CONICO LTD — Interim / Quarterly Report 2008

Oct 29, 2008

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ACN 119 057 457

ASX QUARTERLY REPORT FOR PERIOD ENDED 30TH SEPTEMBER 2008

HIGHLIGHTS

Mt Thirsty Ni Co Mn Project (WA)

• Advanced metallurgical test-work returned recoveries of up to 99% cobalt, 98% manganese and 75% nickel based on recent atmospheric leach tests.

• Conceptual Plant Flow Design for metal extraction has been completed.

• Autoclaves are not required for the leaching process.

• Potential metal recoveries for the total resource approach 33,000 tonnes of cobalt, 133,000 tonnes of nickel and 247,000 tonnes of manganese.

• Potential products include cobalt and nickel hydroxides together with a manganese carbonate by-product.

• Rock-chip sampling has identified nickel-sulphide gossans adjacent to the Mt Thirsty Resource which could represent a primary source to the deposit.

• Eight RC holes were drilled into the Mt Thirsty Resource for additional sample supply for pilot test-work in Canada.

South Australia Uranium Projects

Wynbring

• Infill drilling program about to commence

• Uranium assays up to 5m @ 850ppm (including 1m @ 0.32% U3O8) indicate higher grade central zone

Parkinson Dam

• New uranium JV with Mega Hindmarsh

Level 40, Exchange Plaza, 2 The Esplanade, Perth, Western Australia, 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866

Email: mailroom@fissionenergy.com.au

Report for September Quarter 2008

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MT THIRSTY Ni-Co-Mn PROJECT (Fission 50%)

The Mt Thirsty Cobalt-Nickel Project covering an area of 45km[2] is located 20km north-northwest of Norseman. Fission through its wholly owned subsidiary Meteore Metals Limited owns 50% of the project in joint venture with Barra Resources Limited.

Highlights

• Advanced metallurgical test-work returned recoveries of up to 99% cobalt, 98% manganese and 75% nickel based on recent atmospheric leach test-work.

• Cobalt-nickel-manganese leach rapidly in 8-10 hours at normal atmospheric pressure and moderate temperatures (<100[o] C).

• Autoclaves are not required for the leaching process.

• Potential metal recoveries for the resource approach 33,000 tonnes of cobalt, 133,000 tonnes of nickel and 247,000 tonnes of manganese.

• Potential products include cobalt and nickel hydroxides together with a manganese carbonate byproduct.

• Conceptual Plant flow design for metal extraction has been completed.

• The proposed flowsheet is simple and robust with no new technology required.

• • Production profile targeting 2 million tonnes per annum.

Reverse Circulation Drilling

During the quarter, eight metallurgical RC holes (MTRC1-8) were drilled for 505m. The holes were drilled as twin holes to obtain additional sample supply for metallurgical test-work to be conducted in Canada. The holes were also assayed with significant intersections presented in Table 1.

Independent mining and geological consulting firm Golder Associates Pty Ltd has estimated a JORC compliant Indicated and Inferred Resource of 29,030,000 tonnes grading 0.12% cobalt, 0.56% nickel and 0.88% manganese. The total Indicated and Inferred Resource contains approximately 162,000 tonnes of nickel, 35,000 tonnes of cobalt and 255,000 tonnes of manganese.

Metallurgy

Metallurgical bench scale test-work has been carried out over the past six months on major ore types by Bateman Engineering Pty Ltd (“Bateman”). Seven bulk samples weighing in-excess of 100kg were collected from each of the corresponding ore horizons from drill holes throughout the orebody. A composite sample, representative of run of mine ore, was then prepared for leach testing.

Multiple tests were carried out on the same sample at various temperatures and acid concentrations to optimise nickel recoveries whilst maintaining relatively low levels of iron in solution. This was finally achieved by leaching the ore in two stages.

Stage 1 operates at low temperature (60[o] C) in a reducing atmosphere and utilises the liquor from Stage 2 which has a low acid concentration. The cobalt and manganese recoveries for Stage 1 are typically 85 - 90% after a two hour residence time. A solid liquid separation stage is undertaken and the solids are repulped with acidified process water heated to 100[o] C. This then feeds to the Stage 2 oxidation leach where the bulk of the nickel is extracted and any residual cobalt and manganese recovered. Iron in solution during Stage 2 is precipitated as jarosite by the simple addition of saline process water. Acid consumptions for these tests were in the range of 150-330kg per tonne of ore.

Results of this test-work are summarised in Table 2 and leach curves are illustrated in Figure 1.

Pilot testing of 2 tonnes of high grade ore representing the type of ore to be treated during the first 4

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years of production and 3.5 tonnes of run of mine ore is due to commence in early February 2009 at SGS Lakefield in Ontario Canada. This testing facility is world class and is ideally suited to Mt Thirsty type ore.

Table 1: Mt Thirsty Significant RC Drill Intersections

Hole	North	East	Dip/Az (degrees)	RL (m)	From (m)	To (m)	Width (m)	Grade Co (%)	Grade Ni (%)	Grade Mn (%)
MTRC1	6447573	372106	-90/0	377.8	39	56	17	0.29	0.70	1.35
					66	82	16	0.18	0.64	1.37
MTRC2	6447592	372324	-90/0	369.6	0	3	3	0.20	0.42	1.57
					28	55	27	0.13	0.87	0.89
MTRC3	6447549	372252	-90/0	369.6	0	2	2	0.13	0.42	0.76
					9	25	16	0.13	0.48	0.83
MTRC4	6447465	372133	-90/0	377.8	16	91	75	0.20	0.94	0.82
MTRC5	6447256	372253	-90/0	381.6	31	38	7	0.15	0.46	0.73
MTRC6	6446949	372280	-90/0	382.4	7	8	1	0.27	1.05	0.78
					21	39	18	0.15	0.53	1.24
MTRC7	6446954	372354	-90/0	386.8	32	70	38	0.19	0.83	1.20
MTRC8	6446956	372320	-90/0	384.3	42	54	12	0.12	0.70	1.00

Table 2: Mt Thirsty Metallurgical Test-work Results

Ore Type	Acid Add'n (kg/t)		Total Leach Extraction (%)	Total Leach Extraction (%)
		Nickel	Cobalt	Iron	Manganese
Composite	330	75.0	99.0	14.0	98.6
Composite	200	63.6	99.0	9.9	98.5
Composite	146	31.2	89.2	21.3	91.2

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Two Stage Leach
Temperature 60C Stage 1 and 100C Stage 2
100
90
80
70
60
50
40
30
20
10
0
0 100 200 300 400 500 600 700
Time (minutes)
Ni 330kg/t Co 330kg/t Mn 330kg/t Fe 330kg/t
Ni 200kg/t Co 200kg/t Mn 200kg/t Fe 200kg/t
Metal Extraction (%)
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Figure 1: Mt Thirsty Metallurgical Test-work - Leach Curves

Mt Thirsty Gossan Rock-Chip Sampling

A surface reconnaissance rock-chip sampling program searching for nickel sulphide mineralisation adjacent to the Mt Thirsty Cobalt-Nickel-Manganese Resource was undertaken during the quarter (see Figure 2). Several gossanous samples potentially representing possible disseminated sulphide mineralisation associated with a pyroxenite/dunite contact were collected.

The exploration strategy was based on a geological model similar to Mirabela Nickel Limited’s Santa Rita deposit in Brazil which contains approximately 130 million tonnes @ 0.60% nickel. At Santa Rita, disseminated nickel sulphide ore is situated at the base of a large gabbro intrusion with a dunite footwall containing a modest lateritic nickel resource. The geological setting at Mt Thirsty is very similar with the main cobalt-nickel-manganese oxide resource also hosted within a dunite. The large gabbroic regionally extensive Mt Thirsty intrusion, potentially hosting disseminated nickel sulphide mineralisation at its base, is located immediately east of the oxide deposit.

The samples were analysed for a suite of elements that aid in identifying surface expressions of nickel sulphide mineralisation.

The sampling program was targeted around high grade cobalt-nickel oxide mineralisation in hole MTAC179 believed to be adjacent to the gabbro/dunite contact. Samples MTROCK17-20 and MTROCK 26-29 returned very encouraging results indicating the presence of primary disseminated nickel sulphide mineralisation. These samples are just 20-30m east of MTAC179. An additional gossan (MTROCK22) was located 550m to the north along the same contact. This particular sample also returned encouraging nickel values. Results from this sampling program are presented in Table 3.

The identification of these nickel sulphide gossans is extremely encouraging and may indicate a primary

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sulphide source to the large oxide resource at Mt Thirsty. Further analysis of the results will continue into next quarter in conjunction with planning of an appropriate geophysical survey to define and test the pyroxenite footwall contact prior to drill testing.

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Figure 2: Mt Thirsty Gossan Sampling Locations with Resource outline.

Table 3: Gossan Rock-chip Assay Results

Sample	North	East	Nickel (ppm)	Copper (ppm)	Zinc (ppm)	Palladium (ppb)	Iron (%)
MTROCK017	6447010	372582	2,820	141	347	64	53.2
MTROCK018	6447011	372581	2,223	203	302	116	49.9
MTROCK019	6447010	372581	3,217	194	309	60	52.1
MTROCK020	6447008	372582	2,724	140	290	79	46.1
MTROCK022	6447581	372564	7,537	41	351	32	48.7
MTROCK026	6447000	372568	4,079	153	432	54	53.3
MTROCK027	6447022	372570	3,488	111	400	62	56.3
MTROCK028	6446999	372524	5,280	56	320	88	54.7

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Report for September Quarter 2008

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Aeromagnetic Survey

A detailed low-level aeromagnetic survey was carried out over the Mt Thirsty project tenements this month covering an area approximately 116km[2] . The imaging will be used to interpret geology and define targets to test for gold and nickel sulphide mineralisation.

Geochemical Sampling Program

An application for an auger geochemical program was approved during the quarter by the DoIR. The program will test all of the northern tenements and the western part of E63/373 on a 200 x 80m sampling pattern. Elements to be analysed for are silver, arsenic, gold, cobalt, chromium, copper, nickel, palladium and zinc which will build a dataset to effectively explore for gold and nickel on the Mt Thirsty tenement package. The program will be completed in stages.

Further Potential

There is very good potential to expand the Resource further south along strike to the tenement boundary, a distance of some 600m, as mineralisation remains open beyond the 6,300N section.

URANIUM EXPLORATION (SOUTH AUSTRALIA)

Wynbring Project (Fission 100% uranium rights)

The Wynbring project is located within EL 3306 on the Gawler Craton approximately 100km west northwest of Tarcoola in South Australia (Figure 4). It covers a Tertiary palaeochannel 25km to the northwest of Toro Energy Ltd’s Warrior uranium deposit.

A drilling program of up to 5000m is scheduled to commence early November to follow up an interpreted higher grade zone at the Pundinya prospect where previous drilling in the June quarter returned a best intersection of 5m at 854ppm U3O8, including 1m at 3200ppm (0.32% U3O8,), Figure 5. This will be followed by step out drilling to test other priority uranium targets in the remainder of the potentially reduced palaeochannel which extends for 9km downstream below the Pundinya prospect (Figure 6).

Parkinson Dam Project (Fission 100% uranium rights, Mega Hindmarsh earning 51%)

Fission has formed a joint venture with Mega - Hindmarsh Ltd, a wholly owned subsidiary of Mega Uranium Ltd of Canada to explore the Parkinson Dam project for uranium. The Parkinson Dam tenements, located 60 km west of Port Augusta in South Australia (Figure 4), are held by Tasman Resources NL (ASX: TAS), and Fission Energy has the uranium rights. Tasman is currently exploring these tenements for epithermal gold mineralisation.

Under the new joint venture agreement (Wartaka Joint Venture) Mega Hindmarsh can earn 51% of Fission’s 100% uranium rights within ELs 3307 and 3739 by the expenditure of $300,000 on uranium exploration over 3 years, and can earn up to 75% by the total expenditure of $800,000 over 5 years. Hindmarsh are subject to a minimum expenditure of $50,000 prior to withdrawal. Should Fission dilute below 5% it would be entitled to a 1% NSR uranium royalty.

As the joint venture is for uranium only, any non - uranium minerals discovered by the joint venture would belong to Tasman Resources.

The area is considered prospective for unconformity - associated uranium deposits close to the contact between the Mesoproterozoic Corunna Conglomerate and the underlying Palaeoproterozoic metasedimentary rocks. Outcropping uraninite (uranium oxide) mineralisation (Figure 7) discovered in EL 3307 by an earlier explorer was reported by Tasman in 2006.

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Initial exploration of the Parkinson Dam tenements by Mega Hindmarsh will involve an airborne electromagnetic survey and hyperspectral scanning.

CORPORATE

Fission the completed a $3,961,640 capital raising and underwriting pursuant to the General Meeting of the Company held on 1 July 2008.

The Company successfully completed a placement of 3,560,250 shares at 16 cents for a total of $569,640 together with 21,200,000 shares at 16 cents for a total of $3,392,000 from underwriter SelectInvest Pty Ltd.

These funds were applied in part to the acquisition of 50% of the Mt Thirsty Project.

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Greg Solomon Executive Chairman

The interpretations and conclusions reached in this report are based on current geological theory and the best evidence available to the authors at the time of writing. It is the nature of all scientific conclusions that they are founded on an assessment of probabilities and, however high these probabilities might be, they make no claim for complete certainty. Any economic decisions that might be taken on the basis of interpretations or conclusions contained in this report will therefore carry an element of risk.

The information in this announcement, insofar as it relates to Mineral Exploration activities, is based on information compiled by Guy T LePage who is a member of the Australian Institute of Mining and Metallurgy and Michael J. Glasson, who is a member of the Australian Institute of Geoscientists, both of whom have more than five years experience in the field of activity being reported on. Mr LePage is a Director of the Company and Mr Glasson is a consultant. Mr LePage and Mr Glasson have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Le Page, and Mr Glasson consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

It should not be assumed that the reported Exploration Results will result, with further exploration, in the definition of a Mineral Resource.

.

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Figure 3: Mt Thirsty Project Location and Regional Geology

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Garford
Project
Wynbring
Project
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Figure 4: Location of Wynbring and Garford Palaeochannels

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Report for June Quarter 2008

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Figure 5: Pundinya Prospect. Drill Hole Locations, Interpreted Fluvial Channel, eU3O8 Thickness * Grade Contours (m*ppm) and Thickness/ U3O8 Assay (m/ppm)

[9]

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Report for September Quarter 2008

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Figure 6: Drill Holes and Interpreted Fluvial Sand Locations

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Report for September Quarter 2008

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Figure 7: Location Plan showing ELs 3307 and 3739

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Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

FISSION ENERGY LTD

ABN 49 119 057 457

Quarter ended (“current quarter”) 30 September 2008

Consolidated statement of cash flow

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material)- Net OperatingCash Flows	Current quarter $A’000	Year to Date (3 months) $A’000
	(182) (209) 0 97 0 0	(182) (209) 0 97 0 0
	(294)	(294)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c)other fixed assets 1.9 Proceeds from sale of: (a) prospects (b)equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	(4,691) (55)	(4,691) (55)
	(4,746)	(4,746)
	(5,040)	(5,040)

1.13 Total operating and investing cash flows (brought forward)	(5,040)	(5,040)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Share Application Monies Net financing cash flows	1,438 1,000	1,438 1,000
	2,438	2,438
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(2,602) 7,529 0	(2,602) 7,529 0
	4,927	4,927

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		133
		0
1.25	Explanation necessaryforanunderstanding ofthe transactions
	Management Fees, as per agreement, were paid during the quarter to a company of which Mr GH Solomon and Mr DH Solomon are directors. Bona-fide reimbursement of expenses for the period to 30 September 2008 Directors Fees and Superannuation paid during the period.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

On 18 July 2008 Fission issued 29,520,000 fully paid ordinary shares in relation to the acquisition of Meteore Metals Ltd which holds a 50% interest in the Mt Thirsty Nickel-Cobalt-Manganese Project.

2.2	Details of outlays made by other entities to establish or increase their share in projects in whichthereporting entityhas an interest
	Not applicable

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available	Amount used
		$A’000	$A’000
3.1	Loan facilities	Nil	Nil
3.2	Credit standby arrangements	Nil	Nil

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development	$A’000
	350
Total	350

Subsequent to end of quarter additional capital has been raised to fund part of this expenditure.

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1,177	3,029
	3,750	4,500
	0	0
	0	0
Total: cash at end of quarter(item 1.22)	4,927	7,529

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	E29/650,651 E57/693,695 E77/1393,1402		100%	Nil

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions	NOT APPLICABLE
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Increase release from Escrow (b) Decreases through returns of capital, buy-backs	113,030,258	77,610,258
	18,510,250 29,520,000	18,510,250 20,000,000	16 cents (a)	16 cents (a)
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	NOT APPLICABLE
7.7 Options 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	1,000,000 40,999,992 1,500,000	NIL 28,499,992 NIL	Exercise price 20 cents 20 cents 20 cents	Expiry date 18 June 2010 28 February 2011 31 March 2011
	NIL	NIL
	NIL	2
	NIL	NIL
7.11 Debentures (totals only)	NOT APPLICABLE
7.12 Unsecured notes (totals only)	NOT APPLICABLE

(a) – On 18 July 2008 Fission issued 29,520,000 fully paid ordinary shares in relation to the acquisition of Meteore Metals Ltd which holds a 50% interest in the Mt Thirsty Nickel-CobaltManganese Project.

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view of the matters disclosed.

AARON PHILIP GATES CHIEF FINANCIAL OFFICER Date: 30 October 2008

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities. The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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