VARIABLE REMUNERATION – LONG TERM INCENTIVE (LTI) The objective of the LTI plan is to reward executives in a manner that aligns remuneration with the creation of  shareholder wealth. LTI – Share options Structure LTI awards to executives are made under the Metals X Limited Employee Option Scheme and are delivered in  the form of shares options. The number of options issued is determined by the policy set by the remuneration  committee and is based on each executive’s role and position with the Consolidated Entity.  The share options will vest after one year or as determined by the Board of Directors and executives are able to  exercise the share options for up to three years after vesting before the options lapse. Where a participant ceases  employment prior to the vesting of their share options, the share options are forfeited. Where a participant ceases  employment after the vesting of their share options, the share options automatically lapse after six months of  ceasing employment.  Table 3 provides details of LTI options granted and the value of options granted, exercised and lapsed during the year. Hedging of equity awards The Company does not have a policy to prohibit executives from entering into arrangements to protect the value  of unvested LTI awards. 5. COMPANY PERFORMANCE AND THE LINK TO REMUNERATION Remuneration is not linked to the performance of the Company but rather on the ability to attract and retain  executives of the highest calibre. The overall remuneration policy framework however is structured in an  endeavour to advance/create shareholder wealth. The Metals X Limited Employee Option Scheme has no direct performance requirements but has specified time  restrictions on the exercise of options. The granting of options is in substance a performance incentive which  allows executives to share the rewards of the success of the Company. The Consolidated Entity’s performance is reflected in the following table:  30 June 2007 30 June 2008 30 June 2009 30 June 2010 30 June 2011 Closing share price $0.39 $0.41 $0.11 $0.10 $0.26 Profit/(loss) per share (cents) -0.44 -0.76 -4.82 0.92 4.56 Net tangible assets per share $0.18 $0.20 $0.15 $0.15 $0.19 Total Shareholder Return 90% 4% -73% -13% 166% 32  DIRECTORS’ REPORT