CONICO LTD — Interim / Quarterly Report 2009

Mar 10, 2009

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Fission Energy Ltd ABN 85 009 253 187

and Controlled Entities

Interim Financial Report for the Half-Year Ended 31 December 2008

FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CONTENTS

Corporate Directory	3
Review of Operations	4
Directors’ Report	14
Auditors’ Independence Declaration	15
Condensed Income Statement	16
Condensed Balance Sheet	17
Condensed Statement of Changes in Equity	18
Condensed Cash Flow Statement	19
Notes to the Financial Statements	20
Director’s Declaration	22
Independent Auditor’s Review Report	23

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CORPORATE DIRECTORY

DIRECTORS:

Gregory H Solomon LLB (Executive Chairman) Douglas H Solomon BJuris LLB (Hons) (Non-Executive) Guy T Le Page BA, BSc (Hons), MBA, FINSIA, MAusIMM (Non-Executive) James B Richardson (Non-Executive)

COMPANY SECRETARY:

Aaron P Gates B.Com, CA

REGISTERED OFFICE:

Level 40, Exchange Plaza 2 The Esplanade Perth Western Australia 6000 Tel +61 8 9282 5889 Fax +61 8 9282 5866 Email: mailroom@fissionenergy.com.au Website: www.fissionenergy.com.au

SOLICITORS:

Solomon Brothers Level 40, Exchange Plaza 2 The Esplanade Perth WA 6000

Minter Ellison 1 King William Street Adelaide SA 5000

AUDITORS:

Grant Thornton (WA) Partnership Chartered Accountants Level 1 10 Kings Park Road West Perth WA 6005

SHARE REGISTRY:

Advance Share Registry Services 150 Stirling Highway Nedlands WA 6009

STOCK EXCHANGE LISTING:

ASX Code: FIS (ordinary shares) FISO (options expiring 28 February 2011)

Quotation has been granted for all the ordinary shares and all issued options of the company on all Member Exchanges of the Australian Stock Exchange Limited.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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REVIEW OF OPERATIONS

MT THIRSTY COBALT-NICKEL-MANGANESE OXIDE PROJECT (Fission 50%)

The Mt Thirsty Cobalt-Nickel-Manganese Oxide Project covering an area of 45km[2] is located 20km north-northwest of Norseman (Figure 1). Fission through its wholly owned subsidiary Meteore Metals Limited owns 50% of the project in joint venture with Barra Resources Limited.

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Figure 1: Mt Thirsty Location Plan

Mt Thirsty has the potential to emerge as the world’s fourth largest cobalt supplier according to the latest results of an ongoing metallurgical and engineering pre-feasibility study.

On conservative estimates for the first three years of production, the study found the project could immediately rank comfortably in the world’s top five cobalt producers (see Figure 2).

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World Annual Cobalt Production 2007
Total Supply 53,700t
13,500
12,000
10,500
9,000
7,500
6,000
4,500 3,700t
3,000
1,500
0
Tonnes Cobalt
CTT, Morocco Eramet, France ICCI, Canada Norilsk, Russia OMG, Finland Sumitomo, Japan Umicore, Belgium Vale Inco, Canada Xstrata, Norway China India Minara, Australia South Africa Brasil
3yrs)
BHP Billiton, Australia Mt Thirsty (Annual Production first
----- End of picture text -----

Figure 2: – World annual cobalt production 2007 compared with Mt Thirsty’s forecast annual production rate for the first 3-4 years. (Sourced from the Cobalt Development Institute).

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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The findings are from an independent study by Simulus, a metallurgical and engineering consultancy firm, as part of ongoing pre-feasibility work on the project.

The metallurgical and engineering study found that, as a minimum, Mt Thirsty has the potential to support production of 3,700 tonnes of cobalt per annum (tpa) in its first three years (and about 2600tpa thereafter) at a throughput of 2 million tpa, ranking it around the top four or five such producers globally.

High cobalt throughput can be easily achieved early in the production schedule due to the majority of high grade ore sitting close to the surface, within 8 to 19 metres. This scenario front-loads production, increases Net Present Value (NPV) and significantly shortens capital payback.

The Simulus study determined a project development strategy that builds an atmospheric acid leach plant at Mt Thirsty at a present day cost of approximately US$400 million to produce cobalt and nickel metal together with manganese carbonate concentrate for shipping to third party refineries. The plant is versatile and is easily expanded.

Metallurgical bench scale test-work has been carried out 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.

Eight recent metallurgical RC holes (MTRC1-8) were drilled during the period as twin holes to obtain additional sample supply for the metallurgical test-work. These holes were also assayed, with significant intersections presented in Table 1.

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

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. This work has returned impressive recoveries at low acid consumptions of between 150 and 330kg per tonne (Table 2). Atmospheric leaching at moderate temperatures has returned 99% cobalt, 77.5% nickel and 98% manganese extractions at 329 kg per tonne of acid. Nickel extraction can be increased above 95% with higher acid addition.

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

Overall recoveries were discounted to a more conservative level for financial modelling. Cobalt and manganese extractions used for modelling were 96% and 95% respectively. Nickel extraction was modelled at 90% using 450 kg/t based on extrapolated testwork data.

Cash operating costs for the project are estimated at approximately A$100 per tonne of ore. After cobalt credits, the cash operating cost is in the lowest quartile at approximately US$2.49 per pound of nickel.

A long-term free-on-board sulphur price of US$50 per tonne, based on long-term price forecasting, was applied during the study.

Potential net cash flows after capital payback but excluding capital depreciation, project loan interest, royalties and income tax for the life of the project, are estimated at A$1.65 billion.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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Key findings of the study include:

• Project operating costs would be in the lower quartile – around US$2.49 per pound of nickel after cobalt credits.

• Total capital costs estimated at US$400 million.

• Quick 4 to 5 year capital payback with high grade ore being sourced for the first 3 years of production.

• The project ore is totally oxidised, negating the need for drilling and blasting.

• The shallow ore body is amenable to low cost, simple, conventional open pit mining.

• Acid consumption in processing would be low for atmospheric leach, at around 450kg per tonne.

While further pre-feasibility modelling remains to be completed, it is expected that the proceeds from Mt Thirsty’s nickel production would cover most if not all of the mine’s operating costs leaving the cobalt and manganese production credits delivering an undiluted revenue stream.

Mt Thirsty has a current JORC Indicated Resource of 14,800,000 tonnes at 0.14% Cobalt, 0.59% Nickel and 0.99% Manganese and a JORC Inferred Resource of 14,230,000 tonnes at 0.11% Cobalt, 0.52% Nickel and 0.77% Manganese over an apparent strike of 1.3 kilometres and a width of around 800 metres. This equates to a potential 15 year mine life at a throughput rate of 2 million tpa. The deposit remains open along strike with the potential to further increase resources significantly through further inexpensive aircore drilling.

Further Potential

There is sound 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.

Future

The joint venture partners are working towards completion of a prefeasibility study later this year, and moving towards commencement of a full bankable feasibility study soon after.

MT THIRSTY EXPLORATION

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 3). 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 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.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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Figure 3: 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

Aeromagnetic Survey

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

URANIUM EXPLORATION – SOUTH AUSTRALIA

Fission Energy Ltd was spun out of Tasman Resources Ltd on 19 June 2007. Fission has the uranium rights to Tasman’s Wynbring, Garford and Parkinson Dam projects located on the Gawler Craton in South Australia. Fission also has an interest in any uranium mineralisation in Neoproterozoic or younger rocks within Tasman’s Lake Torrens project area also in South Australia.

Fission also retains an exploration licence application at Ponton Creek, east of Kalgoorlie in Western Australia which is also prospective for palaeochannel hosted uranium mineralisation.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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Garford
Project
Wynbring
Project
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Figure 4: Location Plan - Wynbring and Garford Projects

Wynbring Project (Fission 100% uranium rights)

The Wynbring project is located within EL 3306 on the Gawler Craton approximately 100km 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 and has a similar catchment area to that hosting Warrior.

The Wynbring palaeochannel was initially identified by uranium explorer PNC in the 1980’s but had received no further exploration until Fission completed its first 65 hole 3000m air core drilling programme in December 2007 which discovered uranium mineralisation at the Pundinya prospect.

Drilling by Fission has delineated a portion of a meandering sandy fluvial palaeochannel up to 1km in width within the Wynbring palaeovalley which trends in a broadly north –south direction through the project area.

During the period a third air core drilling programme (95 holes for 4,829m) was completed and involved both close spaced infill drilling at the Pundinya prospect and broad spaced step out drilling to more accurately define the continuation of the Wynbring palaeochannel southwards from the Pundinya prospect for approx. 9km to the tenement boundary (Figure 5).

Infill drilling was carried out on a 50 by 50m spacing around higher grade intersections at the Pundinya prospect where drilling in the June quarter returned a best intersection of 5m at 854ppm U3O8, including 1m at 3200ppm (0.32% U3O8). Best assay results from the latest 24 infill holes were 2m at 648ppm U3O8 in hole W123 from 50 to 52m, 11m at 374ppm from 41 to 52m in hole W126 and 7m at 368ppm from 47 to 54m in hole W120 (refer Table 4 and Figure 5). These latest results confirm the continuity of uranium mineralisation over the 400 by 250m area subjected to infill drilling. The uranium thickness -grade distribution (Figure 6) shows the higher grade core developed on the eastern side of the channel adjacent to the redox boundary.

Step out drilling to the south, mostly on a broad 800m by 400m grid has defined the continuation of the Wynbring palaeochannel sands and the entry of a main tributary from the west (Figure 5). Anomalous downhole radiometrics and uranium assays were intersected in the fluvial channel sands for a further 3km to the south of the Pundinya prospect in the eastern tributary (Figure 7). The highest assays obtained were 2m at 185ppm U3O8 in hole W143 from 39 to 41m and 9m at 166ppm in hole W167 from 37 to 46m. The strongly anomalous uranium assays which are mostly at and immediately below the weathering interface between oxidised and reduced channel sands may represent uranium leakage down-channel from the Pundinya prospect.

Hole W151 (Figures 5 & 7), drilled 2.5km SW of the Pundinya prospect, intersected totally oxidised channel sands in contrast to all of the other widely spaced holes drilled in this area which intersected reduced channel sands. Therefore, there is likely to be a redox front in the vicinity of W151 with the potential to host higher grade uranium mineralisation. Hole W167 referred to above is located a further 600m to the SE down-channel from W151. This area is a priority in-fill drilling target.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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Figure 5

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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Table 4: Wynbring Project Air Core Drilling - Uranium Assay Results*

Hole No	East	North	Total Depth	From	To	U3O8	Thickness
	m	m	m	m	m	ppm	m
W107	379351	6634497	54	51	52	149	1
W108	379299	6634499	57	50	54	178	4
W109	379253	6634497	54	48	52	138	4
W110	379199	6634504	54	50	51	201	1
W111	379251	6634449	54	52	53	209	1
W112	379302	6634458	45	50	52	143	2
W113	379352	6634450	54	48	52	376	4
W114	379392	6634452	53	49	50	160	1
W116	379302	6634547	54	49	50	105	1
				51	52	246	1
W117	379253	6634555	54	48	50	175	2
W118	379446	6634455	51	46	48	144	2
W119	379372	6634406	55	50	53	155	3
W120	379350	6634404	57	47	54	368	7
W121	379321	6634402	57	49	53	360	4
W122	379304	6634349	57	49	52	150	3
W123	379353	6634351	57	46	47	121	1
				50	52	649	2
W124	379401	6634352	57	49	52	301	3
W125	379447	6634349	57	44	48	241	4
W126	379401	6634253	57	38	39	115	1
				41	52	374	11
W127	379349	6634248	57	43	44	168	1
W127				47	52	139	5
W128	379298	6634251	57	48	51	178	3
W129	378808	6633804	54	43	45	135	2
W130	378896	6633796	53	45	46	111	1
W131	379002	6633811	54	43	44	100	1
				45	46	126	1
W132	379118	6633812	57	42	46	133	4
				48	49	102	1
W136	378497	6633812	48	40	41	129	1
W138	378798	6633601	54	40	41	179	1
				42	43	103	1
W141	378592	6633592	51	44	45	106	1
W143	378201	6633591	45	39	41	185	2
W145	378192	6633194	54	46	47	119	1
W146	378406	6633192	54	42	43	113	1
W148	377852	6633209	54	40	41	110	1
W167	376800	6632018	57	37	46	166	9
W168	377010	6632203	57	51	52	104	1
W192	379371	6634430	54	47	53	375	6
W193	379317	6634433	57	49	53	205	4
W194	379448	6634552	54	47	51	136	4
W196	379508	6634550	54	33	34	108	1
W197	379502	6634498	51	33	34	161	1
W198	379497	6634450	54	32	33	212	1
W199	379507	6634399	48	24	26	165	2
W201	379501	6634596	57	34	35	142	1

Based on 100ppm U3O8 cut off over a minimum down hole thickness of 1m. All holes drilled vertical and selected portions sampled in 1m intervals for assay.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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Figure 6

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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Figure 7

Garford Project (Fission 100% uranium rights)

Garford, located on the Gawler Craton approx. 80km south east of Coober Pedy in South Australia (Figure 1a), covers over 80km of Tertiary and older palaeochannels. Garford is considered prospective for Tertiary-age palaeochannel hosted uranium mineralisation similar to that discovered at Wynbring.

An airborne electromagnetic (TEMPEST) survey flown over the Garford palaeochannel in 2006 confirmed that in excess of 80 kilometres of the Garford palaeochannel exists within Fission’s tenements to depths of around 40 to 50m.

A similar length of deeper linear TEMPEST conductors located partially beneath the Garford channel are interpreted to represent older buried Mesozoic palaeodrainages and Permian basins, based on the available stratigraphic drilling data.

Fission has carried out only limited drilling to date which intersected considerable thicknesses of prospective reduced Tertiary palaeochannel sands. Deeper Mesozoic palaeochannel sands were also intersected in places confirming the interpretation of the TEMPEST data.

No follow up drilling was carried out in the last 6 months as exploration was focussed on the uranium mineralisation discovered at Wynbring.

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

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.

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. 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.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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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 8) discovered in EL 3307 by an earlier explorer was reported by Tasman in 2006.

Exploration of the Parkinson Dam tenements by Mega Hindmarsh has involved an airborne electromagnetic survey and hyperspectral scanning. Data from these surveys are currently being interpreted.

CORPORATE

Fission 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.

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 (Mt Thirsty) who is a member of the Australian Institute of Mining and Metallurgy and Michael J. Glasson (Uranium), 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.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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DIRECTOR’S REPORT

Your directors submit the financial report of the consolidated group for the half-year ended 31 December 2008.

Directors

The names of directors who held office during or since the end of the half-year:

Mr Gregory H Solomon

Mr Douglas H Solomon

Mr Guy T Le Page

Mr James B Richardson (appointed 10 November 2008)

Review of Operations

The net loss after income tax for the half year was $447,638 (2007: $161,720).

A review of the operations of the Group during the half-year ended 31 December 2008 is set out in the Review of Operations on Page 4.

Auditor’s Declaration

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 16 for the half-year ended 31 December 2008.

This report is signed in accordance with a resolution of the Board of Directors.

Director

Douglas H Solomon

Dated this 10[th] day of March 2009

ASX Code: FIS

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10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

10 March 2009

AUDITOR’S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF FISSION ENERGY LIMITED

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Fission Energy Limited for the half-year ended 31 December 2008, I declare that, to the best of my knowledge and belief, there have been:

• a No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

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

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GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants

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MJ Hillgrove Partner Perth

Date: 10 March 2009

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Grant Thornton (WA) Partnership ABN 17 735 344 518, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation

FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CONDENSED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

Note Revenue Accounting and audit expense Depreciation and amortisation expense Employee benefits expense Exploration expenditure written-off Finance costs Impairment expense Legal and other consultants expense Management Fees Other expenses Loss before income tax Income tax expense Loss for the period Basic earnings per share (cents per share)	Consolidated Group 31 Dec 2008 31 Dec 2007 $ $ 173,387 203,354 (10,400) (5,000) (8,020) (3,376) (172,326) (198,843) (43,557) (4,018) (2,515) - (171,463) - (16,410) - (113,085) (78,750) (83,249) (75,087)
	(447,638) (161,720) - -
	(447,638) (161,720)
	(0.4049) (0.2837)

The accompanying notes form part of these financial statements.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CONDENSED BALANCE SHEET AS AT 31 DECEMBER 2008

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Property, plant and equipment Exploration and Evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions Non-interest bearing liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained earnings/(accumulated) losses TOTAL EQUITY	Consolidated Group 31 Dec 2008 30 Jun 2008 $ $ 1,907,076 7,529,023 788,996 35,245
	2,696,072 7,564,268
	10,000 508,219 102,671 55,290 12,936,280 553,467
	13,048,951 1,116,976
	15,745,023 8,681,244
	98,950 142,186 405,915 - - 1,522,840
	504,865 1,665,026
	250,000 -
	250,000 -
	754,865 1,665,026
	14,990,158 7,016,218
	15,467,874 7,048,046 286,750 285,000 (764,466) (316,828)
	14,990,158 7,016,218

The accompanying notes form part of these financial statements.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2008

	Share Capital	Share Capital
			Accumulated
	Ordinary	Option Reserve	Losses	Total
	$	$	$	$
Balance at 1 July 2007	5,853,634	-	(65,628)	5,788,006
Shares issued during the period	-	-	-	-
Share issue costs during the period	(19,989)	-	-	(19,989)
Options issued during the period	-	285,000	-	285,000
Loss attributable to members of parent entity	-	-	(161,720)	(161,720)
Sub-total	5,833,645	285,000	(227,348)	5,891,297
Dividends paid or provided for	-	-	-
Balance at 31 December 2007	5,833,645	285,000	(227,348)	5,891,297
Balance at 1 July 2008	7,048,046	285,000	(316,828)	7,016,218
Shares issued during the period	8,684,840,	-		8,684,840,
Share issue costs during the period	(265,012)	-		(265,012)
Options issued during the period	-	1,750	-	1,750
Loss attributable to members of parent entity	-	-	(447,638)	(447,638)
Sub-total	15,467,874	286,750	(764,466)	14,990,158
Dividends paid or provided for	-	-	-
Balance at 31 December 2008	15,467,874	286,750	(764,466)	14,990,158

The accompanying notes form part of these financial statements.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CONDENSED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Goods and Services Tax refunds Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Exploration expenditure Purchase of property, plant and equipment Payment for subsidiary, net of cash acquired Loans to associates Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Repayment of loans Proceeds from issue of options Net cash provided by (used in) financing activities Net increase/(decrease) in cash held Cash at beginning of period Cash at end of period	Consolidated Group 31 Dec 2008 31 Dec 2007 $ $ 39,525 - (530,938) (379,407) 168,045 203,354 126,514 62,578
	(196,854) (113,475)
	(667,458) (86,792) (55,401) (52,550) (5,769,107) (634) (750,000) -
	(7,241,966) (139,976)
	2,177,787 (70,856) (360,914) - - 285,000
	1,816,873 214,144
	(5,621,947) (39,307) 7,529,023 5,773,797
	1,907,076 5,734,490

The accompanying notes form part of these financial statements.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

NOTE 1: BASIS OF PREPARATION

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standard AASB 134: Interim Financial Reporting, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2008 and any public announcements made by Fission Energy Ltd and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 .

The accounting policies have been consistently applied by the entities in the consolidated group and are consistent with those in the June 2008 financial report apart from the changes in accounting policy noted below.

The half-year report does not include full disclosures of the type normally included in an annual financial report.

Reporting Basis and Conventions

The half-year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

The following standards, amendments to standards and interpretations have been identified as those which may impact the Company in the period of initial application. They are available for early adoption at 31 December 2008, but have not been applied in preparing this financial report.

• Revised AASB 101: Presentation of Financial Statements introduces as a financial statement the ‘statement of comprehensive income’. The revised standard does not change the recognition, measurement or disclosure of transactions or events that are required by other accounting standards. The revised AASB 101 will become mandatory for the Company’s 30 June 2010 financial statements. The company has not yet determined the potential effect of the revised standard on the Company’s disclosures.

NOTE 2: ACQUISITION OF SUBSIDIARIES

On the 4th of July 2008 Fission successfully acquired 100% of the issued capital of Meteore Metals Limited (“Meteore”), the manager of a 50:50 Joint Venture with Barra Resources Limited (ASX:BAR) on the Mt Thirsty NickelCobalt- Manganese Project (“Mt Thirsty”). Total consideration for the acquisition of Meteore is $11.3 million, of which approximately A$6.6 million is payable in cash and the balance in fully paid ordinary shares. The assets and liabilities arising from acquisition are recognised at fair value which is equal to the carrying value at acquisition date.

Cash consideration Equity issued as consideration Total purchase consideration Fair value of assets acquired Assets and liabilities held at acquisition date: Receivables Joint Venture interest Creditors Provisions Net assets acquired	$ 6,633,241 4,723,000
	11,356,241
	11,356,241
	40,949 11,976,241 (410,949) (250,000)
	11,356,241

NOTE 3: SEGMENT INFORMATION

The group operates predominately in one geographical segment and one business being uranium and base metals exploration in Western Australia and South Australia.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

NOTE 4: CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The directors are not aware of any contingent liabilities or contingent assets as at 31 December 2008.

NOTE 5: CAPITAL AND LEASING COMMITMENTS

a. Exploration Expenditure Commitments

In order to maintain current rights of tenure to exploration tenements, the company is required to perform minimum exploration work to meet the requirements specified by various State governments. Due to the nature of the company’s operations in exploring and evaluating areas of interest, it is very difficult to forecast the nature and amount of future expenditure. It is anticipated that expenditure commitments for the twelve months will be tenement rentals of $21,000 (2007: $15,000) and exploration expenditure of $72,120 (2007:$NIL). JV parties may effectively meet a significant portion of the commitment costs. These obligations can also be reduced by selective relinquishment of exploration tenure or application for expenditure exemptions.

Pursuant to the agreement made between the Company and Tasman Resources NL (“Tasman”) dated 2 April 2007, the Company was assigned all the rights to all uranium mineralisation which may be discovered in a number of tenements held by Tasman. The Company has no exploration commitments for these tenements however is committed to contribute towards fees, rents, rates and other monies payable under the Mining Act 1978 (SA) by Tasman resources NL. It is anticipated that expenditure commitments for the next twelve months will be reimbursement of tenement rentals of $15,000 (2008: $15,000).

NOTE 6: RELATED PARTY TRANSACTIONS

		2008	2007
		$	$
Transactions between related parties are on normal commercial terms and conditions no
more	favourable than those available to other parties unless otherwise stated.
Transactions with related parties:
a.	Key Management Personnel
	Management fees and administration fees paid to Princebrook Pty Ltd, a
	company in which Mr GH Solomon and Mr DH Solomon have an interest.	113,085	78,750
	Legal and professional fees paid to Solomon Brothers, a firm of which Mr GH
	Solomon and Mr DH Solomon are partners.	65,687	52,232
b.	Associated Companies
	Reimbursement to Tasman Resources NL (which has a 30.7% fully diluted
	interest in the Company) for employee costs on a hourly basis, in relation to
	Tasman staff utilised by the Company	129,772	39,997
	During the six months to 31 December 2008 the Company acquired 750,000 $1.00	convertible notes in Eden
	Energy Ltd (“Eden”) with interest payable at 10%pa payable monthly in arrears, secured over all the assets of
	Eden (excl Eden Hydrogen Inc and Eden Cryogenics LLC) and convertible at the election of the noteholder. In
	addition it was agreed that Eden would issue the Company with 5,000,000 options in Eden, each to		acquire one
	share, at an exercise price of 10 cents at any time on or before 31 December 2011. The notes were repaid in
	full on 27 February 2009.

On 4 July 2008 the Company issued 9,520,000 shares to Standard Nickel Pty Ltd, a company in which Mr G T LePage is a director, in consideration for shares in Meteore Metals Ltd.

On 4 July 2008 the Company issued 10,000,000 shares to G T Le Page & Associates Pty Ltd, a company in which Mr G T LePage is a director, in consideration for introducing the Company to the purchase of Meteore Metals Pty Ltd.

NOTE 7: EVENTS SUBSEQUENT TO REPORTING DATE

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements and notes, as set out on pages 17 to 21:

2. a. comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations; and

3. b. give a true and fair view of the economic entity’s financial position as at 31 December 2008 and of its performance for the half-year ended on that date.

4. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Director Douglas H Solomon

Dated this 10[th] day of March 2009

ASX Code: FIS

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10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872

Independent Auditor’s Review Report

To the Members of Fission Energy Limited

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

Report on the half-year financial report

We have reviewed the accompanying half-year financial report of Fission Energy Limited, which comprises the consolidated interim balance sheet as at 31 December 2008, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date, other selected explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year’s end or from time to time during that half-year.

Directors’ responsibility for the half-year financial report

The directors of the Company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards including the Australian Accounting Interpretations and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagement ASRE 2410: Review of an Interim and Other Financial Reports 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 consolidated entity’s financial position as at 31 December 2008 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 Fission Energy 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

Page 23 of 24

Grant Thornton (WA) Partnership ABN 17 735 344 518, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation.

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 complied with the independence requirements of the Corporations Act 2001.

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 Fission Energy Limited is not in accordance with the Corporations Act 2001, including:

• 1 giving a true and fair view of the consolidated entity’s financial position as at 31 December 2008 and of its performance for the half-year ended on that date; and

• 2 complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporations Regulations 2001.

3

GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants

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MJ Hillgrove Partner

Perth, 10 March 2009

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