CONICO LTD — Interim / Quarterly Report 2012

Mar 12, 2012

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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 2011

FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CONTENTS

Highlights	3
Corporate Directory	4
Review of Operations	5
Directors’ Report	7
Auditor’s Independence Declaration	8
Consolidated Statement of Comprehensive Income	9
Consolidated Statement of Financial Position	10
Consolidated Statement of Changes in Equity	11
Consolidated Statement of Cash Flows	12
Notes to the Financial Statements	13
Directors’ Declaration	15
Independent Auditor’s Review Report	16

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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HIGHLIGHTS

HIGHLIGHTS

MT THIRSTY PROJECT (WA)

Mt Thirsty Co-Ni-Mn Oxide Resource

• Bottle roll tests indicate Mt Thirsty oxide ore may be amenable to the low cost INNOVAT continuous vat leaching process

• Proposal put to native title claimants for grant of Mining Lease

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Figure 1: Mt Thirsty Location Plan

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, ACIS

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 Audit Pty Ltd 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)

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

Page 4 of 17

FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

REVIEW OF OPERATIONS

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

The Mt Thirsty Cobalt –Nickel -Manganese oxide project covering an area of 58km[2] is located 20km north-northwest of Norseman in the southern goldfields of Western Australia, a well endowed nickel terrain (see 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.

Mt Thirsty has a JORC compliant Indicated Resource of 16.6 million tonnes at 0.14% Cobalt, 0.60% Nickel and 0.98% Manganese and a JORC compliant Inferred Resource of 15.3 million tonnes at 0.11% Cobalt, 0.51% Nickel and 0.73% Manganese over a length of 1.6 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 nickel sulphide discovery was made by the joint venture in 2010.

Mt Thirsty Ni –Co- Mn Oxide Deposit

Metallurgical Testwork

Perth consultants RMDSTEM were commissioned to undertake a preliminary evaluation of the viability of leaching Mt Thirsty oxide ore using sodium metabisulphite. The testwork was carried out on available drill chip samples not totally representative of the overall resource and bottle roll test recoveries of 78.7% Co and 21.1% Ni were obtained. Test work also indicates that there is a good possibility of improving metal recoveries by regrinding and leaching after attritioning as the highest recoveries were obtained from the finer sized fractions (refer Figures 2a & b).

Based on these test results Mt Thirsty oxide ore may be amenable to continuous vat leaching using the proprietary INNOVAT treatment process. INNOVAT processing would require considerably lower capital expenditure and operating costs than for the previously developed flow sheet design. Cost benefits of the INNOVAT process could potentially far outweigh the considerably lower Ni recoveries achieved.

It has been proposed that Co and Ni could be precipitated from the pregnant INNOVAT leach liquor as sulphides using

NaHS or as mixed hydroxides using MgO.

Further detailed testwork will be carried out next quarter along with a conceptual feasibility study to determine the efficacy and viability of this process for Mt Thirsty oxide ore.

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100.00
90.00
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70.00
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50.00
% [ Extraction] 40.00 Series1
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Time in Hours
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Figure 2a: Co recovery in the Bottle Roll test for -90µm sample

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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100.00
90.00
80.00
70.00
60.00
50.00
% [ Extraction] 40.00 Series1
30.00
20.00
10.00
0.00
-5 5 15 25 35 45 55 65 75
Time in Hours
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Figure 2b: Co recovery in the Bottle Roll test for -6350 +3350µm sample

Mining Lease

A proposal was put to the native title claimants for a compensation package that will pave the way towards grant of the Mining Lease covering the Mt Thirsty cobalt - nickel oxide deposit. No response has yet been received.

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 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.

ASX Code: FIS

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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DIRECTORS’ REPORT

Your directors submit the financial report of the consolidated group for the half-year ended 31 December 2011.

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

Review of Operations

The net loss after income tax for the half year was $459,103 (2010: $136,664).

A review of the operations of the Group during the half-year ended 31 December 2011 is set out in the Review of Operations on Page 5.

Auditor’s Declaration

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 8 for the half-year ended 31 December 2011.

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

Director Gregory H Solomon

Dated this 13[th] day of March 2012

ASX Code: FIS

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Auditor’s Independence Declaration

To The Directors of Fission Energy Limited

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 info.wa@au.gt.com W www.grantthornton.com.au

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 2011, 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 AUDIT PTY LTD Chartered Accountants

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P W Warr Partner – Audit & Assurance

Perth, 13 March 2012

Grant Thornton Audit Pty Ltd ABN 94 269 609 023

a subsidiary or related entity of Grant Thornton Australia Ltd 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

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FISSION ENERGY LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

Notes Other income Accounting and audit expense Depreciation and amortisation expense Employee benefits expense Realised loss sale of available-for-sale assets Legal and other consultants expense Management Fees Other expenses Loss before income tax Income tax expense Loss for the period Other Comprehensive Income Revaluation Reserve Income tax relating to other comprehensive income Other comprehensive income, after tax Total Comprehensive Income / (Loss) attributable to members of the parent Basic/Diluted earnings per share (cents per share)	Consolidated Group 31 Dec 2011 31 Dec 2010 $ $ 13,887 180,349 (17,789) (13,145) (5,571) (6,837) (110,935) (134,382) (198,099) - (8,460) (15,340) (97,335) (97,335) (34,801) (49,974)
	(459,103) (136,664) - -
	(459,103) (136,664)
	93,849 - - -
	93,849 - (365,254) (136,664)
	(0.3617) (0.1077)

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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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Exploration and Evaluation expenditure Financial Assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	Consolidated Group 31 Dec 2011 30 June 2011 $ $ 338,382 630,036 17,601 61,000
	355,983 691,036
	62,445 68,017 14,611,911 14,589,952 - 104,250
	14,674,356 14,762,219
	15,030,339 15,453,255
	48,881 106,543
	48,881 106,543
	250,000 250,000
	250,000 250,000
	298,881 356,543
	14,731,458 15,096,712
	16,618,474 16,618,474 477,450 383,601 (2,364,466) (1,905,363)
	14,731,458 15,096,712

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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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Share Capital
		Option	Revaluation	Accumulated
	Ordinary	Reserve	Reserve	Losses	Total
	$	$		$	$
Balance at 1 July 2010	16,618,474	477,450	(128,099)	(1,644,134)	15,323,691
Total other comprehensive income	-	-	-	-	-
Loss attributable to members of the parent			-
entity	-	-		(136,664)	(136,664)
Sub-total	16,618,474	477,450	(128,099)	(1,780,798)	15,187,027
Dividends paid or provided for	-	-	-	-	-
Balance at 31 December 2010	16,618,474	477,450	(128,099)	(1,780,798)	15,187,027
Balance at 1 July 2011	16,618,474	477,450	(93,849)	(1,905,363)	15,096,712
Total other comprehensive income	-	-	93,849	-	93,849
Loss attributable to members of the parent			-
entity	-	-		(459,103)	(459,103)
Sub-total	16,618,474	477,450	-	(2,364,466)	14,731,458
Dividends paid or provided for	-	-	-	-	-
Balance at 31 December 2011	16,618,474	477,450	-	(2,364,466)	14,731,458

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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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Exploration and evaluation expenditure Purchase of property, plant and equipment Refund of rehabilitation bond Proceeds from sale of investments Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 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 2011 31 Dec 2010 $ $ 30,670 42,534 (309,615) (322,399) 9,923 26,316
	(269,022) (253,549)
	(32,632) (652,048) - (899) 10,000 - - 350,000
	(22,632) (302,947)
	- -
	- -
	(291,654) (556,496) 630,036 1,350,670
	338,382 794,174

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 2011

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. Compliance with Australian Accounting Standards ensures compliance ensure the financial statements and note also comply with International Financial Reporting Standards.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2011 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 half-year report does not include full disclosures of the type normally included in an annual financial report.

Accounting Policies

The accounting policies have been consistently applied by the entities in the consolidated group and are consistent with those in the June 2011 financial report except for the adoption of the following new and revised Accounting Standards.

Whilst amendments to the Accounting Standards and Australian Accounting Interpretations have been considered and the Group does not anticipate early adoption of any of the reporting requirements and does not expect these requirement to have any material effect on the Group’s financial statements.

Going Concern

These financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities the realisation of assets and extinguishment of liabilities in the ordinary course of business.

The Group has reported a net loss for the period of $459,103 and a cash outflow from operating activities of $269,022.

The directors are confident that the Group, subject to being able to raise further capital, will be able to continue its operations as a going concern, Without such capital, the net loss for the period and the cash outflow from operating activities indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern. The directors also carefully manage discretionary expenditure in line with the Group’s cash flow.

The continuing applicability of the going concern basis of accounting is dependent upon the Group’s ability to source additional finance. Unless additional finance is received the Group may need to realise assets and settle liabilities other than in the normal course of business and at amounts, which could differ from the amounts at which they are stated in these financial statements.

NOTE 2: LOSS FOR THE PERIOD The following revenue and expense items are relevant in explaining the financial performance for the interim period Realised loss sale of available-for-sale assets	2011 $ 2010 $ (198,099) -
	(198,099) -

NOTE 3: SEGMENT INFORMATION

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of Directors (chief operating decision maker) in assessing performance and determining the allocation of resources.

The Group is managed on the basis on the basis it is a mineral exploration company operating in the geographical region of Australia. The mineral assets held via outright ownership or joint venture are considered one business segment and the minerals currently being targeted include cobalt, nickel, manganese and uranium 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 2011

NOTE 4: CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The directors are not aware of any contingent liabilities or contingent assets as at 31 December 2011.

NOTE 5: RELATED PARTY TRANSACTIONS

		2011	2010
		$	$
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.	97,335	97,335
	Legal and professional fees paid to Solomon Brothers, a firm of which Mr GH
	Solomon and Mr DH Solomon are partners.	-	15,974
b.	Associated Companies
	Reimbursement to Tasman Resources Ltd (which has a 28.1% fully diluted
	interest in the Company) for employee costs on a hourly basis, in relation to
	Tasman staff utilised by the Company	-	65,220

NOTE 6: EVENTS SUBSEQUENT TO REPORTING DATE

No 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 9 to 14:

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 2011 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 Gregory H Solomon

Dated this 13[th] day of March 2012

ASX Code: FIS

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Independent Auditor’s Review Report To the Members of Fission Energy Limited

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 info.wa@au.gt.com W www.grantthornton.com.au

We have reviewed the accompanying half-year financial report of Fission Energy Limited (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors’ declaration of the consolidated entity, comprising both the Company and the entities it controlled at the half-year’s end or from time to time during the 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 controls 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 the 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 consolidated entity’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 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

Grant Thornton Audit Pty Ltd ABN 94 269 609 023

a subsidiary or related entity of Grant Thornton Australia Ltd 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

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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:

• a giving a true and fair view of the consolidated entity’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.

Significant uncertainty regarding continuation as a going concern

Without qualifying our opinion, we draw attention to Note 1 in the financial report. The consolidated entity incurred a net loss of $459,103 and net cash outflows from operations of ($269,022) during the half-year ended 31 December 2011. The Company’s ability to continue as a going concern is dependent upon sourcing additional capital and managing discretionary expenditure. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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P W Warr Partner – Audit & Assurance

Perth, 13 March 2012

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