AFFILIATE TRANSACTIONS

9 Months Ended

Jul. 31, 2011

AFFILIATE TRANSACTIONS

(4)           AFFILIATE TRANSACTIONS

The Company entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide management and administration services to the Company. AXIS is affiliated through common management. The Company is one of ten affiliated companies to which AXIS provides services. Each of the companies has some common Directors, officers and shareholders. Currently, there are no material arrangements or planned transactions between the Company and any of the affiliated companies other than AXIS.

During the nine months ended July 31, 2011, AXIS provided services in accordance with the services agreement, incurred direct costs on behalf of the Company and provided funding of $2,098,062. The amounts owed to AXIS as of July 31, 2011 and October 31, 2010 was $3,432,742 and $1,079,272 respectively and are reflected in non current liabilities - advance from affiliates. During the nine months ended July 31, 2011 and 2010, AXIS did not charge interest.

The Company intends to repay these amounts with funds raised either via additional debt or equity offerings, but as this may not occur within the next 12 months. AXIS has agreed not to call the advance within the next twelve months and accordingly the Company has classified the amounts payable as non-current in the accompanying balance sheet.