COPY OF FINAL PROSPECTUS - Mirabela Nickel

MIRABELA NICKEL LIMITED
NOTES TO FINANCIAL STATEMENTS (Continued)
For the year ended 30 June 2006
14. EMPLOYEE BENEFITS (Continued)
Consolidated and parent entity — 2005
Vested and
Balance at Granted Exercised Forfeited Balance at exercisable at
Exercise start of the during the during the during the end of the end of the
Grant date Expiry date price year year year year year year
Number Number Number Number Number Number
25/05/2005 ...... 30/06/2009 $0.60 — 1,200,000 — — 1,200,000 —
16/06/2005 ...... 30/06/2009 $0.60 — 400,000 — — 400,000 —
— 1,600,000 — — 1,600,000 —
Weighted average exercise price ........ $ 0.60 $ 0.60
The options outstanding at 30 June 2006 have an exercise price in the range of $0.60 to $0.95 and a weighted average contractual life of
four years.
During the financial year, no options issued under the plan were exercised (2005: nil).
The fair value of services received in return for share options granted are measured by reference to the fair value of share options
granted. The estimate of the fair value of the services received is measured based on the binominal option-pricing model. The
contractual life of the option is used as an input into this model. Expectations of early exercise are incorporated into the binominal
option-pricing model.
Consultant Director Consultant
options options options
issued on issued on issued on
25 May 2005 16 June 2005 24 April 2006
Fair value at measurement date ($) .............................. 0.3811 0.3811 0.4139
Share price ............................................. 54 54 92
Exercise price ............................................ 60 60 95
Expected volatility
(expressed as weighted average volatility used in the modelling under binominal
option-pricing model) ...................................... 100 100 75
Option life
(expressed as weighted average life used in the modelling under binominal optionpricing
model) .......................................... 4 years 4 years 4 years
Expected dividends ........................................ — — —
Risk-free interest rate
(based on national government bonds) ........................... 5.305 5.305 5.750
The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life of the share options),
adjusted for any expected changes to future volatility due to publicly available information.
Share options are granted under a service condition and, for grants to key management personnel, market and non-market performance
conditions. Non-market performance conditions are not taken into account in the grant date fair value measurement of the services
received.
b) Expenses arising from share-based transactions
Consolidated The Company
2006 2005 2006 2005
AUD AUD AUD AUD
Share options granted in 2005 — equity settled ............................ 31,335 — 31,335 —
Share options granted in 2006 — equity settled ............................ 211,004 — 211,004 —
Total expense recognised as employee costs .............................. 242,339 — 242,339 —
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