CONICO LTD — Interim / Quarterly Report 2013

Jul 28, 2013

ACN 119 057 457

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(Formerly Fission Energy Ltd)

ASX QUARTERLY REPORT

FOR PERIOD ENDED 30TH JUNE 2013

Mt Thirsty Cobalt – Nickel Oxide Project - positive results continue …

Highlights

Further metallurgical test work, process development and financial modelling carried out by Consultants RMDSTEM during the quarter:

• Agitated leach tests prove the ability of SO2 alone to extract ~80% Co and 25% Ni from Mt Thirsty ore in 4 to 5 hours with low Fe extraction and acid consumption.

• Value adding by production of Ni-Co oxide chemicals from a Co-Ni hydroxide precipitate could have a premium of 15-20% above their LME metal values.

• Revised Capex of $66.7-$68.5m for two 3000 tpd processing options including $20m for site infrastructure. Opex estimated at $5.53 to $5.75/lb Co.

• Company name changed to Conico Ltd to reflect operational focus.

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Figure 1: Mt Thirsty Project Location

Level 15, 197 St George’s Terrace, Perth, Western Australia 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866 Website: www.conico.com.au

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Report for June Quarter 2013

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Metallurgical Testwork

Subsequent to the test work successfully completed last quarter consultants RMDSTEM were engaged to carry out the following additional tasks:

• Conduct agitated Leach tests (5 large bottle roll tests) to prove the ability of SO2 to extract Cobalt from Mt Thirsty ore.

• Demonstrate that that SO2 alone, as sulphurous acid, can extract the Cobalt and

• Manganese.

• Demonstrate that no sulphuric acid is needed to drive the process.

• Demonstrate that only minimal iron needs to be released into solution.

• Identify value-added products, assess the cost benefits and outline the process.

• Conduct financial modelling for the recently proposed thickener and resin process flowsheet options (refer previous Quarterly report).

Agitated Leach Tests

• A 10 kg split from a master bulk sample was selected at random. This was screened and crushed to pass a 1.0 mm screen, with a series of 1 kg subsamples derived from this sample.

• The subsamples were placed into a dried 18L bottle fixed in a small cement mixer and a requisite amount of water added, the temperature adjusted, and SO2 injected at various rates.

• Samples were extracted at the start, then at 10, 20, 40, 60, 90 and 120 minutes for four samples. These were carried out at various rates of SO2 injection, and at different temperatures.

• The solids were screened to -300 μm, and -106 μm, and the three solids filtered, dried and assayed. These assays were used to compute a true head grade along with the Co, Ni, Mn, and Fe assays of the liquid samples that were taken.

• The data from the first four tests was examined and it was concluded that more time and more water should be used to allow for more SO2 to be in the experiment.

• A fifth experiment was run for four hours (or 240 minutes).

Test Results

Test results are summarised in Table 1 and graphs (Figure 2a & b) showing results obtained for Tests 3 and 4 are included below

.

RMDSTEM are of the opinion that if continued for another hour both Tests 3 and 4 should achieve 80% Co recovery with Fe release still controlled. Speciation tests indicate that the best possible recovery of Co is 87% (the portion tied up in Mn oxides) as the remainder is locked up in silicates and other minerals by stronger covalent bonds.

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CONICO LTD

Report for June Quarter 2013

Table 1: Summary of Results of Agitated Leach Tests

Test Number	Time Min	Weight Sample	Volume Water	Start pH	Finish pH	Recovery % Co % Mn % Ni % Fe	Recovery % Co % Mn % Ni % Fe	Recovery % Co % Mn % Ni % Fe	Recovery % Co % Mn % Ni % Fe	Temp. C	G SO2
SO2-1	120	1000.5	4032	5.90	1.74	41.91	55.43	13.13	0.24	20	52.38
SO2-2	120	1009.1	4268	5.91	1.8	57.89	68.46	20.95	0.4	40	39.29
SO2-3	120	1003.4	4030	3.65	1.37	70.94	89.03	26.69	0.75	40	81.48
SO2-4	120	1003.3	3921	5.25	1.39	69.06	84.6	26.28	0.79	55	61.11
SO2-5	240	1005.5	6682	4.30	1.53	81.43	61.9	23.91	0.79	60	52.38

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Figure 2a: SO2 Test 3 Metal Recovery and Grams SO2 at 38[o] C

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Figure 2b: SO2 Test 4 Metal Recovery and Grams SO2 at 58[o] C

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CONICO LTD

Report for June Quarter 2013

Based on the test results to date RMDSTEM concluded that provision of 4 to 5 hours of leaching capacity should suffice to give an average Co recovery of 80%. If the temperature is allowed to exceed 40[o] C the speed of the reaction will increase but so will the extraction of Fe which would dilute the final product.

Value Added Products

RMDSTEM were requested to identify potential value added products from Mt Thirsty Co -Ni hydroxide precipitates, assess their cost benefits and outline a recovery process. A production flow diagram (Figure 3) was designed to produce Ni and Co oxide chemicals which could have a 15 to 20% premium above their LME metal value.

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Figure 3: Value Added Co and Ni Chemicals Production Flow Diagram

Financial Modelling

RMDSTEM carried out financial modelling based on two flowsheet options, Resin in Pulp and a Thickener Prewash (refer March Quarterly Report) using a throughput of 3000 tonnes per day. A deterministic sensitivity analysis was undertaken to examine risk and uncertainty.

Both flowsheet options were found to have similar Capex requirements of $68.5m (RIP) and $66.7m (Thickener) including 30% contingencies on plant and equipment and $20m for site infrastructure. Unit operating costs were estimated at $5.75/lb Co for the RIP option and $5.53/lb for the Thickener option.

The major external risk factors are exchange rate and cobalt price and the major internal factors cobalt head grade, payable cobalt and leach recovery rate.

Based on their recent testwork and results of their financial modelling RMDSTEM believe Mt Thirsty has good potential to be a low cost cobalt project. They recommend a detailed Pre- Feasibility study including large scale testing, process development and design.

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CONICO LTD

Report for June Quarter 2013

Corporate

Approval was given for a change of company name from “Fission Energy Ltd” to “Conico Ltd” (ASX Code CNJ) at a general meeting held on 28[th] June. The new name now reflects the focus of the company’s operations on the Mt Thirsty Cobalt-Nickel project.

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Greg Solomon Executive Chairman

Mt Thirsty Project Details

The Mt Thirsty Cobalt –Nickel -Manganese oxide project covering an area of 47km[2] is located 20km north-northwest of Norseman in the southern goldfields of Western Australia, a well endowed nickel terrain (see Figure 1). Conico Ltd through its wholly owned subsidiary Meteore Metals Pty Ltd owns 50% of the project in joint venture with Barra Resources Limited. The Mt Thirsty deposit has the potential to emerge as a significant cobalt supplier. Recent metallurgical test work indicates that high recoveries of cobalt together with some nickel can be achieved through low temperature agitated leaching.

Mt Thirsty has a JORC (2004) compliant Indicated Resource of 16.6 million tonnes at 0.14% Cobalt, 0.60% Nickel and 0.98% Manganese and a JORC (2004) compliant Inferred Resource of 15.3 million tonnes at 0.11% Co, 0.51% Ni and 0.73% Mn over a length of 1.6 kilometres and a width of up to 850 metres.

As well as the Co-Ni 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. Intersections of nickel sulphides up to 4m down hole at 3.5% Ni were made by the joint venture in 2010.

***

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 other Mineral Exploration activities in Australia, 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.

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Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

CONICO LTD (formerly Fission Energy Ltd)

	ABN 49 119 057 457 Consolidated statement of cash flows	ABN 49 119 057 457 Consolidated statement of cash flows	Quarter ended (“current quarter”) 30 June 2013	Quarter ended (“current quarter”) 30 June 2013
			30 June 2013
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		Curent quarter $A’000		Year to June (12 months) $A’000
		- (17) - - (37) - 1 - - 9		- (242) - - (327) - 5 - - 9
		(44)		(555)
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)		- - - - - - - - -		- - - 22 - - - - -
		-		22
		(44)		(533)

Notes

1.2a Exploration & evaluation – This includes payments for exploration and evaluation as part of the due diligence on the Camobian project.

• See chapter 19 for defined terms.

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Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(44)	(533)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. (Refer to 1a) 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	- - 100 - - -	181 - 100 - - -
	100	281
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	56 39 -	(252) 347 -
	95	95

Payments to directors of the entity and associates of the directors

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

the related entities
1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
	-
	-

1.25 Explanation necessary for an understanding of the transactions -

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

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

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
	15
	-
	-
	30
Total	45

Reconciliation of cash

Reconciliation of cash	Reconciliation of cash
Reconciliation of cash at the end of the		Current quarter		Previous quarter
quarter (as shown in the consolidated		$A’000		$A’000
statement of cash flows) to the related items
in the	accounts is as follows.
5.1	Cash on hand and at bank		95		39
5.2	Deposits at call		-		-
5.3	Bank overdraft		-		-
5.4	Other (provide details)		-		-
	Total: cash at end of quarter(item 1.22)		95		39

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

• See chapter 19 for defined terms.

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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.

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	132,431,258	132,431,258
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 5,501,000	NIL NIL	Exercise price 3 cents 8 cents	Expiry date 31 December 2014 31 December 2016
	1,000,000 5,501,000	NIL NIL	3 cents 8 cents	31 December 2014 31 December 2016
	500,000	NIL	19 cents	26 May 2013
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

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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 2013

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 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting 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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• See chapter 19 for defined terms.

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Appendix 5B Page 5