COPY OF FINAL PROSPECTUS - Mirabela Nickel

MIRABELA NICKEL LIMITED
NOTES TO FINANCIAL STATEMENTS (Continued)
For the year ended 30 June 2006
23. RELATED PARTIES (Continued)
Value of options issued to Directors and executives
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 options Director options Consultant options
issued on issued on issued on
25 May 2005 16 June 2005 24 April 2006
Fair value at measurement date (cents per option) ........... 0.3811 0.3811 0.4139
Share price (cents per share) ......................... 54 54 92
Exercise price (cents per option) ...................... 60 60 95
Expected volatility
(expressed as weighted average volatility used in the modelling under
binominal option-pricing model) ...................... 100 100 75
Consultant options Director options Consultant options
issued on issued on issued on
25 May 2005 16 June 2005 24 April 2006
Option life
(expressed as weighted average life used in the modelling under
binominal option-pricing 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.
Loans to key management personnel and their related parties (consolidated)
No loans have been made during the reporting period and at the reporting date there were no loans outstanding to key management
personnel and their related parties (2005: nil).
Other key management personnel transactions with the Company or its controlled entities
A number of key management persons, or their related parties, hold positions in other entities that result in them having control or
significant influence over the financial or operating policies of those entities.
A number of these entities transacted with the Company or its subsidiaries in the reporting period. The terms and conditions of the
transactions with management persons and their related parties were no more favourable than those available, or which might
reasonably be expected to be available, on similar transactions to non-director related entities on an arm’s length basis.
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