Drilling to
date has confirmed significant widths of deeper higher grade mineralisation in
the southeast of the Jinxi deposit including 57m at 3.64g/t Au (including 51m at
4.01g/t Au).  Yelmand infill drilling has confirmed grade continuity and
extensions to mineralisation to the west.



The second phase of the 2007 programme will focus on further infill drilling at
Jinxi to evaluate continuity of high grade mineralisation, at depth, to the
southeast and recently confirmed western extensions to Yelmand will be likewise
evaluated. The second phase of the program includes a budgeted regional
programme of approximately 5,000 metres of diamond core drilling.

Further details on the 2006 and early 2007 exploration programmes are outlined
in the operations review.



In April Mr Grant Thomas was appointed as Managing Director of the Company.
Since October 2004 Mr Thomas held the position of an Executive Director with the
Company. For the past several years Mr Thomas has been instrumental in the
operation, management and exploration of the Gold Mountain Project. Mr Thomas
has now spent a total of seven years working in China providing him and Tianshan
with invaluable knowledge and experience of operating and conducting business in
China. Concurrently Mr David Evans stepped down as Managing Director of Tianshan
and revert to an executive director role to oversee the current pre-feasibility
studies for the Gold Mountain Project.



A pleasant highlight occurred during the year, with the Xinjiang Gold Mountain
Mining Company Limited ("JV Company") (Tianshan 90%) being awarded for its
performance during 2006, namely "Best performing foreign investment enterprise
in the Xinjiang Uygur Autonomous Region". The first prize was presented by the
Deputy Governor of the Xinjiang Uygur Autonomous Region, on behalf of the Bureau
of Foreign Trade and Economic Cooperation of Xinjiang, at an official "Xinjiang
Government" banquet in Urumqi, capital city of Xinjiang. The JV Company is one
of over 200 foreign enterprises currently operating in Xinjiang.



During the year Mr Mark Ashley retired as a Non Executive Director to enable him
to concentrate on his other business ventures.  The Board wishes to extend their
appreciation to Mr Ashley for his valuable contribution to the management of the
Company.



Through the continued hard work of your Company's dedicated management and
staff, in both China and Australia, we have seen the Gold Mountain Project
continue to positively advance. It is the continued successful progress at Gold
Mountain which pays testament to the skills and knowledge of its management that
results in your company's technical and corporate goals being achieved again in
2007.  On behalf of the Board and Shareholders I thank Grant Thomas, David Evans
and all of our employees, joint venture partners and consultants for their
dedication and efforts during the year.




I am always available and pleased to talk with shareholders whenever you have
queries and ideas regarding the operations of our  Company and look forward to
meeting with you at our Annual General Meeting.





Keith Liddell

Chairman



17 September 2007





OPERATIONS REPORT



Tianshan Goldfields Limited ("Tianshan" or "the Company") holds a 90% interest
in the joint venture company, Xinjiang Gold Mountain Mining Company Limited ("JV
Company"), which holds the Gold Mountain Project.  The Gold Mountain Project
consists of a number of exploration licences which host advanced gold projects
with the potential for both large tonnage disseminated gold deposits and
narrower high grade opportunities.



An extensive exploration and resource definition drilling programme was
completed during the 2006 field season culminating in an upgrade to resource
estimates for the Yelmand, Jinxi  (including Balake) and Mayituobi deposits.
Exploration and further infill and extensional resource drilling programmes have
again been undertaken in 2007.  Details of the 2006 and 2007 exploration
programmes are outlined later in this report.



Location

The Gold Mountain Project is located in the highly prospective Tian Shan Gold
Belt where it extends into the north western region of Xinjiang Uygur Autonomous
Region, People's Republic of China.  The belt hosts a number of the world's
largest gold deposits including the Muruntau, Kumtor and Arxi mines.



The Gold Mountain Project tenements are considered prospective for large scale,
high sulphidation, disseminated epithermal gold deposits suited to development
as open pit, heap leach operations, as well as high grade feeder zones to feed a
mill. World class high sulphidation gold deposits include the Yanacocha (20.8m
oz) and Alto Chicama Laguna Norte (8.2m oz) in Peru. Immediately adjacent to the
southern boundary of the Gold Mountain Project tenement is a low sulphidation,
high grade, vein style mineralised system supporting a 400,000 ounce per annum
operation at Arxi.



The JV Company controls granted licences that cover an area of approximately
632.32km2. Five new exploration licenses, granted in 2007, occur both in the
vicinity of the existing Gold Mountain Project and along structural trends,
which are known to host gold deposits and prospects within the Tulasi Basin.
Further tenement applications are in progress.  Access to the Gold Mountain
Project is by sealed road from Yining for the initial 15km, then via 25km of
well-maintained road servicing the neighbouring Arxi mine.  The Gold Mountain
Project area covers foothills on the southern side of the Tian Shan Mountain
range at elevations ranging between 1,200 - 1,900m above sea level.



Exploration Programme Completed in 2006

The 2006 exploration programme by the JV Company involved drill testing the
Jinxi, Yelmand, Mayituobi, Balake, and Lion prospects.  A total of 50 core holes
for 8,846m and 46 reverse circulation holes for 4,492m were drilled on Gold
Mountain and regional tenement.



A total of 36 core holes for 5,727m were drilled predominantly to further define
Jinxi (12 holes), Yelmand (11 holes) and Mayituobi (seven holes) and to test the
Balake (six holes). A total of 11 reverse circulation holes were drilled at
Jinxi for 2,031m.  A total 14 core holes for 3,118m and 35 reverse circulation
holes for 2,461m were drilled on outer prospects.



Yelmand

Gold mineralisation at Yelmand is associated with a near surface sub horizontal
blanket style disseminated silicified breccias.  The breccia blanket is
generally 30-50m thick, but can be up to 90m thick in the south.  The final 11
hole programme in 2006 did not locate extensions to mineralisation sought to the
south and north of known resources. A significant gold intersection of 48m at
0.84g/t Au was reported at a depth of 131m.



Jinxi

Gold mineralisation at Jinxi is associated with high grade sub vertical breccias
within sub horizontal blanket style disseminated silicified breccias similar to
Yelmand. The final 12 hole programme in 2006 tested for extensions to
mineralisation in the southwest and east of Jinxi.  Mineralisation of moderate
tenor at depths in excess of 100m was located. Significant gold intersections
53m at 0.79g/t Au, 27m at 1.48g/t Au and 40m at 0.86g/t Au.



Mayituobi

Gold mineralisation at Mayituobi is associated with a near surface horizontal
blanket style disseminated silicified breccias.  The breccia blanket is
generally 20-30m thick, but can be up to 40m thick in the north east.  The final
seven drill holes completed in 2006 tested the eastern boundaries to
mineralisation. Significant gold intersections include 20m at 0.64g/t Au, 19m at
0.65g/t Au, and 14m at 0.65g/t Au.



Balake

Gold mineralisation at Balake prospect is associated with an outcrop of
silicified breccias and is located 800m south, along Yelmand Creek, from
Yelmand. The prospect was initially drilled in 2005 and a further six cored
drillholes were completed in the second half 2006. Significant gold
intersections include 63m at 0.78g/t Au, 14m at 1.02g/t Au, and 17m at 0.87g/t
Au.





Mineral Resource Estimates

In March 2006 a maiden Mineral Resource estimate was undertaken for the Yelmand,
Jinxi and Mayituobi deposits which are found within a 4.0km2 area in the north
west part of the Gold Mountain exploration licence.  In November 2006 a second
Mineral Resource estimate incorporating all infill and some extensional resource
drilling completed to the end of the 2006 field season.



The combined total Indicated and Inferred Mineral Resources for Yelmand, Jinxi
(including Balake), Mayituobi and Lion is estimated at 95 million tonnes at 0.9g
/t Au for 2.8 moz  of gold (at 0.5g/t Au lower cut off grade).



Table 1: Total Mineral Resource Estimates - Gold Mountain Project
      Tianshan Goldfields - Gold Mountain Project - Total Mineral Resource as at 31 December 2006
                                       Lower cut off at 0.5g.t Au
                       Indicated                     Inferred                    Total Resource
Deposit         Tonnes    Au g/ Au Ounces     Tonnes    Au g/ Au Ounces     Tonnes    Au g/    Au
                            t                             t                             t      Ounces
Yelmand        21,200,000   0.9    586,000    8,400,000   0.9    233,000   29,600,000   0.9      819,000
Jinxi          32,600,000   0.9    904,000   23,400,000   1.1    817,000   56,000,000   1.0    1,721,000
Mayituobi       5,000,000   1.0    162,000            -     -          -    5,000,000   1.0      162,000
Lion                    -     -          -    4,200,000   1.1    141,000    4,200,000   1.1      141,000
Total          58,800,000   0.9  1,652,000   36,000,000   1.0  1,191,000   94,800,000   0.9    2,843,000



Note: Figures used are rounded.  Resource Estimate by Finore Pty Ltd


Outer Prospects

The 2006 drilling completed on other prospects is summarised in Table 2.



Table 2: Summary of Drilling Conducted in 2006 on Other Prospects
       Prospect              Number of Drillholes                Metres Drilled
GOLD MOUNTAIN
Arrow                                               1DC                              309
Ridge                                               3DC                              599
Gorge                                               3DC                              526
Kuan Gou                                            2DC                              480
Plateau                                            28RC                             1635

                                                    1DC                              184
Sunny Valley                                        2RC                              408
Camp Valley                                         3RC                              405
Moony Creek                                         2RC                               13
REGIONAL

TENEMENT
Dakar                                               1DC                              277
Millenium                                           1DC                              145
Jin Gu                                              2DC                              599



Note: DC - Diamond Core; RC - Reverse Circulation Percussion



Ground Magnetic Survey

A detailed ground magnetic programme was commenced in 2006 with survey extending
for some 24km2 over the northern portion of the Gold Mountain tenement on east
west lines spaced 50m apart for an aggregate 480 line km.  The data obtained was
of high quality and will assist in the mapping of structures believed to be
crucial to the model for mineralisation in the Lower Carboniferous
Volcaniclastics.  A small survey, of 6km2, on lines spaced 100m apart was also
completed over the southern border of the tenement north of the Arxi Gold Mine.



Two further surveys on the Urumu-Tulasu and Nalensayi tenements were also
completed.



Exploration Programme in 2007

During the first half of 2007, the JV Company continued field programmes on the
Gold Mountain and regional exploration licenses.  The JV Company plans to
complete up to 15,000m drilling at the Gold Mountain project this field season.
Approximately two thirds of these metres will be devoted to resource infill and
extensional drilling at the Yelmand, Jinxi and Mayituobi deposits, as part of
the pre-feasibility study. The remaining metres will drill exploration targets
located within the tenements of the Gold Mountain Project.



Lithologic and alteration models together with structural interpretation will be
developed for inclusion into a new ore resource estimate and grade model for
future mine planning studies. Fieldwork has commenced on extending detailed
topographic surveys to assist with future mine planning during the
pre-feasibility studies.



Drilling Programme for 2007

A total of 9,147m in 84 core holes have been drilled in the 2007 exploration
programme to 24 August 2006, including 2,166m at Yelmand (27 holes), 5,393m at
Jinxi (44 holes).  The Kezele, Lau Ban, Arrow and Jinshan prospects on Gold
Mountain and the Sakarda prospect on regional tenement were tested by an
aggregate 13 holes for 1,588m drilled.





Yelmand

Twenty-seven core holes, for 2,166m, have been completed within the resource to
confirm grade continuity and test for extensions to mineralisation on the
western and eastern margins of the deposit.  Extensions to mineralisation were
located to the west. Significant gold intersections from the 2007 drilling
include 48m at 1.42g/t Au, 66m at 1.06g/t Au, 57.8m at 1.16g/t Au, 37.5m at
1.69g/t Au, 63m at 0.91g/t Au, 70m at 0.65g/t Au, 64m at 0.67g/t Au, 39m at
0.96g/t Au, 22m at 1.66g/t Au, 21m at 1.61g/t Au, 47m at 0.70g/t Au, 35m at 0.9g
/t Au, 35m at 0.89g/t Au, 30m at 0.99g/t Au, 31.4m at 0.84g/t Au, 26m at 1.02g/t
Au and 37.8m at 0.65g/t Au.  Further drilling in this area will be completed in
the later part of 2007.



Jinxi

Forty-four core holes, for 5,393m, have been completed at the Jinxi deposit.
These drillholes tested the western and eastern flanks of the Jinxi deposit.
Drilling has confirmed existence of mineralisation, at moderate depth, extending
to the southeast.  Significant gold intersections from the 2007 drilling include
57m at 3.64g/t Au (one of the best intersections drilled to date), 35m at 1.71g/
t Au, 30m at 1.51g/t Au, 23m at 1.58g/t Au, 32m at 0.98g/t Au, 25m at 1.10g/t
Au, 30m at 0.89g/t Au and 16m at 1.58g/t Au.



A new area of potentially significant mineralisation has been confirmed at depth
in the southeast that will be further drilled in the second half 2007 drilling
programme.





Outer Prospects

The 2007 drilling completed to date on other prospects is summarised in Table 3.



Table 3: Summary of Drilling Conducted in 2007 on other Prospects
       Prospect                         Number of Drillholes                Metres Drilled
GOLD MOUNTAIN
Kezele                                              3DC                              279
Lau Ban                                             2DC                              134
Arrow                                               2DC                              279
REGIONAL

TENEMENT
Sakarda                                             2DC                              159
Chart                                               4DC                              435
Jinshan                                             4DC                              737



Note: DC - Diamond Core; RC - Reverse Circulation Percussion



The three core holes drilled at Kezele targeted the northern extensions of the
extensive gold mineralised silicified breccia outcropping in this region .
Vuggy siliceous breccias up to 20m thick were intersected at shallow depths. An
increase in tenor of mineralisation to the north provides great encouragement
for a future drill programme to test this zone, which is open to the north.
Significant gold intersections include 7m at 0.86g/t Au from 17m (including 5m
at 1.06g/t Au) and 6m at 0.35g/t Au.



Exploration including detailed rock chip and stream sampling and geological
mapping has commenced on regional tenements in 2007 including an extensive
drainage BLEG sampling programme to detect low-level anomalous gold
concentrations over all existing tenements. The ground magnetic survey coverage
has been extended south to the southern margins of the Gold Mountain Tenement.



Pre-Feasibility Studies and Future Work



Chinese Geological Report and Ore Resource Estimate

The compilation of the Chinese geological report is in progress. This report
together with resources estimations for Yelmand, Jinxi and Mayituobi deposits to
be undertaken by Micromine Consulting of Beijing will be submitted to the
Ministry of Land and Resources ("MOLAR") in Beijing for approval.  Micromine
Consulting will partner with a Chinese approved competent group to submit and
present the report to obtain MOLAR approval.  This approval requires the use of
MICROMINE software for the announcement of resources and reserves in China.


Golder and Associates Pty Ltd

Golder and Associates has been contracted to ensure Xinjiang Gold Mountain (XGM)
Geological Assessment Report work is to International and Chinese standards for
environment, social and hydrology studies and to ensure international
pre-feasibility and Chinese pre-feasibility level Environmental and Social
Impact Assessment (ESIA), hydrology and acid rock drainage studies.  Preliminary
site visit completed and studies initiated. They will assist in coordinating the
work of the following groups;

*                      Baseline Environmental Studies

Appropriate Chinese Institutes have been contracted to undertake key
environmental, social and hydrological studies at the outset of the
pre-feasibility stage.  These institutes will work together with Golder &
Associates Pty Ltd (Beijing) who will be co-ordinating the international
component of the pre-feasibility studies. Preliminary site visits for each of
the following design institutes has been completed and studies initiated;



*                      No. 2 Party Xinjiang

BGMR No. 2 Party Xinjiang has been contracted to carry out ground water studies
to ensure XGM Geological Assessment Report is to Chinese standard and to carry
out ground water studies to ensure XGM would meet ground water studies for a
Chinese feasibility; and



*                      Environmental Protection Authority Xinjiang

Environmental Protection Authority of Xinjiang has been contracted to carry out
environmental studies to ensure XGM Geological Assessment Report is to Chinese
standard and to carry out environmental studies to ensure XGM would meet
environmental studies for a Chinese feasibility.



Metallurgical tests

Metallurgical test work forms an integral part of the pre-feasibility study.

Two metallurgical studies have been completed.  One based on leach testing of
drill core samples, and a second on the heap leach residue and Run of Mine ore
from the 2002-2003 leaching operation undertaken at Yelmand by Chinese partners.
A summary of the studies completed found:


*    initial metallurgical tests on core found gold is freely leachable and 
     is non refractory;

*    leach extractions from -75 micron milled ores range between 72-100% for 
     the oxide types (average 88%) and 17-100% for the non oxide samples 
     (average 65%); and

*    comprehensive sampling of 14,000 tonne heap leach at Yelmand confirms 
     the deposit is amenable to heap leaching.



Detailed BLEG style leaches on 5m composites of drill core from previous drill
campaigns was completed.  After full interpretation and analysis of the results
of current metallurgical test work composites for column leach testing were
prepared to provide heap leach design criteria.  The Company engaged Kappes
Cassiday & Associates ("KCAA") in the USA to undertake the column leach testing
programme.   A total of six column leach tests, with planned 60 day cycle time,
are presently in progress at KCAA.



Summary

The company has been highly encouraged by the drill results received to date
from the 2007 field programme.  The results have confirmed grade continuity at
both Yelmand and Jinxi.  At Jinxi the existence of a high grade feeder zone, at
depth, has been demonstrated as has extension of mineralisation to the west of
Yelmand.



These recent results of the 2007 infill resource extensional drilling will be
included in a new resource estimate to be completed by year end.   Results from
initial modelling will be used to plan additional drilling in the second phase
resource drilling planned in coming months.



The second phase of the 2007 drilling programme will include further infill at
Jinxi to evaluate continuity of high grade mineralisation, at depth, to the
southeast. Extension to mineralisation west at Yelmand will be pursued.



Regional exploration drilling will also be carried out to assess the
significance of gold mineralised targets at Kezele, Chart and Awuliya.  These
targets were identified in 2004, and confirmed in 2005 by mapping, rock chip and
soil sampling programmes.



Pre-feasibility studies will continue to see advances made in our understanding
of the metallurgical, geotechnical, hydrological and environmental-social issues
that build positively toward development of the project.



Mr SL Allnutt (AusIMM, MAIG), Chief Geologist of Tianshan Goldfields Limited,
and Mr K S Liddell (FAusIMM) a director of the Company, compiled the technical
aspects of this report relating to the Gold Mountain Project.  Mr Liddell and Mr
Allnutt have sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity that
is being reported on to qualify as a Competent Person as defined in the 2004
Edition of the Australasian Code for Reporting of Mineral Resources and Ore
Reserves. Mr Allnutt and Mr Liddell consent to the inclusion in the report of
the matters in the form and context in which it appears.



For Further Information, Please Contact:
Tianshan Goldfields Limited

Level 22, Allendale Square

77 St Georges Terrace

Perth WA 6000

Telephone:                   +61 8 9221 7729

Fax:                         +61 8 9221 7866



Keith Liddell - Chairman

Jason Bontempo - Chief Financial Officer







Consolidated Income Statement
For the year ended 30 June 2007



                                                           CONSOLIDATED                PARENT
                                                        2007         2006         2007         2006
                                            Notes      $'000s       $'000s       $'000s       $'000s


Revenue                                       2            496          163          494          162
Employee and consultancy expenses                        (707)        (908)        (707)        (903)
Administration services                                  (240)        (180)        (240)        (180)
Public relations expenses                                 (84)         (13)         (84)         (13)
Insurance expenses                                        (54)         (42)         (54)         (41)
Corporate expenses                                       (227)        (614)        (226)        (609)
Travel expenses                                          (195)        (207)        (195)        (204)
Depreciation                                              (14)          (8)          (8)          (2)
Foreign currency translation                             (533)        (131)        (533)        (131)
Finance costs                                              (6)        (841)          (6)        (841)
Other expenses                                           (148)         (99)        (148)        (112)

Loss Before Income Tax Expense                2        (1,712)      (2,880)      (1,707)      (2,874)

Income tax expense                            3              -            -            -            -

Net Loss                                               (1,712)      (2,880)      (1,707)      (2,874)



Net Loss Attributable to Minority Interest                   -            -            -            -
Net Loss Attributable to Members of the                (1,712)      (2,880)      (1,707)      (2,874)
Parent Entity

Basic earnings per share (cents per share)    5         (0.92)       (2.55)
Diluted earnings per share (cents per share)  5         (0.92)       (2.55)


The accompanying notes from part of these financial
statements.




Consolidated Balance Sheet
As at 30 June 2007


                                                             CONSOLIDATED               PARENT
                                                           2007        2006        2007        2006
                                               Notes      $'000s      $'000s      $'000s      $'000s

Assets

Current Assets
Cash and cash equivalents                        6          7,662      19,442       6,297      16,751
Trade and other receivables                      7             55         177          19         122
Total Current Assets                                        7,717      19,619       6,316      16,873

Non Current Assets
Receivables                                      9              -           -      21,337      14,280
Other financial assets                           8              -           -       1,552         382
Property, plant and equipment                   10            217         251          64          73

Deferred exploration expenditure                11         23,259      15,917           -           -

Total Non Current Assets                                   23,476      16,168      22,953      14,735

Total Assets                                               31,193      35,787      29,269      31,608


Liabilities
Current Liabilities

Trade and other payables                        13            996       1,978          40         522

Interest bearing loans and borrowings           14              -       1,500           -       1,500
Total Current Liabilities                                     996       3,478          40       2,022
Total Liabilities                                             996       3,478          40       2,022
Net Assets                                                 30,197      32,309      29,229      29,586

Equity
Issued capital                                  15         36,650      35,457      36,650      35,457
Reserves                                        15          1,349       2,767       2,225       2,068
Accumulated losses                              15        (9,653)     (7,941)     (9,646)     (7,939)

Parent entity interest                                     28,346      30,283      29,229      29,586
Minority interest                                           1,851       2,026           -           -

Total Equity                                               30,197      32,309      29,229      29,586



The accompanying notes form part of these financial statements.



Consolidated Cash Flow Statement
For the year ended 30 June 2007



                                                         CONSOLIDATED                PARENT
                                                      2007         2006         2007         2006
                                                     $'000s       $'000s       $'000s       $'000s
                                            Notes     Inflows/(Outflows)       Inflows/(Outflows)

Cash Flows from Operating Activities

Receipts from customers                                      -            -            -           69
Payments to suppliers and employees                    (1,783)      (1,616)      (2,334)      (1,735)
Interest received                                          490          158          488          157
Finance costs                                              (6)         (88)           --         (88)
Expenditure on mining interests                        (8,407)      (6,483)           --            -
Net cash provided by/(used in) operating     
activities                                    6        (9,706)      (8,029)      (1,852)      (1,597)

Cash Flows from Investing Activities
Advances to controlled entities                              -            -      (7,056)      (9,480)
Purchase of non current assets                            (17)        (120)          (1)         (73)
Payment for subsidiary                                       -      (1,094)           --            -

Net cash provided by/(used in) investing               
activities                                                (17)      (1,214)      (7,057)      (9,553)



Cash Flows form Financing Activities

Proceeds from issue of shares                               92       24,791           92       24,791

Payment of share issue costs                             (137)        (876)        (137)        (876)
(Repayment of)/proceeds from borrowings                (1,500)        1,500      (1,500)        1,500
Net cash provided by/(used in) financing             
activities                                             (1,545)       25,415      (1,545)       25,415

Net increase/(decrease) in cash and cash            
equivalents                                           (11,268)       16,172     (10,454)       14,265
Cash and cash equivalents at beginning of            
year                                                    19,442        3,162       16,751        2,486
Effects of exchange rate changes on cash                 (512)          108           --            -
Cash and Cash Equivalents at end of year      6          7,662       19,442        6,297       16,751

The accompanying notes form part of these financial
statements.




Consolidated Statement of Changes in Equity
For the year ended 30 June 2007


                                 Attributable to Equity Holders of the Parent
                                 Issued     Accumulated    Reserves     Total       Minority       Total
                                 Capital      Losses                                Interest      Equity
CONSOLIDATED                      $'000s       $'000s       $'000s      $'000s       $'000s       $'000s

At 1 July 2005                    12,324       (5,061)          99       7,362        3,037       10,399

Foreign currency translation           -             -         630         630           70          700
Total income and expense for    
the period recognised
directly in equity                     -             -         630         630           70          700
Loss for the period                    -       (2,880)           -     (2,880)            -      (2,880)

Total income and expense for      
the period                             -       (2,880)         630     (2,250)           70      (2,180)

Equity transactions:
Share-based payments                   -             -         443         443            -          443
- employee benefits
Share-based payments                   -             -         753         753            -          753
- finance costs
Share-based payment                    -             -         283         283            -          283
 - capital raising costs
Issue of share capital            24,579             -           -      24,579            -       24,579
Issue of attaching option              -             -         559         559            -          559
with Sept 2005 placement
Capital raising fees             (1,446)             -           -     (1,446)            -      (1,446)
Purchase of controlled             
entity                                 -             -           -           -      (1,081)      (1,081)

Balance at 30 June 2006           35,457       (7,941)       2,767      30,283        2,026       32,309

Foreign currency translation           -             -     (1,575)     (1,575)        (175)      (1,750)

Total income and expense for         
the period recognised
directly in equity                     -             -     (1,575)     (1,575)        (175)      (1,750)

Loss for the period                    -       (1,712)           -     (1,712)            -      (1,712)

Total income and expense for         
the period                             -       (1,712)     (1,575)     (3,287)        (175)      (3,462)

Equity transactions:

Share-based payments                  67             -         157         224            -          224
- employee benefits
Unallotted Shares                  1,170                                 1,170                     1,170
Issue of share capital                93             -           -          93            -           93
Capital raising fees               (137)             -           -       (137)            -        (137)

Balance at 30 June 2007           36,650       (9,653)       1,349      28,346        1,851       30,197



The accompanying notes form part of these financial statements.





Consolidated Statement of Changes in Equity
For the year ended 30 June 2007



                                        Issued Capital  Accumulated Losses       Reserves           Total
PARENT                                          $                  $                 $                 $

At 1 July 2005                               12,324            (5,065)                30             7,289

Total income and expense for the             
period recognised directly in
equity                                            -                  -                 -                --
Loss for the period                               -            (2,874)                 -           (2,874)

Total income and expense for the period           -            (2,874)                 -           (2,874)

Equity transactions:

Share-based payments                              -                  -               443               443
- employee benefits
Share-based payments                              -                  -               754               754
- finance costs
Share-based payment                               -                  -               283               283
 - capital raising costs
Issue of share capital                       24,579                  -                 -            24,579
Issue of attaching option with                    -                  -               558               558
Sept 2005 placement
Capital raising fees                        (1,446)                  -                 -           (1,446)

Balance at 30 June 2006                      35,457            (7,939)             2,068            29,586


Total income and expense for the               
period recognised directly in
equity                                            -                  -                 -                 -
Loss for the period                               -            (1,707)                 -           (1,707)

Total income and expense for the              
period                                            -            (1,707)                 -           (1,707)

Equity transactions:

Share-based payments                             67                  -               157               224
- employee benefits
Unallotted Shares                             1,170                                                  1,170
Issue of share capital                           93                  -                 -                93
Capital raising fees                          (137)                  -                 -             (137)

Balance at 30 June 2007                      36,650            (9,646)             2,225            29,229



The accompanying notes form part of these financial statements.



1.   STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a)  Basis of Preparation

The consolidated financial report is a general purpose financial report prepared
in accordance with the requirements of the Corporations Act 2001 and applicable
accounting standards, and interpretations and complies with other requirements
of the law.



The consolidated financial report has been prepared on a historical cost basis.



(b)  Statement of Compliance

The financial report was authorised for issue on the date of signing of the
Directors' Report.  The financial report complies with Australian Accounting
Standards, which include Australian equivalents to International Financial
Reporting Standards ("AIFRS").  Compliance with AIFRS ensures that the financial
report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards.



At the date of authorisation of the financial report, the following Standards
and Interpretations, including those Standards and Interpretations issued by the
IASB / IFRIC where an Australian equivalent has not been made by the AASB, were
in issue but not yet effective:


               Amendment/New Standard                                 Affected Standards
AASB 7 'Financial Instruments: Disclosures'          Effective for annual reporting periods beginning on
                                                     or after 1 January 2007
AASB 8 'Operating Segments'                          Effective for annual reporting periods beginning on
                                                     or after 1 January 2009
AASB 101 'Presentation of Financial Statements' -    Effective for annual reporting periods beginning on
revised standard                                     or after 1 January 2007
AASB 123 'Borrowing Costs' - revised standard        Effective for annual reporting periods beginning on
                                                     or after 1 January 2009
AASB 2007-4 'Amendments to Australian Accounting     Effective for annual reporting periods beginning on
Standards arising from ED 151 and other amendments'  or after 1 July 2007
AASB 2007-7 'Amendments to Australian Accounting     Effective for annual reporting periods beginning on
Standards'                                           or after 1 July 2007
Interpretation 10 'Interim Financial Reporting and   Effective for annual reporting periods beginning on
Impairment'                                          or after 1 November 2006
Interpretation 11 'AASB 2 - Group and Treasury Share Effective for annual reporting periods beginning on
Transactions'                                        or after 1 March 2007
Interpretation 12 'Service Concession Arrangements'  Effective for annual reporting periods beginning on
                                                     or after 1 January 2008
IFRIC 13 'Customer Loyalty Programmes'               Effective for annual reporting periods beginning on
                                                     or after 1 July 2008
IFRIC 14 'IAS 19 - The Limit on a Defined Benefit    Effective for annual reporting periods beginning on
Asset, Minimum Funding Requirements and their        or after 1 January 2008
Interaction'



The directors note that the impact of the initial application of the Standards /
Interpretations is not yet known or is not reasonably estimable. These Standards
and Interpretations will be first applied in the financial report of the Group
that relates to the annual reporting period beginning on or after the effective
date of each pronouncement.




1.   STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

(c)  Principles of Consolidation

The consolidated financial report comprises the financial statements of Tianshan
Goldfields Limited ("Tianshan" or "the Company")  and its controlled entities.



A controlled entity is any entity controlled by Tianshan, whereby Tianshan has
the power to control the financial and operating policies of an entity so as to
obtain benefits from its activities.



The financial statements of controlled entities are prepared for the same
reporting period as the parent company, using consistent accounting policies.
Accounting policies of controlled entities have been changed where necessary to
ensure consistencies with those policies applied by the parent entity.



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



Where controlled entities have entered or left the consolidated entity during
the year, their operating results have been included/excluded from the date
control was obtained, or until the date control ceased.



Minority interests in the equity and results of the entities that are controlled
are shown as a separate item in the consolidated financial report.



(d) Significant Accounting Judgements, Estimates and Assumptions

The carrying amounts of certain assets and liabilities are often determined
based on estimates and assumptions of future events.  The key estimates and
assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities with the next annual
reporting period are:



(i)   Share based payment transactions

      The group measures the cost of equity settled transactions with employees
and suppliers by reference to the fair value of the equity instrument at the
date at which they are granted.  The fair value is determined by using a Black
and Scholes model, using the assumptions detailed in Note 12.



(e)  Income Tax

Deferred income tax is provided for on all temporary differences at balance date
between the tax base of assets and liabilities and their carrying amounts for
financial reporting purposes.



No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect
on accounting or taxable profit or loss.



Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or liability is settled.  Deferred tax is
credited in the income statement except where it relates to items that may be
credited directly to equity, in which case the deferred tax is adjusted directly
against equity.



Deferred income tax assets are recognised to the extent that it is probable that
future tax profits will be available against which deductible temporary
differences can be utilised.



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 consolidated 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.  The
carrying amount of deferred tax assets is reviewed at each balance date and only
recognised to the extent that sufficient future assessable income is expected to
be obtained.



The carrying amount of deferred income tax assets is reviewed at each balance
and reduced to the extent that it has become probable.  The sufficient taxable
profit will be available to allow all or part of the deferred income tax asset
to be utilised.



Unrecognised deferred income tax assets are reassessed at each balance sheet
date and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered.




1.   STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

(f)  Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value
less, where applicable, any accumulated depreciation and impairment losses.



Plant and Equipment

Plant and equipment are measured on the cost basis less accumulated depreciation
and impairment losses.



Subsequent costs are included in the assets carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the group and the cost of the
item can be measured reliably.  All other repairs and maintenance are charged to
the income statement during the financial period in which they are incurred.



Impairment

Carrying values of assets are reviewed at each balance date to determine whether
there are any objective indicators of impairment that may indicate the carrying
values may not be recoverable in whole or in part.



Where an asset does not generate cash flows that are largely independent it is
assigned to cash generating unit and the recoverable amount test applied to the
cash generating unit as a whole.



Recoverable amount is determined as the greater of fair value less costs to sell
and value in use.  The assessment of value in use considers the present value of
future cash flows discounted using an appropriate pre tax discount rate
reflecting the current market assessments of the time value of money and risks
specific to the asset.



An impairment exists if the carrying value of the asset is determined to be in
excess of its recoverable amount, the asset or cash generating unit is written
down to its recoverable amount.



Depreciation

The depreciable amount of all fixed assets is depreciated on a straight line
basis over their useful lives to the consolidated entity commencing from the
time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset                  Depreciation Rate
Plant and equipment                          10%



The assets residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.



Gains and losses on disposals are determined by comparing proceeds with the
carrying amount.  These gains and losses are included in the income statement.
When revalued assets are sold, amounts included in the revaluation reserve
relating to that asset are transferred to retained earnings.



(g)  Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in
respect of each identifiable area of interest.  These costs are only carried
forward to the extent that the consolidated entity's rights of tenure to that
area of interest are current and that the costs are expected to be recouped
through the successful development of the area or where activities in the area
have not yet reached a stage that permits reasonable assessment of the existence
of economically recoverable reserves.



Accumulated costs in relation to an abandoned area are written off in full
against profit or loss in the year in which the decision to abandon the area is
made.



When production commences, the accumulated costs for 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 to carry forward costs in relation to that area of
interest.



Costs of site restoration are provided over the life of the facility from when
exploration commences and are included in the costs of that stage.  Site
restoration costs include the dismantling and removal of mining plant, equipment
and building structures, waste removal, and rehabilitation of the site in
accordance with clauses of the mining permits. Such costs have been determined
using estimates of future costs, current legal requirements and technology on an
undiscounted basis.


1.   STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

(g)  Exploration and Development Expenditure (Cont'd)

Any changes in the estimates for the costs are accounted on a prospective basis.
In determining the costs of site restoration, there is uncertainty regarding the
nature and extent of the restoration due to community expectations and future
legislation.  Accordingly the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.



(h) Foreign Currency Transactions and Balances

The functional and presentation currency of Tianshan Goldfields Limited is
Australian dollars.



Transactions in foreign currencies are initially recorded in the functional
currency at the exchange rates ruling at the date of the transaction.  Monetary
assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange ruling at the balance sheet date.



All differences in the consolidated financial report are taken to the income
statement with the exception of differences on foreign currency borrowings that
provide a hedge against a net investment in a foreign entity.  These are taken
directly to equity until the disposal of a net investment, at which time they
are recognised in the income statement.



Tax charges and credits attributable to exchange differences on those borrowings
are also recognised in equity.



Non monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate as at the date of the initial
transaction.



Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rate at the date the fair value was determined.



The functional currency of the overseas subsidiaries is Chinese Yuan Rimimbi ("
RMB").



As at the reporting date, the assets and liabilities of these overseas
subsidiaries are translated into the reporting currency of Tianshan at the rate
of exchange ruling at the balance sheet date and the income statements are
translated at the weighted average exchange rates for the period.



The exchange differences on the retranslation are taken directly to a separate
component of equity.



On disposal of a foreign entity, the deferred cumulative amount recognised in
equity is recognised in the income statement.



(i)  Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with
banks, other short term highly liquid investments with original maturities of
three months or less, and bank overdrafts.  Bank overdrafts are shown within
short term borrowings in current liabilities on the balance sheet.



(j)  Revenue

Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the consolidated entity and the revenue is capable of
being reliably measured.



Interest revenue is recognised on a proportional basis taking into account the
interest rates applicable to the financial assets.



All revenue is stated net of the amount of goods and services tax.



 (k)          Goods and Services Tax ("GST")

Revenues, expenses and assets are recognised net of the amount of GST, except
where the amount of GST incurred is not recoverable from the Australian Taxation
Office.  In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.  Receivables and
payables in the balance sheet are shown inclusive of GST.



Cash flows are presented in the cash flow statement on a gross basis, except for
the GST component of investing and financing activities, which are disclosed as
operating cash flows.




1.   STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)



(l)  Share Based Payment Transactions

Equity settled transactions

The Group provides benefits to directors and employees (including senior
executives) of the Group in the form of share based payments, whereby employees
render services in exchange for shares or rights over shares (equity settled
transactions).



The cost of these equity settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date at which they
are granted.  The fair value is determined using the Black & Scholes model,
further details of which are given in Note 12.



In valuing equity settled transactions, no account is taken of any performance
conditions, other than conditions linked to the price of the shares of Tianshan
(market conditions) if applicable.



The cost of equity settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance and/
or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).



The cumulative expense recognised for equity-settled transactions at each
reporting date until vesting date reflects (i) the extent to which the vesting
period has expired and (ii) the Group's best estimate of the number of equity
instruments that will ultimately vest.  No adjustment is made for the likelihood
of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.  The income statement
charge or credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.



No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is only conditional upon a market condition.



If the terms of an equity settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified.  In addition, an expense is
recognised for any modification that increases the total fair value of the share
based payment arrangement, or is otherwise beneficial to the employee, as
measured at the date of modification.



If an equity settled award is cancelled, it is treated as if it had vested on
the date of cancellation, and any expense not yet recognised for the award is
recognised immediately.  However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new awards are treated as if they were a modification
of the original award, as described in the previous paragraph.



(m)          Employee Benefits

Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual
leave and accumulating sick leave expected to be settled within 12 months of the
reporting date are recognised in other payables in respect of employees'
services up to the reporting date. They are measured at the amounts expected to
be paid when the liabilities are settled. Liabilities for non-accumulating sick
leave are recognised when the leave is taken, and are measured at the rates paid
or payable.



Long service leave

The liability for long service leave is recognised in the provision for employee
benefits and measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting date using
the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures, and period of service.
Expected future payments are discounted using market yields at the reporting
date on national government bonds with terms to maturity and currencies that
match, as closely as possible, the estimated future cash outflows.


1.   STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

(n) Contributed Equity

Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.



(o)  Earnings Per Share

Basic earnings per share is calculated as net profit attributable to members of
the parent, adjusted to exclude any costs of servicing equity (other than
dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.



Diluted earnings per share is calculated as net profit attributable to members
of the parent, adjusted for:

*   costs of servicing equity (other than dividends) and preference share
    dividends;

*   the after tax effect of dividends and interest associated with dilutive
    potential ordinary shares that have been recognised as expenses; and

*   other non discretionary changes in revenues or expenses during the period 
    that would result from the dilution of potential ordinary shares; divided
    by the weighted average number of ordinary shares and dilutive potential
    ordinary shares, adjusted for any bonus element.



(p) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to
conform to changes in presentation for the current financial year.




                                                              CONSOLIDATED               PARENT
                                                            2007        2006        2007        2006
                                                           $'000s      $'000s      $'000s      $'000s
2.   REVENUES AND EXPENSES

(a)  Revenue
Other revenue                                                   6           5           6           5
Interest - other persons/corporations                         490         158         488         157

                                                              496         163         494         162

(b)  Expenses
Finance costs:
- interest expense                                              6          88           6          88
- share-based payments                                          -         753           -         753

                                                                6         841           6         841

Depreciation - plant and equipment                             14           8           8           2



Employment and consultancy expenses:
- wages and fees                                              483         465         483         460
- share-based payments:
shares                                                         67           -          67           -
options                                                       157         443         157         443

                                                              707         908         707         903




                                                             CONSOLIDATED               PARENT
                                                           2007        2006        2007        2006
                                                          $'000s      $'000s      $'000s      $'000s

3.   INCOME TAX

Reconciliation to Income Tax Expense on
Accounting Loss

The prima facie income tax expense on pre tax
accounting loss from operations reconciles to
the income tax expense in the financial
statements as follows:

Accounting loss before income tax                         (1,712)     (2,880)     (1,707)     (2,874)

Tax payable at the statutory income tax rate 30%            (513)       (864)       (512)       (862)



Non Deductible Expenses

Sundry non deductible expenditure                               9           1           9           -

Non deductible share based payments                            20          74          20          74

Non deductible option expense                                  47         132          47         132

Foreign exempt expenditure                                    289         378         289         376

Current year timing differences not                        
recognised                                                    148         279         148         280

                                                                -           -           -           -



The Group has a deferred tax asset of $877,138 (2006: $1,547,947) related to tax
losses arising in Australia that are available indefinitely for offset against
future taxable profits of the companies in which the losses arose.



At 30 June 2007, there is no recognised or unrecognised deferred income tax
liability.



Tax Consolidation

Tianshan Goldfields Limited ("Tianshan") and its 100% owned Australian resident
subsidiaries have formed a tax consolidated group with effect from 1 July 2003.
Tianshan is the head entity of the tax consolidated group.  Members of the group
have entered into a tax sharing arrangement in order to allocate income tax
expense to the wholly owned subsidiaries on a pro rata basis.  In addition the
agreement provides for the allocation of income tax liabilities between the
entities should the head entity default on its tax payment obligations.  At the
balance date, the possibility of default is remote.



The allocation of taxes under the tax funding agreement is recognised as an
increase/decrease in the subsidiaries' intercompany accounts with the tax
consolidated group head company, Tianshan. Because under UIG 1052 Tax
Consolidation Accounting the allocation of current taxes to tax consolidated
group members on the basis of accounting profits is not an acceptable method of
allocation given the group's circumstances, the difference between the current
tax amount that is allocated under the tax funding agreement and the amount that
is allocated under an acceptable method is recognised as a contribution/
distribution of the subsidiaries' equity accounts.  The group has applied the
group allocation approach in determining the appropriate amount of current taxes
to allocate to members of the tax consolidated group.





4.   SEGMENT REPORTING

During the financial year, the consolidated entity operated predominantly in the
gold exploration sector in the Peoples Republic of China.



                                                                                    CONSOLIDATED
                                                                                2007             2006
                                                                          Cents Per Share  Cents Per Share

5.   EARNINGS PER SHARE

Basic earnings per share                                                         (0.92)           (2.55)


                                                                               $'000s            $'000s

Loss used in calculation of total basic earnings per share                      (1,712)          (2,880)



Weighted average number of ordinary shares for the purposes of              
basic earnings per share                                                    185,905,108      113,543,309

Effect of dilution:

-   share options                                                                    --               --

Weighted average number of ordinary shares adjusted for the             
effect of dilution                                                          185,905,108      113,543,309

As the group made a loss for the period diluted earnings per
share has not been calculated as the impact would be to reduce
the loss per share.




                                                            CONSOLIDATED                PARENT
                                                          2007        2006         2007         2006
                                                        $'000s      $'000s       $'000s       $'000s

6.   CASH AND CASH EQUIVALENTS

Cash at bank and on hand                                  7,662      19,442        6,297       16,751



Cash at bank earns interest at floating rates based on daily bank deposit
rates.



(i)  Acquisition of Business

On 25 July 2005, Tianshan announced to the Australian Stock Exchange ("ASX") the
acquisition of the minority interest (31.8%) in the partly owned subsidiary
Mineral Securities (Xinjiang) Pty Limited ("MSJ") which holds the Company's
interest in the Gold Mountain Project in China.



The first tranche of consideration payable to the minority shareholders
comprised 1,913,604 fully paid ordinary shares.  Subsequently, the Company
advised the ASX on 18 October 2005 that pursuant to the final agreement the
Vendors were entitled to receive 6,075,491 shares as final consideration.  On
behalf of the Vendors, the Company arranged for the final tranche of
consideration shares to be placed with a European institutional investor.  The
cash received was then forwarded to the Vendors.



The acquisition of the minority interests in MSJ to give the Company 100%
ownership of MSJ is an important milestone as it both simplifies the ownership
structure and increases the Company's earn in capacity in the Gold Mountain
Project.


6.   CASH AND CASH EQUIVALENTS (Cont'd)

                                                                        2006

                                                                       $'000s
The purchase price was as follows:

-    consideration in shares                                              280

-    cash consideration                                                 1,094

Total                                                                   1,374

Assets and liabilities acquired at acquisition date:

-    cash                                                                   -

-    investment in Mineral Securities (Xinjiang) Pty                    1,080
Limited
-    deferred exploration, evaluation and                                 293
developments costs
Total                                                                   1,373

The cash outflow on acquisition is as follows:

-    net cash acquired with controlled                                      -
entity
-    cash paid                                                         (1,094)

Net Cash Outflow                                                       (1,094)




The assets and liabilities arising from the acquisition are recognised at fair
values which are equal to their carrying value at acquisition date.

                                                             CONSOLIDATED               PARENT
                                                           2007        2006        2007        2006
                                                          $'000s      $'000s      $'000s      $'000s

(ii) Reconciliation of Loss for the Year to
Net Cash Flows from Operating Activities

Loss for the year                                         (1,712)     (2,880)     (1,707)     (2,874)

Depreciation of non current assets                             14           8           8           2

Non cash employment expenses                                  224         443         224         443

Employee benefits                                              19           3          19           3

Unrealised FX loss                                            533          --          --          --

Non cash borrowing expenses                                    --         753          --         753

(Increase)/decrease in assets:

-    current receivables                                      121       (158)         103        (79)

-    exploration, evaluation and development              (8,406)     (6,740)         --          --
     expenditure

Increase/(decrease) in liabilities:

-    current payables                                       (499)         542       (499)         155

Net Cash from Operating Activities                        (9,706)     (8,029)     (1,852)     (1,597)




                                                           CONSOLIDATED               PARENT
                                                         2007        2006        2007        2006
                                                        $'000s      $'000s      $'000s      $'000s

7.   CURRENT TRADE AND OTHER RECEIVABLES

Trade receivables                                            -          71           -          16

Sundry debtors                                              37          74           1          74

GST recoverable                                             18          32          18          32

                                                            55         177          19         122


Trade receivables are non interest bearing and are generally on 30 day terms.


8.   OTHER FINANCIAL ASSETS

At cost

Controlled entities - unlisted                               -           -      1,552          382




9.   RECEIVABLES (NON CURRENT)

Loans to controlled entities                                 -           -     21,337       14,280




The recoverability of loans to controlled entities is dependant on the
successful development and commercial exploitation or sale of the mineral
exploration assets held by these entities.




10. PROPERTY, PLANT AND EQUIPMENT

Cost (adjusted for foreign exchange)                       311         307         74           75

Accumulated depreciation and impairment                    (94)        (56)       (10)          (2)

Net carrying amount                                        217         251         64           73



Plant and Equipment

At beginning of year, net of accumulated                   251         142         73            2
depreciation and impairment

Additions                                                   17         120          -           73

Exchange adjustment                                        (23)         (3)         -            -

Depreciation charge for the year                           (28)         (8)        (8)          (2)

At end of year, net of accumulated                      
depreciation and impairment                                217         251         65           73






The useful life of the assets was estimated as follows for both 2007 and 2006:

Plant and equipment           4 to 10 years




                                                           CONSOLIDATED                PARENT
                                                         2007         2006        2007        2006
                                                          $            $            $           $

11. DEFERRED EXPLORATION EXPENDITURE
Costs carried forward in respect of:

Explorations and Evaluations Phase - At
Cost

-    acquisition of prospects                             3,710        3,710           -           -

-    direct expenditure                                  19,549       12,207           -           -

Total Exploration Expenditure                            23,259       15,917           -           -




The recoupment of costs carried forward in relation to areas of interest in the
exploration and evaluation phases are dependent on the successful development
and commercial exploitation or sale of the respective areas.






                                                        2007          2007         2006         2006
                                                         No         Weighted        No        Weighted
                                                                     Average                   Average
                                                                     Exercise                  Exercise
                                                                       Price                     Price

                                                          $               $          $             $

12. SHARE BASED PAYMENT PLAN
Outstanding options at the beginning of       
the year                                              34,841,431        $0.22    5,500,000        $0.20

Granted during the year                                1,500,000        $0.40   29,841,431        $0.22

Forfeited during the year                                      -            -            -            -

Exercised during the year                              (462,500)        $0.20    (500,000)        $0.20

Expired during the year                              (1,000,000)        $0.40            -            -

Outstanding at the end of the year                    34,878,931        $0.22   34,841,431        $0.22

Exercisable at the end of the year                   34,628,931                 34,008,097




The outstanding balance as at 30 June 2007 is represented by:

*    13,607,502 options over ordinary shares with an exercise price of $0.20
     each, exercisable until 30 June 2008;

*    8,571,429 options over ordinary shares with an exercise price of $0.175
     each, exercisable until 30 June 2008;

*    4,600,000 options over ordinary shares with an exercise price of $0.20
     each, exercisable until 16 October 2008;

*    833,333 options over ordinary shares with an exercise price of $0.20 each,
     exercisable until 31 December 2008;

*    983,333 options over ordinary shares with an exercise price of $0.25 each,
     exercisable until 31 December 2008;

*    983,334 options over ordinary shares with an exercise price of $0.30 each,
     exercisable until 31 December 2008;

*    2,000,000 options over ordinary shares with an exercise price of $0.40
     each, exercisable until 31 December 2008; and

*    3,300,000 options over ordinary shares with an exercise price of $0.34
     each, exercisable until 13 December 2007.



The weighted average remaining contractual life for the share options
outstanding as at 30 June 2007 is between one and two years (2006: 1 and 2
years).



The range of exercise prices for options outstanding at the end of the year was
$$0.175-$0.50 (2006: $0.175-$0.40).



The weighted average fair value of options granted during the year was $0.25
(2006: $0.07).



The fair value of the equity settled share options granted under both the option
and the loan plans is estimated as at the date of grant using a Black & Scholes
model taking into account the terms and conditions upon which the options were
granted.




12.     SHARE BASED PAYMENT PLAN (Cont'd)



The following table lists the inputs to the model used for the year ended 30
June 2006:


                                                                       2007         2006

Volatility (%)                                                        87.0%         77.0%

Risk free interest rate (%)                                           6.25%          6.0%

Weighted average share price at grant date (cents)                   $0.187        $0.225




The expected life of the options is based on historical data and is not
necessarily indicative of exercise patterns that may occur. The expected
volatility reflects the assumption that the historical volatility is indicative
of future trends, which may also not necessarily be the actual outcome. No other
features of options granted were incorporated into the measurement of fair
value.



                                                        CONSOLIDATED               PARENT
                                                      2007        2006        2007        2006
                                            Notes    $'000s      $'000s      $'000s      $'000s

13. TRADE AND OTHER PAYABLES
Trade payables                               (i)           977       1,693          21         236

Other creditors                              (i)            19         285          19         286

                                                           996       1,978          40         522



(i)    Trade payables and other creditors are non interest bearing and are
normally settled on 30 day terms.



14. INTERST BEARING LOANS AND BORROWINGS

Mezzanine loan                                               -       1,500          -       1,500

                                                             -       1,500          -       1,500




The mezzanine loan has been made from Mineral Securities Limited.  The loan was
repayable by 31 December 2007.  Interest is payable at 8.66%.  The loan was
repaid in full on 19 July 2006.



15. CONTRIBUTED EQUITY AND RESERVES                                          CONSOLIDATED AND PARENT
                                                                                  2007        2006
                                                                                 $'000s      $'000s

Issued capital                                                                    36,650      35,457



Fully paid ordinary shares carry one vote per share and carry the right to dividends.


                                                                               Number      $'000s

Movement in ordinary shares on issue

At 1 July 2005                                                                82,736,001      12,324

Public equity raising                                                         27,340,001       4,101

Public equity raising                                                         12,000,000       3,000

Public equity raising                                                         55,000,000      16,563

Issued as consideration for acquisition of                                     7,989,095       1,374
controlled entity

Issued for cash on exercise of share                                          
options                                                                          500,000         100

Share issue costs                                                                      -     (1,445)

Reclassification of issued equity to          
equity benefits reserve                                                                -       (559)

At 1 July 2006                                                               185,565,097      35,457



Un-allotted Shares1                                                           26,000,000       1,170

Share issue costs                                                                      -       (137)

Share-based payment                                                              240,000          67

Options converted                                                                462,500          93

At 30 June 2007                                                              212,267,597      36,650




*       1 On 16 October 2003, the Company issued one preference share to Mineral
Securities Limited as part of the consideration in acquiring 100% of Tulasi Gold
Pty Ltd.  The preference share converts to 26 million ordinary shares upon,
amongst other terms and conditions, confirmation of two million gold resource
ounces within the Gold Mountain Project (including one million measured or
indicated to JORC standard).  The conversion of the preference share will
require shareholder approval at the next annual general meeting planned for
November 2007.  Until then the directors of the Company have determined that it
is probable that the conditions of the preference share will be met and as a
result have recognised the additional acquisition cost of $1,170,000 in Tulasi
Gold Pty Ltd with a corresponding increase in unallotted shares, as at 30 June
2007;



15.        CONTRIBUTED EQUITY AND
           RESERVES (Cont'd)

                                                           Equity Benefits      Currency         
                                                               Reserve         Translation
                                                                                 Reserve            Total
                                                                $'000s            $'000s            $'000s

Reserves - Consolidated

At 1 July 2005                                                     30                69               99

Foreign currency translation                                        -               630              630
Share-based payments - employee benefits                          443                 -              443
Share-based payments - capital raising costs                      283                 -              283
Share-based payments - finance costs                              754                 -              754

Issue of attaching option with Sept 2005 placement                559                 -              559
At 30 June 2006                                                 2,068               699            2,767

Share-based payments - employee benefits                          157                                157

Foreign currency translation                                        -           (1,575)          (1,575)

At 30 June 2007                                                 2,225             (876)            1,349



Reserves - Parent

At 1 July 2005                                                     30                 -               30

Share-based payments - employee benefits                          443                 -              443
Share-based payments - capital raising costs                      283                 -              283
Share-based payments - finance costs                              754                 -              754
Issue of attaching option with Sept 2005       
placement                                                         558                 -              558

At 30 June 2006                                                 2,068                 -            2,068

Share-based payments - employee benefits                          157                 -              157

At 30 June 2007                                                 2,225                 -            2,225




Refer to the Statement of Changes in Equity for a reconciliation of movements in
accumulated losses and minority interest.

Nature and Purpose of Reserves

Employee equity benefits reserve

This reserve is used to record the value of equity benefits provided to
directors, employees and external service providers as part of their fees and
remuneration.



Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign
subsidiaries.






16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICES

Credit risk

The consolidated entity's maximum exposures to credit risk at reporting date in
relation to each class of recognised financial assets, other than derivatives,
is the carrying amount of those assets as indicated in the balance sheet.  The
maximum credit risk exposure does not take into account the value of any
collateral or other security held, in the event other entities/parties fail to
perform their obligations under the financial instruments in question.



It is the Group's policy that all customers who wish to trade on credit terms
are subject to credit verification procedures.



There are no significant concentrations of credit risk within the Group.





17. FINANCIAL INSTRUMENTS

Set out below is a comparison by category of carrying amounts and fair values of
all of the Group's financial instruments recognised in the financial statements,
including those classified under discontinued operation.



Market values have been used to determine the fair value of listed available for
sale investments.



The fair values of derivatives and borrowings have been calculated by
discounting the expected future cash flows at prevailing interest rates. The
fair values of loan notes and other financial assets have been calculated using
market interest rates.
                                     < 1year       > 1- < 2     Total         Weighted Average
                                                   Years                  Effective Interest Rate
Consolidated                          $'000s       $'000s       $'000s               %


30 June 2007

Financial Assets

Floating rate

Cash assets                               7,662            -        7,662           5.5%



Financial Liabilities                         -            -            -           n/a



Parent

30 June 2007

Financial Assets

Floating rate

Cash assets                               6,297            -        6,297           5.5%


Financial Liabilities                         -            -            -           n/a





17.        FINANCIAL INSTRUMENTS (Cont'd)

                                     < 1year      > 1- < 2      Total         Weighted Average
                                                   Years                  Effective Interest Rate
Consolidated                          $'000s       $'000s       $'000s               %

30 June 2006

Financial Assets

Floating rate

Cash assets                              19,442            -       19,442                    5.15%

Financial Liabilities

Floating rate

Mezzanine loan                                -        1,500        1,500                    8.66%



Parent

30 June 2006

Financial Assets

Floating rate

Cash assets                              16,751            -       16,751                    5.15%

Financial Liabilities

Floating rate

Mezzanine loan                                -        1,500        1,500                    8.66%








18. RELATED PARTY DISCLOSURE

The consolidated financial statements include the financial statements of
Tianshan and the subsidiaries listed in the following table:

                                         Country of       % Equity Interest        Investment    ($'000s)
                                       Incorporation      2007        2006               2007        2006

Tulasi Gold Pty Ltd                      Australia        100         100               1,552         382
Mineral Securities (Xinjiang) Pty Ltd    Australia        100         100                   2           2
Xinjiang Gold Mountain Mining Co Ltd       China           90          90              20,287      13,202
Maingrove Pty Ltd                        Australia         80          80                   -           -
Pan Ausino Pty Ltd                       Australia        100         100               1,081       1,081






19. EVENTS AFTER THE BALANCE SHEET DATE

No matters or circumstances have arisen since the end of the financial year
which significantly affected, or may significantly affect, the operations of the
group, the results of those operations, or the state of affairs of the group in
future financial years.


20. AUDITORS' REMUNERATION

The auditors of Tianshan are HLB Mann Judd.


                                                              CONSOLIDATED                PARENT
                                                           2007         2006        2007         2006
                                                             $           $            $           $

Amounts received or due and receivable by HLB
Mann Judd for:

An audit or review of the financial report of      
the entity and any other entity in the
consolidated group                                         28,320       38,000      28,320       38,000



Amounts received or due and receivable by
auditors other than HLB Mann Judd for

-    an audit or review of the financial                    3,500        3,216       3,500        3,216
     report of subsidiaries

                                                           31,820       41,216      31,820       41,216

Amounts received or due and receivable by non
HLB Mann Judd audit firms

Other non audit services - AIM Listing                         --      104,500          --      104,500





21. DIRECTORS AND EXECUTIVE DISCLOSURES


(a)  Details of Key Management Personnel

(i)   Directors

      K S Liddell        (Non Executive Chairman)

      G Thomas           (Managing Director)

      D B Evans          (Executive Director)

      M J Ashley         (Non Executive Director) (Resigned 10 September 2007)


(ii) Executives

     J Bontempo               Company Secretary

     M J Bolton               Company Secretary



There were no changes to key management personnel between the reporting date and
the date the financial report was authorised for issue



(b)  Compensation of Key Management Personnel
                                                             CONSOLIDATED               PARENT
                                                           2007        2006        2007        2006
                                                             $           $           $           $

Key Management Personnel
Short-term                                                470,000     434,167     470,000     434,167
Post-employment                                            20,190       2,700      20,190       2,700
Value of Share Options                                    100,040     395,986     100,040     395,986

                                                          590,230     832,853     590,230     832,853



The Company has applied the exemption under Corporations Amendments Regulation
2006 to transfer key management personnel remuneration disclosures required by
Accounting Standard AASB 124 Related Party Disclosures paragraphs Aus 25.4 to
Aus 25.7.2 to the Remuneration Report section of the Directors' Report.  These
transferred disclosures have been audited.

21. DIRECTORS AND EXECUTIVE DISCLOSURES (Cont'd)



(c)  The following table sets out the responsibilities and interest of directors
     in the Company:
                                                                       Ordinary Shares     Options Over
                                                                                         Ordinary Shares
                              Special Responsibilities

K S Liddell 1   Non Executive Chairman and Chairman of the                37,152,118           11,604,427
                Remuneration Committee
G Thomas        Managing Director with special responsibility for                  -            1,500,000
                management of operations and exploration
D B Evans       Executive Director with special responsibility for           829,000            1,000,000
                project feasibility studies
M J Ashley      Non Executive Director (resigned 10 September 2007)        1,000,000              500,000



1.   The 37,152,118 shares and 11,104,427 options are owned by Mineral
     Securities Limited, a company of which Mr Liddell is Executive Chairman.



(d) Option Holdings of Key Management Personnel


30 June 2007     Balance at    Granted as     Options  Net Change  Balance at        Vested at 30 June 2007
                 Beginning   Remuneration   Exercised     Other       End of
                 of Period                                           Period                                
                   1 July                                            30 June     Total        Not     Exercisable
                    2006                                              2007                Exercisable

Directors

K S Liddell        300,0001        500,000             10,804,427 11,604,427  11,604,427           -  11,604,427
G Thomas          1,500,000              -          -           -   1,500,000  1,500,000           -   1,500,000
D B Evans         1,000,000        500,000          -           -   1,500,000  1,500,000               1,500,000
M J Ashley          500,000              -          -           -     500,000    500,000           -     500,000  
Executives      
 J Bontempo               -        500,000          -           -     500,000    500,000     250,000     250,000
M Bolton            800,000                             (400,000)     400,000    400,000           -     400,000

Total             4,100,000      1,500,000          -  10,404,427  16,004,427 16,004,427     250,000  16,004,427



1. These options are owned by Mineral Securities Limited, a company of which 
   Mr Liddell is Executive Chairman.


30 June 2006    Balance at   Granted as    Options  Net Change  Balance at      Vested at 30 June 2006
                Beginning  Remuner-ation  Exercised    Other      End of
                of Period                                         Period
                  1 July                                         30 June     Total       Not     Exercisable
                   2005                                            2006              Exercisable
Directors
K S Liddell        300,000              -         -           -    300,000  300,0002           -     300,000
D B Evans                -      1,000,000         -   1,000,000  1,000,000 1,000,000    333,3341     666,666
G Thomas                 -      1,500,000         -   1,500,000  1,500,000 1,500,000    500,0001   1,000,000
M J Ashley               -        500,000         -     500,000    500,000   500,000           -     500,000
Executives
M Bolton           800,000              -         -     800,000    800,000   800,000           -     800,000
Total            1,100,000      3,000,000         -   3,800,000  4,100,000 4,100,000     833,334   3,266,666



1.     Exercisable from 31 December 2006.

2.     These options are owned by Mineral Securities Limited, a company of which
Mr Liddell is Executive Chairman.



21. DIRECTORS AND EXECUTIVE DISCLOSURES (Cont'd)



(e)  Shareholdings of Key Management Personnel

                           Balance            Granted as      On Exercise of    Net Change       Balance
                         1 July 2006         Remuneration        Options           Other       30 June 2007
30 June 2007                  Ord                 Ord               Ord              Ord            Ord
Directors
K S Liddell               13,045,4511                  -                -    24,106,6671      37,152,1181
D B Evans                     829,000                  -                -              -          829,000
G Thomas                            -                  -                -              -
M J Ashley                  1,000,000                  -                -              -        1,000,000
Executives
J Bontempo                          -                  -                -        240,000          240,000
Total                      13,145,451                  -                -        240,000       39,221,118



1. These shares are owned by Mineral Securities Limited, a company of which Mr
 Liddell is Executive Chairman.

                           Balance            Granted as        On Exercise of     Net Change       Balance
                         1 July 2005         Remuneration          Options            Other
                                                                                               30 June 2006
30 June 2006                 Ord                 Ord                 Ord               Ord              Ord
Directors
K S Liddell               13,045,4511                  -                -               -       13,045,4511
D B Evans                     100,000                  -                -         729,000           829,000
G Thomas                            -                  -                -               -                 -
M J Ashley                          -                  -                -       1,000,000         1,000,000
Executives
J Bontempo                          -                  -                -               -                 -
Total                      13,145,451                  -                -       1,729,000        14,874,451



1.     These shares are owned by Mineral Securities Limited, a company of which
       Mr Liddell is Executive Chairman.




21. DIRECTORS AND EXECUTIVE DISCLOSURES (Cont'd)



(f)  Other Transactions with Key Management Personnel



Mr David Evans was paid $60,000 (2006: $105,000) during the year under the terms
of his service agreement.



Administration services were provided during the year by Mineral Securities
Limited ("Minsec"), a company of which Mr Liddell is a director and has a
beneficial interest. The value of the services provided by Minsec during the
year was $240,000 (2006: $180,000).



On 7 September 2005, the Company entered into an unsecured mezzanine debt
facility of $1.5m with Minsec.  The facility was extended and subsequently drawn
down on 20 January 2006.  Pursuant to the facility, Minsec was issued with
8,571,429 options exercisable at $0.175 per option on or before 30 June 2008.
These options were valued and booked to the profit and loss in the financial
statements in the year ended 30 June 2006 at $753,628.



The facility purpose was to fund the commencement of the 2006 exploration
programme at the Gold Mountain Project, and for working capital purposes.  The
issue of the options to Minsec was approved by the Company's shareholders at a
general meeting held on 20 October 2005.



On 18 July 2006, Tianshan repaid an unsecured mezzanine debt facility of $1.5m
with Minsec in full including any outstanding interest. Total interest paid
during the period of the loan amounted to $64,249 plus the payment of a
mezzanine loan establishment fee of $30,000.



All services provided by companies associated with directors were provided
on commercial terms.



21.           ANNUAL REPORT AND ACCOUNTS


The Annual Report and accounts have been dispatched to shareholders and further
copies can be obtained from the Company's website
www.tianshangoldfields.com.au




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

FR OKCKPABDDBDB

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