CONICO LTD — Interim / Quarterly Report 2020

Mar 9, 2020

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Conico Ltd ABN 49 119 057 457

and Controlled Entities

Interim Financial Report for the Half-Year Ended 31 December 2019

CONICO 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	12
Auditor’s Independence Declaration	13
Consolidated Statement of Profit or Loss and Other Comprehensive Income	14
Consolidated Statement of Financial Position	15
Consolidated Statement of Changes in Equity	16
Consolidated Statement of Cash Flows	17
Notes to the Financial Statements	18
Directors’ Declaration	20
Independent Auditor’s Review Report	21
Interests in Mining Tenements	23

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

HIGHLIGHTS:

MT THIRSTY COBALT PROJECT:

• Spring level 2 flora and vegetation survey completed

• SO2 leaching testwork completed

• Test work demonstrates reduced nickel losses

• Pre-feasibility study in final stages of engineering

• Mine open pits and tailings design complete

• Wood finalising PFS capital and operating cost estimates

• All supporting PFS chapters in final draft

CORPORATE:

• Non-renounceable pro-rata rights offer to Conico shareholders raised

• $326,399.68 through the issue of 32,639,968 shares at $0.01 each

• Research and Development rebate of $103,000 received

• Loan facility from Barra Resources Ltd for up to $500,000 to facilitate the completion of the Mt Thirsty JV

Figure 1: Mt Thirsty Project Location

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

CORPORATE DIRECTORY

DIRECTORS:

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

COMPANY SECRETARY:

Aaron P Gates B.Com, CA, AGIA

REGISTERED OFFICE:

Level 15 197 St Georges Terrace Perth Western Australia 6000 Tel +61 8 9282 5889 Fax +61 8 9282 5866 Email: mailroom@conico.com.au Website: www.conico.com.au

SOLICITORS:

Solomon Brothers Level 15 197 St Georges Terrace Perth WA 6000

AUDITORS:

Nexia Perth Audit Services Pty Ltd Level 3 88 William Street Perth WA 6000

SHARE REGISTRY:

Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009

STOCK EXCHANGE LISTING:

ASX Code: CNJ (ordinary shares) CNJO (options)

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

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

REVIEW OF OPERATIONS

MT THIRSTY COBALT PROJECT

(50% Conico Ltd: 50% Barra Resources Ltd – Joint Venture, MTJV )

The Mt Thirsty Cobalt Project is located 16km north-northwest of Norseman, Western Australia (Figure 1).

The Project contains the Mt Thirsty Cobalt-Nickel (Co-Ni) Oxide Deposit that has the potential to emerge as a significant cobalt producer. In addition to the Co-Ni Oxide Deposit, the Project also hosts nickel sulphide (Ni-S) mineralisation.

Demand for cobalt looks very encouraging as the world becomes more dependent on rechargeable power sources for portable electronics and electric vehicles. In addition, the battery industry is also competing with demand for cobalt from producers of superalloys, aircraft turbines and chemical industries.

The undeveloped Mt Thirsty Cobalt Project has a significant resource with a potential to have a long mine life. The Project is close to all necessary infrastructure (rail, road, power, water, and sea port) and, being in a mining orientated state, has the potential to attract a variety of interested parties including end users of cobalt. Mt Thirsty has the potential to become a major supplier to the burgeoning battery supply chain.

The great advantage of Mt Thirsty compared to other potential cobalt operations is the nature of the resource, being a flat lying, continuous and thick deposit starting from near surface to around 70 metres below surface. Due to intense oxidation, the deposit is very soft, fine grained and low in silica.

The Mount Thirsty Joint Venture (MTJV) is progressing a Pre-Feasibility Study (PFS) on the project utilising industry leading consultants led by Amec Foster Wheeler Australia Pty Ltd, trading as Wood.

The Mt Thirsty Project is highly leveraged to cobalt prices with approximately 80% of potential revenue being from cobalt; far higher than other nickel laterite projects.

Conico Ltd is the operator of the MTJV and the Joint Venture has appointed Mr Sean Gregory, MD and CEO of Barra Resources Ltd as Manager of the Mt Thirsty Project Prefeasibility Study (PFS).

ACTIVITIES

Mineral Resource Estimate

The Mt Thirsty Mineral Resource was further upgraded during the period to 26.9Mt @ 0.12% cobalt and 0.52% nickel (Table 1).

The upgrade was as a result of checks during mine planning and resulted in a useful increase in contained metal of 4.7%.

Table 1: Mt Thirsty Mineral Resource Summary (0.06% Co cut off). (Refer CNJ ASX Announcement 9 September 2019).

Previously reported results shown in square brackets . Minor discrepancies in totals due to rounding.

	Dry Tonnes (Mdt)	Cobalt (%)	Nickel (%)
Mt Thirsty Indicated	22.8 [22.6]	0.121 [0.116]	0.53
Mt Thirsty Inferred	2.5	0.103 [0.099]	0.45 [0.44]
Mt Thirsty Sub Total	25.4 [25.1]	0.119 [0.114]	0.52
Mt Thirsty North (Inferred)	1.5	0.092	0.55
Mt Thirsty Total	26.9 [26.6]	0.117 [0.113]	0.52

Further Metallurgical Testwork

Variability Leaches

Additional variability leaches were completed at the upper and lower end of the grade ranges expected. Seventeen variability leaches have now been completed on samples with head grades ranging from 0.03% cobalt to 0.43% cobalt. The variability leaches have confirmed strong correlations between cobalt head grade and cobalt and nickel extraction (Figures 2 and 3). The relationship is logarithmic, with very high extractions at high grades and leaching performance dropping off below the resource cutoff grade of 0.06% cobalt.

These simple regressions produced higher correlations than more complex multiple non-linear regressions assessed on a domain-by domain basis.

The variability leaches are in addition to the six bulk leaches, twenty four optimisation leaches and eight beneficiation leaches completed during the PFS and fifteen SO2 leaches in the scoping study, bringing the total number of SO2 leaches completed to fifty five, with remarkably robust performance, giving confidence in the leaching method proposed.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

Figure 2: Cobalt extractions and regressions from variability leaches

Figure 3: Nickel extractions and regressions from variability leaches

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

Bulk Leaches

Bulk Leaches 4, 5 and 6 have been completed. The results are shown in Table 2 below.

Table 2: Mt Thirsty Bulk Leaches

BL	Test ID	Co extraction (%)	Ni extraction (%)	Fe in sol’n (g/l)
1	HY7334	85.43	30.45	11.7
2	HY7460	82.52	27.38	1.3
3	HY7556	83.36	26.57	2.2
4	HY8147	83.74	36.85	13.0
5	HY8190	85.78	35.30	8.1
6	HY8189 (lower grade)	68.61	20.46	3.0

Bulk Leaches 1-4 and 6 were completed on the Master Composite (0.18% Co) derived from 2016 Reverse Circulation (RC) drilling using pure SO2 and O2 gas to allow the conditions to be accurately optimised. Pleasingly, Bulk Leach 5 using dilute SO2 gas more typically available in operations delivered the best result yet. Bulk Leach 6 was on a lower grade composite (0.12% Co) derived from 2018 Air Core (AC) drilling that performed as expected based on the variability leaches as plotted on Figures 2 and 3.

Conservatively, the PFS will average the extractions from Bulk Leach 3 and Bulk Leach 5 as there is only one test using dilute SO2. This also moderates the nickel extraction to reflect the economic target of leaching 5 g/l iron.

The bulk leach extractions selected have been used to adjust the regressions charted in Figures 2 and 3. This results in an increase in cobalt extraction of about 6% which fairly represents the gains made during optimisation between the variability leaches and the bulk leaches. The nickel recoveries will be adjusted 6% downwards using the same method and reflective of the excess iron leaching that occurred in the variability leaches.

Primary and secondary neutralisation tests have all been completed without any significant losses of payable metals.

Mixed Sulphide Precipitation

Mixed Sulphide Precipitation testwork was completed during the period.

Five sighter tests were completed on one litre solutions at 70 degrees celsius. NaHS addition was set at 107-125% of the stoichiometric requirement and NaOH addition was 0.54-0.80kg/m[3] . The pH was increased gradually from 3.2 in the first test to 3.8 in the fifth test. Cobalt precipitation increased from 75.7% to 94.5% and nickel precipitation increased from 91.7% to 99.4% from the first to the fifth sighter test.

The bulk 17.2 litre sample from the secondary neutralisation test was then run at 70 degrees celsius and pH 3.8. NaHS and NaOH were added in excess, at 164% of the stoichiometric requirement and 0.93kg/m[3] respectively, to ensure the target precipitation was achieved. Both cobalt and nickel precipitation exceeded 99.8%, demonstrating that minimal losses are achievable in mixed sulphide precipitation. This is an improvement on previous assumptions for Nickel losses during mixed sulphide precipitation, which will be revised downwards for the previously assumed 2% to the now demonstrated 1%.

Cobalt losses during mixed sulphide precipitation will remain as previously assumed at 2%

Assumed losses in the Counter Current Decantation (CCD) will remain at 2% for both payable metals. The CCD loss estimate can only be refined with continuous piloting, which will be part of forward work post PFS.

The only testwork still underway is Manganese precipitation, both as an oxide for disposal to allow process water recycling and as a carbonate as a potential future by-product.

Mine Planning

Open pit designs have been finalised. 18 pit stages have been designed based on the best known revenue and operating cost assumptions (Figure 4). These multiple stages will allow the scheduling of the highest value material first. They will also allow the later stages to be not mined should economic conditions prove less favourable. As a final step in the PFS, the final revenue and operating cost assumptions will be used to refine the final mine schedule to be published in the PFS.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

The preliminary mine schedule was sent out as a request for quotation. Mining quotes have been received from Hamptons Transport Services Pty Ltd and MACA Ltd. A third major mining contractor is also planning to provide a quote.

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Figure 4: Preliminary mine layout showing pits, dumps, plant, infrastructure and TSF (left) and pit stages (right).

Tailings Design

A tailings sample has undergone testing with results showing that the tailings settle slowly.

The tailings design has now been finalised. The Tailings Storage Facility (TSF) will be constructed using the downstream stacking method, thereby avoid any risks of stacking tailings walls above unconsolidated wet tailings. The embankments will be constructed primarily using mine waste fill. Low permeability clay sourced locally and from the mine waste will be used to line the TSF. The tailings dam has been designed to accommodate 21.6 Mm[3] of tailings up to a maximum height of 35m above natural ground surface. The TSF footprint is large enough for up to 11 years of tailings production, with sufficient real estate available on the mining tenements within the topographical constraints for future expansions (Figure 4).

Process Design

The flowsheet for the PFS is ostensibly unchanged from that proposed during the scoping study other than being increased in scale from 1.5 to 1.8 Mdtpa feed rate or 2.3 Mwtpa to bring revenue forward and maximise the net present value (NPV) of the project. The basic process steps and PFS processing plant layout are shown in Figures 5 and 6.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

Figure 5: Schematic Process Flowsheet for Mt Thirsty.

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Figure 6: 3D isometric of the Mt Thirsty processing plant showing generalised process flow (numbered labels).

Capital and Operating Cost Estimates

Capital and operating cost estimates are being prepared by Wood with all major equipment items being based on multiple vendor quotes.

Report Writing

The following chapters are in final draft: Geology, Mineral Resources, Environment and Community, Marketing, Hydrogeology and Tailings. Write up of Metallurgy, Mining, Process Design, and Infrastructure chapters has commenced.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

Land Access

Following on from the Spring 2018 Level 1 Flora and Fauna survey, a Level 2 Flora and Vegetation survey was completed by Spectrum Ecology during September 2019. The survey did not identify any rare plants or animals and will be suitable to support approvals for the project. All biological surveys sufficient to support approvals for the project are now complete.

Granted tenure, land access agreements and program of works approvals are now in place for water search drilling for the project. This activity has however been rescheduled as a post-PFS activity.

Tenement applications for mining, roads and infrastructure are also moving through the process towards grant.

Discussions are continuing with the Ngadju Traditional Owners towards a Native Title agreement.

Cobalt-Nickel Market

Nickel has been trading at US$13,800 per tonne. Cobalt has stubbornly held levels at around US$32,000 per tonne despite mine closures and production challenges reported at the world’s three largest cobalt mines in the Democratic Republic of Congo (DRC).

Most commodity price forecasters continue to predict that cobalt prices will rise with increased Electric Vehicle (EV) demand in 2020. Cobalt is often cited as the metal most heavily leveraged to the electric vehicle revolution, due to its scarcity. Whilst EV demand has continued to accelerate in Europe, demand in China in the second half of 2019 was impacted by the planned reduction of electric vehicle subsidies. Promisingly, the Chinese government has now scrapped further reductions previously planned for 2020.

The Tesla Model 3 has dominated EV sales in the US and now accounts for approximately half of all electric vehicle sales there. This vehicle represents a compelling value proposition for superior performance and prestige compared to similarly priced European luxury cars. New models expected to debut from traditional OEMs may be what is required for another kick in EV sales growth in this market and hence cobalt commodity prices.

Longer term, the fundamentals of the cobalt and nickel markets remain exceptional, with very few high-quality projects such as Mt Thirsty expected to be available to meet the demand driven by EV’s.

Next Steps

Once the capital and operating cost estimates are finalised, one final version of the mine schedule will be run and the project financial model will be updated. At this point the PFS will be ready for publication, marking a significant milestone for the MTJV and opening the door to project partnering with tier one mining and refining firms looking to secure sustainable sources of cobalt. Importantly, the completion of the PFS will also see a significant reduction in cash burn on the project until the future development partner for the project is agreed and can stamp their mark on the next phase of study.

CORPORATE

Loan Facility

The previously announced loan facility of up to $500,000 from Barra to Conico to facilitate the completion of the PFS was agreed and drawn down by $174,665 during the quarter (refer ASX Announcement dated 29 October 2019).

Research and Development Rebate

A Research and Development rebate of $103,000 was received during the current quarter.

Capital Raising

During the period a non-renounceable pro-rata rights offer to Conico shareholders raised $326,399.68 through the issue of 32,639,968 shares at $0.01 each.

Disclaimer

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 based on interpretations or conclusions contained in this report will therefore carry an element of risk.

This report contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements are expressed in good faith and believed to have a reasonable basis. These statements reflect current expectations, intentions or strategies regarding the future and assumptions based on currently available information. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary from the expectations, intentions and strategies described in this report. No obligation is assumed to update forward-looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

Competent Persons Statements

The information in this report that relates to Exploration Results for the Mt Thirsty project is based on and fairly represents information compiled by Michael J Glasson, a Competent Person who is a member of the Australian Institute of Geoscientists. Mr Glasson is an employee of Tasman Resources Ltd and in this capacity acts as part time consultant to Conico Ltd and the MTJV. Mr Glasson holds shares in Conico Ltd.

The information in this report which relates to the metallurgical test-work for Exploration Results for the Mt Thirsty Cobalt-Nickel Project is based on and fairly represents information compiled by Mr Dean David who is a Member of the Australian Institute of Mining and Metallurgy and a full-time employee of Wood. Mr David consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report which relates to Mineral Resources at the Mt Thirsty Cobalt-Nickel Project is based on information provided to and compiled by Mr David Reid, a Competent Person who is a full-time employee of Golder Associates Pty Ltd, and a Member of the Australasian Institute of Mining and Metallurgy.

Messer’s Glasson, David, and Reid have sufficient relevant experience to the style of mineralisation and type of deposits under consideration and to the activity for which they are undertaking to qualify as a Competent Person as defined in the JORC Code (2012 Edition).

The company is not aware of any new information or data that materially affects the information presented and that the material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Persons’ findings are presented have not been materially modified from the original market announcements.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

DIRECTORS’ REPORT

Your directors submit the financial report of Conico Ltd and its controlled entities (Group) for the half-year ended 31 December 2019.

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 $158,668 (2018: $245,997).

A review of the operations of the Group during the half-year ended 31 December 2019 is set out in the Review of Operations on Page 5.

Events subsequent to reporting date

Results of the Mt Thirsty Pre-Feasibility Study (PFS) were released to the market on 20th February 2020 (Refer CNJ ASX Announcement, 20/02/20 “Positive Mt Thirsty PFS to Provide ‘First World’ Security of Cobalt Supply”).

No other matters or circumstances have arisen since the end of the period 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.

Auditor’s Declaration

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 13 for the half-year ended 31 December 2019.

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

Chairman Gregory H Solomon

Dated this 9[th] day of March 2020

ASX Code: CNJ

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Auditor’s independence declaration under section 307C of the Corporations Act 2001

To the Directors of Conico Limited

I declare that, to the best of my knowledge and belief, in relation to the review for the period ended 31 December 2019, there have been:

• (i) no contraventions of the auditor’s independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• (ii) no contraventions of any applicable code of professional conduct in relation to the review.

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Nexia Perth Audit Services Pty Ltd

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M. Janse Van Nieuwenhuizen

Director

Perth 9 March 2020

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

Notes Other income Accounting and audit expense Depreciation and amortisation expense Employee benefits expense Insurance expense Legal and other consultants expense Management fees Other expenses Loss before income tax Income tax (expense)/benefit Loss for the period Other Comprehensive Income Items that may be reclassified to profit or loss Other comprehensive income, after tax Total Comprehensive Loss attributable to members of the parent Basic and diluted loss per share (cents per share)	Consolidated Group 31 Dec 2019 31 Dec 2018 $ $ 9,430 14,373 (23,286) (13,690) (511) (601) (91,980) (99,316) (30,412) (24,661) (23,039) (50,241) (72,000) (72,000) (31,470) (39,900)
	(263,268) (286,036) 104,600 40,039
	(158,668) (245,997)
	- -
	- -
	(158,668) (245,997)
	(0.0420) (0.0726)

The accompanying notes form part of these financial statements.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019

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 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest bearing liabilities Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	Consolidated Group 31 Dec 2019 30 Jun 2019 $ $ 268,553 131,063 12,544 10,676
	281,097 141,739
	6,288 6,799 15,794,636 15,469,981
	15,800,924 15,476,780
	16,082,021 15,618,519
	213,693 74,753
	213,693 74,753
	174,665 - 275,000 275,000
	449,665 275,000
	663,358 349,753
	15,418,663 15,268,766
	20,394,350 20,085,785 788,650 788,650 (5,764,337) (5,605,669)
	15,418,663 15,268,766

The accompanying notes form part of these financial statements.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

Balance at 1 July 2018 Net loss for the period Issue of shares, net of costs Other comprehensive income / (loss) Balance at 31 December 2018 Balance at 1 July 2019 Net loss for the period Issue of shares, net of costs Other comprehensive income / (loss) Balance at 31 December 2019	Share Capital Ordinary Option Reserve Accumulated Losses Total $ $ $ $ 19,282,403 788,650 (5,137,168) 14,933,885 - - (245,997) (245,997) 803,382 - - 803,382 - - - -
	20,085,785 788,650 (5,383,165) 15,491,270
	20,085,785 788,650 (5,605,669) 15,268,766 - - (158,668) (158,668) 308,565 - - 308,565 - - - -
	20,394,350 788,650 (5,764,337) 15,418,663

The accompanying notes form part of these financial statements.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received R&D Tax Rebate Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Exploration and evaluation expenditure Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from loans Net proceeds from share issues 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 2019 31 Dec 2018 $ $ 10,724 13,813 (136,540) (291,848) 131 919 104,600 40,039
	(21,085) (237,077)
	(324,655) (229,831)
	(324,655) (229,831)
	174,665 - 308,565 803,382
	483,230 803,382
	137,490 336,474 131,063 165,746
	268,553 502,220

The accompanying notes form part of these financial statements.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

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 AASB 134: Interim Financial Reporting ensures compliance with IAS 34: Interim Financial Reporting.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2019 and any public announcements made by Conico Ltd and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules . 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 2019 financial report except for the adoption of new and revised Accounting Standards.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. The new and revised Standards and amendments thereof and Interpretations, included AASB 16 Leases . The Group did not have any leases in current or prior periods hence there is no material impact on the adoption of AASB 16 in the current or comparative periods.

Going Concern

These financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activities and 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 $158,668 (2018: $245,997) and a cash outflow from operating activities of $21,085 (2018: $237,077).

Based on the Group’s cash flow forecast it is likely that the Group will need to access additional working capital in the next 12 months to advance its exploration projects and to ensure the realisation of assets on an orderly basis and the extinguishment of liabilities as and when they fall due.

The directors are confident that the Group will be successful in raising additional funds through the issue of new equity, should the need arise. The directors are also aware that the Group has the option, if necessary, to defer expenditure and reduce administration costs in order to minimise its capital raising requirements.

Based on these facts, the directors consider the going concern basis of preparation to be appropriate for this financial report. Should the Company be unsuccessful in securing additional funding, there is a material uncertainty which may cast significant doubt whether the entity will be able to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

The financial statements do not include any adjustments relative to the recoverability and classification of recorded asset amounts or, to the amounts and classification of liabilities that might be necessary should the entity not continue as a going concern.

NOTE 2: 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 it is a mineral exploration company operating in the geographical region of Australia. The mineral assets are considered one business segment and the minerals currently being targeted include cobalt, nickel and manganese in Western Australia.

NOTE 3: CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The directors are not aware of any contingent liabilities or contingent assets as at 31 December 2019.

ASX Code: CNJ

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CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

NOTE 4: EVENTS SUBSEQUENT TO REPORTING DATE

Results of the Mt Thirsty Pre-Feasibility Study (PFS) were released to the market on 20th February 2020 (Refer CNJ ASX Announcement, 20/02/20 “Positive Mt Thirsty PFS to Provide ‘First World’ Security of Cobalt Supply”).

No other matters or circumstances have arisen since the end of the period 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.

NOTE 5: RELATED PARTY TRANSACTIONS

NOTE 5: RELATED PARTY TRANSACTIONS
	Consolidated Group
31	Dec 2019	31 Dec 2018
	$	$
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 during the period:
Key Management Personnel
Management fees and administration fees are paid/payable to Princebrook Pty Ltd, a
company in which Mr G Solomon and Mr D Solomon have an interest.	72,000	72,000
At 31 December 2019 an amount of $12,000 (30 June 2019: $12,000) was included in
Trade and Other Payables as owing to Princebrook Pty Ltd.
Corporate advisory fees paid/payable to RM Corporate Finance Pty Ltd, a company in which
Mr G Le Page and Mr J Richardson have an interest.	21,000	49,000
At 31 December 2019 an amount of $23,100 (30 June 2019: $7,700) was included in Trade
and Other Payables as owing to RM Corporate Finance Pty Ltd.
	Consolidated Group
31	Dec 2019	31 Dec 2018
	$	$
Associated Companies
Reimbursement to Tasman Resources Ltd (which has a 13% interest in the Company)
for employee costs on an hourly basis, in relation to Tasman Resources Ltd staff utilised
by the Company.	5,626	22,025

ASX Code: CNJ

Page 19 of 23

CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The consolidated financial statements and notes, as set out on pages 14 to 19:

2. a. comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

3. b. give a true and fair view of the Group’s financial position as at 31 December 2019 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 Group 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.

Chairman Gregory H Solomon

Dated this 9[th] day of March 2020

ASX Code: CNJ

Page 20 of 23

Independent Auditor’s Review Report to the members of Conico Limited

Report on the Interim Financial Report

Conclusion

We have reviewed the accompanying interim financial report of Conico Limited and its controlled entity and joint venture company (the “Group”), which comprises the condensed consolidated statement of financial position as at 31 December 2019, the condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the period ended on that date, other selected explanatory notes and the directors’ declaration of the Group comprising the Company and the entity it controlled and its interest in a joint venture company at the half-year end or from time to time during the period.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Conico Limited and its controlled entity and interest in a joint venture company is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the Group’s financial position as at 31 December 2019 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.

Emphasis of Matter - Material Uncertainty Related to Going Concern

Without modifying our review conclusion, we draw attention to Note 1 of the interim financial report, which indicates that the Group will require further funding in the next twelve months from the date of this report to fund its planned operating costs. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

Directors’ Responsibility for the Interim Financial Report

The directors of the Company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the directors determine are necessary to enable the preparation of the interim financial report that is free from material misstatement, whether due to fraud or error.

Page 21 of 23

Auditor’s Responsibility

Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with 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 interim financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2019 and its performance for the period ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Conico Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of an interim 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 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 have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Conico Limited, would be in the same terms if given to the directors as at the time of this Review Report.

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Nexia Perth Audit Services Pty Ltd

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M. Janse Van Nieuwenhuizen Director

Perth 9 March 2020

Page 22 of 23

CONICO LTD ABN 49 119 057 457 AND CONTROLLED ENTITIES

Interests in Mining Tenements

Tenements	Location	Interest held at end of period	Acquired during the period	Disposed during the period
E63/1267	WA	50%	-	-
R63/4	WA	50%	-	-
E63/1790	WA	50%	-	-
P63/2045	WA	50%	-	-
M(A) 63/669*	WA	50%	-	-
M(A) 63/670#	WA	50%	-	-
G(A) 63/93^	WA	50%	-	-
L63/80	WA	50%	-	-
L63/81	WA	50%	-	-
L(A) 63/91	WA	50%	-	-
L(A) 63/92	WA	50%	-	-

Notes:

*MLA over E63/1267, #MLA over R63/4, ^GLA over E63/1790 & P63/2045

LA 63/91&92 for haul roads and services. L63/80 & 81 for ground water search.

ASX Code: CNJ

Page 23 of 23