ARK MINES LIMITED — Interim / Quarterly Report 2012

Mar 14, 2012

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Ark Mines Limited

ACN 123 668 717

Half-Yearly Financial Report

for the period ended 31 December 2011

Lodged with the ASX under Listing Rule 4.2A. This information should be read in conjunction with the 30 June 2011 Annual Report.

Table of Contents:	Page
Corporate Directory	1
Directors' Report	2
Auditor’s Independence Declaration	3
Financial Report
Statement of Comprehensive Income	4
Statement of Financial Position	5
Statement of Cash Flows	6
Statement of Changes in Equity	7
Notes to the Financial Statements	8 - 12
Directors Declaration	13
Independent Auditor's Report	14 - 15
Schedule of Tenements	16

CORPORATE DIRECTORY

ARK MINES LTD
Corporate Directory
31 December 2011
Directors	Antony Corel
	Roger Jackson
	Robert McLennan
	Ian Mitchell
	John Slade
Company Secretary	Ian Mitchell
Registered Office	Websters Solicitors and Barristers
	Level 11
	37 Bligh Street
	Sydney NSW 2000
Principal place of business	Suite C, Level 4
	140 William Street
	Woolloomooloo NSW 2011
Share Register	Gould Ralph Pty Ltd
	Level 42 Suncorp Place
	259 George Street
	Sydney NSW 2000
Auditor	PKF (East Coast Practice)
	Level 10
	1 Margaret Street
	Sydney NSW 2000
Solicitors	Websters Solicitors and Barristers
	Level 11
	37 Bligh Street
	Sydney NSW 2000
Bankers	National Australia Bank
	Level 15, Ernst and Young Centre
	680 George Street
	Sydney NSW 2000
Stock Exchange Listing	Ark Mines Ltd shares are listed on the Australian
	Securities Exchange (ASX code: AHK)
Website address	www.arkmines.com.au

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Ark Mines Ltd ACN 123 668 717 Page 1

DIRECTORS’ REPORT

The Directors of Ark Mines Limited (“Ark” or “the Company”) have pleasure in submitting their report for the half-year ended 31 December 2011.

DIRECTORS

The names of the directors of the Company in office during the half-year period and until the date of this report are:

Antony Corel Roger Jackson Robert McLennan Ian Mitchell John Slade

REVIEW OF OPERATIONS AND OPERATING RESULTS

The principal activity of the Company was the exploration and evaluation of gold, base metal and rare earth element projects. No change in the principal activity occurred during the period. A full list of tenements is disclosed on the last page of the financial report.

The Company listed on the Australian Stock Exchange on the 9th May 2011, after issuing 15,500,000 ordinary fully paid shares at 20c each raising a total of $3,100,000 before share issue costs. On the 26 September 2011 the Company issued a further 4,200,000 ordinary fully paid shares for $1,050,000 before costs. During the period the Company's interest in EL6338 Babinda lapsed resulting in an impairment loss of $1,145,177 in the Statement of Comprehensive Income. Overall, the Company had a net reduction of $458,468 on exploration and evaluation assets in its Statement of Financial Position.

The loss after income tax for the half-year ended 31 December 2011, attributable to the members of Ark Mines Limited, was $1,859,166, which includes an impairment for the lapsed tenement of $1,145,177 (prior period loss after tax of $118,160). During the half-year the Company paid a $259,000 deposit in relation to acquiring a Contract of Works (COW) in Indonesia,.

SUBSEQUENT EVENTS

No matters or circumstances have arisen since the end of the financial period, not otherwise dealt with in the financial report, which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration on page 3, as required under Section 307C of the Corporations Act 2001 , is attached to and forms part of the Directors Report for the half-year ended 31 December 2011.

Signed in accordance with a resolution of the directors.

Sydney, 15 March 2012.

Antony Corel Chairman

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Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001

To: the directors of Ark Mines Limited I declare to the best of my knowledge and belief, in relation to the review for the financial half-year ended 31 December 2011 there have been:

• no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and

• • no contraventions of any applicable code of professional conduct in relation to the review.

• PKF John Bresolin 15 March 2012 Partner Sydney

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726 Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia

The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

Page 3

STATEMENT OF COMPREHENSIVE INCOME

ARK MINES LTD

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 DECEMBER 2011

	Note	Half-year end 31 December 31 December 2011 2010 $ $ 53,936 23,091 56,886 - 20,536 - 20,000 9,000 1,118 100 15,000 - 14,610 22 71,979 30,777 121 - 238,439 91,250 5,741 - 1,145,177 - 13,369 7,379 144,995 - 31,063 38 11,920 1,800 12,702 - 23,730 - 85,716 885 1,913,102 141,251 (1,859,166) (118,160) - - (1,859,166) (118,160) - - (1,859,166) (118,160) (6.16) (0.27) (6.16) (0.27)
		31 December
		2011
		$
Revenue from ordinary activities	2	53,936
Less expenses: Accounting expenses ASX fees Audit fees Bank fees Company secretarial fees Computer and communication expenses Consulting fees Depreciation Directors' fees Finance costs Impairment Insurance Legal fees Office expenses Rent Share registry costs Standstill payment – Marsuparia Travel and accommodation expenses	2 3	56,886 20,536 20,000 1,118 15,000 14,610 71,979 121 238,439 5,741 1,145,177 13,369 144,995 31,063 11,920 12,702 23,730 85,716
Total expenses		1,913,102
Loss from continuing operations before income tax Income tax expense Loss from continuing operations after income tax Othercomprehensiveincomeforthe period		(1,859,166) -
		(1,859,166) -
Total comprehensive income for the period		(1,859,166)
Earnings per share Basic - cents per share Diluted - cents per share		(6.16) (6.16)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

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STATEMENT OF FINANCIAL POSITION

ARK MINES LTD STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other financial assets Prepayments TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation expenditure Enviromental bonds Deposits paid Plant and equipment Other assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES	CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other financial assets Prepayments TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation expenditure Enviromental bonds Deposits paid Plant and equipment Other assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES	Note 4 3 5	Note 4 3 5	As at 31 December 2011		As at
						30 June
						2011
				$ 1,605,418 37,171 - 6,580 1,649,169 2,346,383 50,000 259,000 1,468 990 2,657,841 4,307,010 127,980 127,980 127,980		$
						181,300 60,722 2,000,000 17,992
						2,260,014
						2,804,851 50,000 - 1,588 990
						2,857,429
						5,117,443
						100,372
						100,372
						100,372
NET ASSETS EQUITY Contributed equity Accumulated losses		6		4,179,030 8,197,245 (4,018,215)		5,017,071
						7,176,120 (2,159,049)
TOTAL EQUITY				4,179,030		5,017,071

The above statement of financial position should be read in conjunction with the accompanying notes.

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STATEMENT OF CASH FLOWS

ARK MINES LTD STATEMENT OF CASH FLOWS FOR THE HALF-YEAR PERIOD ENDED 31 DECEMBER 2011

CASH FLOW FROM OPERATING ACTIVITIES Receipt from other income Payments to suppliers and employees Interest received Interest paid	Note	Half-year end	Half-year end
		31 December	31 December
		2011	2010
		$	$
		- (699,493) 53,936 (5,741)	22,727 (37,419) 364 -
Net cash used in Operating Activities		(651,298)	(14,328)
CASH FLOW FROM INVESTING ACTIVITIES Deposit paid Paymentforexplorationand evaluationexpenditure		(259,000) (686,709)	- (670)
Net cash used in Investing Activities		(945,709)	(670)
CASH FLOW FROM FINANCING ACTIVITIES Proceeds from share issue Capital raising costs Prepaid IPO costs		1,050,000 (28,875) -	- - (11,548)
Net cash provided by financing activities		1,021,125	(11,548)
Net decrease in cash held **Cash at beginning of halfyear **		(575,882) 2,181,300	(26,546) 33,067
Cash at end of half year		1,605,418	6,521

The above statement of cash flows should be read in conjunction with the accompanying notes.

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STATEMENT OF CHANGES IN EQUITY

ARK MINES LTD STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR PERIOD ENDED 31 DECEMBER 2011

Balance at 1 July 2010 Total comprehensive income for the period	Issued capital $ 4,237,239 -	Accumulated Losses $ (1,662,189) (118,160)	Total $ 2,575,050 (118,160) 2,456,890 5,017,071 (1,859,166) 1,021,125 4,179,030
Balance at 31 December 2010 Balance at 1 July 2011 Total comprehensive income for the period Ordinary shares issued, net of transaction costs	4,237,239 7,176,120 - 1,021,125	(1,780,349) (2,159,049) (1,859,166) -
Balance at 31 December 2011	8,197,245	(4,018,215)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

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Ark Mines Ltd ACN 123 668 717 Page 7

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF- YEAR ENDED 31 DECEMBER 2011

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

These general purpose financial statements for the interim half-year reporting period ended 31 December 2011 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

New, revised or amending Accounting Standards and Interpretations adopted

The entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The adoption of these Accounting Standards and Interpretations did not have any impact on the financial performance or position of the consolidated entity. The following Accounting Standards and Interpretations are most relevant to the entity:

• AASB 2009-5: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 101, 107]

The amendments to some Australian Accounting Standards arising from AASB 2009-5 result in accounting changes for presentation, recognition or measurement purposes, while some amendments relate to terminology and editorial changes that have little or no effect on the relevant accounting requirements. A summary of the main reporting changes arising from AASB 2009-5 is provided below.

• AASB 101: Presentation of Financial Statements clarifies that the classification of a current liability for which the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date is not affected by the existence of any terms that could, at the option of the counterparty, result in the settlement of the liability by the issue of equity instruments by the entity

• AASB 107: Statement of Cash Flows clarifies that only expenditures that result in a recognised asset in the statement of financial position would be classified as cash flows from investing activities in the statement of cash flows

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Ark Mines Ltd ACN 123 668 717 Page 8

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF- YEAR ENDED 31 DECEMBER 2011

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Going concern

The Company recorded a loss from operations of $1,859,166 for the period ended 31 December 2011 and had cash outflow from operations of $651,298. The Company also entered into an agreement to acquire the issued share capital of a Company that holds a Contract of Works in Indonesia, further details of this acquisition are in Note 5 and 9. On completion of the conditions precedent of the agreement the Company will be required to pay the remaining $741,000 initial payment. Subsequent to payment of the $741,000 should the Company choose to exercise it's option and proceed with the acquisition a further $3,000,000 of cash would be required to complete the acquisition. These conditions may give rise to a material uncertainty which may cast significant doubt over the Company’s ability to continue as a going concern.

The Directors believe the Company will be able to raise additional funds to fund ongoing activities as the Company has been successful in raising funds in the past. On this basis the Directors are of the opinion that the financial statements can be prepared on a going concern basis and the Company will be able to pay its debts as and when they fall due and payable.

Should the Company be unable to continue as a going concern it may be required to realise its assets and discharge its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due.

NOTE 2: LOSS BEFORE INCOME TAX EXPENSE Losses before income tax expense have been determined after: (a) Income - Bank interest Total revenue from operating activities (b) Expenses Finance costs: - Related party interest - Bank interest Total borrowing costs	Half-year ended	Half-year ended
	31 December 2011 $ 53,936 53,936 5,000 741 5,741	31 December
		2010
		$
		364
		364
		- -
		-

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Ark Mines Ltd ACN 123 668 717 Page 9

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF- YEAR ENDED 31 DECEMBER 2011

	As at	As at
31	December	30 June
	2011	2011
	$	$

NOTE 3: EXPLORATION AND EVALUATION EXPENDITURE - NON CURRENT

Opening balance Capitalised during the period Impaired during the period Closing balance	2,804,851 686,709 (1,145,177) 2,346,383	2,496,612 308,239 -
		2,804,851

During the period EL6338 Babinda expired and was not renewed by the New South Wales Department of Primary Industries. This is in the process of being appealed. This resulted in the asset being impaired subject to the outcome of the appeal process.

The ultimate recoupment of costs carried forward for exploration and evaluation expenditure is dependent on the successful development and commercial exploitation or sale of respective areas. The Company reviews annually the carrying value of the capitalised exploration and evaluation expenditure, and will capitalise the expenditure if it considers the area of interest to be prospective. Should the particular area of interest no longer be considered prospective, then the Company will make a provision in the accounts for the carrying value of the project.

NOTE 4: CASH AND EQUIVALENTS

Cash at bank NOTE 5: DEPOSIT PAID Deposit paid for Marsuparia Carrying Value	1,605,418 259,000 259,000	181,300
		- -

During the period the Company entered into a contract to acquire a Contract of Works (COW) in Indonesia known as Marsuparia. This contract is still in its due diligence phase and a total of $259,000 (refundable) has been paid. As set out in the ASX announcement dated 13 September 2011 the Company is required to pay an initial deposit of $1,000,000 of which $259,000 has been paid with $741,000 due on completion of the conditions precedent (refer note 9 for further details of the payment for the acquisition of Marsuparia). A total of $438,365 in relation to the acquisition has been expensed to date.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF- YEAR ENDED 31 DECEMBER 2011

NOTE 6: CONTRIBUTED EQUITY 32,200,000 (2010: 28,000,000) Ordinary shares fully paid (a) Ordinary Shares Number Balance at the beginning of the half-year period Share buyback Issued Capital Share issued during the period Seed capital Issued Capital Balance at the end of the financial year (b) Ordinary Shares Value Balance at the beginning of the year Share issue costs Share buyback Issued Capital Share issued during the period Seed capital Issued Capital Balance at the end of the financial year	Half-year ended	Half-year ended
	31 December 2011 $ 28,000,000 - - 4,200,000 32,200,000 7,176,120 (28,875) - - 1,050,000 8,197,245	30 June 11 2010 $ 44,511,720 (34,761,720) 2,750,000 15,500,000 28,000,000 4,237,239 (435,771) (348) 275,000 3,100,000 7,176,120

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

No options over unissued ordinary shares were issued during the year.

NOTE 7: SEGMENT INFORMATION

The Company has identified its operating segment based on internal reports that are reviewed and used by the chief operating decision maker in assessing performance and in determining the allocation of resources. Management has identified gold exploration as the Company’s operating segment as this is its principal activity.

NOTE 8: RELATED PARTY TRANSACTIONS

The Company has paid the following fees to entities related to the Directors for services.

Transactions with director related entities

Centius Gold Limited, an entity with Robert McLennan and John Slade on the board, received $9,660 in payment for office rent during the period.

Torpedo Drilling Pty Ltd, an entity with Roger Jackson on the board, received $236,145 in payment for drilling services during the period.

Mineral Exploration Consultants, an entity with Robert McLennan on the board received $5,000 in interest on a short term loan provided to the Company as the deposit for Marsuparia and $72,355 in relation to the provision of geological services.

Anthony Correl received $16,285 for professional services provided to Company.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF- YEAR ENDED 31 DECEMBER 2011

NOTE 9: COMMITMENTS AND CONTINGENCIES

a) Commitments

The Company is required to meet minimum committed expenditure requirements to maintain current rights of tenure to exploration licences. These obligations may be subject to re-negotiation, may be farmed-out or may be relinquished and have not been provided for in the statement of financial position. A summary of aggregate commitments is as follows:

Exploration and evaluation expenditure Within 1 year More than 1 year but not later than two years Total Operating Expenditure Commitment Management fees Other Commitment Option payment in respect of Marsuparia transaction	As at	As at
	31 December	30 June
	2011	2011
	$	$
	313,000 313,000 626,000 239,583 741,000	313,000 313,000
		626,000
		260,000
		1,000,000

b) Contingent assets and liabilities

Marsuparia

Ark Mines Ltd signed an option agreement with Fullway Limited on the 9th of September 2011 to acquire ownership and control of the Masuparia Contract of Work (COW) tenement in Central Kalimantan, Indonesia. Under the terms of the agreement, Ark will acquire the business and COW for $4.00 million cash, and issue the vendors 10M Ark shares (5m shares will be held in escrow for 6 months). Ark will be funding this through various equity raisings. Ark intends acquiring this business as a going concern and having full control of the business and the tenement.

No other contingent assets or liabilities exist as at the date of this report.

NOTE 10: EVENTS AFTER REPORTING DATE

No matters or circumstances have arisen since the end of the financial period, that are not otherwise dealt with in the financial statements, which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods.

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DIRECTORS’ DECLARATION

Directors’ Declaration

In the directors' opinion:

• the attached financial statements and notes thereto comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;

• the attached financial statements and notes thereto give a true and fair view of the entity's financial position as at 31 December 2011 and of its performance for the financial half-year ended on that date; and

• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5) of the Corporations Act 2001.

On behalf of the directors

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Antony Corel Chairman

Sydney, 15 March 2012

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF ARK MINES LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Ark Mines Limited, which comprises the statement of financial position as at 31 December 2011, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the company’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Ark Mines Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726 Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia

The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

Page 14

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Ark Mines Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the company’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

Emphasis of Matter

Without qualifying our conclusion, we draw attention to Note 1 in the financial report, which indicates that the company incurred a net loss of $1,859,166 during the year ended 31 December 2011 and had cash outflow from operations of $651,298. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business.

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PKF

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John Bresolin 15 March 2012
Partner Sydney
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TENEMENT SCHEDULE

Schedule of Ark Tenements

Exploration Licence Act (1992)	Title Name	Expiry Date	Status
6365 6341 6339 6726	Byrock Gundabooka Bald Hills Nangerybone	16-Jan-13 9-Nov-11 8-Nov-12 1-Mar-13	Current On application for renewal Current Current

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