CONICO LTD — Interim / Quarterly Report 2010

Jul 28, 2010

ACN 119 057 457

ASX QUARTERLY REPORT FOR PERIOD ENDED 30[TH] JUNE 2010

HIGHLIGHTS

MT THIRSTY PROJECT (WA)

Nickel Sulphide Exploration

• New nickel sulphide discovery (6m @ 3.4%Ni) in hole MTRC015

• Follow up RC drilling next Quarter

Mt Thirsty Co-Ni-Mn Oxide Resource - Pre Feasibility Study

• PFS tender submissions received from selected globally recognised engineering companies

• Successful tenderer to be announced. PFS to commence within the next few months.

• Mt Thirsty project showcased at China Nickel Conference in Shanghai

==> picture [335 x 63] intentionally omitted <==

==> picture [335 x 63] intentionally omitted <==

==> picture [335 x 124] intentionally omitted <==

----- Start of picture text -----

E63/373
----- End of picture text -----

Figure 1: Mt Thirsty project location and regional geology.

Level 40, Exchange Plaza 1 2 The Esplanade, Perth, Western Australia 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5855 Website: www.fissionenergy.com.au

Report for June Quarter 2010

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

The Mt Thirsty Cobalt –Nickel -Manganese oxide project covering an area of 66km[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. The Mt Thirsty deposit has the potential to emerge as a significant world cobalt supplier. Metallurgical testwork indicates that high recoveries of cobalt, nickel and manganese can be achieved through low temperature atmospheric leaching. Based on the current flowsheet design, approximately 27,000 tonnes of mixed sulphide precipitate (containing 2,700t Co & 10,000t Ni) and 33,000 tonnes of manganese carbonate could be produced annually from Mt Thirsty.

Mt Thirsty has a current JORC compliant Indicated Resource of 14.8 million tonnes at 0.14% Cobalt, 0.59% Nickel and 0.99% Manganese and a JORC compliant Inferred Resource of 14.2 million tonnes at 0.11% Cobalt, 0.52% Nickel and 0.77% Manganese over a length of 1.3 kilometres and a width of up to 850 metres.

As well as the Cobalt-Nickel–Manganese oxide resource, the Mt Thirsty joint venture tenements have potential for nickel sulphide mineralisation at greater depth within the same ultramafic sequence which hosts the near surface oxide deposit. A potentially significant nickel sulphide discovery was made during the quarter (refer below).

Nickel Sulphide Exploration

A very thick sequence of originally olivine-rich, cumulate - textured ultramafic rocks has been intersected in previous holes drilled at Mt Thirsty. These rocks contain variable amounts of disseminated, vein and stringer-style sulphide mineralisation. The footwall contact where the best concentration of nickel sulphides might be expected was unable to be reached in any holes drilled until this quarter. Basal lava channel embayments located on ultramafic-basalt contacts are a preferred location for nickel sulphide accumulations eg. in the Kambalda region. Several of these basal embayment type structures have been identified within the project area and are currently being evaluated at Mt Thirsty.

RC Drilling

Four RC holes for a total of 775m (MTRC014-017) were completed during the quarter testing the footwall contact position of an interpreted basal lava channel embayment at the southern end of E63/373 (Figures 1 to 3). A 6 metre thick zone of massive stringer nickel sulphides assaying 3.38% nickel (Table 1 and Figure 2) was intersected adjacent to the footwall basalt-ultramafic contact at a down hole depth of 201 metres (a vertical depth of approximately 190 metres) in hole MTRC015. This hole (collared at 370970E and 6446450N (GDA94 Zone 51)) and inclined at 60[o] to the west was the first to intersect the footwall contact zone. Sampling was undertaken with a spear and assayed by Inductively Coupled Plasma – Mass Spectroscopy (ICP MS). The average weight of the samples was 4 kg.

Two other holes MTRC014 and MTRC016 located 200 metres north and south of MTRC 015, failed to reach the footwall contact due to drilling constraints. These may be deepened by diamond drilling at a later date.

The zone of nickel sulphide mineralisation contains visible sulphide minerals including pyrrhotite, chalcopyrite, pentlandite, pyrite and magnetite. The mineralisation is located near the base of a 50m thick flow of serpentinised olivine-rich cumulate textured ultramafics.

2

Report for June Quarter 2010

The massive nickel sulphide stringer mineralisation in MTRC015 appears to have been remobilised from a nearby source. Geophysical interpretation based on aeromagnetic data indicates the lava channel has a strike length of at least 400m. The geology appears quite complex (Figure 2) with several flat dipping pegmatite sills breaking up the stratigraphy into segments similar to the geological setting of Western Areas Flying Fox Nickel Deposit at Forrestania.

Table 1: Nickel and copper assays for RC drill hole MTRC 015.

Hole No	From	To	Downhole	Ni	Cu
	(m)	(m)	Width (m)	(%)	(%)
MTRC015	201	202	1.00	2.4%	0.05%
MTRC015	202	203	1.00	0.2%	0.43%
MTRC015	203	204	1.00	6.0%	0.12%
MTRC015	204	205	1.00	7.5%	0.15%
MTRC015	205	206	1.00	0.2%	0.01%
MTRC015	206	207	1.00	4.0%	0.08%

Based on the current geological interpretation, down hole intercepts are less than true width (refer Figure 2).

==> picture [389 x 319] intentionally omitted <==

Figure 2: Interpreted cross section through RC Holes MTRC010 & 015 showing location of nickel sulphide intersection.

3

Report for June Quarter 2010

==> picture [455 x 314] intentionally omitted <==

Figure 3: Mt Thirsty drill hole locations over TMI magnetic image showing interpreted footwall contact. Black dots are previous holes testing the oxide resource.

Diamond Drilling

Two diamond holes MTDD025 and MTDD026 (Figure 3) totalling 544.90m were also completed during the quarter following up deep hole MTDD008. Hole MTDD008 intersected a substantial zone of remobilised stringer nickel sulphides at 314m. This hole was originally drilled to test one of two EM conductors identified following a surface EM survey over the eastern portion of E63/373 in the vicinity of surface nickel sulphide gossans.

Holes MTDD025 and 026 were designed to test the centres of both EM conductors at around 300m depth. The EM anomalies were interpreted to be possible nickel sulphide accumulations at the base of the Mt Thirsty sill. MTDD025, designed to test the southern of the two conductors, was unable to reach target depth due to drilling problems.

MTDD026 was completed to a depth of 323m passing through a sulphide stringer zone at almost the same stratigraphic position as in hole MTDD008. This zone is 24m in thickness and commences at 274m downhole. Downhole EM surveying of MTDD026 confirmed a significant conductor at 250m depth which coincided with a 1m thick black shale unit. The stringer zone only recorded a weak off-hole EM response.

MTDD027 is currently being drilled to test the southern conductor and is presently at 255m depth. The hole is targeting the centre of the EM anomaly and target depth is around 320m.

Future Program

Follow-up RC drilling around the strong nickel sulphide intersection in RC hole MTRC015 is planned for the second week in August.

4

Report for June Quarter 2010

Mt Thirsty Ni –Co- Mn Oxide Deposit

Pre Feasibility Study (PFS)

Tender documents were prepared and forwarded to selected globally recognised process engineering companies during the quarter. All of the tender submissions received from the process engineers have been evaluated and a short list compiled. The successful tenderer will be announced shortly.

The PFS is now scheduled to commence within the next few months with completion early in 2011. Pending a favourable outcome the joint venture partners are confident the project has all of the necessary ingredients to attract a major international cobalt refiner/off-take partner to fund a final feasibility and project construction.

Metallurgical Testwork

Metallurgical testwork continued during the quarter on large composite samples of the PQ drill core obtained in the previous quarter to allow further refinement of the Mt Thirsty flow sheet.

Process Water

A number of potential ground water sources have been identified in the Mt Thirsty area and further work to test these will be carried out during the remainder of 2010 to provide sufficient information for the PFS.

Infill Resource Drilling

Infill resource drilling has been delayed pending an aboriginal heritage survey. The survey has now been successfully completed and drilling should commence mid to late August. Approximately 150 holes will be drilled for about 7,500m mostly on the western side of the orebody within the current inferred resource. This will allow an updated ore resource estimation and enable open pit optimisation and mine scheduling studies to be carried out in conjunction with the PFS.

Advantages of the Mt Thirsty Project

A presentation was made by metallurgical consultants IMO on behalf of the Mt Thirsty Joint Venture at the China Nickel Conference in Shanghai in May. This presentation highlighted Mt Thirsty as having the following advantages compared to other nickel-cobalt oxide projects elsewhere in the world:

• World class cobalt orebody, with

• Favourable metallurgy, single stage leach which requires no autoclaves for high recoveries and has low acid consumptions

• Large proportion of revenue from cobalt which is perceived to have strong future price fundamentals

• Located in a developed country with low sovereign risk

• Located in a mining friendly state with very significant experience in the operation of hydrometallurgical treatment plants for nickel laterites

• Low rainfall area which allows disposal of tailings without the requirement for ocean disposal of plant effluents (compared with many global laterite projects)

5

Report for June Quarter 2010

• Good infrastructure – close to main highway, railway, gas and potable water pipelines, Esperance port etc.

==> picture [214 x 38] intentionally omitted <==

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 Michael J. Glasson and Robert N Smith, who are members of the Australian Institute of Geoscientists, both of whom have more than five years experience in the field of activity being reported on. Mr Glasson and Mr Smith are consultants. Mr Glasson and Mr Smith 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 Glasson and Mr Smith 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.

6

Appendix 5B Mining exploration entity quarterly report

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, 01/06/10.

Name of entity

	Name of entity
	FISSION ENERGY LTD
	ABN 85 009 253 187 Consolidated statement of cash flows
			30 June 2010
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & 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 Operating Cash Flows		Current quarter $A’000		Year to date (12 months) $A’000
		17 (351) - - (176) - 16 - - -		63 (1,259) - - (533) - 71 - - -
		(494)		(1,658)
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)		- - (2) - - - - - -		- (405) (3) - - 30 - -
		(2)		(378)
		(496)		(2,036)

• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(496)	(2,036)
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) Net financing cash flows	- - - - - -	1,147 - - - - -
	-	1,147
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 ofquarter	(496) 1,847 -	(889) 2,240 -
	1,351	1,351

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A'000

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
		109
		-
1.25 Explanation necessaryfor an understandingof the 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. Directors Fees paid during the period. Reimbursement of bona-fide expenses Non-cash financing and investing activities	Explanation necessaryfor an understandingof the 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. Directors Fees paid during the period. Reimbursement of bona-fide expenses

2.1 2.2	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
	-
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	-

• See chapter 19 for defined terms.

Appendix 5B Page 2

30/9/2001

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

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

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	350
	-
	-
	150
Total	500

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as	Current quarter		Previous quarter
shown in the consolidated statement of cash flows) to	$A’000		$A’000
the related items in the accounts is as follows.
5.1 Cash on hand and at bank		1,351		1,847
5.2 Deposits at call		-		-
5.3 Bank overdraft		-		-
5.4 Other (provide details)		-		-
Total: cash at end of quarter(item 1.22)		1,351		1,847

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
	EL 63/1267 EL 63/1303 EL 63/1304	Direct Direct Direct	0% 0% 0%	50% 50% 50%

• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

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
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital,buy-backs	126,930,258	126,930,258
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 (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	1,000,000 44,824,992 1,000,000 511,508 3,000,000 888,888 500,000	NIL 44,824,992 NIL NIL NIL NIL NIL	Exercise price 20 cents 20 cents 20 cents 20 cents 13.75 cents 12 cents 19 cents	Expiry date 18 June 2010 28 February 2011 31 March 2011 16 April 2012 20 Nov 2012 12 Feb 2013 26May2013
7.11 Debentures (totals only)	NOT APPLICABLE
7.12 Unsecured notes (totals only)	NOT APPLICABLE

• See chapter 19 for defined terms.

Appendix 5B Page 4

30/9/2001

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act.

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

Sign here: (Company secretary)

Date: 29 July 2010

Print name: Aaron Gates

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.

• == == == == ==

• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 5