CONICO LTD — Share Issue/Capital Change 2007

Apr 23, 2007

PROSPECTUS 2007

An Offer of 20 million Shares at an issue price of twenty cents (\$0.20) per Share. The Offer if fully subscribed will raise \$4, 000, 000.00 (before expenses of the issue).

Oversubscriptions of up to a further to million Shares at an issue price of twenty cents (\$0.20) per Share to raise up to a further \$2 million may be accepted.

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers.

THE SHARES OFFERED BY THIS PROSPECTUS ARE OF A SPECULATIVE NATURE.

Fission Energy Limited Uranium Exploration Project Locations

Front Cover Photo:

Parkinson Dam Project: Southerly view from the Corunna Conglomerate across the unconformity to area of uraninite occurrence on low tree lined rise in middle distance.

IMPORTANT STATEMENT

This Prospectus is dated 11 April 2007.

A copy of this Prospectus was lodged with the Australian Securities and Investments Commission (ASIC) on 11 April 2007. ASIC takes no responsibility for the contents of this Prospectus.

This Prospectus will be issued in paper form and as an Electronic Prospectus, which may be viewed on line at www.fissionenergy.com.au. The offer of Shares pursuant to this Prospectus is available to persons receiving an electronic version of this Prospectus in Australia.

The Corporations Act prohibits any person passing onto another person the Application Form or the Tasman Priority Application Form unless it is attached to, or accompanied by, the complete and unaltered version of this Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by e-mail at mailroom@fissionenergy.com.au.

Distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

This Prospectus does not constitute an offer in any place or country in which, or to any person to whom, it would not be lawful to make an offer.

No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. Application will be made within 7 days after the date of this Prospectus for permission for the Shares offered by this Prospectus to be listed for Quotation on the Australian Securities Exchange.

The Shares offered by this Prospectus are of a speculative nature. Applicants should read this Prospectus in its entirety and, if in any doubt, or if Applicants have any questions, they should consult with their professional advisors before deciding whether to apply for Shares. In particular, it is important Applicants consider the risk factors (refer to section 11 of this Prospectus) which could adversely affect the financial performance of the Company. The Shares offered under this Prospectus carry no guarantee in respect of return of capital, return on capital investment, payment of dividends or the future value of the Shares.

DISCLAIMER

No person is authorised to give any information or to make any representation in connection with this Issue which is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by the Company (or its Directors or advisers) in connection with this Issue.

DEFINITIONS AND ABBREVIATIONS

Throughout this Prospectus abbreviations and defined terms are used. Defined terms are generally identified by the use of an uppercase first letter. Details of the definitions and abbreviations used are set out in sections 14 (general) and 16 (technical) of this Prospectus.

XX

CORPORATE DIRECTORY

Directors

Gregory H. Solomon, LLB (Executive Chairman) Douglas H. Solomon, B.Juris LLB (Hons) (Non-executive) Guy T. LePage, B.A, B.Sc. (Hons), M.B.A, FFin, MAusIMM (Non-executive)

Company Secretary

Raymond F. Buscall

Registered Office

Level 40 Exchange Plaza 2 The Esplanade Perth, Western Australia

Tel: $+61 - 8 - 9282 - 5889$ $+61 - 8 - 9282 - 5866$ $Fax$ e-mail: mailroom@fissionenergy.com.au website: www.fissionenergy.com.au

Broker to the Issue

Taylor Collison Limited Level 2 12 Pirie Street Adelaide, South Australia

$TeI$ $+61 - 8 - 8217 - 3900$ $+61 - 8 - 8231 - 3506$ $Fax$

Investigating Accountant

Bentleys MRI Perth Level 1 10 Kings Park Road West Perth, Western Australia

$Tel$ $+61 - 8 - 9480 - 2000$ $Fax$ $+61 - 8 - 9322 - 7787$

Independent Geological Consultants on South Australian Tenements

David Tonkin & Associates 25 Palmerston Road Unley, South Australia

$+61 - 8 - 8272 - 0999$ Tel: $Fax:$ $+61 - 8 - 8271 - 9671$

Independent Geological Consultants on Western Australian Tenements

Al Maynard & Associates Suite 9 280 Hav Street Subiaco, Western Australia

$TeI$ $+61 - 8 - 9388 - 1000$ Fax: $+61 - 8 - 9388 - 1768$

Independent Solicitors Reporting on South Australian Tenements

Minter Ellison Grenfell Centre 25 Grenfell Street Adelaide, South Australia

$Tel$ $+61-8-82335555$ $Fax +61-8-823355556$

Solicitors Reporting on Western Australian Tenements

Solomon Brothers Level 40 Exchange Plaza 2 The Esplanade Perth, Western Australia

Tel: $+61 - 8 - 9282 - 5888$ Fax: $+61-8-9282-5855$

Solicitors to the Company

Solomon Brothers Level 40 Exchange Plaza 2 The Esplanade Perth, Western Australia

$+61 - 8 - 9282 - 5888$ Tel: Fax: $+61 - 8 - 9282 - 5855$

Share Registry

Advanced Share Registry Services 110 Stirling Highway Nedlands, Western Australia

$Tel$ $+61 - 8 - 9389 - 8033$ $Fax$ $+61 - 8 - 9389 - 7871$

$\blacksquare$ SUMMARY OF OFFER

This information is intended as a summary only and should be read in conjunction with the more detailed information appearing elsewhere in this Prospectus. Applicants should read this entire Prospectus, including the risks in section 11, in order to make an informed decision about acquiring Shares

$1.1.$ Investment Highlights

Fission Energy, through an agreement with Tasman Resources, has uranium exploration rights to approximately 8.900km² of granted exploration licences and one application for an exploration licence within the Gawler Craton of South Australia including the Wynbring and Garford palaeochannels. In addition, Fission has applied for uranium prospective exploration licences over nine areas covering approximately 1.300km² in Western Australia, eight on the Yilgarn Craton and one in the Rudall River area

Apart from limited recent uranium exploration by Tasman Resources in South Australia, the areas the subject of the above exploration licences are either unexplored or have not been explored for uranium for nearly 30 years. Fission is therefore in a position to test these areas applying the latest geological models and employing modern exploration technology.

The Company's immediate priority is to test the Wynbring palaeochannel in South Australia where previous wide spaced drilling in the 1980's intersected radiometric anomalies up to five times background. Stellar Resources Ltd's Warrior palaeochannel uranium deposit occurs in an adjacent palaeochannel 15 kilometres to the southeast.

Fission's management team are highly experienced with a strong technical background in uranium exploration and mining geology.

$1.2.$ Keypoints

ال المحمد المحمد المحمد المحمد المحمد التي يتم المحمد المحمد المحمد المحمد المحمد المحمد المحمد المحمد المحمد ا Share Issue Price	\$0.20 per new Share
Maximum number of Shares to be issued under this Issue	Up to 20 million
(excluding oversubscriptions)
Amount to be raised under this Issue (excluding oversubscriptions)	Up to $$4$ million
Shares on issue as at the date of this Prospectus	27 million
Options on issue as at the date of this Prospectus (see Note 1)	12.5 million
Maximum number of Shares on issue following completion of the	Up to $47$ million
Issue (excluding oversubscriptions)
Maximum number of Options on issue following completion of the	12.5 million
Issue (excluding oversubscriptions) (see Note 1)

Note 1: In addition to the 12.5 million Options currently on issue, Fission has agreed to grant:

XI

• to Taylor Collison Limited, 1 million Options; $(a)$
• $(b)$ to three employees of Tasman, 500,000 Options each (a total of 1.5 million Options),

following the successful allotment of Shares under this Prospectus and the listing of the Company on the ASX. See sections 13.3.4 and 13.12 of this Prospectus respectively for further information. In addition, see section 3.12 of this Prospectus for details of additional proposed future Option issues.

If this Prospectus is fully oversubscribed a further 10 million Shares will be issued raising a further \$2 million.

A priority allocation of up to 17,500,000 Shares to be issued under this Prospectus will be made to Tasman Shareholders in accordance with section 3.6 of this Prospectus.

$1.3.$ Summary of Important Dates

Date of Prospectus	Wednesday 11 April 2007
Tasman Shareholders Record Date	Monday 16 April 2007
Subscription Lists Open for Application	Thursday 19 April 2007
Projected Closing Date for Applications	Friday 1 June 2007
Dispatch of Statements of Share Holdings (Expected)	Wednesday 6 June 2007
Quotation of Shares on ASX expected to commence	Monday 11 June 2007

This timetable is indicative only and subject to change. The Company reserves the right, subject to the Corporations Act and the Listing Rules, to vary the above dates (including, without limitation, to extend the Closing Date or to close this Offer early), or to withdraw this Offer and Prospectus at any time, without prior notice. Any extension of the Closing Date will have a consequential effect on the date for the issue of the Shares.

	CONTENTS	PAGE
	IMPORTANT STATEMENT	l
	CORPORATE DIRECTORY	$\overline{2}$
1.	SUMMARY OF OFFER	3
2.	CHAIRMAN'S LETTER	6
3.	DETAILS OF THE OFFER	$\overline{\gamma}$
4.	DETAILS OF THE DIRECTORS	13
5.	PROJECT / INVESTMENT REVIEW	14
6.	INDEPENDENT GEOLOGICAL CONSULTANT'S REPORT ON SOUTH AUSTRALIAN TENEMENTS	32
7.	INDEPENDENT GEOLOGICAL CONSULTANT'S REPORT ON WESTERN AUSTRALIAN TENEMENTS	49
8.	INDEPENDENT SOLICITOR'S REPORT ON SOUTH AUSTRALIAN TENEMENTS	74
9.	SOLICITOR'S REPORT ON WESTERN AUSTRALIAN TENEMENTS	88
10.	INVESTIGATING ACCOUNTANT'S REPORT	98
11.	RISK FACTORS	109
12.	EFFECT ON CAPITAL STRUCTURE	117
13.	ADDITIONAL INFORMATION	118
14.	GLOSSARY NAMES AND TERMS	134
15.	GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS	136
16.	CONSENT BY DIRECTORS	141
	APPLICATION FORM

CHAIRMAN'S LETTER $2.$

Dear Investor.

On behalf of our Directors, it is my pleasure to invite you to become a shareholder in Fission Energy Ltd ("Fission" or "the Company").

Fission was established as a wholly owned subsidiary of Tasman Resources to focus primarily on uranium exploration. For that purpose, an agreement has been entered into between Tasman and Fission pursuant to which Fission has been granted the uranium exploration rights over all of Tasman Resources' extensive South Australian tenements, with the exception of, first, a 13km² area at the Parkinson Dam gold/silver epithermal prospect (which area has been excluded), and, secondly, the pre-Neoproterozoic basement in a number of the tenements which is the host of possible iron-oxide copper-gold deposits which are the targets of an existing joint venture between Tasman Resources and WCP Resources. Additionally, Fission has applied for, in its own name, exploration licences over nine prospective uranium areas in Western Australia.

The exploration interests of Fission cover a wide range of different styles of potential uranium mineralisation, including extensive palaeochannel targets in South Australia, unconformity related targets in South Australia and calcrete hosted targets in Western Australia. Full details of the uranium prospectivity of these exploration interests are detailed in the two consulting geologists reports included in this Prospectus.

The Directors consider these exploration interests to have significant potential and provide a very good base for the Company's initial uranium exploration projects. It is Fission's intention to both explore for uranium in its own right and to consider entering into strategic joint ventures with other parties over its exploration interests where it is considered appropriate.

With global warming increasing and world attention turning to alternate sources of electricity which do not produce carbon dioxide, nuclear power is anticipated to become one of the major potential sources of electricity for many countries around the world. However, the existing supply of uranium, from both current and proposed uranium mines, and from reprocessing of decommissioned nuclear weapons, is limited, and it is anticipated that with the increasing demand for uranium, the very strong market for uranium will continue for the foreseeable future.

South Australia and Western Australia have high potential for significant uranium discoveries and, subject to relevant approvals, production and I look forward to welcoming you as a shareholder of the Company to share in our future growth.

Yours sincerely

Gregan Tomoro

Gregory H Solomon Chairman

$3.1.$ Shares Offered For Subscription

This Prospectus invites investors to apply for a total of up to 20 million Shares at an issue price of twenty cents (\$0.20) per Share. All Shares issued pursuant to this Prospectus will be issued as fully paid ordinary shares and will rank equally in all respects with the Shares already on issue.

$3.2.$ Applications

Applications must be for a minimum of 10,000 Shares (\$2,000) and thereafter in multiples of 1,000 Shares (\$200) and can only be made by completing the Application Form attached to this Prospectus or the Tasman Priority Application Form which will be sent together with this Prospectus to Tasman Shareholders. The Company reserves the right to reject any Application or to allocate any Applicant fewer Shares than the number applied for.

$3.3.$ Over-Subscriptions

The Company reserves the right to accept over-subscriptions of up to \$2 million through the issue of a further 10,000,000 Shares at an issue price of \$0.20 per Share. The maximum amount which may be raised under this Prospectus is therefore \$6 million (before expenses of the Issue) by the issue of a maximum of 30,000,000 Shares.

$3.4.$ Minimum Subscription

The minimum subscription to the Issue is 15 million Shares raising \$3,000,000.00 (before expenses of the Issue). If the minimum subscription has not been raised within 4 months of the date of this Prospectus, all Applications will be dealt with in accordance with the Corporations Act. If the minimum subscription only is raised, the Company's expenditure is budgeted as shown in section 5.4 of this Prospectus.

$3.5.$ Purpose of the Issue

The purpose of this Issue is to raise a minimum of \$3 million, which is the minimum amount necessary for Fission to progress its objectives (and potentially up to \$4 million without oversubscription), to fund the exploration activities of Fission.

A summary of the first twenty-four months budgeted expenditure of Fission is contained in section 5.4 of this Prospectus.

The Directors are of the opinion that the Company will have enough working capital to carry out its stated objectives.

×

$3.6.$ Priority Allocation

Priority is to be given to Applicants who are Tasman Shareholders to apply for Shares under this Prospectus in accordance with this section. Applications must be for a minimum of 10,000 Shares $(\$2,000)$ .

Each such Tasman Shareholder will receive a copy of this Prospectus accompanied by a Tasman Priority Application Form. Tasman Shareholders must complete the Tasman Priority Application Form and it must be received by the Share Registry by the Closing Date (whenever that shall occur) in order to be eligible to participate in the Offer.

If demand from Applicants (both Tasman Shareholders and the general public) exceeds the number of Shares available for subscription under this Prospectus, Tasman Shareholders will be treated preferentially to general public Applicants in terms of scaling back or declining Applications for up to 17,500,000 Shares. The Company retains absolute discretion regarding allocation of Shares to Tasman Shareholders as part of the Tasman priority allocation. Tasman Shareholders should note that their applications may be subject to scale back or be declined. The Board of the Company may elect at its sole discretion to close the Tasman priority allocation at any stage during the Offer Period and, accordingly, Tasman Shareholders should lodge their Applications as soon as possible.

$3.7.$ Allotment and Allocation of Shares

Subject to the ASX granting approval for the Company to be admitted to the Official List, the allotment of Shares to Applicants will occur as soon as possible after the Issue is closed, following which statements of Shareholdings will be dispatched. It is the responsibility of Applicants to determine their allocation prior to trading in Shares. Applicants who sell Shares before they receive their holding statements will do so at their own risk. Pending the issue of the Shares or return of the Application Moneys, the Application Moneys will be held in trust for the Applicants.

The Company has the right to allocate the Shares under the Offer. Up to 17,500,000 Shares will be issued to shareholders of Tasman Resources on a priority basis in accordance with section 3.6 of this Prospectus. The Company may reject any Application (including a Tasman Priority Application) or allocate any Applicant fewer Shares than applied for under the Offer. If an Application (including a Tasman Priority Application) is not accepted, or is accepted in part only, the relevant part of the Application Moneys will be refunded. Interest will not be paid on Application Moneys refunded.

$3.8.$ Broker to the Issue

Taylor Collison Limited, stockbrokers, will be the Broker to the Issue and will be paid:

• a management fee of 1% of the total funds raised under this Prospectus; and $(a)$
• a handling fee of 5% of the total funds raised under this Prospectus, less all funds raised under $(b)$ Tasman Priority Applications. Taylor Collison Limited will negotiate, and be responsible for, any fees payable to holders of an Australian Financial Services licence which procure the subscription for any Shares under this Prospectus.

Additionally, Taylor Collison will, on the allotment of Shares under this Prospectus and the listing of the Company on the ASX, be issued with 1 million unlisted Options each to acquire 1 Share exercisable at any time within 3 years of the date of their grant (subject to ASX escrow) at an exercise price of \$0.20 per Share.

3.9. Opening and Closing Dates

Subscription lists will open on 19 April 2007 and will remain open until 5.00pm WST on 1 June 2007. Subject to the requirements of the Corporations Act and the ASX Listing Rules the Company may either close the Issue at an earlier time and date or extend the closing time and date without prior notice. Applicants are encouraged to submit their Applications as early as possible. No Shares will be issued on the basis of this Prospectus later than thirteen $(13)$ months after the date of this Prospectus.

3.10. Indicative Timetable

See section 1.3 of this Prospectus for an indicative timetable for the Offer.

The dates in this timetable are indicative only. As mentioned in section 1.3 of this Prospectus, subject to the requirements of the Corporations Act and the ASX Listing Rules, the Company reserves the right either to extend the Closing Date or close the Issue early.

3.11. Shares

There are currently 27 million Shares on issue. In addition, a total of 20 million Shares will be issued by the Company at the successful conclusion of the Offer if no over-subscriptions are accepted and the full \$4 million is raised. If the Offer is fully oversubscribed a total of 30 million Shares will be issued by the Company and \$6 million raised.

3.12. Options

There are currently 12,500,000 Options on issue to Tasman Resources. Each Option entitles Tasman Resources to acquire one Share at an exercise price of 20 cents per Share at any time up to and including 28 February 2011. A summary of the terms and conditions of these Options is contained in section 13.2 of this Prospectus. In addition, following the successful allotment of Shares under this Prospectus and the listing of the Company on the ASX, the Company has agreed to grant:

• to Taylor Collison Ltd, 1 million Options. Each such Option will entitle Taylor Collison Ltd $(a)$ to acquire one Share at an exercise price of 20 cents per Share at any time up to and including 3 years after the grant of the Options to Taylor Collison Ltd (subject to ASX escrow);
• (b) to three employees of Tasman (Mike Glasson, Rob Smith and Graham Jeffress), 500,000 Options each under the Company's ESOP (a total of 1.5 million Options). Each such Option will entitle its holder to acquire one Share at an exercise price of 20 cents per Share. A summary of the terms and conditions of these Options is contained in section 13.12 of this Prospectus.

Further, the Company proposes, subject to receiving shareholder approval at an extraordinary general meeting to be convened after this Prospectus has closed, to issue 1,000,000 Options to each of its current directors in consideration of services which they have provided, and will subsequently provide, to the Company. Further, it is the intention of the Company, within 3 months of the date of admission of the Company to the Official List of the ASX, to make an offer, on a record date to be advised, to all Fission shareholders as at that record date of 1 Option for every 2 Shares then held (each Option being to acquire 1 Share at any exercise price of 20 cents per Share at any time up to and including 28 February 2011) at an issue price of 1 cent per Option. The Options which are proposed to be issued to the Directors and to Fission shareholders will be issued on the same terms and conditions as the Options currently on issue to Tasman. See section 13.2 for a summary of the terms and conditions of these Options.

3.13. Commission payable on Shares to be issued under this Prospectus

As indicated in section 3.8 above. Taylor Collison Ltd will negotiate the fees to be paid to any holder of an Australian Financial Services licence which procures the subscription for any Shares under this Prospectus, which fees shall be paid out of the handling fee payable to Taylor Collison (see section 3.8 of this Prospectus).

3.14. Applicants Outside of Australia

This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant who is resident outside Australia to ensure compliance with all laws of any country relevant to their Application, and any such Applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed, to enable them to apply for and be allotted the Shares. No action has been taken to register or qualify the Shares or the Offer or otherwise permit a public offering of the Shares in any jurisdiction outside Australia.

3.15. ASX Listing

Within seven days after the date of this Prospectus, application will be made to the ASX for admission of the Company to the Official List and for the quotation of the Shares on the ASX. If the Shares are not admitted to Quotation within three months after the date of this Prospectus, the Company will not allot or issue any Shares pursuant to the Offer and will repay all Application Moneys without interest as soon as practicable.

ASX takes no responsibility for the contents of this Prospectus. The fact that the ASX may admit Fission to its Official List is not to be taken in any way as an indication of the merits of the Company or the Shares offered pursuant to this Prospectus.

3.16. CHESS

Fission will apply to participate in the clearing house electronic sub-register system ("CHESS"), operated by ASX Settlement & Transfer Corporation Pty Ltd ("ASTC") (a wholly owned subsidiary of ASX), in accordance with the Listing Rules and SCH Business Rules. On admission to CHESS, the Company will operate an electronic issuer-sponsored sub-register and an electronic CHESS sub-register. The two subregisters together will make up the Company's principal register of securities.

Under CHESS, the Company will not issue certificates to Applicants. Instead the Company will provide Applicants with a holding statement (that will be similar to a bank account statement) that will set out the number of Shares allotted to that Applicant under this Prospectus. The statement will also advise Applicants of either their Holder Identification Number (HIN) in the case of the holding on the CHESS sub-register or Security Holding Reference Number (SRN) in the case of a holding on the issuer sponsored sub-register. A statement will be routinely sent to holders at the end of any calendar month during which their holding changes. A holder may request a statement at any other time, however a charge may be incurred for additional statements.

3.17. How To Apply

Applications for Shares under the Offer can only be made on the Application Form attached to this Prospectus or on the Tasman Priority Application Form which will be sent together with a copy of this Prospectus to all Tasman Shareholders. Applications for Shares cannot be made electronically. The Application Form or Tasman Priority Application Form must be completed and signed in accordance with the instructions set out on the back of each such application form and submitted with an accompanying cheque in Australian dollars drawn on an Australian branch of an Australian bank for twenty cents (\$0.20) per Share.

AT ANY TIME AFTER THE OPENING DATE COMPLETED APPLICATION FORMS AND TASMAN PRIORITY APPLICATION FORMS AND ACCOMPANYING CHEQUES SHOULD BE:

LODGED WITH: Fission Energy Ltd c/- Advanced Share Registry Services PO Box 1156. Nedlands WA 6909

OR DELIVERED TO: Fission Energy Ltd c/- Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009

Cheques must be payable to: "Fission Energy Ltd Share Account" and crossed "Not Negotiable". No brokerage or stamp duty is payable by Applicants. Applications must be for a minimum of 10,000 Shares at an issue price of \$0.20 per Share (equal to an investment of \$2,000). Applications for more than 10,000 Shares must be in multiples of 1,000.

3.18. Escrow Provisions

Shares on issue as at the date of this Prospectus to promoters and seed capitalist investors may be subject to the restricted securities provisions of the Listing Rules. Accordingly, a proportion of such Shares may be required to be held in escrow for up to 24 months and may not be transferred, assigned or otherwise disposed of during that period. In such a case, shareholders will be required to enter into escrow agreements in accordance with the Listing Rules.

3.19. Electronic Prospectus

This Prospectus is available on-line at www.fissionenergy.com.au (see section 13.10 for more information).

3.20. No Valuation

No formal valuation has been completed of any of the assets, or the Shares, of the Company.

$3.21.$ Risk factors

In addition to the general risks applicable to all investments in listed companies, there are specific risks associated with an investment in Fission, which are set out in section 11 of this Prospectus.

3.22. Acknowledgment And Privacy Statement

By returning an Application Form or a Tasman Priority Application Form, each Applicant acknowledges that they have received and read this Prospectus.

If Applicants apply for Shares pursuant to this Prospectus, Fission and its share registry (Advanced Share Registry) will be collecting certain personal information from Applicants (from the Application Form or the Tasman Priority Application Form).

The information included on an Application Form or a Tasman Priority Application Form is used for the purposes of processing the Application Form or the Tasman Priority Application Form and to administer the Applicant's holding of Shares. By submitting an Application Form or a Tasman Priority Application Form, each Applicant agrees that the Company may use the information provided by a Applicant on the Application Form or the Tasman Priority Application Form for the purposes set out in this privacy statement and may disclose it for those purposes to the Company's share registry and to the Company's related bodies corporate, agents and contractors and third party service providers, including mailing houses, professional advisers (e.g. auditors, lawyers and accountants), intellectual technology support providers and to other regulatory authorities.

The Corporations Act requires the Company to include information about each Shareholder (including name, address and details of the Shares held) in its public register. The information contained in the Company's public register must remain there even if that person ceases to be a Shareholder. Information contained in the Company's register is also used to facilitate payments and corporate communications (including the Company's financial results, annual reports and other information that the Company wishes to communicate to its Shareholders) and compliance by the Company with legal and regulatory requirements.

Under the Privacy Act, Shareholders have a right to gain access to personal information that the Company holds about that person, subject to certain exemptions under law. A fee may be charged for access. Access requests must be made in writing to the Company's registered office.

If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Acceptance Form.

3.23. Dividend Policy

At this time the Directors do not intend to pay a dividend.

3.24. Enquiries In Relation to this Issue

This Prospectus provides information for Applicants and should be read in its entirety. Enquiries concerning the Application Form accompanying this Prospectus or the Tasman Priority Application Form which will be sent together with this Prospectus to all Tasman Shareholders or about subscribing for Shares under this Issue should be directed to Taylor Collison (attention Daniel Eddington) by telephone on $(+618)$ 8217 3900 or facsimile on (+618) 8231 3506 or to Fission (attention Greg Solomon) by telephone on $(+618)$ 9282 5889 or facsimile on $(+618)$ 9282 5866.

If after reading this Prospectus or contacting Fission you have any questions about any aspect of an investment in Fission, please consult your financial advisor.

$\overline{4}$ . DETAILS OF DIRECTORS

Gregory Howard Solomon, LLB (Executive Chairman)

In addition to being the executive chairman of the Company, Mr Solomon is executive chairman of ASX listed Tasman Resources and ASX listed Eden Energy Ltd. Mr Solomon is also a solicitor with more than 30 years Australian and international experience in a wide range of areas including mining and energy law, commercial negotiation (including numerous mining, energy and exploration joint ventures) and corporate law. He has held numerous directorships of various Australian public companies since 1984 including several resources and technology companies. He is also a partner in the Western Australian legal firm Solomon Brothers

Douglas Howard Solomon, LLB (Non-Executive Director)

Mr Solomon is a barrister and solicitor with more than 25 years experience in the areas of mining, corporate, commercial and property law and finance. He is a partner in the legal firm Solomon Brothers. In addition to being a director of the Company, he is a director of ASX listed Tasman Resources and ASX listed Eden Energy Ltd. Mr Solomon has advised a wide range of national and international companies on many transactions and has significant experience in both negotiation and dispute resolution.

Guy Touzeau Le Page, B.A., B.Sc. (Hons), M.B.A., FFin, MAusIMM (Non-Executive Director)

Mr Le Page is currently a corporate adviser at RM Capital Pty Ltd specialising in resources. He is actively involved in a range of corporate initiatives from mergers and acquisitions, initial public offerings to valuations, consulting and corporate advisory roles. Mr Le Page was Head of Research at Morgan Stockbroking Limited (Perth) prior to joining Tolhurst Noall as a Corporate Adviser in July of 1998. As Head of Research, Mr Le Page was responsible for the supervision of all Industrial and Resources research. As a Resources Analyst, Mr Le Page published detailed research on various mineral exploration and mining companies listed on the ASX. The majority of this research involved valuations of both exploration and production assets.

Prior to entering the stockbroking industry he spent 10 years as an exploration and mining geologist in Australia, Canada and the United States. His experience spans gold and base metal exploration and mining geology and he has acted as a consultant to private and public companies. This professional experience included the production of both technical and valuation reports for resource companies.

Mr Le Page holds a Bachelor of Arts, a Bachelor of Science and a Masters Degree in Business Administration from the University of Adelaide, a Bachelor of Applied Science (Hons) from the Curtin University of Technology and a Graduate Diploma in Applied Finance and Investment from the Financial Services Institute of Australia.

Mr Le Page is also a director of ASX listed Tasman Resources and ASX listed Eden Energy Ltd.

$5.$ PROJECT / INVESTMENT REVIEW

5.1. Background

Fission was incorporated in Australia in March 2006, as a wholly owned subsidiary of Tasman Resources, to initially focus on uranium exploration in South Australia and Western Australia.

It is Fission's intention to both explore for uranium in its own right and to consider entering into strategic joint ventures with other parties over its exploration interests where it is considered appropriate.

$5.2.$ Tenement Interests

$5.2.1$ Western Australia

Fission holds exploration licence applications in Western Australia over nine areas, all of which are considered prospective for uranium.

The following table provides a summary of these tenement applications:

	Tenement	Area	Location
ELA	28/1744	181	PontonCreek
ELA	29/650	162	Barlee East
ELA	29/651	102	Elvire
ELA	57/693	133	Noondie
ELA	57/695	60	Perseverance
EL A	77/1393	27	Elvire South
ELA	77/1402	209	Barlee South
ELA	$77/1417^{(1)}$	209	Barlee West
FI A	45/2997	222	Mt Sears Range

Note (1): Application ELA 57/692 was initially lodged by the Company over, in part, the area the subject of this application, however, as it was delayed in delivery to the Mines Department, it substantially encroached (as to approximately 73%) upon the area the subject of another tenement application. Accordingly, the Company lodged this application, which encompasses only that part of EL 57/692 which does not encroach on the area in the earlier lodged tenement application.

5.2.2 South Australia

In addition, Fission has acquired an interest in certain uranium, thorium or other radio-active mineralisation which may be discovered in a number of tenements held in South Australia by Tasman Resources pursuant to an agreement with Tasman dated 2 April 2007 ("the Tasman Agreement") (for a summary of the terms and conditions of the Tasman Agreement please see section 13.3.2 of this Prospectus).

State	Type	ID	Area Km 2	Locality	Expiry Date	Note
SA	EL	2989	874	Hedley Hill	24-Jul-07	$\overline{2}$
SA	EL	3102	75	Wartaka	19-Jun-07
SA	EL	3109	244	White Cliff	23-Jul-07	$\overline{2}$
SA	EL	3123	615	Stuart Creek	02-Sep-07
SA	EL	3140	440	Porter Hill	14-Oct-07	$\overline{2}$
SA	EL	3174	363	Fergusson Hill	09-Mar-07	1,2
SA	EL	3175	12	Andamooka	09-Mar-07	1,2
SA	EL	3177	402	Todds Dam	09-Mar-07	1,2
SA	EL	3209	1,302	Andamooka North	$10$ -May-07	$\overline{2}$
SA	EL	3254	247	Mt Norwest	28-Sep-07
SA	EL	3261	160	Harcus Hill	13-Oct-07	$\overline{2}$
SA	EL	3306	436	Warrior (Wynbring)	16-Feb-07	$\mathbf{1}$
SA	EL	3307	194	Iron Knob	16-Feb-08
SA	EL	3339	62	McDouall Peak	19-May-07
SA	EL	3340	173	Gina Outstation	19-May-07
SA	EL	3341	339	Muckanippie	19-May-07
SA	EL	3342	184	Garford	19-May-07
SA	EL	3343	430	Sandstone	19-May-07
SA	EL	3344	262	Commonwealth Hill	19-May-07
SA	EL	3345	131	Mulgathing Hill	19-May-07
SA	EL	3423	215	Wildingi Claypan	04-Oct-07
SA	EL	3449	47	Gambier Hill	14-Nov-07	2
SA	EL	3453	223	Reid Lookout	14-Nov-06	$\mathbf{l}$
SA	EL	3532	379	Galaxy Tank	21-Mar-07	1
SA	EL	3541	271	South Hill	18-Apr-07
SA	EL	3607	281	Bopeechee	27-Jul-07
SA	EL	3634	473	Parakylia	08-Oct-07	$\overline{2}$
SA	EL	3677	107	Cadnia Hill	14-Dec-07
SA	EL	3712	168	Sandy Tank	19-Feb-08
SA	ELA	289/06	40	Old Wartaka

The following table provides a summary of the South Australian tenements which are the subject of the Tasman Agreement:

Notes:

• $1.$ Renewal applied for – pending
• $\overline{2}$ . These tenements are subject to the WCP Agreement.

Under the Tasman Agreement, Fission has acquired an interest:

in the case of tenements the subject of the WCP Agreement (see note 2 of the above table), in $(1)$ any Neoproterozoic and younger sediment hosted uranium, thorium or other radio-active mineralisation which may be discovered (where the in-ground valuation of the uranium, thorium or other radio-active mineralisation in any JORC Compliant Resource is at least 50% of the value of any poly metallic deposit); and

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$(2)$ in the case of all other tenements set out in the above table, all uranium mineralisation which may be discovered (where the in-ground valuation of the uranium, thorium or other radio-active mineralisation in any JORC Compliant Resource is at least 50% of the value of any poly metallic deposit). At Parkinson Dam a 13km² area prospective for epithermal gold-base metal mineralization is excluded.

5.3. Overview of Projects

5.3.1 South Australia

The Wynbring, Garford and Parkinson Dam projects are held by Tasman, and Fission has an interest in uranium mineralisation within those projects in accordance with paragraph (2) in section 5.2.2 above. Fission also has an interest in any uranium mineralisation in Neoproterozoic or younger rocks within the Lake Torrens project area in accordance with paragraph (1) in section 5.2.2 above.

Wynbring, Garford and Parkinson Dam are prospective for palaeochannel hosted uranium deposits. An example of a paleochannel hosted uranium deposit is Heathgate Resources Pty Ltd's Beverley deposit in the Lake Frome area 800km north of Adelaide where uranium is presently being extracted by insitu leaching. Parkinson Dam is also prospective for unconformity style uranium associated with the base of the Mesoproterozoic Corunna Conglomerate. The latter is considered by the Company to be analogous to the Mesoproterozoic Kombolgie sandstone which caps the Alligator Rivers unconformity style uranium deposits, such as Energy Resources of Australia Ltd's Ranger and Jabiluka deposits in the Northern Territory.

Figure 1: Fission Project Location - South Australia

Wynbring

The Wynbring project is considered highly prospective for the discovery of palaeochannel hosted (rollfront-style) uranium deposits. It is situated within the Gawler Craton approximately 180km southwest of Coober Pedy in South Australia near the Trans Australia Railway (Figures 1 and 2). The area covers the northern portion of the Wynbring palaeovalley, a southerly draining valley in Precambrian granite terrane which has been filled with unconsolidated Tertiary age fluvial and lacustrine sediments with lignite interbeds deposited in local coal swamp environments.

Economic palaeochannel hosted uranium mineralisation within South Australia is best known at Heathgate Resources Pty Ltd's Beverley Deposit (21,600t contained $U_3O_8$ , PIRSA, 2007) in the north of the state, currently Australia's third uranium mine. Uranium mineralisation at Beverley is associated with pyritic and carbonaceous Tertiary palaeochannel sands draining Precambrian basement and is being recovered by insitu leaching.

Figure 2: Wynbring and Garford Palaeochannel Locations

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Palaeochannel hosted uranium deposits are believed to have formed when uranium is released by the weathering of granitic/felsic rocks which have above average uranium contents. The uranium is carried in solution by acidic oxidised ground waters along aquifers within the permeable palaeochannel sediments derived from weathering of the granites, and is deposited in reducing environments within the channels around pyritic and carbonaceous sediments and lignites as shown in Figure 3.

Figure 3: Schematic Facies Model for Marine-Influenced Eastern Eucla Palaeochannels, Showing Favourable Facies for Uranium Deopsits (modified after Hou, Frakes and Alley, 2001)

The Wynbring area was explored in the early 1980's by uranium explorer PNC Exploration (Australia) Pty Ltd ("PNC") and most of PNC's work was south of Fission's ground. Based upon previous exploration results, the Company considers that roll-front-style uranium mineralisation may exist within the channel. Granites, a possible primary source of the uranium, were intersected at the bottom of many of the PNC holes, and outcrops of granite occur sporadically in the catchment area of the palaeochannel. Approximately 95% of the palaeochannel within the Wynbring project remains untested.

Figure 4: Wynbring Drill Hole Cross Section (PNC Drilling, 1980) at Southern end of EL3306

Figure 5: Wynbring Palaeochannel Interpretation

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Wynbring is located 15km west of Stellar Resources Ltd's Warrior Uranium deposit in an adjacent palaeochannel draining essentially the same granitic source rocks as the Warrior palaeochannel. Uranium mineralisation at Warrior is associated with carbonaceous sediment horizons and is closely related to the base of surface oxidation and the top of the water table. The catchment area of the Wynbring palaeochannel is of similar size to that of the Warrior palaeochannel.

Results from a recent EM survey carried out by Tasman Resources suggests that the Wynbring palaeochannel continues northwards for at least 13km within Fission's ground and has several E-W trending tributaries possibly covering a further 30km, making it a sizable uranium exploration target.

Initial drill testing and down hole radiometric logging of the Wynbring palaeochannel on one kilometre line spacings is planned following resolution of access issues and depending on drilling rig availability.

Garford

Fission also has the right to explore for uranium on six granted exploration licences covering an 80km length of the Garford palaeochannel situated on the Gawler Craton, 85km southwest of Coober Pedy and 80km north of Wynbring (refer Figures 1 and 2). Although essentially unexplored for uranium, this area is also considered prospective for Tertiary-age palaeochannel hosted (roll-front-style) uranium mineralisation as it is draining Precambrian crystalline basement (potential uranium enriched source rocks) and contains Tertiary palaeochannel sediments with reduced horizons (potential uranium traps).

An airborne electromagnetic (TEMPEST) survey was flown for Tasman Resources over the Garford palaeochannel in August 2006 and was designed to better define the location and depth of the channel to aid planning of follow-up ground exploration. Interpretation of the TEMPEST conductivity images by the Company confirmed that in excess of 80 kilometres of the Garford palaeochannel exists within Fission's Garford tenements to depths of around 40 to 50m (Figure 6).

Figure 6: Conductivity Depth Image at 40m and Interpreted Garford Palaeochannel

A similar length of deeper linear TEMPEST conductors to maximum depths of 130m located partially beneath the Garford channel (Figure 7) are interpreted by the Company to represent older buried Mesozoic-Permian palaeodrainages, based on the available stratigraphic drilling data. As the latter are also draining Precambrian crystalline basement rocks and are known to contain carbonaceous material they are also considered by the Company to be prospective for the roll-front-style of uranium deposit identified in the younger Tertiary palaeodrainages.

Figure 7: Conductivity Depth Image at 70m, Interpreted Garford Palaeochannel and Older Palaeochannels.

Figure 8: Conductivity Depth Image North-South Cross Section Showing Palaeochannels (Refer location in Figures 6 and $\gamma$ )

Preliminary drill testing and downhole radiometric logging of the Garford palaeochannel along existing roads and fence lines is planned following resolution of access issues and depending on drill rig availability.

Figure 9: Surface Expression of Garford Palaeochannel

Parkinson Dam

The Parkinson Dam project is located on the Gawler Craton 40km west of Port Augusta. Although the area was originally picked up by Tasman Resources for gold, there is also considerable potential for uranium discoveries within the project area; it having been targeted in the 1980's by a previous uranium explorer who focussed on a number of targets, using a combination of geophysical, geochemical and ground-based geological methods. Outcropping uranium mineralisation as the uranium-bearing mineral torbernite was discovered within a Palaeoproterozoic quartzite, and a surface sample collected assayed 970ppm U. Tasman has since relocated the occurrence (see Figure 1), although the main uranium-bearing mineral has been identified as uranimite (or $UO_2$ ) by scanning electron microscope (Figure 2).

Figure 10: Parkinson Dam: Tenement Plan, showing the location of the basal unconformity of the Corunna Conglomerate, uraninite bearing outcrop and the area excluded from the Tasman Agreement

Figure 11: SEM (scanning electron microscope) photograph of uraninite (or uranium oxide, shown white) within quartzite (grey) from surface outcrop within EL3307 at Parkinson Dam Project. The length of the uraninite crystal aggregate in this view is approximately 300 microns or 0.3mm.

There is potential for two styles of uranium mineralisation within the project area:

• Unconformity-style uranium associated with the basal unconformity of the Mesoproterozoic Corunna Conglomerate (see Figure 10). This contact is prospective for unconformity-style uranium deposits such as Ranger & Jabiluka owned by Energy Resources of Australia Ltd in the Northern Territory. The uraninite occurrence noted above is located close to this contact.
• Palaeochannel-hosted uranium deposits associated with Tertiary-age sediments. Several potential Tertiary palaeochannels have been interpreted in the western part of the project area. Uranium could have been sourced from a large area of relatively uranium-rich Gawler Range Volcanics that the interpreted palaeochannels would have drained.

Tasman initially identified this area as having potential for gold based on known copper-gold mineralisation to the south (Spencer prospect) and anomalous gold in both calcrete and lag samples collected by previous explorers that had not been effectively followed up. Tasman subsequently discovered outcropping epithermal-style gold-silver mineralisation on EL 3307 in early 2005, and conducted initial programmes of drilling in 2005 and 2006.

This initial drilling has disclosed a significant epithermal gold-silver-lead-zinc system, returning a number of significant medium to high grade intercepts, including 3m from 129m down hole at 3.4g/t Au and 80g/t Ag, and 1.66m from 254.3m down hole at 7.6% Pb, 10.5% Zn, 1.2g/t Au and 120g/t Ag. The epithermal potential of this project is particularly encouraging and exploration over the whole project area by Tasman will continue, including further drilling which commenced in March 2007.

Approximately 13 square kilometres of the Parkinson Dam tenements considered most prospective for epithermal gold-silver are excluded from the Tasman Agreement as shown in Figure 10 (and, accordingly, Fission has no interest in this area).

Tasman conducted limited exploration for uranium in 2006, including drilling several shallow RC percussion drill holes to specifically test the outcropping uranimite occurrence. These holes did not

intersect significant uranium, however it is believed by the Company that the prospectivity for unconformity-style uranium within the project is not significantly diminished by this result as the drilling tested a very small part of the target area. Proposed exploration for this style of mineralisation includes ground reconnaissance, sampling and radiometrics and drilling of any prospective targets.

The palaeochannel targets will initially be test drilled to determine if appropriate reduced sediments (potential hosts to uranium) are present. If positive, further shallow drilling will be conducted to precisely locate the palaeochannels and test for uranium-rich horizons.

Lake Torrens

Tasman's tenements in this area adjoin or are in close proximity to BHP Billiton Ltd's Olympic Dam TOCGU deposit near Roxby Downs in South Australia (Figure 1). Included in these tenements is one known iron-oxide copper gold system (Titan), another haematite-altered breccia system (Marathon South) and at least five other untested targets identified from geophysical surveys (magnetics and gravity) within a 30 to 40km range of the Olympic Dam ore body which have the potential to host IOCGU deposits. The Olympic Dam ore body is the largest IOCGU deposit in the world, and contains more than 40% of the world's known uranium resources.

Tasman's tenements in this area are the subject of a farm-in and joint venture agreement between Tasman and WCP Resources ("the WCP Agreement"), however the interest which WCP may earn in these tenements under the WCP Agreement does not extend to, inter alia, any Neoproterozoic and younger sediment hosted uranium, thorium or other radioactive mineralisation. The WCP Agreement imposes certain obligations on Tasman and WCP to co-operate and co-ordinate their activities on the tenements in good faith so as not to conflict or interfere with the activities of any other party within the project area, and to give a notice to each other party setting out the nature and location of any activities which it proposes to undertake on the tenements. The parties have also agreed on a procedure for establishing priority of mining of minerals over the same area, which is based on the estimate of the recoverable value of the respective mineral resource situated within the proposed area to be mined. Fission has entered into a deed of covenant with Tasman and WCP to comply with such terms and conditions of the WCP Agreement (see section 13.3.3 of this Prospectus for further information).

No high priority uranium exploration targets available to Fission have so far been identified in the Lake Torrens tenements, however a sediment hosted uranium model recently proposed by Eromanga Uranium Ltd involving basal Mesozoic sandstone units overlying Precambrian basement may be applicable to Tasman's tenements and further investigation is required.

5.3.2 Western Australia

Fission has applied for exploration licences over eight areas on the Yilgarn Craton for sediment-hosted uranium and one area in Mt Sears Range for unconformity-style uranium (which is 40km east of Rio Tinto Ltd's Kintyre uranium deposit) (Figure 12).

Seven of the Yilgarn licences cover airborne radiometric uranium anomalies associated with Tertiary palaeodrainages/playa lakes incised into Archaean granite terrane in the northern Yilgarn Craton. The Yilgarn Craton is the host for a significant number of surficial uranium deposits associated with palaeodrainages/playa lakes including those at Yeelirrie, Lake Way, Hinkler-Centipede, Lake Raeside, Lake Austin and Lake Maitland which were discovered during the last uranium exploration boom over 30 years ago. The other Yilgarn application (Ponton Creek) covers a Tertiary palaeochannel 170 km east of Kalgoorlie. Ponton Creek has potential to host uranium mineralisation of similar style to that at Mulga Rock deposit (60km to the north east) and to the South Australian deposits such as Beverley and Warrior (none of which are held by Fission).

Figure 12: Fission Project Locations - Western Australia

Mt Sears Range contains a known uranium occurrence discovered in 1979 near the top of the Mesoproterozoic Coolbro Sandstone, which is located in the Rudall River National Park. The unconformity at the base of this sandstone formation is host to the unconformity style Kintyre uranium deposit and hence Mt Sears Range is also prospective for this uranium deposit style.

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Noondie and Barlee

Exploration licences over six areas (Noondie, Barlee East, West & South, Elvire & Elvire South), located approximately 500km north east of Perth, have been applied for over radiometric (uranium) anomalies around the margins of Lake Noondie and Lake Barlee (Figure 13). These playa lakes are remnants of an extensive Tertiary drainage system incised into Archaean granite terrane. Fission's applications are considered prospective for Playa type uranium deposits in which uranium released from weathering of the surrounding granites is transported and deposited in near surface gypsiferous and calcareous playa lake clays near the water table, predominantly as the mineral carnotite. An example is Aldershot Resources Ltd's Yuinmery uranium deposit on the north west margin of Lake Noondie, 25km to the north west of Fission's Noondie application and 60km to the northwest of Lake Barlee. Other known uranium deposits of similar style in the region are Lake Maitland and Lake Austin deposits (which are not held by the Company).

As well as near surface enrichments of uranium Lake Noondie and Lake Barlee are also considered prospective for deeper palaeochannel (roll-front-style) deposits associated with redox fronts around reduced lake sediments.

Fission initially intends to carry out detailed ground radiometric surveys over the strongest airborne radiometric anomalies. This will be followed by auger or shallow air core drilling of the best targets to test for uranium mineralisation at shallow depth. Airborne EM surveys may prove useful in defining the location of the main fluvial channels beneath the lakes which could be possible hosts for deeper roll-front uranium mineralisation. Fences of deeper RC percussion drill holes using a track mounted drilling rig will be required to test any palaeochannels delineated by these surveys.

Perseverance

This tenement application, which is located 30km to the north west of Lake Noondie, covers a discrete "bullseye" airborne uranium radiometric anomaly approximately 2km in diameter. Based on GSWA mapping the anomaly is over Quaternary alluvium and not associated with any mapped outcropping Archaean age rocks. Ground reconnaissance will be carried out to determine if the anomaly is due to subcropping Archaean rocks with a high uranium background or uranium enriched Tertiary valley sediments draining into Lake Noondie. A major calcrete-bearing drainage system, a tributary of Lake Noondie, associated with the Yuinmery uranium deposit is located 9km to the east. Tasman's Perseverance prospect could represent a branch of this tributary joining Lake Noondie.

Exploration of this area will involve geological reconnaissance and ground radiometric surveys and possible bedrock RAB drilling.

Figure 13: Locations of Perseverance, Lake Noondie and Lake Barlee Applications and Yuinmery Uranium Deposit on Landsat Mosaic of Australian Image (copyright Commonwealth of Australia - ACRES, Geoscience Australia)

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Ponton Creek

The Ponton Creek application covers the confluence of two southeast trending Tertiary palaeochannels draining Archaean granite-greenstone terrane 170km ENE of Kalgoorlie. No uraniferous drainage channel calcrete is likely to have developed this far south in the Yilgarn Craton, however the area is considered prospective for the palaeochannel (roll-front) style of uranium mineralisation as explored for in South Australia. The Mulga Rock palaeochannel uranium deposit (which is not held by the Company) 60km to the north east of Ponton Creek is of this style. Although the palaeochannel has been incised into Permian sediments rather than granitic basement its uranium mineralisation is believed to have been derived from uranium-rich granitoids/metamorphic rocks of the Yilgarn Craton and adjacent Albany - Fraser Province.

Exploration of this area will involve an airborne EM survey to better define the palaeochannel location and its depth. This would be followed up by fences of aircore/RC drilling with down-hole radiometric probing to test the channels for uranium mineralisation.

A portion of this application is located on the Queen Victoria Nature Reserve and hence there may be issues associated with the grant of the exploration licence and access.

Figure 14: Ponton Creek Application Area on Landsat Mosaic of Australia Image (copyright Commonwealth of Australia - ACRES, Geoscience Australia)

Mt Sears Range

The Mt Sears Range application is located in the Paterson Orogen, a Proterozoic structural complex, in the south western part of the Great Sandy Desert, 1250km north east of Perth and 80km south of the Telfer gold mine. The application is located approximately 40km to the east of the Kintyre uranium deposit which was discovered by CRA in 1985 and is currently held by Rio Tinto. Kintyre is considered to be an unconformity-style, vein type uranium orebody with similarities to deposits in the East Alligator River Province of the Northern Territory, such as Energy Resources of Australia Ltd's Ranger and Jabiluka deposits, and the Athabasca region of northern Saskatchewan, Canada.

Host rocks at Kintyre are Palaeoproterozoic schists and quartzites of the Rudall Metamorphic Complex and the mineralisation is localised at the unconformity with sediments of the overlying Mesoproterozoic Yeneena Group.

The basal unit of the Yeneena Group, the Coolbro Sandstone outcrops within Fission's application area. As the latter has an easterly dip the uranium prospective unconformity may be at shallow depth within the southwestern portion of the ELA beneath sand dune cover.

Fission's application also covers a known uranium occurrence in the Mt Sears Range which was discovered in 1978 and has an associated airborne radiometric uranium anomaly. Uranium mineralisation comprising finely disseminated pitchblende occurs within feldspathic quartzite at the contact between the Mesoproterozoic Coolbro Sandstone and overlying Broadhurst Formation. A large grab sample collected from the original discovery site by a previous explorer assayed 6350ppm $U_3O_8$ and 1200ppm Cu. Ground radiometric surveys showed the mineralisation to occur discontinuously along strike for about 600m. Two percussion holes and one deeper RC hole drilled into the prospect returned a maximum $U_3O_8$ equivalent at the contact of 741ppm over 1.1m from 66.2m in hole SR1 as determined from down hole radiometric probing.

Previous regional radon emanometer surveys were inconclusive. Also shallow drilling to bedrock on a 400 x 100m spaced pattern was of limited success due to thick sand cover, laterite and gravel and the programme was eventually abandoned.

A track etch radon survey was also carried out over the immediate prospect area. The survey delineated three anomalous zones which apparently crossed rather than paralleled the trend of the prospect. They could be due to deep seated feeder veins which could imply a primary uranium source at greater depth. An east west trending, cross cutting fault structure has been mapped by the GSWA on the Rudall 1:250,000 map sheet in the vicinity of the prospect and this could have tapped uranium-bearing fluids from a primary source at greater depth, perhaps at the unconformity.

The Mt Sears Range uranium mineralisation style represents a secondary uranium target at a higher stratigraphic level for further follow up and could possibly be an indicator of primary unconformity style mineralisation at depth.

Figure 15: Mt Sears Range Application, Portion of GSWA Rudall 1:250,000 Geology Sheet showing location of Mt Sears Range Uranium Prospect. Coolbro Sandstone (Ptc), Broadhurst Formation (Ptb), Quarternary Sand/Clay and Sand Dunes (Qs).

The Mt Sears Range application is mostly located within the Rudall River National Park (the Kintyre deposit is excised from the National Park). Grant of Fission's application is unlikely in the short term due to the current policy of the Western Australian Government which is opposed to granting exploration licences in national parks.

5.4 Proposed Expenditure

The proposed expenditure budget of the Company (including salaries as appropriate), subject to Fission raising at least the minimum subscription under this Prospectus (refer to section 3.4 of this Prospectus), for the next two years is set out below. The funds raised under this Prospectus would be augmented by any further funds expended on exploration by any potential joint venture partner and any further funds raised by the Company after listing on the ASX.

The Company is of the opinion that, upon the successful completion of a capital raising of at least \$3 million, the Company will have enough working capital to carry out on its own its stated objectives. without having to enter into any strategic farm-out agreements which it will consider on each of the various projects as appropriate.

	S3 million Iminimum	\$4 million [fully]	\$6 million [including
	subscription	subscribed	over.
	only]		subscriptions]
Exploration Programs South Australia
Wynbring	500,000	500,000	650,000
Garford	500,000	500,000	650,000
Parkinson Dam	50,000	80,000	80,000
Lake Torrens	10,000	20,000	50,000
Exploration Programs Western
Australia
Noondie	100,000	100,000	100,000
Barlee	450,000	550,000	550,000
Perseverance	50,000	50,000	50,000
Ponton Creek	10,000	10,000	10,000
Mt Sears Range	10,000	10,000	10,000
Project Evaluation and Acquisitions		380,000	500,000
Issue Costs(including brokers'
commission(1)	365,000	425,000	545,000
Unallocated Working Capital		375,000	1,805,000
Operating Expenses	955,000	1,000,000	1,000,000
Total	\$3,000,000	\$4,000,000	\$6,000,000.

Note (1): Broker's commission has been calculated on the assumption that no funds will be raised under this Prospectus from Tasman Priority Applications – to the extent that funds are so raised, the fees payable by the Company will be reduced.

Given the speculative nature of the Company's business, the intended allocation of funds as set out above may change depending upon the market conditions and the results obtained in exploration programs.

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6. INDEPENDENT GEOLOGICAL CONSULTANT'S REPORT ON SOUTH AUSTRALIAN TENEMENTS

DAVID TONKIN & ASSOCIATES

25 Palmerston Road, Unley, S.A. 5061 Telephone (08) 8272 0999

ABN 36 140 574 941

28 February 2007

The Directors Fission Energy Limited Level 40, Exchange Plaza 2 The Esplanade Perth WA 6000

Gentlemen.

INDEPENDENT CONSULTING GEOLOGIST'S REPORT - SOUTH AUSTRALIAN MINERAL PROPERTIES

Fission Energy Limited ("Fission Energy") commissioned me to prepare an Independent Geologist's Report on twelve exploration properties located in South Australia. This report is to be included in a Prospectus, to be lodged with the Australian Securities and Investments Commission, offering for subscription Shares, at an issue price of 20 cents per Share, to raise up to \$6 million. A portion of the funds raised will be employed in exploration and evaluation of the South Australian mineral properties. I have provided consent for the inclusion of the Independent Geologist's Report in the Prospectus, in the form and context in which the Report appears, for the purpose of informing shareholders and prospective investors.

The sources used in preparing this Report included information provided to me by Fission Energy, open file technical reports submitted to the Government by previous exploration licence holders, technical reports and data made available by Government agencies, and other relevant published and unpublished information, as well as my professional knowledge of and experience in the regions covered by the Prospectus. A listing of selected published references is included in the Report, together with a list of relevant Government open file reports. I have worked extensively on the Gawler Craton and based on this knowledge made no field inspections during preparation of this Report.

The twelve properties described in this Report are understood to comprise eleven Exploration Licences and one Exploration Licence Application and cover a total area of 2,760 square kilometres.

I understand that an agreement between Fission Energy and Tasman Resources NL ("Tasman Resources") gives Fission Energy the rights to explore for, mine and process uranium on these properties. The tenements are licensed to Tasman Resources, which retains the rights to minerals other than uranium. However, where uranium occurs in association with other recoverable minerals and the value of the uranium exceeds 50% of the value of the mineral deposit, Fission Energy will hold the uranium rights. The agreement with Tasman Resources also gives Fission Energy rights to uranium found in the shallower, younger rocks within Tasman Resource's Lake Torrens project, but not to uranium found within the basement rocks or the Pandurra Formation sediments, which overlie basement, as these are the subject of a separate joint venture. The shallower strata available to Fission at Lake Torrens are, based on current knowledge, considered to have relatively low potential for the discovery of economically recoverable uranium deposits and are not considered in this Report.

It should also be noted that I have not considered matters concerning valuation of the mineral properties, the status of the tenements, the terms of any joint ventures and possible government or land ownership impacts in this report, and these matters are addressed elsewhere in the Prospectus. The Solicitor's Report, elsewhere in this Prospectus, provides a list of all mineral properties and associated tenement details.

The mineral properties to which Fission Energy has access are considered to be "Exploration Areas", which are inherently of a speculative nature. Nevertheless, it is evident that these tenements have been identified by Fission Energy on the basis of sound geological concepts and technical merit. Each is considered to be prospective to varying degrees for the discovery of uranium and further exploration is justified. Fission Energy has proposed exploration programmes and budgets that are in accordance with the perceived prospectivity and in balance with the funds to be raised. Fission Energy's budget is considered reasonable and sufficient to meet the anticipated combined annual statutory expenditure requirement of approximately \$1.1 million on the South Australian exploration tenements. The principals of Fission Energy are technically well qualified to oversee the implementation of the proposed exploration programmes and to keep abreast of new developments and opportunities as they arise. In my opinion, Fission Energy has developed satisfactory and well-defined exploration programmes and budgets that are consistent with the exploration targets indicated.

This report was prepared by me, David Tonkin. I am a qualified geologist with extensive experience in mineral exploration. For the past twenty years I have worked as an independent geologist, mainly in South Australia and the Northern Territory, consulting to clients who included major international resource companies, junior mineral explorers and the South Australian Department of Primary Industries and Resources. Much of this consulting work involved mineral exploration in the Gawler Craton and Stuart Shelf regions of South Australia. Prior to that, I had twenty years experience as a geologist with a major Australian resource company, during which time I worked on and managed mineral exploration programmes throughout Australia. I therefore have expert knowledge of the geological terrains covered by this prospectus.

I am a Member of the Australian Institute of Geoscientists (AIG), a Member of the Geological Society of Australia (GSA) and as detailed above have appropriate qualifications, experience and competence to be considered as an "Independent Individual Expert" and a "Competent Expert" under the relevant codes. This Independent Geologist's Report has been prepared in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (The VALMIN Code, 2005 Edition), which is binding on Members of the AIG.

I have no material interest in current mineral tenements held by Fission Energy or any other conflicts of interest in preparing this report. My relationship with Fission Energy is solely that of a professional association between consultant and client. The sole benefit to me is cash remuneration paid at agreed daily rates plus any expenses. Payment of these fees is in no way contingent on the opinions expressed in this Report.

Yours faithfully,

DG Tonkin B Sc, M AIG, M GSA

FISSION ENERGY LIMITED

Independent Geologist's Report

DG Tonkin February 2007

EXECUTIVE SUMMARY

Fission Energy Limited ("Fission Energy") has the uranium exploration and development rights to 12 properties covering a total of about 2,760 square kilometres on the Gawler Craton of South Australia (Figure Project Location). These properties hold potential for the discovery of commercial deposits of uranium in the following three geological settings:

• In Tertiary age palaeochannels $\bullet$
• Associated with iron-oxide copper-gold ("IOCG") deposits in Proterozoic basement $\bullet$
• $\bullet$ In unconformity related deposits associated with redbeds overlying the basement.

At Fission's Wynbring and Garford projects, Tertiary palaeochannels flowing into the Eucla Basin hold potential for sedimentary uranium deposits associated with reduction-oxidation (redox) fronts in waterbearing sediments that fill ancient channels cut into the weathered basement rocks of the western Gawler Craton, Radiogenic Hiltaba Suite Granites and Gawler Range Volcanics in the weathered basement provided a primary source of uranium for transport and re-deposition at redox interfaces within the Tertiary palaeochannels. Previous exploration during the 1970s and 1980s discovered deposits of this kind at Warrior prospect, 15 kilometres southeast of Wynbring project and at Yarranna prospect in the Narlaby Palaeochannel, further south. At Fission's Parkinson Dam project, Tertiary palaeochannels are not yet known to be present, but Tertiary sediments are known in the area and palaeochannels may be present.

Work in recent years by the Geological Survey of South Australia has greatly expanded knowledge of the Eucla Basin and its former tributaries, the Tertiary palaeochannels. Together with modern exploration tools, this knowledge provides current uranium explorers with a much improved opportunity to discover further roll front uranium deposits. Modern techniques include remote sensing imagery, such as Landsat, NOAA thermal imagery and digital elevation modelling (DEM), which provide an overview of concealed palaeochannel locations. More precise definition of channels is provided by electromagnetic methods and detailed gravity profile surveys. Aircore drilling techniques now make it possible to sample accurately through overlying unconsolidated sediments and to conduct down-hole geophysical testing through the inner tube of an aircore drill.

Parkinson Dam and Wynbring projects lie on the margins of the Gawler Range Volcanics Domain, a former sub-volcanic igneous environment, which is prospective for Olympic Dam style IOCG-uranium deposits. Some magnetic anomalies in these projects could potentially reflect hydrothermal iron oxide associated with IOCG-uranium alteration systems. Investigation of these anomalies with detailed gravity surveys could provide drilling targets that potentially represent hematitic breccias associated with IOCG-uranium deposits.

Parkinson Dam project also has potential for unconformity related uranium deposits. Oxidised sediments of the Corunna Conglomerate may play a similar role to the sediments unconformably overlying older Proterozoic basement in the Alligator Rivers region of the Northern Territory or the Athabasca Basin in Canada, where oxidised fluids in the overlying redbeds transport and concentrate uranium weathered from basement rocks into suitable trap sites.

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WYNBRING PROJECT

Introduction

Wynbring project comprises three properties on the central Gawler Craton, covering the upper reaches of the Wynbring Palaeochannel and part of the interpreted headwaters of the Kingoonya Palaeochannel System, above the Warrior uranium prospect (Figure 1). The properties include Warrior (EL 3306). Muckanippie (EL 3341) and Mulgathing Hill (EL 3345) licences, covering a total area of 906 square kilometres about 80 km northwest of the historic Tarcoola Goldfield.

Geological Setting

Quaternary sands, clays and salt lake sediments blanket the region, generally concealing bedrock. Beneath this cover are Tertiary palaeochannels, representing the preserved remains of an ancient river system. The approximate locations of these channels are shown on Figure 1, interpreted from a variety of sources, including satellite imagery, geophysical surveys, elevation models and past drillhole information. The project area lies towards the headwaters of Wynbring and Malbooma-Warrior Palaeochannels, which flow to the south, and possibly at the head of the Mulgathing Palaeochannel, which flows northwest. These Tertiary channels are incised into relatively thin Mesozoic sediments on the southern rim of the Eromanga Basin.

Figure 1: Wynbring Geology and Interpreted Palaeochannel Locations

Beneath the cover sediments are crystalline basement rocks of the Gawler Craton. Wynbring project lies on the northwest Gawler Craton, marginal to the Gawler Range Volcanics Domain. The oldest rocks are interpreted as Archaean gneisses of the Mulgathing Suite and Palaeoproterozoic granitoids of the Tunkillia Suite. Approximately 30 kilometres to the east these older basement rocks are overlain by Mesoproterozoic Gawler Range Volcanics. Co-magmatic with the volcanics are granites of the Hiltaba Suite, which intrude both Gawler Range Volcanics and the older basement.

Uranium Exploration Potential

Wynbring project has potential for the discovery of sedimentary roll front uranium deposits in the Wynbring and Malbooma-Warrior Palaeochannels. Exploration prior to 1983 discovered a sub-economic uranium deposit at the Warrior prospect, about 20 kilometres to the southeast in the Warrior Palaeochannel. Past explorers also found anomalous radioactivity associated with carbonaceous Tertiary channel sediments south of the project in the Wynbring Palaeochannel. Wynbring project may also hold potential for uranium mineralisation associated with Olympic Dam style IOCG deposits.

A study completed in 2001, by Primary Industry and Resources South Australia ("PIRSA") and the University of Adelaide, highlighted the uranium potential in the Tertiary palaeochannels of this region. The study established that the palaeochannels are highly charged with groundwaters and identified organic channel sediments with potential to precipitate uranium from the groundwaters. Within the basement rocks are radiogenic granites of the Hiltaba Suite, providing an erosion source for channel fill sediments and uranium.

Interpretations by PIRSA show the Wynbring Palaeochannel flowing southwards through Warrior licence. HoistEM surveys by Tasman Resources confirm this and suggest there are at least three tributaries, two from the east and one from the west (Figure 16), providing at least 40 kilometres of prospective palaeochannels. Interpretations suggest that other palaeochannels could extend into the Mulgathing Hill and Muckanippie licences.

Modern exploration techniques and research provide current uranium explorers with cost-effective exploration tools that were not available during the pre-1983 period of uranium exploration. These tools include modern satellite remote sensing instruments like Landsat and NOAA, sophisticated image processing techniques, GPS satellite navigation and levelling instruments and GIS computer mapping applications. These techniques combine to quickly identify probable channel systems and home in on potential target areas, before testing with aircore drilling.

Wynbring project may also hold potential for uranium mineralisation in IOCG-uranium deposits, as found at Olympic Dam. The project lies marginal to the Gawler Range Volcanics Domain, in an area with Hiltaba Suite granitoid intrusions. This was once a sub-volcanic environment into which Hiltaba Suite granitoids intruded at a high crustal level, and therefore potentially the setting for an Olympic Dam style deposit. A map of Gawler Craton IOCG potential, produced by Geoscience Australia and PIRSA, gives the eastern part of this region a ranking of three (where one represents high potential and four represents moderate potential).

Previous Uranium Exploration

Three companies explored for uranium in the project area between 1973 and 1983, after which further exploration was discouraged by government constraints on uranium mining.

XX

Nissho-Iwai (Aust) Pty Ltd ("Nissho-Iwai"), later replaced by PNC (Aust) Pty Ltd ("PNC"), explored for sedimentary uranium in the Warrapi area, which covered parts of the Warrior and Mulgathing Hill licences, from 1973 to 1975. Nissho-Iwai conducted a vehicular radiometric survey and analysed groundwaters, before drilling 42 open holes and a cored hole. Weak radiometric anomalies and absence of organic matter in palaeochannel sediments intersected by drilling discouraged further investigation.

From 1975 to 1982, PNC searched for sedimentary uranium in an area mainly southeast of Warrior licence, where they discovered a Tertiary palaeochannel system containing uranium-bearing carbonaceous sediments. Extensive drilling programs revealed a Tertiary channel up to 80 metres deep containing lacustrine lignites up to 10 metres thick. PNC found uranium-bearing sediments in the Tertiary channel system over an area of about 25 square kilometres. The best radiometric response was found in hole TM 418, where PNC equated the radiometric response to an intercept of 0.5 metres $\omega$ $0.08\%$ U₃O₈. This was found in carbonaceous sediments about 30 metres below the surface.

Uranerz (Aust) Pty Ltd ("Uranerz") searched for uranium in Tertiary sediments on the northern part of Warrior licence in 1974-75. Uranerz undertook refraction seismic and gravimetric surveys prior to drilling. They concluded that further work was not justified because of a lack of radioactive anomalism, low uranium analyses and an absence of favourable Tertiary sediments in holes drilled.

PNC also explored the Wynbring Palaeochannel southwest of Warrior licence between 1978 and 1983, searching for sedimentary uranium in the Tertiary palaeodrainage. PNC found the Wynbring Channel to be up to three kilometres wide and 74 metres deep, containing sands (partly carbonaceous) as well as silts and mudstones. They detected significant radiometric anomalies at depths of less than 20 metres, near the top of the carbonaceous sequence. PNC considered the presence of oxidised and reduced channel sands suggested potential for roll front uranium deposits. The best result was in hole TW 108, where an intercept of 0.4 metres gave a radiometric response that PNC estimated equated to $0.1\%$ $U_3O_8$ . PNC noted that the magnitude of the radiometric response may vary between samples with similar uranium assay values, suggesting some spatial separation between uranium and its daughter elements. However, radiometric peaks generally coincided spatially with assay peaks, indicating this separation is probably limited.

From 1980 until 1983, Afmeco Pty Ltd ("Afmeco") explored for uranium, base metals and diamonds in an area covering part of Mulgathing Hill licence and the western edge of Muckanippie licence. After making an interpretation of existing airborne magnetic and radiometric data, Afmeco undertook reconnaissance mapping and rock chip sampling, followed by the drilling of 20 aircore and diamond drill holes. Afmeco discovered a significant thorium anomaly in the sedimentary cover near West Well, but did not find a primary source in nearby bedrock gneiss.

From 1983, when government introduced controls on uranium mining and export, explorers in this region switched their focus back to searching for base metals, gold and diamonds.

Proposed Exploration Program

Following clearance and preparation of access tracks, Fission Energy plans to test the interpreted palaeochannel with aircore drilling programs designed to confirm the main channel positions. Radiometric down-hole probing will test for the presence of uranium mineralisation, backed up by geochemical assay of drilling samples for uranium.

GARFORD PROJECT

Introduction

Garford project comprises five properties on the central Gawler Craton, covering major sections of the Garford Palaeochannel (Figure 2). The properties include Garford (EL 3342), Sandstone (EL 3343), Wildingi Claypan (EL 3423), Galaxy Tank (EL 3532) and Sandy Tank (EL 3712) licences. The project covers a combined area of 1,322 square kilometres, located about 100 kilometres southwest of Coober Pedy.

Geological Setting

Quaternary sands, clays and playa lake sediments blanket the area, concealing the bedrock in most places. Lines of playa lakes tend to reflect the course of the underlying Garford Palaeochannel, which represents the buried remnants of an ancient (Tertiary) river system. The Tertiary channel is incised into relatively thin Mesozoic and late Palaeozoic sediments on the southern rims of the Eromanga and Arckaringa Basins.

Beneath the cover sediments are crystalline basement rocks of the Gawler Craton, interpreted from limited outcrop and drillhole information as Archaean gneisses of the Mulgathing Suite and Palaeoproterozoic granitoids of the Tunkillia Suite (Figure 2). Immediately east of Sandstone licence, outliers of Mesoproterozoic Gawler Range Volcanics are preserved in subcrop.

Figure 2: Garford Geology and Interpreted Palaeochannel Location

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Uranium Exploration Potential

Garford project holds largely untested potential for the discovery of sedimentary uranium deposits in the Garford Palaeochannel system. A study completed in 2001 by PIRSA and the University of Adelaide, highlighted the uranium potential of the Tertiary palaeochannels of this region. The study established that the palaeochannels are highly charged with groundwaters and identified organic channel sediments with potential to precipitate uranium from the groundwaters. Drilling carried out in the middle and upper reaches of the Garford channel in 2000 intersected organic channel sediments of the Pidinga Formation, including sandy and clayey lignite and fluvial carbonaceous sand and clay. Weathered and eroded remnants of Gawler Range Volcanics at the headwaters of the channel system could have provided a primary source of uranium.

Previous Uranium Exploration

Before 2006, there was no previous uranium exploration in the Garford project area, which covers the middle and upper section of the Garford Palaeochannel. The extent of the palaeochannel has only been established in recent years, mainly by PIRSA research programs.

Between 1971 and 1981 uranium was a target for exploration in the lower reaches of the palaeochannel system and in the adjacent Anthony Palaeochannel. CRA Exploration Pty Ltd explored for sedimentary uranium in the Lake Anthony and Lake Bring areas, where they found anomalous concentrations of uranium (up to 643 ppm) in Tertiary lignites within lake sediments. BP Mining Development Australia Pty Ltd searched for sedimentary uranium in the Lake Anthony and Wilkinson Lakes area, identifying a palaeochannel system, which contained weak uranium mineralisation.

In 2006, Tasman Resources NL (Tasman) commissioned an airborne EM (TEMPEST) survey over the project area. The survey covered 1.450 line kilometres, flown on north-south lines at one kilometre line spacing and was designed to better define the Garford Palaeochannel. Interpretation of TEMPEST conductivity imagery suggests that more than 80 kilometres of the palaeochannel lies within the project area, to depths of about 40 or 50 metres (Figure 3). The TEMPEST data also indicates the possible presence of deeper palaeochannels in older Mesozoic to Permian sediments beneath the Garford Palaeochannel. Tasman concluded that these deeper channels may also have potential for roll front uranium deposits.

Figure 3: Garford TEMPEST Survey Conductivity Image at 40m

Proposed Exploration Program

Following clearance and preparation of access tracks. Fission Energy plans to test the interpreted palaeochannel with aircore drilling programs designed to confirm the main channel positions. Radiometric down-hole probing will test for the presence of uranium mineralisation, backed up by geochemical assay of drilling samples for uranium.

PARKINSON DAM PROJECT

Introduction

Parkinson Dam project comprises four properties on the southern Gawler Craton in South Australia (Figure 2). The properties include Wartaka (EL 3102), Iron Knob (EL 3307), Reid Lookout (EL 3453) and Old Wartaka (ELA 289/06) licences, which cover a total area of 532 square kilometres on the southeast margin of the Gawler Range Volcanics Domain on northern Eyre Peninsula, about 20 kilometres north of Iron Knob.

Geological Setting

Parkinson Dam project lies on the south-eastern margin of the Gawler Range Volcanics Domain (Figure 4). The oldest rocks in the area are the Palaeoproterozoic Myola Volcanics and Broadview Schist, which comprise deformed acid volcanics and fine-grained gneisses, schists and quartzites. Unconformably overlying this basement in the Iron Knob licence is the Mesoproterozoic Corunna Conglomerate, a sedimentary sequence including both reduced and oxidised facies of shales, siltstones, sandstones and conglomerates.

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Figure 4: Parkinson Dam Geology

Also unconformably overlying the older basement and partly synchronous with the Corunna Conglomerate are the Mesoproterozoic Lower Gawler Range Volcanics, here represented by the Nonning Rhyodacite and Eucarro Dacite. Outcrop patterns and aeromagnetic data suggest that contacts between Gawler Range Volcanics and older rocks are controlled by conjugate northeast and northwest trending fault systems. In the northeast corner of Reid Lookout licence, red sandstones of the Mesoproterozoic Pandurra Formation unconformably overlie the volcanics.

Bedrock outcrop is fairly good in most parts of the project, especially over Nonning Rhyodacite. Quaternary gravels, clays, silts and sands, including dune sands, cover the rest of the area, and could possibly conceal Tertiary palaeochannels.

Uranium Exploration Potential

Parkinson Dam project has potential for unconformity style uranium deposits associated with redox boundaries in the Corunna Conglomerate, which unconformably overlies Palaeoproterozoic basement. Previous exploration has detected uranium in groundwaters and identified anomalous radioactivity in the Grey Sandstone Member.

Parkinson Dam project lies on the margin of the Gawler Range Volcanic Domain, so the geological setting at the time the Gawler Range Volcanics were extruded was a high-level, sub-volcanic igneous environment, suitable for the formation of Olympic Dam style IOCG-uranium deposits. As at Menninnie Dam prospect, which lies in a similar setting 50 kilometres to the west, there is no confirmed occurrence of Hiltaba Suite granite, but its presence could be obscured by deep weathering and Quaternary cover, or intrusions may have failed to breach the Gawler Range Volcanics. A map of Gawler Craton IOCG potential, produced by Geoscience Australia and PIRSA, ranks the potential in Parkinson Dam project area at two (where one represents high potential and four represents moderate potential).

At Thurlga, 100 kilometres to the west, a concealed Tertiary palaeochannel drains southwards from the Gawler Range Volcanics. Other explorers have interpreted similar concealed palaeochannels from remote sensing imagery. It is possible that Tertiary channels are also present in the larger valleys in Parkinson Dam project, concealed beneath Quaternary cover. Weathering of radiogenic Gawler Range Volcanics would provide a proximal source of uranium for concentration in roll front deposits within such palaeochannels.

Previous Uranium Exploration

Several previous explorers searched for uranium in the Parkinson Dam project area. BHP Company Ltd explored regionally for uranium (and copper) between 1968 and 1970, undertaking geological mapping, ground scintillometer surveys, soil and stream geochemistry. IP surveys, airborne magnetic and radiometric surveys, and drilling.

Nissho-Iwai Company (Aust) Pty Ltd ("Nissho") explored the Iron Knob licence for sedimentary uranium in the Corunna Conglomerate in1970-71. Work by Nissho included radiometric surveys, geochemical sampling, groundwater analysis and geological mapping. Drainage samples did not detect uranium, but water analyses detected uranium in most samples, especially over Gawler Range Volcanics areas. Nissho determined that anomalous radioactivity in pebble conglomerate of the Grey Sandstone Member of the Corunna Conglomerate is mostly due to the thorium minerals monazite and thorite.

AOG Minerals Pty Ltd ("AOG") explored the Iron Knob licence in 1972-73, conducting ground scintillometer surveys, geochemical sampling and heavy mineral sampling. AOG obtained anomalous radioactive readings from a thin bed within the Corunna Conglomerate, but assays showed only low concentrations of uranium.

In 1986-87, PNC Exploration (Aust) Pty Ltd explored for uranium in the Iron Knob and Wartaka licences. Work included RAB drilling to investigate Proterozoic bedrock beneath alluvial and regolith cover. PNC found generally low values for uranium, base metals and precious metals in both drill hole and groundwater samples. PNC also investigated airborne magnetic anomalies and conducted geological mapping, IP surveys, ground magnetic surveys and radon surveys, discovering minor torbernite (a

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copper-uranium phosphate mineral) near Wartaka homestead, on Iron Knob licence. PNC also reported elevated copper and uranium values related to the Roopena Fault, east of the project area.

Previous explorers have also searched the project area for IOCG mineralisation, which can contain significant uranium, as at Olympic Dam. WMC Resources Ltd ("WMC") explored for IOCG deposits on the Iron Knob and Wartaka licences between 1993 and 2000. WMC conducted infill magnetic and gravity surveys, followed by IP surveys and lag geochemistry, without finding significant anomalies.

From 1977 to 2002, Acacia Resources Ltd explored Reid Lookout and Iron Knob licences for IOCGuranium deposits. Rock chip sampling located anomalous base metals in quartz veins, which carried visible galena and malachite. Calcrete sampling outlined weak gold and base metal anomalies.

In 2002-2003, Avoca Resources Ltd ("Avoca") explored for IOCG-uranium mineralisation in the northeast part of Reid Lookout licence. Avoca collected soil samples and analysed by partial leach and enzvme leach methods, without detecting anomalous soil geochemistry.

In 2005, Tasman Resources NL investigated the surface uranium occurrence reported previously by PNC. Microscopic examination identified the uranium oxide mineral uraninite, as well as traces of an unidentified uranium phosphate. Tasman tested this outcropping mineralisation in 2006 with several RC percussion holes. The drilling showed that this occurrence is of fairly limited extent. However, Tasman concluded that because this uranium occurrence lies close to a regional geological unconformity, it may represent a positive indication of the regional potential for unconformity related uranium deposits. Field work by Tasman in 2006 also confirmed the possibility of Tertiary palaeochannel sediments within the project area.

PIRSA completed a detailed gravity survey (2km x 2km centres) which covered the entire project area in 2006, as part of a PACE funded program designed to encourage exploration by providing basic exploration data. This gravity data will assist exploration for IOCG-Uranium deposits in this region.

Proposed Exploration Program

Fission Energy plans to conduct ground radiometric surveys along the unconformity at the base of the Corunna Conglomerate, following up anomalous areas with RAB or RC drilling, down-hole radiometric probing and assay of drilling samples. Fission also plans to examine NOAA satellite imagery for any indications of Tertiary palaeochannels that may cross the project area and drill a number of RC percussion holes to test.

PRINCIPAL SOURCES OF INFORMATION

The sources of information for this report included published scientific papers, unpublished PIRSA open file reports, confidential company reports provided by Fission Energy and my own professional experience working in the regions covered by these projects. Selected published references are listed below, followed by a table listing PIRSA open file envelopes relevant to the projects covered by this report.

Selected Published References

Baudemont, D., Piquard, F. Ey. and Zimmerman, J., 1993. The Sue uranium deposits, Saskatchewan, Canada. Exploration Mining Geology, vol. 2, no. 3: 179-202.

Drexel, J.F., Preiss, W.V., and Parker, A.J., 1993. The geology of South Australia, Vol. 1, The Precambrian, South Australia. Department of Primary Industry and Resources. Geological Survey. Bulletin, 54.

Drexel, J.F., and Preiss, W.V. (Eds), 1995. The geology of South Australia, Vol. 2, The Phanerozoic, South Australia. Department of Primary Industry and Resources. Geological Survey. Bulletin, 54.

Ferris, G.M., Schwarz, M.P., and Heithersay, P., 2002. The geological framework, distribution and controls of Fe-oxide and related alteration, and Cu-Au mineralisation in the Gawler Craton, South Australia: Part I: geological and tectonic framework. In: Porter, T.M., (Ed.), Hydrothermal iron oxide copper-gold and related deposits: a global perspective. Vol. 2. PGC Publishing, Adelaide.

Geological Survey of South Australia, 2005. South Australia Geoscientific GIS Dataset, South Australia. Department of Primary Industry and Resources. December 2005 release CD.

Hou, B., Frakes, L.A., Alley, N.F., Stamoulis, V. and Rowett, A., 2000. Geoscientific signatures of Tertiary palaeochannels and their significance for mineral exploration in the Gawler Craton region. MESA Journal, 19: 36-39.

Hou, B., Frakes, L.A. and Dodds, A.R., 2001. Recent drilling in the Garford Palaeochannel, Gawler Craton – testing a model derived from interpreted geological, geophysical and spectral methods. MESA Journal, 20: 24-27.

Hou, B., Frakes, L.A. and Alley, N.F., 2003. Palaeochannel evolution, northwestern Gawler Craton, South Australia. http://leme.anu.edu.au/RegLandEvol/Palaeochannel.pdf

Hou, B. and Mauger, A.J., 2005. How well does remote sensing aid palaeochannel identification? an example from the Harris Greenstone Belt. MESA Journal, 38: 46-52.

JNR Resources Inc., 2005. Uranium industry; uranium deposits & exploration; Athabasca Basin overview. http://www.jnrresources.com/s/UraniumPages.asp accessed 10/11/2005.

McKay, A, Lambert, I.B. and Miezitis, Y. 2001. Australia's uranium resources and production in the world context. In: Hardy, C. Ed. Proceedings, Fourth Conference on Nuclear Science and Engineering in Australia, 24-25 October, 2001, ANA, Sydney: 23-29

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Rogers, P.A., Fabris, A.J. and Hou, B., 2003. Cainozoic basins. In: Heithersay, P.S., Drexel, J.F., Hibburt, J.E. and Thomas, C.A. (Eds), 2003, South Australian mineral explorers guide. South Australia. Department of Primary Industries and Resources. Mineral Exploration Data Package, 11, ch. 13.

Schwarz, M.P., Morris, B.J., Sheard, M.J., Ferris, G.M., Daly, S.J., and Davies, M.B., 2002. Gawler Craton. In: Heithersay, P.S., Drexel, J.F., Hibburt, J.E., and Thomas, C.A., (Eds) 2002. South Australian mineral explorers guide, draft edn. Office of Minerals and Energy Resources. South Australian Department of Primary Industry and Resources, Adelaide, CD.

Skirrow, R., Fairclough, M., Budd, A., Lyons, P., Raymond, O., Milligan, P., Bastrakov, E., Fraser, G., Highet, L., Holm, O. and Williams, N., 2006. Iron oxide Cu-Au(-U) Potential map (Preliminary Ed.), 1:500 000 scale, Geoscience Australia, Canberra.

Uranium Information Centre Ltd, 2001. Geology of uranium deposits. Nuclear issues briefing paper #34 November 2001. http://www.uic.com.au/nip34.htm accessed 11/11/2005.

Lease	Licensee		Granted Expired	References
	WYNBRING PROJECT
SML 261	Kennecott Explorations (Australia) Pty Ltd		Nov-68 Aug-69	ENV01131
SML 333	Kennecott Explorations (Australia) Pty Ltd	Aug-69	$Feb-70$	ENV01375
SML 491	Otter Expln NL	Oct-70	$Oct-71$	ENV01510
SML 620	Abadon Holdings NL	Aug- $71$	Feb-72	ENV01822
SML 684	Abadon Holdings NL	$Mar-72$	Sep- $72$
EL 48	Nissho-Iwai Co. (Aust.) Pty Ltd		Mar-73 Mar-75	ENV02255
				ENV02390
EL 195	Nissho-Iwai Co. (Aust.) Pty Ltd	$Jun-75$	$Jun-77$	ENV02591
EL 360	Nissho-Iwai Co. (Aust.) Pty Ltd	Sep- $77$	Sep- $78$	ENV03255
EL 460	PNC Exploration (Aust.) Pty Ltd	Apr-79	Apr-81	ENV03510
EL 762	PNC Exploration (Aust.) Pty Ltd	$Dec-80$	$May-$	RB 00788
			82	RB74/00168
EL 157	Uranerz (Aust.) Pty Ltd	Oct-74	Apr- $75$	ENV02477
				RB75/00005
				RB75/00046
EL 504	Cultus Pacific NL	Aug- $79$	Aug- $81$	ENV03596
EL 505	Cultus Pacific NL	Aug-79	Aug- $81$	ENV03597
				ENV03598
EL 551	PNC Exploration (Aust.) Pty Ltd		$Nov-79$ Nov-80	ENV03752
EL 866	PNC Exploration (Aust.) Pty Ltd	Aug- $81$	Aug- $83$
EL 579	Afmeco Pty Ltd	$Jan-80$	$Jan-82$	ENV03777
EL 974	Afmeco Pty Ltd		Mar-82 Mar-83
EL 828	Stockdale Prospecting Ltd	Apr- $81$	Apr-83	ENV04266
				ENV04993
EL 931	CRA Exploration Pty Ltd		$Nov-81$ Nov-83	ENV04613
EL 932	CRA Exploration Pty Ltd		Nov-81 Nov-83	ENV04613
EL 1375	Tarcoola Gold Ltd	$Jan-87$	Jul-89	ENV06823
EL 1392	Cape Range Oil NL	$Mar-87$	Sep- $87$	ENV06897
EL 1409	Cape Range Oil NL	Jun-87	$Oct-87$

Unpublished Company Reports Held in Open File at PIRSA

Lease	Licensee		Granted Expired	References
EL 1526	CRA Exploration Pty Ltd	Oct-88	Feb-90	ENV08073
EL 1529	CRA Exploration Pty Ltd	$Oct-88$	Sep-89	ENV08236
EL 1788	Dominion Gold Operations Pty Ltd,	Oct-92	Oct-97	ENV09229
EL 2452	Resolute Resources Ltd	$Oct-97$	$Oct-02$
	Resolute Resources Ltd, Dominion Gold
EL 1789	Operations Pty Ltd Aztec Mining Company Ltd	Oct-92	Oct-97	ENV08686
EL 2015	Aztec Mining Company Ltd	$Sep-94$	Sep-99	ENV09348
EL 2475	Oxford Resources Ltd	Dec-97	$Dec-02$	ENV09349
EL 2674	Oxford Resources Pty Ltd	$Dec-99$	Dec-01	ENV09624
EL 2004	Dominion Gold Operations Pty Ltd		Aug-94 Aug-95	ENV08976
EL 2030	Websters Find Gold Pty Ltd		Nov-94 Nov-99	ENV09007
EL 2696	Websters Find Gold Pty Ltd	Feb-00	Aug- $01$	ENV09028
EL 2154	Tri Resources Pty Ltd		Mar-96 Sep-98	ENV09177
EL 2703	Magnum Gold NL		Mar-00 Mar-02
EL 2992	ACN 099 477 915 Pty Ltd	Aug-02	Aug- $05$
EL 3011	Barra Resources Ltd, Downie J L	Sep-02	Sep-03
	GARFORD PROJECT
SML 622	Utah Development Co	Aug- $71$ Oct-73	Aug- $72$ $Jan-74$	ENV01795
EL 100 EL 125	Utah Development Co. Utah Development Co.	$Feb-74$	Feb-76	ENV02239 ENV02389
EL 250	Utah Development Co.	$Jun-76$	$Jun-78$	ENV02409
EL 433	Utah Development Co.		Nov-78 Nov-80	ENV02410
				ENV02774
				ENV03451
				RB00824
				RB94/45
EL 806	Utah Development Co.	$Jan-81$	May- 82	ENV03451 RB00824
				RB94/45
EL 775	Southern Cross Exploration NL	$Jan-81$	$Jan-83$	ENV04097
				ENV04211
EL 828	Stockdale Prospecting Ltd		Apr-81 Apr-83	ENV04266
EL 837	Stockdale Prospecting Ltd	Apr-81	Apr-83	ENV04993
				ENV04266
EL 1132	Steetley Industries Ltd			ENV04993 ENV05121
		Apr-83	Apr- $84$	ENV06732
EL 1323	CRA Exploration Pty Ltd	Apr-86	May- 90	ENV08304
EL 1371	Roebuck Research NL	$Dec-86$	Dec-90	ENV06809
				ENV06857
EL 1718	BHP Minerals Ltd		May-91 Nov-93	ENV08782
EL 1719	BHP Minerals Limited	$May-91$	May-	ENV08782
			95
EL 1817 EL 1900	Norscon Pty Ltd Minotaur Gold NL	$Jan-93$ $Dec-93$	$Oct-93$ Dec-98	ENV09494
				RB2000/3
EL 2018	Coombedown Resources NL	$Sep-94$	$Sep-99$	ENV09054
				ENV09229
EL 2120	Dominion Gold Operations Pty Ltd,		$Nov-95$ Nov-00	ENV09229
	Resolute Resources Ltd			ENV09774
EL 2121	Dominion Gold Operations Pty Ltd,		$Nov-95$ Nov-97	ENV09220
	Resolute Resources Ltd			ENV09229
EL 2123	Normandy Exploration Ltd		$Nov-95$ Nov-98	ENV09170

Lease	Licensee		Granted Expired	References
EL 2124	Equinox Resources NL		$Nov-95$ Nov-99	ENV09159
EL 2236	Equinox Resources NL		Nov-96 Nov-99	ENV09159
EL 2237	Goldstream Mining NL		Nov-96 Apr-99	ENV09284
EL 2256	Eagle Bay Resources NL	$Jan-97$	$Jan-99$	ENV09256
EL 2654	Dominion Gold Operations Pty Ltd	$Oct-99$	Oct-04	ENV09774
EL 2856	Coombedown Resources Pty Ltd	$Oct-01$	Oct-02
EL 2880	Anglo American Exploration (Australia) Pty Ltd	$Jan-02$	$Jan-05$	ENV10327
EL 2912	Quantum Resources Ltd		Apr-02 $ Apr-04 $
	PARKINSON DAM PROJECT
SML 204	BHP Co Ltd	Jul-68	Jun-70	ENV01174 ENV01175
	SML 205 BHP Co Ltd	$Jul-68$	Jun-70	ENV01175
	SML 340 Asarco (Aust) Pty Ltd	$Oct-69$	Apr-70	ENV01199
	SML 498 Nissho-Iwai Co (Aust) Pty Ltd		$Nov-70$ Nov-71	ENV01520
SML 690	AOG Minerals Pty Ltd		Apr-72 Apr-73	ENV01992
EL 352	Abminco NL	Aug-77	$May-$ 78	ENV03123
EL 398	Samedan Oil Corp.	$May-78$	May-	ENV03292
EL 692	Samedan Oil Corp.	Aug- $80$	80
EL 1041	Samedan Oil Corp.	$Sep-82$	Aug-82 $Sep-85$
EL 529	Samedan of Australia	$Sep-79$	$Sep-81$	ENV03613
EL 1339	PNC Exploration (Aust.) Pty Ltd	$Jun-86$	Jun-88	ENV06778
EL 1872	WMC Resources Ltd	$Oct-93$	$Sep-98$	ENV08900
EL 2559	WMC Resources Ltd	$Oct-98$	Oct-00	ENV09120
EL 2321	Acacia Resources Ltd	Apr-97	Apr-02	ENV09398
EL 2701	Helix Resources NL		Mar-00 $Mar-01$
EL 2742	Helix Resources Ltd	$Jul-00$	$Jul-04$
EL 2924	Avoca Resources Ltd		Apr-02 Apr-03	ENV09953

AL MAYNARD & ASSOCIATES Consulting Geologists

www.geological.com.au

(ABN 95 336 331 535)

9/280 Hay Street,	Tel: (+618) 9388 1000	Mob: 04 0304 9449
SUBIACO. WA. 6008	Fax: (+618) 9388 1768	A/h: (618) 9443 3333
Australia		al@geological.com.au

The Directors. Fission Energy Limited Level 40, Exchange Plaza. 2 The Esplanade. Perth, 6000. Western Australia

12th March, 2007.

Gentlemen.

INDEPENDENT CONSULTING GEOLOGIST'S REPORT

At your request we have prepared the following independent geological report on the geology and exploration potential of your 9 uranium projects in Western Australia. We understand that Fission Energy Limited ("FEL") has gained a 100% interest in the projects, located in the northern portion of the Yilgarn Craton and the Pilbara of Western Australia. The 8 projects in the Yilgarn lie within a large recognised province of important uranium mineralisation hosted by surficial palaeo-drainage calcrete deposits. The projects contain similar geological settings suitable for the concentration of uranium. Examples of the known deposits in the region include the valley, playa and terrace styles similar to the Yeelirrie uranium deposit (52,500) tonnes (t) $U_3O_8$ ) as shown on Figure 1 and are set out and described in the report below. The Mt Sears Range Project in the Rudall Range area of the Pilbara is located in close proximity to and along strike from the high grade Kintyre deposit. Australia's 5^th largest uranium deposit $(34.900 t U₃O₈)$ .

The report has been prepared for inclusion in a Prospectus to be lodged with the Australian Securities and Investments Commission ("ASIC") on or about 11 April 2007, offering for subscription 20,000,000 million shares at an issue price of 20 cents per share to raise \$4 million with oversubscriptions to raise up to \$6 million. It has been prepared in accordance with the relevant requirements of the Listing Rules of the Australian Stock Exchange Limited. ASIC Practice Notes 42 and 43 and the Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports (the Valmin Code) which is binding upon members of the Australasian Institute of Mining and Metallurgy ("AusIMM").

The aim of the report is to present the results of reviewing all available data relating to the project areas, describe the status of current exploration targets and the suitability of proposed exploration programs and expenditure. The contents of this report are based on reports and data held by FEL and that on open file at the Department of Industry and Resources ("DoIR") of Western Australia. The areas covered by the prospects discussed in this report have all been visited by at least one of the writers. The writers have made all reasonable inquiries to verify the accuracy and completeness of the data provided. FEL has warranted to the best of its knowledge that full disclosure has been made of all material in its possession and that

XX

information is complete, accurate and true. None of the information provided by FEL has been specified as being confidential and not to be disclosed in this report. The legal status of the tenements, including Native Title considerations are the subject of a separate Solicitor's Report which appears elsewhere in the Prospectus, and these matters have not been independently verified by the writers.

The writers believe FEL has reasonable, defined exploration expenditure programs and sufficient exploration work has taken place in past vears to justify the budgeted programs.

The writers, Allen Maynard and Garry Hemming, are independent consulting geologists with more than 60 years combined experience in the mineral exploration industry, predominantly in Western and South Australia. Africa. Asia and South America. The Principal. A. Maynard has been practicing as a consultant since 1982. He holds a BAppSc(Geol) degree and is a member of the Australian Institute of Geoscientists ("AIG") and the Australasian Institute of Mining and Metallurgy ("AusIMM"). The writers have the relevant experience and competence to be considered an "Expert" under the definitions provided by ASIC Practice Notes 42 and 43 and the Valmin Code. The writers warrant that they have no direct or contingent interest in FEL or in any of the mineral properties included in this report, nor in any other asset of FEL. Fees for the preparation of this report are charged at commercial rates whilst expenses are reimbursed at cost. Payment of fees and expenses is not contingent upon the conclusions of this report or on the outcome of the proposed listing of FEL. For the purpose of Sections 731 to 733 of the Corporations Law, the writers have been involved in the preparation of this Independent Consulting Geologists' Report included in the Prospectus and have authorised or caused the issue of this part of the Prospectus. The writers have given consent in writing to the issue of the Prospectus with this Independent Report in the form and context in which it is included and has not withdrawn their consent before the lodgement of the Prospectus with the ASIC.

Yours faithfully.

Wmagand

Allen J. Maynard BAppSc(Geol) MAIG.MAusIMM

Garry Hemming BAppSc(AppGeol) MAusIMM

CONTENTS

SUMMARY OF THE FEL URANIUM PROIECTS $3.0₁$

$2.0$ YOUANMI / BARLEE URANIUM PROJECT

• $21$ INTRODUCTION
• $22$ CLIMATE AND PHYSICAL FEATURES
• $2.3$ LOCATION AND ACCESS
• $2.4 -$ TENURE
• $2.5 -$ REGIONAL GEOLOGY
• $2.6 -$ LOCAL GEOLOGY AND MINERALISATION
• $2.7$ PREVIOUS EXPLORATION
• 2.8 ELVIRE
• $2.9 -$ ELVIRE SOBTH
• 2.10 BARLEE WEST
• 2.11 BARLEE SOUTH
• 2.12 BARLEE EAST
• 2.13 NOONDIE
• 2.14 PERSERVERANCE
• 2.15 CONCLUSIONS AND RECOMMENDATIONS

PONTON CREEK / CUNDEELEE URANIUM PROJECT $3.0₁$

• INTRODUCTION $3.1$
• CLIMATE AND PHYSICAL FEATURES $3.2^{\circ}$
• $3.3^{\circ}$ LOCATION AND ACCESS
• $3.4^{\circ}$ TENURE
• $3.5$ REGIONAL GEOLOGY
• $3.6$ PREVIOUS EXPLORATION
• CONCLUSIONS AND RECOMMENDATIONS $3.7$
• PROPOSED PROGRAM $3.8$

4.0 MT SEARS RANGE / RUDALL URANIUM PROJECT

• $4.1$ INTRODUCTION
• $4.2^{\circ}$ CLIMATE AND PHYSICAL FEATURES
• $4.3$ LOCATION AND ACCESS
• $4.4^{\circ}$ TENURE
• 4.5 REGIONAL GEOLOGY AND MINERALISATION
• 4.6 KINTYRE URANIUM DEPOSIT
• $4.7$ PREVIOUS EXPLORATION
• $4.7$ CONCLUSIONS AND RECOMMENDATIONS

XX

4.8 PROPOSED PROGRAM

REFERENCES $5.0$

FIGURES

• FIGURE 1 FISSION ENERGY LIMITED PROJECT LOCATIONS, WESTERN AUSTRALIA
• FIGURE 2 AUSTRALIAN URANIUM MINES / PROSPECTS
• FIGURE 3 YOUANMI / BARLEE PROJECT LOCATIONS ON LANDSAT IMAGE
• FIGURE 4 YOUANMI / BARLEE URANIUM PROJECT URANIUM RADIOMETRICS OVERVIEW
• FIGURE 5 ELVIRE URANIUM RADIOMETRIC AND LANDSAT IMAGES
• FIGURE 6 ELVIRE SOUTH URANIUM RADIOMETRIC IMAGES
• FIGURE 7 BARLEE WEST URANIUM RADIOMETRIC AND LANDSAT IMAGES
• BARLEE SOUTH URANIUM RADIOMETRIC AND LANDSAT IMAGES FIGURE 8
• FIGURE 9 BARLEE EAST URANIUM RADIOMETRIC AND LANDSAT IMAGES
• FIGURE 10 NOONDIE URANIUM RADIOMETRIC IMAGE
• FIGURE 11 PERSEVERANCE URANIUM RADIOMETRIC IMAGE
• FIGURE 12 PONTON CREEK URANIUM RADIOMETRIC AND LANDSAT IMAGES
• FIGURE 13 MT SEARS RANGE URANIUM RADIOMETRIC AND LANDSAT IMAGES
• FIGURE 14 MT SEARS RANGE GEOLOGY

1.0 SUMMARY OF THE FEL URANIUM PROJECTS

FEL have a brownfields and greenfields uranium exploration portfolio in WA. Eight of FEL's projects are located in the extensive uranium province of the Yilgarn of Western Australia. The province's surficial uranium deposits are largely located in Archaean greenstone/granitoid terranes in the northern portion of the Yilgarn Block. The ninth FEL project is located in Proterozoic of the Rudall portion of the Bangemall Basin along strike from the unconformityassociated Kintyre Uranium Deposit. Western Australia has additional uranium deposits in Proterozoic granites and gneisses of the Gasgoyne Province and Proterozoic sediments of the Nabberu and Bangemall basins.

×i

History of Exploration in Western Australia

Western Australia was first prospected for uranium during the rush after the 2^nd World War up until the demise of uranium prices after 1980. Exploration work ceased until the past vear or two with the upswing in the uranium price to over US\$80 per pound (lb) $U_3O_8$ . After this 20 vear hiatus in uranium exploration activity, an opportunity exists in WA to apply modern exploration technologies and assess new data to successfully target and define uranium resources.

In 1944 British and United States governments requested Australia explore for uranium. In 1948 the Commonwealth government offered tax-free rewards for the discovery of uranium orebodies and as a result several significant discoveries were made by prospectors in northern Australia (1949-56) (Lambert, et al. 1996).

A second wave of exploration activity in the late 1960s was due to the development of civil nuclear power. Most of Australia's major orebodies were discovered by the involvement of major companies with large budgets and using advanced exploration techniques. Exploration expenditure decreased during 1972-75 due to government policies.

Stimulated by buoyant prices, exploration increased after 1975 although by then new uranium development was discouraged, and exploration expenditure generally declined to the mid 1990s largely as a result of low uranium prices. Australia's known uranium resources have increased little since 1982 (except for Olympic Dam). In the same time period uranium exploration in Canada has resulted in a substantial increase in known resources. In 2004 exploration in Australia started to ramp up again and the surficial deposits discovered prior to 1982 have come to prominence due to their size and ability to come into production quickly should the Australian governments allow development.

Uranium occurs in a number of different igneous, hydrothermal and sedimentary geological environments. Most of Australia's uranium resources are in two kinds of orebodies, unconformity-associated and breccia complex, while surficial sedimentary deposits are less significant than overseas. Most Canadian deposits are unconformity-related.

Figure 2: Australian Uranium Mines/Projects

Surficial uranium deposits are broadly defined as young (Tertiary to Recent) near-surface uranium concentrations in sediments or soils. These deposits usually have secondary cementing minerals including calcite, gypsum, dolomite, ferric oxide, and halite. Uranium deposits in calcrete are the largest of the surficial deposits. Uranium mineralisation is in finegrained surficial sand and clay, cemented by calcium and magnesium carbonates (Townsend, $2000$ ).

Deposit	tonnes	grade ppm $U_3O_8$	grade pounds/ $t U_3 O_8$	Contained tonnes $\underline{U_3O_8}$
Yeelirrie	35,000,000	380	0.8	52,500
Kintyre	23,300,000	1500	3.3	35,000
Mulga Rock	10,830,000	1415	3.1	15,329
Manyingee	14,700,000	1000	2.2	12,078
Lake Way	9,100,000	909	2.0	8,252
Lake Maitland	15,200,000	540	1.2	8,222
Thatcher Soak	15,000,000	400	0.9	6,000
Nowthanna	10,368,000	446	1.0	4,626
Oobagooma	22,800,000	120	0.26	2,736
Lake Mason	7,700,000	350	0.8	2,695

Surficial deposits comprise about 4% of world uranium resources. Calcrete deposits represent 5% of Australia's total reserves and resources of uranium. The larger deposits are:

These calcrete type uranium deposits formed where uranium-rich granites were deeply weathered in a semi-arid to arid climate (the Yeelirrie deposit in WA is one of the world's largest surficial deposits. They are controlled by basement geology, sedimentology and climatic factors (Butt et al, 1977). The shield of Western Australia has a long weathering history of continuous planation resulting in a regolith of up to 100 metres depth. Although the deposits appear relatively young (Quaternary age), the history of concentration is likely to have begun 250 million years ago at the end of the Permian glaciations. The lack of tectonic activity in the western two-thirds of the Australian continent, chemical wasting in the Late Mesozoic and Early Tertiary and the emergent environment continuously exposing the rocks to sub-aerial weathering in temperate to sub-tropical conditions allowed the formation and preservation of a mantle of a deep lateritic profile. A more recent arid climate developed slowing the rate of weathering and causing local erosion, however, the weathered mantle is largely preserved.

Broad valleys are the oldest feature of the landscape characterised by low elevation (less than 650 metres), low relief and overall flatness. The valleys now contain strings of dry playa lakes following older, possibly Permian, river systems modified by migration and sedimentation. As the playas became disconnected deposition of evaporites and calcretes occurred along with the alluvium and became the chemical focus for concentration of the uranium mineralisation.

Granitoids are the prominent bedrock lithology with the weathered profile consisting of a bleached saprolite of kaolinite and quartz (commonly over 30 metres in thickness) overlain by sands and grits. The upper laterite horizons usually have ferruginous mottling and accumulation of pisolites, but ferruginous duricrust did not develop over the granitoids. In the lower parts of the landscape the residual profile is overlain by colluvial and alluvial sediments. also deeply weathered locally. The calcrete and evaporite chemical deposits are precipitated close to the water table and overlie and are part of the alluvium. The alkalies, originally derived

XX

from weathering and rainfall, have been recycled during deflation of the playa surfaces. redistributed across the landscape and accumulated under arid conditions. The chemical sediments can exhibit positive relief features due to upward growth and harder erosional characteristics, but are generally overlain by alluvium particularly in the upper parts of the valleys. They grade downward into transitional clay-guartz units which may be alluvium or a residual weathering profile. Wiluna Hardpan silcrete and silicified colluvium overlies the calcrete deposits and is related as a product of the same environmental processes. The development of calcretes are restricted to north of a line of latitude running through Menzies $(30°S)$ .

The distribution of calcretes has been of considerable importance in the exploration for uranium in these environments; however, not all deposits are hosted by calcrete (river valley and roll-front deposits are examples) and blanketing by a thin layer of clay alluvium can mask the airborne radiometric response of these deposits.

FEL surficial uranium projects

FEL has accumulated 8 exploration licences for surficial deposits in the Yilgarn, particularly concentrating on the Youanmi area in proximity to the Yuinmery Uranium Deposit, located 500 kilometres north of Perth, in the East Murchison Mineral Field. The tenements cover large portions of the Barlee playa lake system which has a radiometric signature similar to the Yuinmery Uranium Deposit to the north. The Yuinmery uranium deposit has a historical resource (early 1970s) published as 1.580.000 tonnes averaging 370 ppm (0.81 lbs/tonne) $U_3O_8$ . The mineralisation is located between a channel calcrete deposit and a playa lake. The resource was open to the south and west where potential existed for high grade zones. The radiometric anomaly which covers a portion of the deposit extends 7 kilometres south of the deposit. Radiometric highs in the region were tested sporadically with shallow pits. One shallow pit to the south of the deposit returned a value of 420 ppm (0.92 lbs/tonne) $U_3O_8$ attesting to the exploration potential.

FEL Unconformity-related project - The $9^th$ tenement covers a large tract of ground along strike from the unconformity-related Kintyre Uranium Deposit in the Rudall Range District of the Pilbara. The radiometrics show the trend of the geology along strike from Kintyre. A radiometric high in the centre south of the tenement demonstrates exploration targets exist within the area although targets are likely to be deep with no surface radiometric indications. A thin clay mantle will mask a radiometric response and unconformity type targets are likely to not intersect the surface.

Unconformity-related deposits arise from geological changes occurring close to major unconformities. Below the unconformity, the metasedimentary rocks which host the mineralisation are usually faulted and brecciated. The overlying younger Proterozoic sandstones are usually un-deformed.

These deposits constitute approximately 33% of the World uranium resources and they include some of the largest and richest deposits. Minerals are uraninite or pitchblende ( $UO₂$ ). The main deposits occur in Canada (the Athabasca Basin, Saskatchewan and Thelon Basin, Northwest Territories); and Australia (the Alligator Rivers region in the Pine Creek Geosyncline, NT and Rudall River area, WA). Unconformity-related deposits constitute a major proportion (20%) of Australia's total uranium resources, and much of Australia's total production since 1980 has been mined from two of these deposits - Nabarlek (now mined out) and Ranger 1 & 3. Other major deposits in the Alligator Rivers region are Jabiluka, Koongarra and Ranger 68.

Today, all of Canada's uranium production is from unconformity-related deposits - Key Lake. Cluff Lake, Rabbit Lake (all now depleted), and McClean Lake and McArthur River deposits. Other large, exceptionally high grade unconformity-related deposits currently being developed include Cigar Lake (averaging almost $20\%$ U₃O₈, some zones over 50% U₃O₈).

In Australia there has been very little exploration to locate deeply concealed deposits lying above the unconformity. It is possible that very high grade deposits occur in the sandstones above the unconformity in the Alligator Rivers/Arnhem Land area similar to the very high grade deposits in Canada. The Kintyre deposit in the Rudall River area is similar to the deposits in the Alligator Rivers region. Metallurgical tests have shown that Kintyre mineralisation can be radiometrically sorted and upgraded prior to milling and processing.

2.0 YOUANMI / BARLEE URANIUM PROJECT

$2.1$ INTRODUCTION

The project area comprises a northwest trending group of 7 Exploration Licenses (Figure 3) spread over a distance of 150km with the southeastern tenement (Elvire South) located approximately 200km northwest of Kalgoonie and the northwestern tenement (Perseverence) located approximately 100km southeast of Mt Magnet. This group of FEL projects comprises 902 square kilometres covering the uranium enriched Barlee Lake system and a valley system north of a smaller lake system containing the Yuinmery Uranium Deposit (Styles, 1998). Prospectivity is considered high due to the presence of high level radiometric anomalies. particularly over Lake Barlee (Figure 4).

Figure 3: Youanmi / Barlee Project Locations on Landsat Image

$2.2$ CLIMATE AND PHYSICAL FEATURES

The region's arid to semi-arid climate has extremes of temperature that range from average minimum and maximum of 5° to 18° in winter to 20° to 35°C in summer. Occasionally the temperature reaches the mid 40°s. Precipitation averages 200mm per annum.

In the project area, the terrain is dominated by a peneplain with flat to low relief topography with mainly eastward draining creeks. The area is generally covered with mulga scrubland but lower lying areas are dominated by bluebush and saltbush. The pastoral holding covering the area is Ora Banda Station.

Low elevation, flat topography and broad valleys are the main features of the landscape (less than 650 metres). The valleys contain salt playa lakes following older systems. The playas, evaporites and calcrete deposits host the chemical concentration of the uranium mineralisation.

Figure 4: Youanmi / Barlee Uranium Project Uranium Radiometrics Overview

$2.3$ LOCATION AND ACCESS

The project location and area is displayed in Figures 1 and 3 and is situated between the gold mining and supply centres of Menzies, Leonora, Sandstone, Mt Magnet, and Paynes Find with relevant infrastructure, on topographic sheets Barlee SH 5008 and Youanmi SH 5004 $(1:250,000 scale).$

Road access is along the partially sealed roads to and from each of the centres, and then via station tracks. The access quality diminishes as the salt lakes are approached.

$2.4$ TENURE

The details of the seven Exploration Licence applications are set out below;

Name	No	Area Sq km	Sub Blocks	Minimum Expenditure	Rent
Noondie	ELA 57/693	133	44	\$44,000	\$4,642.00
Elvire South	ELA 77/1393	27	9	\$20,000	\$ 949.50
Elvire	ELA 29/651	102	34	\$54,000	\$3,587.00
Barlee East	ELA 29/650	162	54	\$54,000	\$5,697.00
Barlee South	ELA 77/1402	209	70	\$70,000	\$7,353.50
Barlee West	ELA 77/1417	209	70	\$70,000	\$7,353.50
Perseverance	ELA 57/695	60	20	\$20,000	\$2,101.00
Total		902	301	\$332,000	\$31,683.50

The tenure totals approximately 902 square kilometres and further details can be found elsewhere in this Prospectus in the Solicitors Report. The current minimum annual expenditure is set at A\$332,000.

$25$ REGIONAL GEOLOGY

The district is located in the Eastern Goldfields Province of the Yilgarn Craton in south central Western Australia. The majority of the craton consists of Archaean granite-greenstone terrane, and the eastern Goldfields Province contains large areas of granitoid rocks interspersed with abundant belts of greenstones up to 150 kilometres wide. Studies of the structure and geophysics of the districts include significant work by Williams and Swager (1997). Local structural descriptions include Bogacz (1995). The area forms part of the Norseman-Wiluna Greenstone Belt interpreted as a trough or graben (Williams, 1974) based on a komatiite-rich sequence without development of banded-iron-formation (BIF). Witt (1990) described the belt as a tectonically and volcanically active trough during formation flanked by more stable Archaean platform.

The greenstones of the Kalgoorlie Terrane were deposited around 2.7 Ga, with the main period of deformation, granitoid intrusion, metamorphism and gold emplacement between 2.66 and 2.64 Ga (Swager et al, 1990). The general stratigraphic sequence documented within the fault

×

bound Kalgoorlie Terrane greenstone belts is a lower basalt unit overlain by komatiite and an upper basalt unit overlain by felsic volcanosedimentary sequences deposited in a deep marine basin. The absence of vesicular basalts and the abundance of komatiites suggest deposition of the lower units in a deep trough. Surrounding terranes are interpreted as platforms due to abundant BIF and paucity of komatiite. The shield of Western Australia has a weathered regolith of up to 100 metres depth and is overlain with recent arid climate deposits.

The granitoids of the Archaean terrane contain high levels of uranium which has been concentrated into the calcareous and evaporitic deposits of the regolith. The overlying calcrete type uranium deposits are controlled by basement geology, sedimentology and climatic factors.

$2.6$ LOCAL GEOLOGY AND MINERALISATION

Granitoids are the prominent bedrock lithology varying from outcrop in eroded areas to highly weathered in breakaways. The weathered profile consists of a bleached saprolite of kaolinite and quartz overlain by sands and grits. The residual profile within the FEL leases is overlain by colluvial and alluvial sediments, also deeply weathered locally. Wiluna hardpan, silcrete and silicified colluvium overlies the calcrete deposits and is a related product of the same environmental processes.

The Yuinmery Uranium deposit which was discovered in 1968 is located on the north western edge of Lake Noondie and contains a historical indicated resource of 1,580,000 tonnes averaging 370 ppm $U_3O_8$ (Styles, 1998). The deposit is located at the transition zone of a channel calcrete feeder and the playa lake. It has a similar geological setting to the Lake Maitland and Lake Austin deposits, all genetically related to the Yeelirrie deposit. The resource is open to the south and west and limited exploration using shallow pitting in the region returned up to 420 ppm $U_3O_8$ away from the resource. The anomaly was defined as a +300 cps contour covering an area of 1600m by 500m. Ground radiometrics extended the anomaly and located additional spot highs including an outcrop with visible carnotite.

The uranium mineralisation is found in two zones, the first within 1 metre of the surface in brown sandy clay and the second in the base of the calcrete unit at 2 to 3m depth. Mineralisation is in the secondary form of carnotite $(K_2(UO_2)_2(V)_4)2.3H_2O)$ . Both uranium and vanadium are released by the weathering of granite and concentrated into the chemical environments of the valley fill alluvium within the palaeochannels. The calcretes are highly porous and permeable and act as chemical concentrators in the near surface. Butt et al. (1984) described the deposits as concentrating near the water table and classified them by their geomorphological situation into two types, Valley deposits and Playa deposits. Valley deposits occur in the central channels of major drainages and in the platforms and chemical deltas where they enter the playa lakes. Playa deposits occur in near surface gypsiferous and calcareous clays, calcrete and carbonaceous sediments of the playa lakes. The prime depositional control is the change in solubility products of uranium, vanadium and potassium which are in turn sensitive to a range of physico-chemical conditions which are highly variable in time and location. The system is ongoing to the present day with solution and precipitation processes in action.

2.7 PREVIOUS EXPLORATION

Exploration in the region began with a BMR radiometric survey covering parts of the Murchison district in 1968 producing contoured results at 1:250,000 scale. A large anomaly of 150 counts per second (cps) against a background of 50 to 100 cps was found to cover the northwest end of Lake Noondie and calcrete areas to the north and south. Peak values of +300 cps are over known mineralisation at the transition zone between the northern channel calcrete and the lake. An additional anomaly is located at the southern arm of the lake adjacent to a calcrete area.

Drilling in 1972 from Shepard Well to the northern edge of the lake returned up to 1.5 metres averaging 1590 ppm $U_3O_8$ and was included in the historical resource. Drilling 1100 metres north of Shepard Well returned up to 3 feet averaging 141 ppm U₃O₈. Water from each hole was sampled returning up to 99 ppm $U_3O_8$ . In 1973 a detailed radiometric survey located 33 anomalous areas from 2.3 to 4.6 times background. Pits to 2 feet were completed however since only moderate increases in radioactivity were found in the pits no samples were submitted for analysis. Detailed work in 1974 to 1976 defined a mounded 5km long calcrete channel zone trending south from Shepard Well within a calcrete sheet. Samples returned up to 5000 ppm $U_3O_8$ . Drilling ascertained a best zone of 800m by 200-400m in size in a 1 to 1.5m thick layer of silicified calcrete at the base of the channel and averaging 117 ppm $U_3O_8$ . Further work at the BMR anomaly included 37 drillholes to 10 metres depth. A 4.5 km by ~800m zone was defined with 1m intersections of over 100 ppm $U_3O_8$ . The top metre is logged as brown silty clay then 2-3m of calcrete and then brown-orange sandy clay. Peak results of up to 472 ppm $U_3O_8$ were returned.

The BMR anomaly and the southern anomaly attracted further attention in 1976 to 1977 to investigate the deeper alluvium but drilling was never carried out. A more regional approach in 1978 to 1979 returned up to 330 ppm $U_3O_8$ from water in a hole on the eastern edge of the known mineralisation.

$2.8$ ELVIRE

The Elvire Exploration License covers 102 sq km and a broad moderate to high order radiometric anomaly of 15 km by up to 5 km coincident with part of the Lake Barlee system (Figure 5).

Figure 5: Elvire Uranium Radiometric and Landsat Images

2.9 ELVIRE SOUTH

The Elvire South Exploration License covers 27 sq km (Figure 6) and a series of significant radiometric anomalies, from the early BMR survey, along the south eastern edge of Lake Barlee in a river tributary. The similarities between this response and those over known deposits in the region is striking.

×i

Figure 6: Elvire South Uranium Radiometric Images

2.10 BARLEE WEST

The Barlee West Exploration License covers 209 sq km (Figure 7) and similar although lower order anomalies to Elvire South in what may be a large tributary system.

Figure 7: Barlee West Uranium Radiometric and Landsat Images

$2.11$ BARLEE SOUTH

The Barlee South Exploration License covers 209 sq km (Figure 8) with over half the tenement having low order radiometric anomalies with potential for tributary river valley uranium deposits. Transport and deposition of clay rich alluvium potentially blanketing the radiometric response is probable in this area and work to establish the tenor of any uranium mineralisation at depth is warranted. Clay-rich alluvium may halve the intensity approximately for each metre depth

Figure 8: Barlee South Uranium Radiometric and Landsat Images

×i

$2.12 -$ BARLEE EAST

The Barlee East Exploration License covers 162 sq km (Figure 9) with lesser radiometric anomalies, however again, blanketing clay- rich alluvium may exist.

Figure 9: Barlee East Uranium Radiometric and Landsat Images

$2.13$ NOONDIE

The Noondie Exploration License covers 133 sq km (Figure 10) and a portion of the Noondie tributary system leading into Lake Noondie which contains the Yuinmery Uranium Deposit. This tributary may contain river valley roll-front mineralisation similar to the Frome Embayment of the uranium mining centre in South Australia.

2.14 PERSEVERENCE

The Perseverence Exploration License covers 60 sq km (Figure 11) and again is in a position suitable for the concentration of uranium in roll-front settings.

The tenement application which is located 30km to the north west of Lake Noondie covers a discrete "bullseve" airborne uranium radiometric anomaly approximately 2km in diameter. Based on GSWA mapping the anomaly is over Quaternary alluvium and not associated with any mapped outcropping Archaean age rocks, Investigations to determine if the anomaly is due to sub-cropping Archaean rocks with a high uranium background or uranium enriched Tertiary valley sediments draining into Lake Noondie is warranted. A major calcrete-bearing drainage system, a tributary of Lake Noondie, associated with the Yuinmerv uranium deposit is located 9km to the east. Fission's Perseverance prospect could represent a branch of this tributary joining Lake Noondie.

Figure 11: Perseverance Uranium Radiometric Image

2.15 CONCLUSIONS AND RECOMMENDATIONS

The distribution of calcretes has been of considerable importance in the exploration for uranium in these environments; however, not all deposits are hosted by calcrete. Palaeochannel alluvial and sandstone redox fronts for example, and sheeted mineralisation in the river channel deposits leading into the lake are possible, similar to the Lake Frome style of mineralisation in the Mt Painter region of South Australia and the western uranium province of Namibia. Southern Africa.

Three exploration targets were recognised in the Yilgarn prospects;

• 1. near surface oxidised enrichments in the playa lake.
• 1. near surface oxidised calcrete chemical delta playa style mineralisation and
• 1. mineralised redox fronts in the deeper reduced lake sediments.

A fourth possibility is for redox fronts in the river valley alluvial deposits.

2.16 PROPOSED PROGRAM

			Year 1 (\$000's)	Year 2 (\$000's)	Total (\$000's)
Noondie	ELA 57/693	Land Access	15	$\theta$
		Data Compilation	5	5
		Geophysics	10	10
		Drilling	$\Omega$	30
		Assay	$\Omega$	5
		Field Support	10	10
		Sub Total	40	60	100
Barlee	ELA 29/650	Land Access	45	10
	ELA 29/651	Data Compilation	25	40
	ELA 77/1393	Geophysics	50	50
	ELA 77/1402	Drilling	$\mathbf{0}$	180
	ELA 77/1417	Assay	$\Omega$	35
		Field Support	50	65
		Sub Total	170	380	550
Perseverance	ELA 57/695	Land Access	5	$\overline{0}$
		Data Compilation	5	$\theta$
		Geophysics	5	5
		Drilling	0	15
		Assay	$\Omega$	5
		Field Support	5	5
		Sub Total	20	30	50

To carry out the above outlined work the following programme is anticipated;

3.0 PONTON CREEK / CUNDEELEE URANIUM PROJECT

$3.1$ INTRODUCTION

The Ponton Creek application located 170km ENE of Kalgoorlie, covers palaeochannels prospective for valley type (roll-front style) uranium deposits (Figure 12). The Mulga Rock uranium deposit 60km to the north east of Ponton Creek is of this style where a palaeochannel has been incised into Permian sediments rather than granitic basement. The uranium mineralisation is believed to have been derived from uranium-rich granitoids/metamorphic rocks of the Yilgarn Craton and adiacent Albany - Fraser Province (Fulwood & Barwick, 1990).

32 CLIMATE AND PHYSICAL FEATURES

The arid climate is typical of the goldfields as described above. The physiography comprises a gently undulating lateritic duricrust overlain by sandplain. The broad drainage zones feed the salt lakes which are surrounded by alluvial flats of saline gypsiferous clays about 100 metres below the elevation of the old erosion surface

Figure 12: Ponton Creek Uranium Radiometric and Landsat Images

$3.3$ LOCATION AND ACCESS

The area is located on the western portion of the Cundeelee Sheet SH 51-11 adiacent to the Barlee Sheet area. It is accessed via station tracks from the Kalgoorlie Leonora Highway.

$34$ TENURE

The details of the tenement are set out below and elsewhere in this Prospectus:

A portion of this application is located on the Queen Victoria Nature Reserve which may cause access issues.

3.5 REGIONAL GEOLOGY

The Ponton Creek application covers the confluence of two southeast trending Tertiary palaeochannels draining Archaean granite-greenstone terrane 170km ENE of Kalgoorlie. No uraniferous drainage channel calcrete is likely to have developed this far south in the Yilgarn Craton, however the area is considered highly prospective for the Tertiary palaeochannel (rollfront) style of uranium mineralisation as explored for in South Australia.

3.6 PREVIOUS EXPLORATION

No previous exploration is known for uranium.

$3.7$ CONCLUSIONS AND RECOMMENDATIONS

Exploration of this area will involve an airborne EM survey to better define the palaeochannel location and its depth. This would be followed up by fences of aircore/RC drilling with downhole radiometric probing to test the channels for uranium mineralisation.

×i

$3.8$ PROPOSED PROGRAM

As grant of the tenement is unlikely in the short term, only data compilation has been budgeted within the next two vears:

			Year 1	Year 2 $($000's)$ $($000's)$ $($000's)$	Total
Ponton Creek	ELA 28/1744	Data Compilation	10	0
		Sub Total	10	0	10-

4.0 MT SEARS RANGE / RUDALL URANIUM PROJECT

$4.1$ INTRODUCTION

The Mt Sears Range Exploration License (Figure 13) covers 181 sq km of the Mt Sears Range, 50 km southeast of the Kintyre Uranium Deposit in the Rudall Range. The Kintyre historical resource is the 5^th largest in Australia and is comprised of three unconformity vein style $U_3O_8$ deposits; Kintyre, Whale and Pioneer totalling 36,000 tonnes of contained $U_3O_8$ at grades varying from 1500 to 4000 ppm $U_3O_8$ .

Figure 13: Mt Sears Range Uranium Radiometric and Landsat Images

$4.2$ CLIMATE, VEGETATION AND PHYSICAL FEATURES

The arid climate has annual precipitation of 200mm mainly derived by storm and cyclone activity between November and March. Average precipitation is 4400mm and the prevailing winds are from the east and southeast. Average summer temperatures range from 25 to 40^°C. Winter temperatures can vary from 5 to 25°C. Vegetation consists mostly of spinifex grasses and other forms of vegetation vary with terrain. Sandplains contain grevillea, acacia and soft shrubs, Eucalyptus, ti-tree, and desert oak. Major drainage contains large Eucalyptus and various grasses. Rocky outcrop has small scrub, grasses, mulga and Eucalypts.

The physiography is the result of several periods of erosion and deposition including Permian glaciation. Tertiary peneplanation and recent erosion and deposition.

$4.3$ LOCATION AND ACCESS

The Rudall region is bounded by latitudes $22^{\circ}$ S and $23^{\circ}$ S and longitudes 121^oE and 123^oE. Occupying the northern margin of the Little Sandy Desert and the southwestern margin of the Great Sandy Desert the area forms part of the Marble Bar District of the Pilbara Mineral Field. The Rudall River National Park covers a large portion of the region and ELA 45/2997 is located partly within it. Access is via Telfer 80 km to the north and then by station tracks to the various bores. Tracks in the southern portion of the area connect to Newman via Balfour Downs Homestead and the Ethel Creek - Jigalong road.

$44$ TENURE

The Exploration License Application details are set out below and in the Solicitors Report elsewhere in this Prospectus. The committed minimum expenditure is:

ELA	45/2997	つつつ 222 sa km	70 blocks	,353.50 \$	Mt Sears Range	Mostly in Rudall National Park
------------	---------	---------------------	--------------	---------------	-------------------	-----------------------------------

The Mt Sears Range application is mostly located within the Rudall River National Park. Kintyre is within the park boundaries, but is in an excised area. Grant of Fission's application is unlikely in the short term.

$45$ REGIONAL GEOLOGY AND MINERALISATION

The Rudall Range area occupies the central area of the Paterson Orogen including the Palaeoproterozoic Rudall Complex, Neoproterozoic Yeneena Supergroup and Neoproterozoic Officer Basin. The Paterson Orogen extends 1200km across the central part of Western Australia from the Yilgarn to the Musgrave Complex. The Rudall Complex consists of highly deformed and metamorphosed sedimentary and igneous rocks.

The main mineralisation of the region is the uranium mineralisation and base metal mineralisation at Maroochydore (Broadhurst 1:100,000 Sheet). Low-order gold occurs with the uranium around Larry Creek (Rudall 1:100,000 Sheet).

×

Figure 14: Mt Sears Range Geology

4.6 KINTYRE URANIUM DEPOSIT

Kintyre is an unconformity-associated, vein type uranium deposit discovered by Rio Tinto in 1985 by surface follow-up of radiometric anomalies detected during an airborne survey near the unconformity between the Yandagooge Formation of the Rudall Complex and Coolbro Sandstone (Jackson and Andrew, 1990). The published historical resources (combined Kintyre, Whale and Pioneer deposits) totals 36,000 tonnes of contained $U_3O_8$ with average grades ranging from 1500 to 4000 ppm $U_3O_8$ categorised as Indicated 24,000 tonnes and Inferred 11,000 tonnes.

The mineralisation is in axial-planar cleavage in the axial region of an F2 antiform forming a shallowly dipping lens to 150m depth. The mineralisation is hosted by sheared chloritic schist in contact with dolomitic limestone and graphitic schist. The ore mineral is mainly pitchblende with accessory copper, lead, zinc, bismuth, gold, platinum and palladium. The gold has peak assays of 15 g/t Au. Other uranium mineralisation in the area can also have associated silver, molybdenum, chromium and nickel.

4.7 PREVIOUS EXPLORATION

Isolation and lack of surface water impeded exploration until the discovery of gold at the Telfer Dome in 1971 (Hickman and Bagas, 1998). The Rudall 1:250,000 sheet area (SF 51-10) was mapped in 1974-75 (Chin et al., 1980) and reported on by Williams et al., 1976. The BMR produced Bouger gravity maps in 1970 and radiometric contour maps in 1987. Uranium was

discovered at Kintyre on the Broadhurst 1:100.00 Sheet in 1985 and exploration for this style intensified utilizing airborne geophysics and stream sediment geochemistry.

Anomalous radioactivity was discovered by Occidental Minerals Corp, at the southern end of the Mt Sears Range during geological reconnaissance of the basal units of the Yeneena Group in 1978. Initial grab samples assayed up to 670ppm $U_3O_8$ and 890ppm Cu. Mineralogical study determined the mineralization to be finely disseminated pitchblende associated with copper and iron sulphides and carbon in pyritic feldspathic quartzite Swingler (1980) and Shwabe (1981)) Occidental subsequently carried out an airborne radiometric survey on 300m line spacings, geological mapping, radon surveys and drilling.

The mineralization was found to be located at the contact of the Coolbro Sandstone and the overlying Broadhurst Formation. Ground radiometrics showed the mineralization to occur discontinuously along strike for approximately 600m with the host quartzite striking north and dipping 60°E. The central 200 to 300m was highly leached and weathered with local anomalous radiometrics at the foot of the less weathered quartzite outcrop. The outcrop is extensively eroded and sand covered. Mineralisation is more prominent at the northern and southern ends. At the north end it is up to 6m thick over a strike length of 140m and grab samples assayed up to 1800 ppm $U_3O_8$ (4lb/tonne) and 0.05% Cu. At the southern end the host quartzite strikes for about 300m before being concealed beneath sand dunes. A thickness of 20m appears to be uraniferous with grab samples returning low level anomalous results for Uranium and Copper.

A large grab sample from the original discovery site returned 6350 ppm $U_3O_8$ and 1200ppm Cu with the uranium in radioactive equilibrium.

A track etch radon survey was carried out which delineated 3 anomalous zones which crossed rather than paralleled the prospect. It was postulated that they could be due to deep seated feeder veins.

Occidental concluded that the surface dimensions and grades were sufficiently encouraging to warrant drilling. Two percussion holes totalling 178m were drilled into the prospect in November 1979. The percussion holes intersected narrow bands of uranium mineralization close to the contact in black carbonaceous quartzite. Sample return was poor. Down hole gamma logging returned the following intersections: (300ppm cut off):

Hole No	From	To	Interval	Estimated ppm $U_3O_8$
SR 1	66.2	67	0.8	672
includes	66.6	66.8	0.2	1219
plus	67.4	67.5	0.1	341
SR 2	57.8	58	0.2	343
and	61.9	62.4	0.5	864
includes	62	62.2	0.2	1307

	Drilling Results for the Mt Sears Range Project

A single RC hole (SR3) drilled in September 1980 to test for depth extensions and better grades down dip intersected the Coolbro-Broadhurst contact at 190.4m returning low grades in quartzite and shale. The contact was strongly sheared with quartz veining and bleaching of the quartzite. Shales above the contact were brecciated and silicified and contained minor pyrite pyrrhotite & chalcopyrite.

×i

Hole No	From	То	Interval	e $\mathsf{U}3\mathsf{O}{8\,\mathrm{ppm}}$
SR 3	189.9	190.1	0.2	126
	190.2	190.3	0.1	123
	192.7	193.9	1.2	186
	193.7	193.8	0.1	360

Further Drilling Results at Mt Sears Range Uranium Project

Occidental concluded that the drilling results indicated a narrow erratic zone of mineralisation at or near the Coolbro-Broadhurst contact. Genesis was likely to have been hydrothermal and may represent low grade remobilized primary material from the carbonaceous shales concentrated at the shale – sandstone interface.

Occidental also surveyed the Coolbro-Broadhurst contact for 24km with a radon emanometer which confirmed the presence of the known mineralised zone but did not locate any new targets. This survey also missed some of the mineralized zones so results were considered inconclusive. In addition Occidental carried out wide spaced regional shallow drilling to bedrock on a 400 x 100m spacing which was of limited success due to thick sand cover. laterite and gravel and was eventually abandoned. No carbonaceous quartzite or pyritic material was intersected in the holes completed.

48 CONCLUSIONS AND RECOMMENDATIONS

In the Rudall region potential for further unconformity associated uranium deposits exists particularly under thin surface clay and sand deposits.

Unconformity-associated uranium mineralisation has been demonstrated throughout the region although the discovery was after the fall in uranium prices and exploration activity. A modern approach to the search for further deposits particularly those concealed by shallow clav rich alluvium is warranted.

4.9 PROPOSED PROGRAM

As grant of the tenement is unlikely in the short term, only data compilation has been budgeted within the next two years:

			Year 1 (\$000's)	Year 2 (\$000's)
Mt Sears Range	ELA 45/2997	Land Access	0	0
		Data Compilation	10	0
		Geophysics	0	0
		Drilling	0	0
		Assay	0	0
		Field Support	0	0
		Sub Total	10	0

5.0 REFERENCES

• Bagas L., Williams, I.R., and Hickman A.H., 2000. Explanatory Notes Rudall Sheet SF 51-10. Geological Survey of Western Australia.
• Butt, C.R.M., Mann, A.W. and Horwitz, R.C., 1977, Uranium occurrences in calcretes and associated sediments in Western Australia. CSIRO Division of Mineralogy. Report FP 16 $(1977) 67$
• Fulwood, K.E., and Barwick, R.E., Mulga Rock Uranium Deposits, Officer Basin, Geology of the mineral Deposits of Australia and New Guinea. Editor F.E. Hughes, AustMM, Melbourne.
• Hickman, A.H., and Bagas, L., 1998, Geology of the Rudall 1:100,000 Sheet, Geological Survey of Western Australia.
• Hickman, A.H., and Clarke, G.L., 1994, Explanatory Notes, Broadhurst 1:100,000 Sheet. Geological Survey of Western Australia
• Jackson, D. G., and Andrew, R. L., 1990, Kintyre Uranium Deposit, in Geology of the Mineral Deposits of Australia and Papua New Guinea edited by F. E. Hughes: Australasian Institute of Mining and Metallurgy Monograph 14, p. 653-658
• Kalgoorlie '97 An International Conference on Crustal Evolution, Metallogeny and Exploration of the Yilgarn Craton - An Update, Extended Abstracts. AGSO Record 1997/41, p49-53.
• Lambert, I., and McKay, Y., and Miezitis, Y., 1996, Australia's Uranium Resources: Trends, Global Comparisons and New Developments. Bureau of Resource Sciences Canberra.
• Marston, R.J., 1979. Copper Mineralization in Western Australia. Geological Survey of Western Australia, Mineral Resource Bulletin 13, p129.
• Swager, C.P., 1995. Geology of the Greenstone Terranes in the Kurnalpi-EdudinaRegion, Southeastern Yilgarn Craton., Report 47, 28pp.
• Swager, C.P., 1997. Structural Evolution of Greenstone Terranes in the Southern Eastern Goldfields, Western Australia. In, Cassidy, K.F., Whitaker, A.J., and Liu, S.F., (Eds).
• Swingler. 1981. Mt Sears Range Prospect. Rudall River Region. Western Australia, Annual Report for 1979, Occidental Minerals Corp of Australia, TR 6883, Geological Survey of Western Australia WAMEX Item 1694
• Shwabe, 1981, Mt Sears Range Annual Report for 1980, Occidental Minerals Corp of Australia, Geological Survey of Western Australia WAMEX Item 1694.
• Styles, G.R., 1998. The Yuinmery Uranium Project. Annual Report E57/392 Pickaxe Ptv. Ltd. Geological Survey of Western Australia, WAMEX Item 10674.
• Townsend, D.B, Gao Mai, and Morgan, W.R., 2000, Mines and Mineral Deposits of Western Australia: Digital Extract from Minedex. Geological Survey of Western Australia, Record 2000/13, 28pp.
• Tripp, G.I., 2000. Structural Geology and Gold Mineralisation of the Ora Banda and Zuleika Districts, Eastern Goldfields, Western Australia, Curtain University WCH20021016,.
• Walker, I.W., and Blight, D.F., 1983, Explanatory Notes Barlee Sheet SF 50-8, Geological Survey of Western Australia.

XX

3 April 2007

MinterEllison

The Directors Fission Energy Ltd Level 40 Exchange Plaza 2 The Esplanade PERTH WA 6000

Dear Sirs

Solicitors' report on tenements

This report has been prepared for inclusion in a prospectus dated on or about 5 April 2007 (Prospectus), to be issued by Fission Energy Ltd (Company).

The Prospectus relates to a public offer of 20 million ordinary shares in the Company, for subscription at an issue price of \$0.20 per share, payable in full on application to raise \$4,000,000.00 with the right to accept oversubscriptions of up to a further 10 million shares to raise up to a further \$2,000,000.

$\mathbf{1}$ . Scope of instructions

Our instructions are:

• $(a)$ to advise on the status of certain exploration licences (EL) and applications for explorations licences (ELA), as set out in the Schedule to this report (Tenements) in which the Company holds an interest pursuant to an agreement with Tasman Resources NL dated 2 April 2007 (refer to Part 13 - Material Agreements of this Prospectus for further information on this agreement);
• $(b)$ to advise on the effect of any registered dealings and any unregistered dealings which may affect the Company's interests in the Tenements; and
• $(c)$ to conduct searches and summarise the effect upon the Tenements of any registered native title claims over the subject land.

$\sum_{i=1}^{n}$ Schedule of Tenements

• $2.1$ The Schedule to this report is an accurate statement at the date of signing this report of:
• the Tenements: $(a)$

• $(b)$ relevant dealings approved and registered by the South Australian Minister for Mineral Resource Development (SA Minister) in respect of the Tenements; and

• $(c)$ native title claims registered by the National Native Title Tribunal (NNTT) that may affect the tenements.

• $2.2$ The Schedule is substantially based on searches and enquiries of the publicly available records referred to in section 3 of this report. There are no material matters or events subsequent to those searches, except as disclosed in the Prospectus, that have come to our attention during the course of our enquiries which would cause the information included in this report to be in any material respect misleading. The Schedule is also partly based on information provided to us by the Company.
• $2.3$ The Company's interests in and rights in relation to the Tenements are subject to the registered holder of the Tenements continuing to comply with the Mining Act 1971 (SA) (Mining Act) and the Mining Regulations 1998 (SA) (Regulations) and the conditions of grant for each Tenement.
• $3.$ Searches
• $3.1$ Title searches

For the purposes of this report the following searches and enquiries in respect of all Tenements have been made and considered:

• $(a)$ searches of the mining tenement register maintained by the Department of Primary Industries and Resources South Australia (PIRSA) received on 20 February 2007 and 26 February 2007; and
• $(b)$ electronic material available from South Australian Resources Information Geoserver, accessible from the PIRSA website at http://www.pir.sa.gov.au/pages/minerals/sarig/sarig.htm.

We have assumed the information in the registers maintained by PIRSA is accurate and up to date. No survey has been conducted to verify the accuracy of the Tenement areas. We have also assumed that the Tenements have been validly granted and that the SA Minister and person exercising delegated authority have acted within the scope of their powers and discretions.

$3.2$ Native Title Searches

We have considered the following material:

• extracts from the register of native title claims maintained by the NNTT in (a) relation to the registered native title claims which affect the Tenements, provided on 23 February 2007; and
• electronic material available from www.nntt.gov.au derived from the Register of $(b)$ Indigenous Land Use Agreements maintained by the NNTT under the Native Title Act 1993 (Cth) (NTA).

×i

$3.3$ Underlying tenure searches

We have not conducted enquiries as to the current or historical land tenure underlying the areas of land subject of the Tenements. In this regard we are unable to express an opinion on the likelihood of native title rights and interests having been extinguished by previous land grants affecting part or all of the land the subject of the Tenements.

$\overline{4}$ . Tenements

$4.1$ General Licence Conditions

The relevant legislation governing the terms and conditions applicable to ELs is the Mining Act and the Regulations. Key aspects of that legislation are as follows:

• an EL authorises exploratory operations of the kind described in the EL in respect $(a)$ of the land over which it is granted:
• an EL has a term of up to five years, but if granted for a lesser term, may be $(b)$ renewed for a period that does not in aggregate exceed five years;
• the Minister may, on the expiration of an EL, the term or aggregate terms of $(c)$ which was five years, grant to the licensee a subsequent EL:
• the maximum area an of an EL is $1,000 \text{ km}^2$ , but there is Ministerial discretion to $(d)$ grant an EL over a larger area in some circumstances:
• the grant of an EL is subject to terms and conditions prescribed by the Minister $(e)$ from time to time, and the Minister has a discretion to impose additional terms and conditions as he sees fit:
• $(f)$ a licensee must, as soon as reasonably practicable, report to the Director of Mines the discovery of minerals potentially capable of economic production;
• the licensee must conduct operations under the licence (including managing waste $(g)$ resulting from mining operations) in accordance with a programme approved from time to time by the Minister, designed to:
• prevent pollution to or contamination of surface or underground waters; $(i)$ and
• minimise surface damage to the land; and $(ii)$
• $(iii)$ ensure that, in drilling or other underground investigations, no interconnection between groundwater aquifers occurs:
• $(h)$ an EL may be suspended or cancelled where the licensee contravenes or fails to comply with any provision of the Mining Act or any condition of the EL;

• $(i)$ an EL confers no automatic right to carry out mining operations on native title land (this is discussed further at section 7 of this report).

• $4.2$ Application for EL

• An ELA which has been lodged under the Mining Act confers priority to the $(a)$ applicant over the subject area until the Minister has decided whether or not to grant the licence applied for. The grant of an EL pursuant to an application is a matter of ministerial discretion.
• $(b)$ An ELA is circulated by PIRSA to relevant government departments for comment prior to a letter of offer being sent to the applicant. Once the offer is accepted and returned by the applicant, the ELA is advertised, and a period of 28 days allowed from the advertising date for objections. If no objection is received an EL is then granted.
• The Company has an interest in ELA 2006/00289, applied for by Tasman $(c)$ Resources NL pursuant to an agreement with Tasman Resources NL dated 2 April 2007 (refer to Part 13- Material Agreements of this Prospectus for further information on this agreement).
• $(d)$ ELA 2006/00289 has been circulated by PIRSA and was offered to Tasman Resources NL on 23 January 2007 and accepted on 7 February 2007. It was then advertised with the last date for advertising being 21 February 2007. Therefore, in the absence of objection, ELA 2006/00289 may be granted at least 28 days from 21 February 2007.
• $4.3$ Other obligations
• $(a)$ The Mining Act also imposes obligations on the holder of a mining title (including an EL) in relation to entry to and use of land, notice requirements and compensation to landholders. The tenement holder is required to give prior notice to landholders of the relevant land on which operations are to be conducted (including native title holders).
• $(b)$ Part 9 of the Mining Act establishes procedures for the giving of the required entry notices and details how authorisation for entry can be acquired.
• The owner of any land upon which operations are carried out under the Mining $(c)$ Act is entitled to receive compensation for any economic loss, hardship and inconvenience suffered as a consequence of the operations.
• $(d)$ Compensation can be the subject of agreement between the parties or failing agreement can be determined by the Wardens Court. Obligations are also imposed in relation to compliance with environmental conservation and heritage obligations and rehabilitation requirements.
• $4.4$ Uranium specific legislation
• We understand that the Company may intend to explore for uranium on the $(a)$ Tenements. Operations involving uranium may be subject to further restrictions.

×

• Each of the ELs authorise the Company to explore for all minerals, except for $(b)$ "extractive minerals" (gravel, sand, stone etc.) or "precious stones" (as defined under the Mining Act), within the area of the ELs.
• $(c)$ The Mining Act defines 'minerals' to include any naturally occurring deposit of metal or metalliferous ore, precious stones or other mineral. Accordingly, a licence issued under the Mining Act for exploration or mining of minerals applies to uranium.
• $(d)$ However due to the nature of uranium as a radioactive mineral, there are various other legislative frameworks which govern uranium operations.
• Section 10A of the Mining Act sets out additional requirements for uranium. $(e)$ Section 10A provides as follows:
• $''(I)$ Subject to this section, no person shall carry out mining operations (other than exploratory operations) for the recovery of any radioactive mineral unless he is the holder of a mining lease or retention lease upon which the Minister has endorsed an authorisation to carry out mining operations for that purpose.
• $(2)$ An authorisation to carry out mining operations for the recovery of a radioactive mineral may be granted upon such conditions as the Minister thinks fit and may be revoked upon breach of any condition.
• This section does not prevent the recovery of any radioactive $(3)$ mineral in the course of mining operations carried out for the recovery of other minerals provided that the radioactive mineral
  • is stockpiled in accordance with conditions stipulated by $(a)$ the Minister: or
  • $(b)$ is of such low concentration that it may, in the opinion of the Minister, be safely discarded as waste and is in fact discarded as waste.
• Notwithstanding any other provision of this Act, the property in $(4)$ any radioactive mineral-
  • $(a)$ stockpiled in pursuance of conditions imposed by the Minister under subsection (2); or
  • (b) stockpiled in pursuance of subsection $(3)(a)$ ,

does not pass from the Crown unless and until the Minister, by instrument in writing, authorises the person by whom the radioactive mineral was mined to sell and dispose of the mineral."

The Radiation Protection and Control Act 1982 (SA) also includes requirements $(f)$ that persons shall, in carrying out an activity related to uranium, endeavour to

ensure the exposure of persons to radiation is kept as low as reasonably achievable after taking social and economic factors into account. So far as this legislation concerns the Company, section 24 of the legislation provides that a person is prohibited from carrying out operations for the mining or milling (which expression includes in situ leeching of uranium) unless the operations are authorised by a licence granted by the responsible Minister. In granting the licence, the Minister must be satisfied that the proposed operations comply with the regulations which relate to radiation exposure and to the transport of uranium. The Minister has the discretion to attach conditions to the licence.

• $(g)$ The Atomic Energy Act 1953 (Cth) requires the discovery of uranium to be reported to the responsible Minister. The Minister has the power to require a person to furnish written statements or returns containing particulars in respect of the uranium they have in their possession or control.
• $(h)$ For the purposes of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) a 'nuclear action' includes mining or milling of uranium ore. This act prohibits a person from undertaking a nuclear action that has, will have or is likely to have a significant impact on the environment unless the responsible Minister has approved the taking of such nuclear action. The approval must specify the period for which it has effect and set out the conditions attached to the approval.
• $(i)$ Under the Customs Act 1901 (Cth) and Regulation 9 of the Customs (Prohibited Exports) Regulations 1958 (Cth), the export from Australia of uranium is prohibited unless the responsible Minister has permitted the export. The Minister's permission may impose conditions or requirements to be complied with by the holder of the permission and may impose time limits with which such condition or requirement must be satisfied. The requirement for an export permission is designed to give effect to Australia's obligation as a signatory to the Nuclear Non-proliferation Treaty.

Native Title 5.

• $5.1$ The decision of the High Court of Australia in Mabo and Others v The State of Queensland in 1992 recognised that the concept of Aboriginal native title to land had survived the Crown's acquisition of sovereignty. Native title is the term given to the collection of rights held by certain Aboriginal peoples to use lands in accordance with their traditional customs and laws.
• 5.2 In 2002, native title rights were further clarified by the decision of the High Court of Australia in Western Australia v Ward. The High Court of Australia confirmed that (in relation to the facts of that case):

×

• native title interests may be seen as a 'bundle of rights', each of which needs to be $(a)$ separately proven and each of which is capable of being extinguished;
• $(b)$ rights of land users (under a mining lease) and rights of native title parties can coexist, however where they conflict, the native title rights which continue will vield to the rights conferred by the grant of the mining lease; and

$(c)$ no native title rights to minerals or petroleum could be recognised (on the facts of this case) because there was no evidence of any traditional Aboriginal law. custom or use in relation to minerals or petroleum.

Native Title Legislation 6.

• $6.1$ The NTA came into operation nationally in January 1994, and regulates activities on native title lands. The NTA was substantially amended in 1998 in response to the 1996 decision of the High Court of Australia in Wik Peoples v The State of Queensland. The NTA establishes and clarifies the rights of Government, native title and non-native title parties in dealings with native title lands (including confirmation of extinguishment and validation of certain acts).
• $6.2$ Since the NTA only provides for extinguishment and validation by the Commonwealth. each State Government enacted complementary native title legislation (State Validation Acts) adopting the provisions of the Commonwealth legislation. The State Validation Acts operate in conjunction with the Native Title Act and have enabled the States and Territories to validate tenements granted by them prior to 1 January 1994.
• 6.3 South Australian native title legislation (SA legislation) (which was fully operational by mid-1996), provides an alternative and complementary state-based system for certain procedures under the NTA (SA Scheme).
• 6.4 The 'right to negotiate', established under the NTA, is required to be followed in order to validate the grant of a tenement, as the grant is a 'future act' for the purposes of the NTA. The SA Scheme largely replaces the operation of the NTA's 'right to negotiate' provisions, however the NTA still applies to the extent that the SA Scheme does not.
• $6.5$ The SA legislation included, amongst other things, amendments to the Mining Act. establishing specific provisions in Part 9B for land access and separate 'right to negotiate' procedures for mining operations on native title lands in South Australia.

7. The SA Scheme - Part 9B of the Mining Act

• $7.1$ Part 9B of the Mining Act (Pt 9B) created a statutory alternative method to the 'right to negotiate' process under the NTA that upon its implementation in 1996, became mandatory.
• $7.2$ Pt 9B removed the immediate right to explore on 'native title land' (being land where native title 'might' exist) and removed the State Government as a party to negotiations with native title parties. Pt 9B provides that an Explorer cannot carry out exploration operations (as opposed to mineral production operations), unless:
• the mining operations do not 'affect' native title. That is, they are not wholly or $(a)$ partially inconsistent with the continued existence, enjoyment or exercise of rights deriving from native title:

• $(b)$ a declaration is made under the law of the State or Commonwealth to the effect that the land is not subject to native title;

• $(c)$ an indigenous land use agreement (ILUA) registered under the NTA provides that statutory rights to negotiate are not intended to apply in relation to the mining operations; or

• $(d)$ an agreement authorising mining operations is made under Part 9B of the Mining $Act$
• $7.3$ Pt 9B establishes the procedure by which an agreement must be negotiated. Where an agreement must be negotiated, any native title parties whose claim is 'registered' by the NNTT must be parties to the agreement. The Schedule to this report details both the registered and unregistered native title claims which affect the Tenements. We have not undertaken the considerable legal, historical, anthropological and ethnographic research that would be necessary to form an opinion as to whether the current or any future claims which may be lodged for native title would succeed or the possible outcome for the Company if this occurred.
• $7.4$ An agreement under Pt 9B can:
• authorise a mining operation by a particular mining operator (individual $(a)$ authorisation):
• (b) extend to future exploration activities and production tenements of an operator holding a mining production tenement (conjunctive authorisation); or
• authorise a specified class of mining operators to carry out a specified class of $(c)$ mining operations (umbrella authorisation).
• $7.5$ Conjunctive authorisations can only be entered into under Pt 9B by native title parties who are determined holders of (rather than claimants to) native title land.
• 7.6 As set out in the Schedule, agreements under Pt 9B have already been entered into with the relevant native title parties in respect of ELs 3123 and 3140.

8. Registered ILUA

• 8.1 A template ILUA for mineral exploration exists which represents the agreement reached between the State Government, SA Chamber of Mines and Energy Inc. Aboriginal Legal Rights Movement Inc. Antakirinia Matu-Yankunytiatiara native title claim group and the Antakirinja Land Management Aboriginal Corporation.
• 8.2 The first template ILUA for mineral exploration was initially registered by the NNTT on 18 May 2004 over a limited area of the Antakirinia Matu-Yankunytiatiara native title claim (SC95/7). After the removal of many overlapping claims, a further template ILUA for mineral exploration was registered by the NNTT on 14 June 2005 which applied to a larger area.
• 8.3 The template ILUA for mineral exploration is intended to allow explorers to formally agree to be bound by the terms of the ILUA without the need conduct separate negotiations. The ILUA deals with explorers obligations, payments, Aboriginal heritage issues, rehabilitation and other matters.

×

• 8.4 A search of the register of Indigenous Land Use Agreements maintained by the NNTT revealed that the template ILUA for mineral exploration registered on 14 June 2005 covers the area of ELs 3306, 3339, 3340, 3341, 3342, 3343, 3344, 3345, 3423, 3532 and 3712.
• 8.5 The search results received from PIRSA indicate that Tasman Resources NL is not currently a signatory to this ILUA.

9. Extinguishment of Native Title

• $9.1$ The common law of Australia provided that upon acquisition of sovereignty by the Crown, native title became vulnerable to extinguishment by legislative or executive actions of Government which manifested a clear and plain intention to extinguish native title. Valid alienation of land by the Crown, such as the granting of an interest which is wholly or partially inconsistent with a continuing right to enjoy native title, extinguishes native title to the extent of any inconsistency. Valid grants of freehold interests will therefore have extinguished native title.
• 9.2 As a result of the 1998 amendments, the NTA now provides that 'previous exclusive possession acts' (including grants of freehold or leasehold interests that conferred exclusive possession on the holder) will have completely extinguished native title. By contrast, 'previous non-exclusive possession acts' (including grants of leasehold interests that conferred non-exclusive possession on the holder, such as many forms of pastoral lease) will only have extinguished native title to the extent of any inconsistency between the native title rights and the rights conferred under the grant.

10. Aboriginal Heritage & Sites of Significance

Commonwealth and State Aboriginal heritage protection legislation applies in South Australia.

• $10.1$ South Australia
• $(a)$ The Aboriginal Heritage Act 1998 (SA) (Aboriginal Heritage Act) provides for the protection and preservation of Aboriginal heritage in South Australia. The Aboriginal Heritage Act applies to land the subject of a tenement granted under the Mining Act.
• $(b)$ All operators and holders of interests under a tenement must observe the provisions of the Aboriginal Heritage Act in relation to operations on their mineral tenements. While sites of significance to Aboriginal people are identified in a register maintained pursuant to the Aboriginal Heritage Act, this register is not exhaustive, and other undiscovered and unregistered sites may exist on lands. including lands the subject of mineral tenements granted now or in the future.

• Discovered Aboriginal sites, objects or remains must be reported to the relevant $(c)$ Government Minister. It is an offence to not comply with the reporting procedure. It is also an offence to damage any Aboriginal object, or disturb, interfere with or remove any Aboriginal object or remains.

• $(d)$ The Company must ensure that it complies with these obligations, and that may require consultations with Aboriginal people.

• 10.2 Commonwealth
• The Commonwealth Aboriginal and Torres Strait Islander Heritage Protection (a) Act 1984 applies nationally and in all States and Territories.
• $(b)$ The purpose of this act is to preserve and protect from injury or desecration areas and objects in Australia and in Australian waters that are of particular significance to Aboriginal people in accordance with Aboriginal tradition.
• $(c)$ An important feature of this act is the capacity of the relevant Commonwealth Minister to make declarations for the protection and preservation of an area. There is also capacity for emergency declarations to be made. These declarations have the potential to halt exploration operations in cases where Aboriginal areas, objects or remains are encountered anywhere within Australia.

11. Environment & Rehabilitation of Land

• $11.1$ Statutory requirements in SA require mineral tenement lands to be protected and rehabilitated ensuring that environmental damage is avoided or minimized. Environmental risks associated with undertaking exploration and mining operations are an inherent part of the industry and the Company will have to ensure vigilance in relation to all operations conducted on the Tenements.
• $11.2$ In South Australia, in addition to the Environment Protection Act 1993 (SA) (EPA) and the Native Vegetation Act 1991 (SA) (NVA), the Mining Act and the Regulations also contain provisions to manage environmental effects of mining activities.
• The Mining Act and the Regulations make general provision for the regulation of $11.3$ activities on exploration and mining tenement lands.

×

11.4 In addition, the EPA and the NVA impose a wide range of obligations on persons to ensure compliance with various environmental standards. The provisions of the EPA do not extend to wastes produced in the course of activities authorised under the Mining Act when contained within the area of a tenement. Whilst not expressly stated within the terms of the EPA, these standards otherwise appear to extend to land held within mining tenements granted under the Mining Act.

$12.$ Disclosure of Interest

The Adelaide office of Minter Ellison has been instructed by the Company to prepare this report, and will be paid approximately \$8,000.00 for work performed in relation to this report. It has also provided and continues to provide commercial advice to the Company, for which it is paid for its services at commercial rates.

13. Consent

Minter Ellison has given and has not, before the lodgement of the Prospectus, withdrawn its consent to the issue of the Prospectus with this report in the form and context in which it appears.

Yours faithfully MINTER ELLISON

بعنكني اسمانا

Ewan Vickery Partner

Contact: Email: Our reference: Ewan Vickery (08) 8233 5411 ewan.vickery@minterellison.com EJV 30057/9

I
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Native little claims	Barngarla Native Title Claim (SC96/4)	The Arabunna Peoples Native Title Claim Barngarta Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2) Adnyamathanha No. 1 (SC99/1) (SC98/2)	Barngarta Native Title Claim (SC96/4)	The Arabunna Peoples Native Title Claim Barngarta Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2) (SC98/2)	The Araburna Peoples Native Title Claim Barngarta Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2) (SC98/2)	The Arabunna Peoples Native Title Claim Barngarta Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2) (SC98/2)	The Arabunna Peoples Native Title Claim Barngarta Native Title Claim (SC96/4) (50902)	Barngarta Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2)	Barngarta Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2)
					٠
Recisiered dealing	NIA.	None listed	↽ See Note	None listed	$\sim$ See Note	See Note 2	None listed	None listed	None listed
anna comment Curentmumum per tement	Š	\$115,000	\$140,000 over term of licence	\$55,000	\$90,000	\$75,000	\$65,000	\$30,000	\$70,000
Expiry date	NIA.	24-Jul-07	$19 -$ Jun-07	23-Jul-07	$02-$ Sep-07	14-Oct-07	$09 - 1$ Mar $-07$ *	$09 - Mar - 07*$	09-Mar-07*
granted strained ã č	$12 - Jun-06$	25-Jul-02	20-Jun-03	24-Jul-03	03-Sep-03	15-Oct-03	10-Mar-04	10-Mar-04	10-Mar-04
ta S	Old Wartaka	Hedley Hill	Wartaka	White Cliff	Stuart Creek	Porter Hill	Fergusson Hill	Andamooka	Todds Dam
from 1 July Annual rent Ê	\$336.00	\$3,972.15	\$341.25	\$1,110.20	\$2,789,15	\$2,002.00	\$1,651.65	\$336.00	\$1,829.10
ê Ê	Ş	873	Ю	244	613	40	363	얼	402
Equal L je Engel	2006/00289	2989	3102	3109	3123	3140	3174	3175	3177
Energi g	e El	뭅	ᆸ	뭅	뭅	ᆷ	ᆸ	ᆸ	置
ESSED	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman

Native ille die ms	The Arabunna Peoples Native Title Claim Barngarta Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2) Adnyamathanha No. 1 (SC99/1) (SC98/2)	The Arabunna Peoples Native Title Claim Barngarla Native Title Claim (SC96/4) Adnyamathanha No. 1 (SC99/1) (SC98/2)	Barngaria Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2)	Antakirinja Matu-Yankunytjatjara (SC95/7) ۰	Barngaria Native Title Claim (SC96/4) ٠	Antakirinja Matu-Yankunytjatjara (SC95/7) $\ddot{\bullet}$	Antakirinja Matu-Yankunyijatjara (SC95/7) ٠	Antakirinja Matu-Yankunytjatjara (SC95/7) ٠	Antakirinja Matu-Yankunytjatjara (SC95/7) ٠	Antakirinja Matu-Yankunytjatjara (SC95/7) ٠	Antakirinja Matu-Yankunytjatjara (SC95/7)	Antakirinja Matu-Yankunytatjara (SC95/7)	Antakirinja Matu-Yankunytjatjara (SC95/7)	Barngarla Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2)
Registered deaings	None listed	None listed	None listed	None listed	None listed	None listed	None listed	None listed	None listed	None listed	None listed	None listed	None listed	None listed
amial comment Curent minimum per tenement	\$310,000	\$120,000 over term of licence	\$100,000	\$140,000 over term of licence	\$100,000	\$80,000 over term of licence	\$100,000 over term of licence	\$130,000 over term of licence	\$125,000 over term of licence	\$140,000 over term of licence	\$115,000 over term of licence	90,000 over term of licence ↮	50,000 ↔	\$65,000 over term of licence
Expry date	10-May-07	28-Sep-07	$13 - 0ct - 07$	$16 - Feb - 07$ *	$16 - Feb - 08$	19-May-07	$19$ -May-07	19-May-07	$19$ -May-07	19-May-07	19-May-07	19-May-07	04-0ct-07	14-Nov-07
granted appred $\frac{a}{\sqrt{2}}$ Ö	11-May-04	29-Sep-04	14-Oct-04	$17 + eb - 05$	$17 - Feb - 05$	20-May-05	20-May-05	20-May-05	20-May-05	20-May-05	20-May-05	$20$ -May-05	05-Oct-05	15-Nov-05
$\frac{1}{\overline{8}}$ 9	Andamooka North	Norwest 莹	Harcus Hill	Warrior	Iron Knob	McDouall Peak	Outstation Gira Gira	Muckanippie	Garford	Sandstone	Commonwealth Ï	Mulgathing Hill	Wildingi Claypan	Gambier Hill
Amuairent item 1997 Ê	\$5,905.90	\$1,123.85	\$728.00	\$1,979.25	\$882.70	\$336.00	\$782.60	\$1,537.90	\$837.20	\$1,951.95	\$1,187.55	\$591,50	\$978.25	\$336.00
E Ě	1,298	247	160	435	184	8	172	338	$\frac{84}{5}$	429	261	130	215	$\ddot{+}$
Tanement Tenent B DDC	3209	3254	3261	3306	3307	3339	3340	3341	3342	3343	3344	3345	3423	3449
å	置	ᆸ	풉	ᆸ	ᆸ	뭅	置	ᆸ	ᇤ	ᆸ	뭅	ᆸ	置	ᆸ
esse Sesse	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman

Native lite claims	None listed • Barngarta Native Title Claim (SC96/4)	None listed · Antakirinja Matu-Yankunytjatjara (SC95/7)	The Arabunna Peoples Native Title Claim Barngarta Native Title Claim (SC96/4) Adnyamathanha No. 1 (SC99/1) (SC992)	The Arabunna Peoples Native Title Claim (SC98/2)	Barngarla Native Title Claim (SC96/4) Kokatha Native Title Claim (SC99/2)	The Arabunna Peoples Native Title Claim (SC98/2)	None listed · Antakirinja Matu-Yankunytjatjara (SC95/7)
Regiered dealings			None listed	None listed	None listed	None listed
aminications Curent minimum perience E	\$50,000	\$65,000	\$55,000	\$110,000	\$75,000	\$80,000	\$45,000
	14-Nov-06*	$21 - Max - OT*$	$18 -$ Apr-07	27-Jul-07	8-Oct-07	$14 - Des-07$	19-Feb-08
granted/applied Expiry date åe ė	15-Nov-05	22-Mar-06	19-Apr-06	28-Jul-06	9-DC-8	15-Dec-06	20-Feb-07
liya V ğ	Lookout Reid	Galaxy Tank	South Hill	Bopeechee	rakylia Б, С	Cadnia Hill	Woorong
item 1.13 is valve E R	\$1,014.65	\$1,724.45	\$1,233.05	\$1,278.55	\$2,152.15	\$486.85	\$764.40
ř $\widetilde{\epsilon}$	23	379	271	281	473	$\ddot{\circ}$	168
Tenement Tenement E E E	3453	3532	3541	3607	3634	3677	3712
L	置	뭅	$\vec{u}$	ᆸ	ᆸ	$\vec{u}$	置
en En	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	Resources NL Tasman	h 1.4.4.4.4

X

Note 1:
Consent given on 1/9/2005 to transfer from Avoca Resources Ltd to Tasman Resources NL

Note 2:
Mining Native Title Agreement between the licensee and the registered representatives of:
Mining Native Title Agreement between the licensee and the registered representatives of:

• Native title Claim SC99/2 (Kokatha) dated 10 January 2001;
• Native title Claim SC96/4 (Barngarla) dated 23 November 2000; and
• Native title Claim SC98/2 (Arabunna) dated 16 May 2001

* Renewal decision pending. Pursuant to section 30A(5) of the Mining Act 1971 (SA) an EL continues in operation until the application for renewal is determined.

Solomon Brothers

Barristers, Solicitors, Attorneys

Level 40 Exchange Plaza, 2 The Esplanade, Perth, Western Australia. 6000 Telephone: $4(618)$ 9282 5888 Facsimile: $+(618)$ 9282 5855 PO Box Z5360, St George's Terrace, Perth 6831

11 April 2007

The Board of Directors Fission Energy Ltd Level 40 Exchange Plaza 2 The Esplanade PERTH WA - 6000

Dear Sirs

SOLICITOR'S REPORT ON WESTERN AUSTRALIAN MINING TENEMENT APPLICATIONS

$\mathbf{I}$ . PURPOSE

This solicitor's report ("Report") is prepared for inclusion in a prospectus to be issued by Fission Energy Ltd ("the Company") on or about 11 April 2007 ("the Prospectus") for the purpose of raising \$4,000,000.00 by the issue of 20,000,000 ordinary fully paid shares (each referred to as "a Share") at an issue price of 20 cents per Share (together with the right to accept oversubscriptions of up to \$2,000,000.00 through the issue of up to a further 10,000,000 Shares).

We have been instructed by the Company to conduct searches of, and to outline the rights conferred by, the exploration licences which have been applied for by the Company.

As at the date of this Report, the Company has applied for the grant of 10 exploration licenses ("the Tenements"). Details of these Tenements are set out in the schedule of Tenements ("the Schedule") which is attached to and forms part of this Report.

Solomon Brothers are the solicitors for the Company, and two of the directors of the Company (namely, Gregory Solomon and Douglas Solomon) are partners of Solomon Brothers. Solomon Brothers' costs of preparing this Report have been calculated based on its normal charge out rates.

$\overline{2}$ . SEARCHES

All of the Tenements are located in Western Australia.

For the purposes of preparing this Report, we have relied upon the following searches and enquiries with government agencies during the period 16 February 2007 to 22 March 2007:

• $(a)$ searches of all of the Tenements in the register maintained by the Western Australian Department of Industry and Resources ("DOIR"), which were conducted on 16 February 2007 and 22 March 2007;
• quick appraisal searches of the Tengraph System maintained by DOIR. The search of E28/1744 was $(b)$ conducted on 30 January 2007, the search of E45/2997 was conducted on 5 February 2007, and all other searches were conducted on 20 February 2007;
• searches of the National Native Title Tribunal's register ("the Register") to determine if any native $(c)$ title claims are registered over the areas of the Tenements, which were conducted on 13 March 2007; and

$(d)$ searches of the register of Aboriginal Sites maintained by the Department of Indigenous Affairs ("DIA") at www.dia.gov.au which were conducted on 12 March 2007.

The Company's right to become the registered holder of the Tenements depends upon the grant of the Tenement applications. Subject to the statements set out below, on the basis of the searches conducted, we consider that this Report (and the Schedule) provides an accurate statement as to the status of the Company's interest in the Tenements as at the date of this Report.

$\overline{3}$ . TENEMENT APPLICATIONS 1978 (WA) ("THE MINING ACT")

The Tenements comprise exploration licences applied for by the Company under the Mining Act 1978 (WA) ("the Mining Act").

We are instructed by the Company that it has, in accordance with s.60 of the Mining Act, lodged individual securities for each Tenement application in the time period required by the Mining Act.

The grant of an exploration licence (and the terms and conditions thereof) is at the discretion of the Minister, after receiving a recommendation of the mining registrar or the warden. None of the Tenement applications have, as at the date of the searches referred to in paragraph $2(a)$ above, been recommended for grant by the mining registrar or warden.

ELA 57/692 encroaches upon ELA 57/691 registered in favour of Resource Properties Pty Ltd prior to the registration of ELA 57/692 (as to approximately 73%), and, accordingly, if ELA 57/692 is granted, it will therefore exclude any area of land the subject of ELA 57/691. We are instructed by the Company that, on becoming aware of this encroachment, they applied for ELA 77/1417, which extends to that part of ELA 57/692 which does not encroach on ELA 57/691. In addition:

• $\mathbf{1}$ . ELA 77/1402 encroaches upon EL 77/1398 registered in favour of Goldpride Pty Ltd and Peter Alexander Peebles prior to the registration of ELA 77/1402 (as to approximately 14.3%) and, accordingly, if ELA 77/1402 is granted, it will therefore exclude any area of land the subject of ELA 77/1398;
• ELA 29/651 encroaches upon ELA 30/325 registered in favour of Bluekebble Pty Ltd and Zircon 2. International Pty Ltd prior to the registration of ELA 29/651 (as to approximately 6.5%) and, accordingly, if ELA 29/651 is granted, it will therefore exclude any area of land the subject of ELA 30/325;
• $3₁$ ELA's 57/695 and 45/2997 encroach, to a small degree, over existing exploration licenses or prior exploration licence applications (between $0.4\%$ to $0.7\%$ ) and, accordingly, if these exploration license applications are granted, they will therefore exclude these areas of encroachment.

A number of the Tenement applications encroach on pastoral leases and, if granted, special conditions may be imposed with respect to those pastoral leases.

In addition, a number of exploration licence applications lodged by third parties after the Tenement applications encroach on areas comprised in the Tenement applications, however as the searches referred to in paragraph 2(a) above for these Tenement applications indicate that the Company's applications were lodged at the office of the mining registrar first in time they should receive priority pursuant to clause 105A of the Mining Act.

Some of the Tenement applications affect environmentally sensitive lands as noted in the Schedule. This may result in a refusal to grant some of the Tenement Applications or a refusal to permit exploration or mining activities or the imposition of restrictive conditions on these activities. Specifically, the application for ELA 45/2997 is predominately within the Rundall River National Park (Crown Reserve 34607), and ELA 28/1744 is predominately within an A Class Nature Reserve (Crown Reserve 30491). The responsible agency for both of these Crown reserves is the Department of Conservation and Land Management (and management orders in favour of the National Parks Authority of WA and WA Wildlife Authority respectively have been made). Both of these reserves are also national estate register sites. In the case of a national park and an A class nature reserve, under sections 23 and 24 of the Mining Act, mineral explorations and mining cannot be conducted within the area of those applications (if granted) without the prior consent of the Minister for Industry and Resources who must first consult and obtain the consent of the Minister for Environment. Furthermore, a mining lease or general purpose lease cannot be granted within the area of a class A reserve unless both Houses of Parliament by resolution consent to the grant.

We note that the current policy of the Western Australian State Government is to "prohibit mineral and petroleum exploration or production in National Parks, A Class reserves and Marine Nature Reserves". It is therefore possible, indeed likely, that the mining warden or register may not recommend ELA 28/1744 and ELA 45/2997 for grant.

$\overline{4}$ . EXPLORATION LICENCES GENERALLY

An exploration licence remains in force for a period of five $(5)$ years from and including the date of grant and expires at the end of this period. However, the Minister may extend the term of an exploration licence in prescribed circumstances by one period of five $(5)$ years and by a further period or periods of two $(2)$ years on application as to the whole or any part of the land the subject of the exploration licence. The prescribed circumstances are where the Minister is satisfied that:

• $(a)$ there were delays or difficulties in carrying out an exploration program, or the marking out of a mining lease could not be undertaken, completed or was subject to impracticable conditions;
• $(b)$ the land has been unworkable for a considerable part of any year;
• work already carried out under the licence justifies further exploration; and $(c)$
• $(d)$ if the exploration licence has a retention status, the grounds for approval of retention status continue to exist.

An exploration licence is subject to statutory relinquishment. As all of the Tenements were applied for after 10 February 2006, on or before the expiration of the initial five (5) year term ("the End Day"), the holder of an exploration licence must lodge a surrender for registration in respect of $40\%$ of the blocks that are subject to the exploration licence. The Minister may defer this requirement if the Minister is satisfied that there were delays or difficulties in carrying out an exploration program, or the marking out of a mining lease could not be undertaken, completed or was subject to impracticable conditions, in which case, the holder of the exploration licence must lodge a surrender for registration within 12 months of the End Day.

The holder of an exploration licence (whilst it remains in force and subject to the Mining Act and any conditions to which the exploration licence is subject) has the right to apply for one or more mining leases in respect of the area the subject of the exploration licence at any time prior to the date of the statutory relinquishment, thus ensuring priority of title to the area the subject of the exploration licence.

The prior written consent of the Minister is required to a transfer or dealing in a legal or equitable interest in or affecting an exploration licence during the first year of the term for which an exploration licence is granted.

The holder of an exploration licence is required to comply with conditions prescribed by the Mining Act. including as to payment of rent and expenditure, reporting requirements and environmental conditions and other conditions as specified. Conditions may be unilaterally changed from time to time by DOIR. As none of the Tenements have been granted as at the date of this Report, the minimum amount per year which the Company will be required to spend on exploration activities on each Tenement (should the application in respect thereof be granted) is not known. The holder of an exploration licence may apply for exemption from compliance with the minimum expenditure requirements on the grounds set out in the Mining Act or at the discretion of the Minister. A failure to comply with expenditure requirements, unless exempted, renders an exploration licence open to forfeiture.

If an exploration licence expires or is surrendered or forfeited the holder of that licence (or a person on their behalf) cannot apply for a further exploration licence in respect of that same land within a period of three months from the date of forfeiture.

The Tenements are also subject to the statutory requirements of the Rights in Water and Irrigation Act 1914 and the Aboriginal Heritage Act 1972 (see section 4 below) together with other statutory requirements including the Environmental Protection Act 1986 (WA), the Contaminated Sites Act 2003 (WA) and the Conservation and Land Management Act 1984 (WA).

$\overline{\mathbf{5}}$ . ABORIGINAL SITES

The Tenements will be subject to the provisions of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) and the Aboriginal Heritage Act 1972 (WA) ("the Heritage Act").

The Heritage Act protects sites, places and objects of significance to Aboriginal persons, and prohibits any use of the land that is likely to result in damage to or destruction of an Aboriginal site or any objects on or under that site, and prohibits any person assuming the possession, custody or control of such object unless acting with the authorisation of the Registrar of Aboriginal Sites or with the consent of the Minister.

The Heritage Act applies to all Aboriginal sites and objects whether or not they are registered under the Heritage Act on a register of sites maintained by the DIA. There is no requirement or need for a site to be registered in any public manner or be in any way acknowledged as an Aboriginal site for it to qualify as an Aboriginal site for the purposes of the Heritage Act. The searches which we have conducted of the register of sites maintained by the DIA in relation to the Tenement applications disclose the presence of seven registered heritage surveys on ELA 45/2997 and 2 registered heritage surveys on ELA 57/695. However, it is probable that there are also unregistered sites over the Tenement applications. We are instructed by the Company that no heritage surveys of the land the subject of the Tenements have been conducted by the Company.

The Company will therefore need to ensure that any interference with such Aboriginal sites is in strict conformity with the provisions of the Heritage Act and the applicable Commonwealth heritage legislation (as appropriate).

6. NATIVE TITLE

6.1 Background

Judicial recognition of native title at common law occurred in Mabo v. Oueensland (No. 2), a decision of the High Court of Australia on 3 June 1992. Following this decision, the Commonwealth Parliament passed the Native Title Act 1993 (Cth) (as amended) ("the Act") which came into effect on 1 January 1994. The Act provides a legislative regime for dealings in, and for the recognition, protection and determination of, native title, and for the validation of some acts affected by native title. The Act recognises that the content of native title is determined by the application of the common law.

The source of native title is the traditional aboriginal occupancy of, or connection with, the land (or water) by the Aboriginal people as a community or society. Native title comprises a bundle of rights (the content and extent of which will be determined by the traditional law acknowledged, and customs observed, by the Aboriginal group). The extent and content of the native title rights enjoyed by particular Aboriginal groups is determined by facts that need to be proved by evidence. The nature and extent of the rights that a particular group may establish to land may vary.

In order for an aboriginal party to establish native title at common law (and pursuant to the Act) there must be:

• a traditional connection with, or occupation of, the land under the laws or customs of the Aboriginal $\mathbf{1}$ . people;
• $\overline{2}$ . an identifiable community or group in existence; and
• $3₁$ the substantial maintenance of the connection.

The existence of native title is not dependent upon a determination by a Court.

Native title may be extinguished by the Crown at common law by a valid legislative or executive act which shows a clear and plain intention to extinguish native title or a grant of inconsistent rights in the land. This may be done without the consent of the Aboriginal people and without the need for payment of any compensation. This may occur, for example, by the grant of an estate in freehold. An act which is not inconsistent with the continued enjoyment of native title may have the effect of only suspending native title.

However, as from 1975, an act of the Crown which had the effect of extinguishing native title may have been invalid by virtue of the Racial Discrimination Act 1975 ("the RDA"). The RDA is binding on the Commonwealth and the States, and generally makes racial discrimination unlawful. Accordingly, if the grant of a mining tenement post-1975 is found to have been discriminatory, and therefore unlawful under the RDA, the result may be either that the grant of the mining tenement is invalid, or that such grant would give rise to a claim for compensation by the affected Aborigines against the Commonwealth pursuant to the RDA.

6.2 Legislative Requirements

The Act is binding on the Commonwealth and the States. The Act permits the States to pass equivalent legislation providing it conforms with the provisions of the Act, or is permitted by the Act. Prior to the commencement of the Act. the Western Australian Parliament passed the Land (Titles and Traditional Usage) Act 1993. On 16 March 1995, the High Court found this Act was invalid and inoperative. Subsequently, the Western Australian Parliament passed the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995, which came into effect on 4 July 1995 and which, consistently with the Act, provides for the validation of past dealings inconsistent with native title (eg. grants of mining tenements).

Persons claiming to hold native title may lodge an application for determination of native title with the Federal Court. It should however be noted that the absence of a native title claim in an area does not mean that native title does not exist in an area.

Once a native title claim has been lodged, the Court will refer the application to the Native Title Registrar. The Native Title Registrar must determine whether the claim meets certain conditions concerning the merits of the claim, and certain procedural and other requirements set out in the Act (the "Registration Requirements"). If the claim meets these Registration Requirements, it will be entered on the Register of Native Title Claims ("the Register") maintained by the Native Title Registrar. Claimants under registered claims are afforded certain procedural rights under the Act, including the "right to negotiate" in relation to future acts (see section 5.3).

Claims which fail to meet the registration requirements referred to above are recorded and may be entered on the Register at a later date if additional information is provided by the claimant that satisfies the registration requirements.

Most of the Tenements relate to land which is currently the subject of one or more native title claims. These claims are identified in the Schedule. Where native title is found to exist, the nature of the native title may be such that consent to mining may be required by the native title holders, who may withhold their consent or only grant their consent on conditions which are unacceptable to the Company.

We have not undertaken the considerable historical, anthropological and ethnographic work that would be required to determine the likelihood that existing claims may be successful, or the possibility of any further native title claims being made in the future.

6.3 New Tenement Applications

In order for the grant of a mining Tenement to be valid, the applicable processes prescribed by the Act must be complied with.

Applications for exploration licences are "future acts" and are subject to the "right to negotiate" procedures of the Act. These procedures apply where the Commonwealth or the State proposes to grant, inter alia, certain mining interests for the benefit of a third party, and provide a mechanism for preserving the status quo for native title holders pending the formal determination of their claim.

Accordingly, if the State proposes to grant a mining tenement on the application of a third party, it must issue a future act notice to any registered native title body corporate, registered native title claimant and any representative Aboriginal body. If the State considers that the granting of the tenement is not likely to involve a major disturbance to the land or waters and is not likely to interfere directly with the carrying on of community or social activities of, or the sites of particular traditional significance to, the native title holders, the State may provide in the notice that it considers that the proposed act attracts the expedited procedure. A person who becomes a registered native title claimant within four (4) months of the notification date is generally also entitled to become a native title party (being the date on which it is reasonable to assume that the "future act" notices have been received).

The right to negotiate procedure and expedited procedure are commenced by the State publishing a notice of its intention to grant a mining tenement under s 29 of the Native Title Act. The State Government is currently adopting a policy whereby the intended grant of an application for an exploration licence is an act that attracts the expedited procedure, subject to the applicant formally agreeing with the native title parties to identify and protect Aboriginal Heritage sites within the boundaries of the tenement applications. Current DOIR policy requires an applicant to provide evidence by way of a statutory declarations that it has entered into a heritage agreement or is willing to enter into a heritage agreement with one of the affected claimants. Once this evidence is provided, DOIR will commence processing the application via the expedited procedure. We are instructed by the Company that it has not yet received a request from DOIR to enter into, and has not yet entered into, any such heritage agreements with respect to the Tenements and that no future acts notices have yet been issued with respect to any of the Tenement applications. A list of registered native title claims and applications is contained in the Schedule. As the future act notices have not yet been issued, there is the possibility of further native title claims being made with respect to the Tenements.

A native title party may, within 4 months after the notification date, object to the inclusion of the statement that the act attracts the expedited procedure. If no objection to the expedited status is lodged by the native title parties, the State may do the act. If an objection to the expedited status is lodged, the National Native Title Tribunal must determine whether the proposed act (eg. the grant of the mining tenement) attracts the expedited procedure. If the National Native Tribunal determines that the act attracts the expedited procedure, the State may do the act. If it does not, the parties must participate in the negotiation process.

The negotiation process consists of a statutory period of negotiation between the State, the native title claimants/s and the grantee party. The parties must negotiate in good faith with a view to obtaining agreement to the doing of the act (with or without conditions). If no agreement has been reached within six (6) months of the notification date, any negotiation party may apply to the National Native Title Tribunal for a determination. The National Native Title Tribunal then determines whether the act can be done, cannot be done or may be done subject to conditions.

A right exists for a State or Territory Minister to overrule the determination of the National Native Title Tribunal if it considers it to be in the State's interest.

Indigenous Land Use Agreements ("ILUA") are also authorised under the Act. Native title claimants or holders and other interest holders, such as mining companies, may enter into binding agreements relating to native title. An ILUA can also be used to obtain the native title claimant's or holder's consent to the granting of current tenement applications and, to obtain the native title claimant's consent for future tenement applications within a certain area.

As a consequence of the right to negotiate procedure, or by virtue of an ILUA, it is possible that the Company may be required to make payments to, or meet other commitments on behalf of, native title claimants which may affect the costs and economics of any operations it wishes to conduct.

64 Extension of Initial Term

An extension of the term of an earlier tenement will be valid where:

• 1. that earlier tenement was itself granted pursuant to the "future act" provisions of the Act;
• $2¹$ the area to which the earlier tenement relates will not be extended;
• $\overline{3}$ . the extended part of the term will not be longer than the initial term; and
• 1. the rights to be created are not greater than the rights conferred by the earlier grant.

Provided that these qualifications are met, if the applications for the Tenements are granted, the right to negotiate procedures under the Act will not apply to the first application for extension of term of any of these Tenements. It remains unclear as to whether the right to negotiate procedures will apply to second and subsequent applications for extension of such Tenements and the matter has not as yet been determined by the Courts.

$\overline{7}$ . URANIUM MINING

We are instructed by the Company that, if the Tenement applications are granted, it proposes to explore for uranium.

The Federal Government and the Western Australian Government have adopted policies which currently restrict uranium mining and/or the exportation of uranium.

The Federal Government currently permits the mining and export of uranium under strict international agreements designed to prevent nuclear proliferation. A party seeking to mine uranium must obtain a permit from the Australian Safeguards and Non-Proliferation Office under the Safeguards Act 1987 (Cth). New uranium mines or significant expansions of existing mines require assessment and approval under the Environment Protection and Biodiversity Conservation Act 1999. Further, the export of uranium is tightly controlled by the Federal Government pursuant to the Customs Act 1901 (Cth) and Regulation 9 of the Customs (Prohibited Exports) Regulations 1958 (Cth) which only allows the exportation of uranium which is permitted by the Minister for Industry. Tourism & Resources (which, consistently with Australia's obligations as a signatory to the Treaty on the Non-proliferation of Nuclear Weapons will only be given to permit Australian uranium to be exported to those countries who undertake to use it for peaceful, non-weapons and non-military purposes).

The policy platform of the Australian Labor Party provides for uranium production and export only from existing mines upon its return to office and prohibits the development of any new mines (Chapter 12 of the National

Platform and Constitution 2004). The Australia Labor Party will debate the issue again at its 2007 National Conference.

The Western Australian State Government has a policy opposing uranium mining and all mining leases granted since June 2002 are subject to a condition which prohibits the mining of uranium.

Accordingly, whilst the Company will not be restricted from exploration and evaluation of their uranium deposits on the Tenement applications (if granted), the development of the uranium deposits will be contingent upon a change of Western Australian State Government policy in relation to uranium production.

8. OUALIFICATIONS

In this Report:

• we have relied upon and assumed the accuracy and completeness of all Tenement searches and other $(a)$ information or responses which were obtained from the relevant Departments or authorities;
• the holding of the Tenements is subject to compliance with the terms and conditions and the provisions of $(b)$ the Mining Act:
• $(c)$ we have assumed and relied upon the accuracy and completeness of any instructions or information which we have received from the Company or any of its officers, agents and representatives;
• $(d)$ we express no opinion as to whether any of the Tenement applications will ultimately be granted and as to whether reasonable conditions will be imposed upon grant, although (with the exception of ELAs 28/1744 and 45/2997) we have no reason to believe that any Tenement application will be refused;
• $(e)$ where a possible claim is not disclosed on the face of the searches referred to in this Report, we express no opinion on such claim; and
• references in the Schedule to the areas of the Tenements are taken from details shown on the searches. It $(f)$ is not possible to verify the accuracy of those areas without conducting a survey and we have not caused a survey to be completed for the purposes of this report.
• $9₁$ CONSENT

Solomon Brothers consents to being named in the Prospectus as being responsible for the preparation of this Report. Except for this Report, and any other references to this Report in the Prospectus, Solomon Brothers:

• has not authorised or caused the issue of this Prospectus; $(a)$
• (b) is not responsible for any matter included in or omitted from this Prospectus;
• makes no representation or warranty, either express or implied, with respect to the accuracy or $(c)$ completeness of the information contained in the Prospectus;
• $(d)$ disclaims liability to any persons in respect of any statement included in or omitted from the Prospectus; and
• in respect of this Report has refled upon and assumed the accuracy and completeness of any information $(e)$ and documentation provided to Solomon Brothers, including, without limitation, by the Company or any of its officers, agents or representatives and searches provided by the DOIR, the Native Title Tribunal and DIA.

×

This Report is given solely for the Company and the directors of the Company in connection with the issue of the Prospectus and is not to be relied on or disclosed to any other person or used for any other purpose or quoted or referred to in any public document or filed with any government body or other person without prior consent.

Yours faithfully

Stowart Besther

Solomon Brothers Barristers & Solicitors

SCHEDULE OF TENEMENTS APPLIED FOR BY FISSION ENERGY LTD

	Tenement	Area (BL)	Shares Held (out of 100)	Application Date	Objection Closing Date (see Note 1)	Native Title Claims (see Note 2)	Environmental Claims & Land Affected
$\overline{1}$ .	E 28/1744	61.00	100	30 January 2007	6 March 2007	Central East Goldfields (WC99/030)	A Class Reserve (Crown Reserve) 30491 National Estate - Registered Site (NER/9716)
$\overline{2}$	E 29/650	54.00	100	18 January 2007	22 February 2007	Wutha (WC99/010) Koara (WC 99/5) (1) Ngalia Kutjungkatja $(WA 00/14)$ (1)	AW/59 Lake Barlee Pastoral Leases H91304 & 3114/939
$\overline{3}$ .	E 29/651	31.00	100	18 January 2007	22 February 2007	Wutha (WC99/010) Ngalia Kutjungkatja (WA 00/14) (1)	AW/59 Lake Barlee
4.	E 45/2997	70.00	100	5 February 2007	12 March 2007	Martu (WC96/078) (2)	National Park (Crown Reserve 34607) National Estate - Registered Site (NER/10054) DIA HSR Survey ID's 1453, 957, 342, 1468, 1469, 1465, 3273
5.	E 57/692	37.00	100	23 January 2007	27 February 2007	Wutha (WC99/010) Ngalia Kutjungkatja (VVA 00/14) (1)	AW/59 Lake Barlee Pastoral Lease 3114/939
6.	E 57/693	44.00	100	23 January 2007	27 February 2007	Wutha (WC99/010) Koara (WC 99/5) (1) Ngalia Kutjungkatja $(WA 00/14)$ (1)	CPL/19, Part Bulga Downs P/I 3114/775 Pastoral Lease 3114/1039
7.	E 57/695	20.00	100	25 January 2007	1 March 2007	Wutha (WC99/010) Koara (WC 99/5) (1) Ngalia Kutjungkatja (WA 00/14) (1)	Pastoral Leases 3114/1150 and 3114/873 DIA HSR Survey ID's 3338, 370 Gas Pipeline Working Group (OMP) FNA/4803
$\overline{8}$	E 77/1393	9.00	100	18 January 2007	22 February 2007		AW/59 Lake Barlee CPL/22, Mt Elvire P/I 3114/885
g.	E 77/1402	70.00	100	23 January 2007	27 February 2007	Ngalia Kutjungkatja (WA 00/14) (1)	AW/59 Lake Barlee CPL/22, Mt Elvire P/I 3114/885 Pastoral Lease 3114/1110
10.	E 77/1417	70.00	100	1 February 2007	8 March 2007	Wutha (WC99/010) (2)	AW/59 Lake Barlee Pastoral Lease 944414440

Notes: $\mathbf{I}$ .

Objection Closing Date

The searches of the Tenements in the register maintained by DOIR on 22 March 2007 do not indicate that any objections have been lodged against the Tenement application and we are instructed by the Company that it is not aware of any objections having been lodged.

$\overline{2}$ . Native Title Claim

• These claims have not been accepted for registration. The searches which we have obtained from the $2.1$ National Native Title Tribunal indicates that the status of these applications is notification complete, in mediation.
• $2.2^{\circ}$ The existence of these claims have been ascertained from the quick appraisal Tengraph searches, as the searches which we obtained from the National Native Title Tribunal did not locate any records for these titles (which they have indicates usually suggests that a new tenement has not, as yet, been updated on their database). It is therefore possible that further native title claims may exist over these tenements.

XX

10. INVESTIGATING ACCOUNTANT'S REPORT

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The Directors Fission Energy Limited Level 40 Exchange Plaza 2 The Esplanade Perth W.A. 6000

Beatlevs MR1 Perth Financial Services Ptv Ltd ABN 92 064 268 260 AFS Licence 259 864

Level 1, 10 Kings Park Road West Perih WA 6005 Australia.

PO Box 570 West Perth WA 6872

T 61 8 9480 2600 F 61 8 9322 7787

admin@brusin.com.au www.bentleys.com.au

Dear Sirs.

INVESTIGATING ACCOUNTANT'S REPORT

INTRODUCTION $\mathbf{1}$

The Directors of Fission Energy Limited ("Fission" or the "Company") have requested Bentleys MRI Perth Financial Services Pty Ltd ("Bentleys MRI") to report on the Balance Sheet of Fission as at 31 December 2006 and the Pro Forma Balance Sheet ("Pro Forma") as at 31 December 2006 assuming completion of certain assumed transactions.

This report has been prepared for inclusion in a prospectus ("the Prospectus") to be dated on or around 3 April 2007, relating to an offer of 20,000,000 ordinary shares ("Shares") at an issue price of 20 cents per Share. The Offer will raise up to \$4,000,000 excluding oversubscriptions.

Oversubscriptions on the Offer may be accepted through the issue of a further 10,000,000 Shares at 20 cents each, to raise up to an additional \$2,000,000. The oversubscriptions are not underwritten.

$2.$ SCOPE OF OUR REPORT

Background Information

Fission is an Australian Public Company, limited by shares. It was registered on 13 March 2006. The Company, has not, to the date of the Prospectus carried on any business activities.

The principal objectives of the Offer are to raise funds to fund the exploration activities of Fission.

Report on Actual and Pro Forma Financial Information

We have conducted a review of the Actual and Pro Forma Balance Sheets of the Company and the notes thereto as at 31 December, as set out in Appendix A.

The purpose of the Pro Forma Balance Sheet is to show the financial effects on the Company as if the proposed transactions outlined in Appendix A had taken place as at 31 December 2006. The Pro Forma Balance Sheet has been based on the audit reviewed Balance Sheet as at 31 December 2006.

Chartered Accountants

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We have reviewed the Financial Information in order to state whether anything has come to our attention that would indicate that the Financial Information as set out in Appendix A is not presented fairly on the basis of the proposed transactions and in accordance with the measurement requirements, but not all of the disclosure requirements, of applicable Accounting Standards and other mandatory professional reporting requirements.

Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements and was limited primarily to enquiries and discussions with the Directors and personnel of Fission, reading of Directors minutes and relevant contracts, analytical procedures applied to the financial data, performance of certain limited verification procedures and comparison for consistency in application of accounting standards and policies. The significant accounting policies of the Company are detailed in Appendix A.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. As we have not performed an audit on the Financial Information of the Company as at 31 December 2006, we do not express an audit opinion.

$3.$ STATEMENTS

Financial Information

Based on the scope of our review, which is not an audit, nothing has come to our attention which would require any modification to the Financial Information, as set out in Appendix A in order for it to present fairly the financial position of the Company as at 31 December 2006, on the basis of the proposed transactions (also set out in Appendix A) and in accordance with the measurement requirements, but not all of the disclosure requirements, of applicable Accounting Standards and other mandatory professional reporting requirements, had the transactions taken place on 31 December 2006.

$\overline{a}$ . SUBSEQUENT EVENTS

To the best of our knowledge and belief, and based on the work we have performed as described in the scope paragraph above, there have been no material transactions or events subsequent to 31 December 2006, other than those disclosed in the Prospectus, that would require comment on, or adjustment to, the information referred to in our report or that would cause the information included in this report to be misleading.

5. OTHER MATTERS

The "Additional Information" section of the Prospectus sets out particulars of material contracts, directors' interests and employee and directors' options plans. No options have yet been granted under these plans nor has the financial effect been included in the pro forma financial information as they are subject to ASX listing of the company and shareholder approval.

6. DISCLOSURES

Bentleys MRI does not have any pecuniary interest that could reasonably be regarded as being capable of affecting its ability to give an unbiased opinion in this matter. Bentleys MRI will receive a fee for the preparation of this report.

The Directors have agreed to indemnify and hold harmless Bentlevs MRI and its employees from any claims arising out of misstatement or omission in any material or information supplied by the Directors.

Consent for the inclusion of the Investigating Accountant's Report in this Prospectus in the form and context in which it appears has been given. At the date of this report this consent has not been withdrawn.

Yours faithfully
BENTLEYS MRI PERTH FINANCIAL SERVICES

Al C

MJ HILLGROVE Director

APPENDIX A

BALANCE SHEET

Set out below is the Balance Sheet of Fission as at 31 December 2006, and the Pro Forma Balance Sheet of the Company as at 31 December 2006 on the basis of the assumptions contained in Note 4
of Appendix B. The significant accounting policies upon which the Balance Sheet and the Pro Forma Balance Sheet of the Company are based are contained in Appendix B.

	NOTE	REVIEWED ACTUAL DEC 2006 \$	REVIEWED PROFORMA DEC 2006 \$
CURRENT ASSETS Cash and Cash Equivalents	4	1	3,775,251
TOTAL CURRENT ASSETS		1	3,775,251
NON-CURRENT ASSETS
Deferred Exploration Expenditure		21,570	21,570
TOTAL NON-CURRENT ASSETS		21,570	21,570
TOTAL ASSETS		21,571	3,796,821
CURRENT LIABILITIES
Trade and Other Payables		22,785	22,785
TOTAL CURRENT LIABILITIES		22,785	22,785
TOTAL LIABILITIES		22,785	22,785
NET ASSETS		(1,214)	3,774,036
EQUITY
Contributed Equity Accumulated Profits/(Losses)	5	1. (1,215)	3,775,251 (1,215)
TOTAL EQUITY		(1,214)	3,774,036

×

APPENDIX B

NOTES TO THE BALANCE SHEET

$1.$ Significant Accounting Policies

The balance sheet as at 31 December 2006 has been drawn up in accordance with the measurement requirements, but not the disclosure requirements, of applicable Accounting Standards and other mandatory professional requirements.

Going Concern $(a)$

The Directors have prepared the balance sheet on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and extinguishments of liabilities in the ordinary course of business.

The Company's operations require it to raise capital on an on-going basis to fund its planned exploration program and commercialise its tenement assets. If the Company does not raise further capital in the short term, it can continue as a going concern by reducing planned but not committed exploration expenditure until funding is available and/or entering into joint venture arrangement where exploration is funded by the joint venture partner.

Accounting policies $(b)$

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified where applicable by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property. A summary of the Company's significant accounting policies is set out below.

$(c)$ Acquisitions of assets

The purchase method of accounting is used to account for all acquisitions of assets (including business combinations) regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

$(d)$ Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

Fair value estimation $(e)$

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Company is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market (for example, over-thecounter derivatives) is determined using valuation techniques. The Company uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments.

Exploration and evaluation expenditure $(f)$

Exploration and evaluation costs related to areas of interest are carried forward to the extent that:

• the rights to tenure of the areas of interest are current and the Company controls the area of $(i)$ interest in which the expenditure has been incurred; and
• such costs are expected to be recouped through successful development and exploitation of the $(ii)$ area of interest, or alternatively by its sale; or
• $(iii)$ exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets will be assessed annually for impairment and where impairment indicators exist, recoverable amounts of these assets will be estimated based on discounted cash flows from their associated cash generating units.

The income statement will recognise expenses arising from the excess of the carrying values of exploration and evaluation assets over the recoverable amounts of these assets. Expenditure capitalised under the above policy is amortised over the life of the area of interest from the date that commercial production of the related mineral occurs. In the event that an area of interest is abandoned or if the directors consider the expenditure to be of no value, accumulated costs carried forward are written off in the year in which that assessment is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Provisions $(a)$

Mine restoration and rehabilitation costs are provided for at the present value of future expected expenditures required to settle the Company's obligations on commencement of commercial production, discounted using a rate specified to the liability. When this provision is recognised a corresponding asset is also recognised as part of the development costs of the mine to the extent that it is considered that the provision gives access to future economic benefits. On an ongoing basis, the rehabilitation liability is re-measured at each reporting period in line with the changes in the time value of money (recognised as an expense in the income statement and an increase in the provision), and additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability.

$(h)$ Employee Benefits

Share-based payments

Share-based compensation benefits will be provided to employees via various Share Option Plans. The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital. The market value of shares issued to employees for no cash consideration under the Share Plans is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares.

Investments and other financial assets $\left($ i)

The Company classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date.

(i) Financial assets at fair value through profit or loss

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance sheet date.

Investments and other financial assets (continued) $(i)$

(ii) Loans and receivables

Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Company provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the balance sheet

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company's management has the positive intention and ability to hold to maturity.

(iv) Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are nonderivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Purchases and sales of investments are recognised on trade-date - the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non monetary securities classified as available-for-sale are recognised in equity in the available-for-sale investments revaluation reserve.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These include reference to the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances.

When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.

The Company assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or protonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

Income tax $\left($ i

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Post Balance Date Events $\mathbf{2}$

Subsequent to balance date the following events occurred:

• Issued 24,999,999 fully paid ordinary shares to Tasman at 0.01 cents each, raising \$250. $\mathbf{i}$
• Issued 2,000,000 fully paid ordinary shares to seed capital investors at 10 cents each. ii) raising \$200,000.
• iii) Issued 12,500,000 options to Tasman for nil consideration. Each option entitles Tasman to acquire one share at an exercise of \$0.20 per share on or before 28 February 2011.

3. Basis of Preparation

The Pro Forma Financial Statements in Appendix A includes the following adjustments:

• Shares issued post balance date detailed in 2(i) and 2(ii). i)
• ii) Issue of 20,000,000 fully paid ordinary shares at 20 cents each to raise \$4,000,000 and no oversubscriptions accepted.
• The estimated costs of the Offer totalling \$425,000. This assumes that no funds are raised iii) under the prospectus pursuant to the Tasman Priority Applications. If and to the extent that funds are so raised, the expenses associated with the offer will be reduced.

FISSION ENERGY LIMITED
INVESTIGATING ACCOUNTANT'S REPORT

Ĩ.

		NOTES TO THE BALANCE SHEET (continued)

		NOTE	REVIEWED Actual DEC 2006 \$	REVIEWED PROFORMA DEC 2006 \$
4.	Cash
	Cash and Cash Equivalents		1	4,200,251
	Opening balance			1
	Issue of 24,999,999 Shares at 0.01 cents	2(i)		250
	Issue of 2,000,000 Shares at 10 cents	2(ii)		200,000
	Issue of 20,000,000 Shares at 20 cents	3(ii)		4,000,000
	Associated costs of the Share Offer	3(iii)		(425,000)
	Closing balance		1	3,775,251
5.	Contributed Equity
	Issued and paid up ordinary share capital		1	3,775,251
	Opening balance			1
	Issue of 24,999,999 Shares at 0.01 cents	2(i)		250
	Issue of 2,000,000 Shares at 10 cents	2(ii)		200,000
	Issue of 20,000,000 Shares at 20 cents	3(ii)		4,000,000
	Associated costs of the Share Offer	3(iii)		(425,000)
	Closing balance		1	3,775,251
Details:	Movements in number of ordinary share capital Balance as at 31 December 2006			Number 1
	Issue of 24,999,999 Shares	2(i)		24,999,999
	Issue of 2,000,000 Shares	2(ii)		2,000,000
	Issue of 20,000,000 Shares	3(ii)		20,000,000
	Balance per report			47,000,000

If only the minimum subscription is raised, then the cash and contributed equity positions will be reduced by \$960,000 after adjustment for a reduction in associated costs of \$60,000.

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NOTES TO THE BALANCE SHEET (continued) 6. Related Party Disclosures

We have not examined related party transactions as part of this investigating accountants report as these are disclosed elsewhere in this prospectus.

$\overline{7}$ . Options

There are currently 12,500,000 options on issue to Tasman. Each option entitles Tasman to acquire one share at an exercise of \$0.20 per share on or before 28 February 2011.

8. Contingencies and Commitments

Details of various commitments are outlined in the Prospectus (Section 13.3).

9. Other

Uranium mining is subject to extensive government regulation and policy in Australia, which may impact future impairment testing of any associated mining assets.

$11.$ RISK FACTORS

There are a number of risk factors, both specific to the Company and of a general nature, which may affect the financial position, financial performance, cash flows, ability to pay dividends and growth prospects of the Company and the outcome of an investment in the Company. There can be no guarantee that the Company will achieve its stated objectives, or that forward looking statements will be realised.

This Section describes certain, but not all, risks associated with an investment in the Company. Each of the risks set out below could, if they eventuate, have an adverse material impact on the Company's operating performance and profits.

An investment in the Company carries risk and, before deciding to invest in the Company, potential Applicants should read this Prospectus in its entirety and, in particular, should consider the risk factors that could affect the financial performance of the Company. Applicants should carefully consider these factors in light of their personal circumstances and should consult their professional advisers (for example, their accountant, stockbroker, lawyer or other professional adviser) before deciding whether to invest.

Neither Fission nor its officers, employees, agents and advisers guarantee that any specific objectives of Fission will be achieved or that any particular performance of the Shares, including those offered under this Prospectus, will be achieved.

RISKS SPECIFIC TO THE COMPANY

11.1. Regulation of the Uranium Mining Industry

Uranium mining is subject to extensive regulation by State and Federal Governments in relation to exploration, development, production, exports, taxes and royalties, labour standards, occupational health, waste disposal, protection and rehabilitation of the environment, mine reclamation, mine safety, toxic and radioactive substances, native title and other matters. Compliance with such laws and regulations will increase the costs of exploring, drilling, developing, constructing, operating and closing mines and other production facilities.

The Federal Government currently permits the mining and export of uranium under strict international agreements designed to prevent nuclear proliferation. The export of uranium is tightly controlled by the Federal Government through its licensing process and Australian uranium can only be exported to those countries who undertake to use it for peaceful purposes. The Federal Government currently has no policy restricting new uranium mines in Australia.

However, Applicants should be aware that the policy platform of the Federal Australian Labor Party provides for uranium production and export only from existing mines upon its return to office and prohibits the development of any new mines (Chapter 12 of the National Platform and Constitution 2004). The Australia Labor Party will debate the issue again at its 2007 National Conference.

The Company's tenements are located in South Australia and Western Australia. There is currently no legislation that expressly prohibits uranium mining in Western Australia or South Australia.

However, the Western Australian State Government does have a policy opposing uranium mining. All mining leases granted since 22 June 2002 are subject to a condition which prohibits the mining of uranium. Whilst the Company is not restricted from exploration and evaluation of their uranium deposits, the development of the uranium deposits in Western Australia is contingent upon a change of Western Australian State Government policy in relation to uranium production.

The South Australian State Government does not have a formal policy opposing uranium mining. The Premier of South Australia has indicated that the South Australian Government supports the uranium mining industry in Australia and the export of uranium to countries that need nuclear power to supply energy as they do not have sufficient alternatives, such as Natural Gas. There are uranium mines currently operating in South Australia. However, as set out above, current Federal Australian Labour Party policy is opposed to the development of any new mines and it is therefore possible that such policy may need to be changed before a new uranium mine can be opened in South Australia.

Thus there is the significant risk that, even if economic deposits of uranium are discovered, the necessary government approvals for their commercial exportation may not be granted or may be significantly delayed.

There can be no assurance that the above Government policies will change in the future and this may adversely affect the long-term prospects of the Company. In addition, future changes in governments, regulations and policies may have an adverse impact on the Company.

11.2. Nuclear Power and its Competition with other Energy Sources

If a commercially viable uranium deposit is located and able to be mined (see section 11.1 of this Prospectus), and the Company enters into production, this will result in the Company competing directly with other energy producers which may have greater financial and other resources than the Company.

Existing and future projects developed by competitors of the Company in coming years may be able to mine uranium at or below the price at which the Company is able to do so. Lower costs of production of competitors may have a material adverse effect on the capacity of the Company to sell its uranium.

Nuclear energy is also in direct competition with other, more conventional sources of energy which include oil, gas, coal, hydro-electricity and other "green" energy sources. These conventional and green energy sources may be provided at lower costs resulting in a decrease in demand for uranium.

Furthermore, the growth of the nuclear power industry (with an attendant increase in the demand for uranium) beyond its current level will depend upon continued and increased acceptance of nuclear technology as a means of generating electricity. The nuclear industry is currently subject to divided public opinion due to political, technological and environmental factors. This may have an adverse impact on the demand for uranium and increase the regulation of uranium mining.

One of the arguments for nuclear energy is its substantially reduced level of carbon emissions. Alternative energy systems such as wind or solar also have very low levels, if any, of carbon emissions. Technology changes may occur that make alternative energy systems more efficient and reliable.

11.3. Operating Risks

The operations of the Company may be affected by various factors including failure to locate or identify uranium deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, inadequate water supplies, unanticipated technical problems which may affect extraction rates and costs, inability to obtain satisfactory joint venture partners, difficulties in obtaining requisite planning approvals, adverse weather conditions, industrial and environmental accidents, industrial disputes, unexpected shortages and increases in the cost of consumables, spare parts, plant and equipment. No assurances can be given that the Company will achieve commercial viability through the successful exploration and (subject to appropriate regulatory approvals) production of its tenements or its tenement interests. Until the Company is able to realise value from its projects, it will incur ongoing operating losses.

Production Risks $11.4.$

Even assuming that viable deposits of uranium are located and able to be mined (see section 11.1 of this Prospectus), the quality and rate of extraction of uranium will be variable (depending, for example on the size of the deposits, timing and/or success of development work and uranium quality). Production may be impacted or shut down for considerable periods of time due to any of the following factors:

• government regulation;
• $\bullet$ processing interruptions;
• equipment failure; $\bullet$
• equipment or manpower shortages; $\bullet$
• force majeure; $\bullet$
• $\bullet$ well blowouts:
• explosions; $\bullet$
• $\bullet$ fires:
• $\bullet$ pollution;
• releases of toxic gas; or $\bullet$
• other environmental hazards and risks. $\bullet$

$11.5.$ Operating Hazards and Risks

If a commercially viable uranium deposit is located and able to be mined (see section 11.1 of this Prospectus), the Company's operations will become subject to all the hazards and risks normally incident to the extractive industries including environmental hazards, industrial actions and accidents, technical failures or difficulties, labour disputes, extended interruptions due to inclement and hazardous weather conditions, fires, explosions and other accidents. These hazards and risks could result in damage to life, damage to or the destruction of, production facilities, and property, environmental damage and possible legal liability for any and all damage. One or a combination of these events and impacts could have a material adverse effect on the financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price of the Company.

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11.6. Insurance

Insurance of risks associated with the mining of uranium is sometimes unavailable and may attract large premiums. Accordingly, if a commercially viable uranium deposit is located and able to be mined (see section 11.1 of this Prospectus), no assurance can be given that the Company will be able to obtain such insurance coverage at reasonable rates, or that any coverage it arranges will be adequate and able to cover any such claims. If the Company incurs uninsured losses or liabilities, this could have a material adverse effect on the financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price of the Company.

Commodity Price Volatility & Exchange Rate Risks $11.7.$

If the Company achieves success which results in uranium production, the revenue it will derive through the sale of uranium exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company, including supply and demand fluctuations for energy, technological advancement, forward selling activities and other micro and macro economic factors. International prices of various commodities are largely denominated in United States dollars, whereas the income and expenditure of the Company, whilst operating on Australian projects, will be in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar.

Title Risks and Native Title $11.8.$

Interests in exploration and mining tenements in Australia are governed by legislation and are evidenced by the granting of leases or licences. The exploration licences which the Company has applied for in Western Australia have not yet been granted (or recommended for grant) and, accordingly, there is a risk that they may not be granted (especially those applications which are in an A class reserve or national park). Each lease or licence is for a specific term and carries with it annual expenditure and reporting conditions as well as other conditions requiring compliance. These conditions include the requirement, particularly for exploration licences, for compulsory reduction in the area held under licence from time to time. The Company could also lose title to the tenements it has applied for (assuming they are granted) or its interest in the tenements the subject of the Tasman Agreement, if it or Tasman does not meet the licence conditions or if insufficient funds are available to meet expenditure commitments. The loss of granted tenements or the inability to obtain new tenements may have a material adverse effect on the Company's financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price.

Further, it is possible that the Company may in the future enter into to joint ventures with third parties, which raises the possibility of disputes and potential conflict with such joint venture parties which would have a material adverse effect on the Company's financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price.

It is also possible that, in relation to tenements in which the Company has an interest or in the future may acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to obtain the consent of any relevant land owner, or to progress from the exploration phase to the development and mining phases of the operation, may be adversely affected. The Native Title Act 1993 (Cth) provides a series of procedures which the Company may need to comply with in order to be granted additional rights in relation to land in respect of which native title has been determined to exist or a native title claim has been registered. These procedures may require the negotiation of significant agreements with native title parties and may require the payment of compensation for loss of or impairment of any native title rights and interests. Significant resources may be required to administer any native title agreements in relation to which the Company is a party. The success and costs of administration of these native title issues may have a material adverse impact on the financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price of the Company.

11.9. Environmental Risks

Although the Company is not aware of any endangered species of fauna or flora within any of the tenements or tenement applications in which it has an interest, no definitive study has been carried out over these areas, and if any were discovered this could prevent mining occurring.

11.10. Working Capital

The Company is only raising sufficient funds to cover approximately two years of working capital requirements and, subject only to the terms of any joint venture which may be entered into, the Company is likely to have to raise further capital prior to the initial capital being exhausted. In this regard, capital costs in developing all of the tenements and tenement applications in which the Company has an interest and bringing all of them into production will be significant. The Company's ability to raise further equity or debt, or to divest part of its interest in the said tenements and tenement applications, and the terms of such transactions will vary according to a number of factors, including the progress of production and supply agreements, success of exploration results and the future development of projects, stock market conditions and prices for uranium. There is no guarantee that such additional funds will be available to the Company, and the Company may be adversely affected in a material way if, for any reason, access to such funds is not available.

11.11. No Formal Valuation of Tenement or Shares

No formal valuation of any of the tenements and tenement applications in which the Company has an interest or the Shares has been carried out.

11.12. Contractual Arrangements

The Company is a party to a number of material contracts. Failure by any party to a contract with the Company to comply with their obligations could have a material adverse effect on the financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price of the Company.

See Section 13.3 of this Prospectus for a summary of the Company's material contracts.

11.13. Reliance on Alliances

The Company may need to rely on alliances with third parties in order to establish a viable company operating within the mining industry. There is no guarantee that such alliances can be formed, or formed in a timely manner.

11.14. Regulatory and Litigation Risk

If a commercially viable uranium deposit is located and able to be mined (see section 11.1 of this Prospectus), much of the Company's then-operations will be governed by national and local environmental laws and regulations that set standards regulating certain aspects of health and environmental quality, provide for penalties and other liabilities for the violation of such standards and establish, in some circumstances, obligations to remediate current and former facilities and locations where operations are or were conducted. This may have a material adverse impact on the financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price of the Company. Liability could be imposed on the Company for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous owners of property acquired by the Company, native title claims, tenure disputes, legal action from special interest groups, and non-compliance with environmental laws or regulations.

11.15. Limited Operating History

Whilst the Company has engaged the services of highly qualified consultants, the Company does not have a record of any revenue-producing operations. Consequently, there is no operating history upon which to base an assumption that the Company will be able to successfully implement its business plans or achieve its business goals.

11.16. Energy Prices

If a commercially viable uranium deposit is located and able to be mined (see section 11.1 of this Prospectus), the Company's future revenues, operating results, profitability, future rate of growth and the carrying value of its assets will rely heavily on prevailing market prices for uranium or prices that can be contracted in any future agreements that the Company may enter into. As set out in section 11.1 of this Prospectus, the export of uranium is tightly controlled by the Federal Government and the persons to whom the Company could supply uranium is limited. A decline in the price of uranium or a decline in the price at which the Company supplies uranium may have a material adverse effect on financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price of the Company.

Factors beyond the control of the Company which may affect prices of uranium or prices at which the Company could supply uranium include:

• · supplies of uranium;
• economic conditions;
• · marketability of production;
• consumer demand:
• competition and cost base of competitors;
• the price, availability and acceptance of alternative fuels;
• weather conditions; and
• actions of national, state or country, local and foreign authorities.

11.17. Environmental Impact Constraints

If a commercially viable uranium deposit is located and able to be mined (see section 11.1 of this Prospectus), the Company's exploration and appraisal programs will, in general, be subject to approval by government authorities and development of any uranium resource will be dependent on the project meeting environmental guidelines and gaining approvals by government authorities. Inability to obtain these approvals or the terms and conditions on which these approvals are obtained may have a material adverse effect on the financial position, financial performance, cash flows, growth prospects, ability to pay dividends and Share price of the Company.

GENERAL INVESTMENT RISKS

11.18. Share Market Conditions

There are risks associated with any share investment. The price of the Shares will be influenced by international and domestic factors affecting market conditions in equity, financial and commodity markets.

These factors may affect the share price for all listed companies, and the price of the Shares may fall or rise, and the price of the Shares may trade below or above the issue price of \$0.20 per Share, and Applicants who decide to sell their Shares after listing may not receive the amount of their original investment.

The price at which the Shares can be sold may be affected by factors specific to the Company and by external factors over which the Directors and the Company have no control. Factors specific to the Company include actual or anticipated announcements in regards to the Company's operations, financial performance, financial position, growth prospects, contracts and agreements and exploration and production activity, announcement of new services by the Company or competitors, changes in financial estimates, valuations or opinions of securities analysts, conditions or trends in the mining industry, changes in the market valuations of competitors, announcements by the Company or its competitors of acquisitions, strategic relationships, joint ventures or capital commitments and additions and departures of key personnel. External factors include general economic conditions, changes in government, taxation or other regulatory or policy changes, investor perceptions and sentiment, movements in interest rates and local and international stock markets and changes in financial estimates by securities analysts.

11.19. General Political Economic Conditions

In addition, there is a risk that the price of the Shares and returns to Shareholders may be affected by changes in many general factors including local and world economic conditions and outlook, general movements in local and international stock markets, investor sentiment, interest rates, the rate of inflation, exchange rates, levels of tax, taxation law and accounting practice, government legislation or intervention, changes in government, inflation or inflationary expectations, natural disasters, social disorder or war in Australia or overseas, international hostilities and acts of terrorism, as well as many other factors which are beyond the control of the Company. These factors and, in particular, the market price for any uranium that the Company may produce and sell could have a material adverse effect on the financial position, financial performance, cash flows, ability to pay dividends and Share price of the Company.

×

OTHER RISKS

The above list of risk factors is not exhaustive of the risks faced by the Company and its Shareholders. The above risks, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus. Therefore, no assurances or guarantees of future profitability, distributions, payment of dividend, return of capital or performance of the Company or its securities can be, or is, provided by the Company.

$12.$ EFFECT ON CAPITAL STRUCTURE

The Offer contemplated by this Prospectus will have an effect on the capital structure of the Company. The effect is summarised below. The pro-forma capital structure of the Company summarised below assumes the Offer is fully subscribed and assumes that none of the current Options of the Company have been converted to Shares.

	Shares	Percentage	Options	Percentage
Shares and Options on issue as at the date	27,000,000	47.37%	12,500,000	$100\%$
of this Prospectus
Shares and Options now offered (excluding)	20,000,000	35.09%	Nil	$0\%$
oversubscriptions)
Sub-Total	47,000,000	82.46%	12,500,000	100%
Maximum additional Shares and Options if	10,000,000	17.54%	Nil	$0\%$
oversubscriptions accepted
Total	57,000,000	100%	$12,500,000$ 1	100%

Issued and Paid Up Capital

The issue of the Shares will affect the current financial position of the Company by, if this Prospectus is fully subscribed (but excluding oversubscriptions), increasing both the cash assets and issued share capital amount by approximately \$3,595,000.00, being the maximum amount to be raised less the estimated costs of the Offer (refer to section 13.7 of this Prospectus).

If fully oversubscribed, the amount of the cash assets and issued share capital will be increased by approximately \$5.475,000.00, being the maximum over subscription amount to be raised less the estimated costs of the Offer (refer to section 13.7 of this Prospectus).

In both of the above scenarios, cash assets will be further increased if, and to the extent that, funds are raised under this Prospectus from Tasman Priority Applications (as the handling fee of 5% is not payable to the broker with respect to such funds).

Note 1:- No Options are being offered under this Prospectus, however see section 3.12 of this Prospectus in relation to issues of Options which the Company has agreed to make on the successful allotment of Shares under this Prospectus and the listing of the Company on the ASX and issues of Options which are proposed after this Prospectus has closed.

X,

$13.$ ADDITIONAL INFORMATION

$13.1$ Constitution and Rights Attaching to Shares

Full details of the rights attaching to Shares are set out in the Company's Constitution, a copy of which can be inspected, free of charge, at the Company's registered office during normal business hours.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders

All Shares issued pursuant to this Prospectus will, from the time they are issued, rank pari passu with all the Company's existing Shares.

13.1.1 Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there are none), at meetings of the shareholders of the Company:

• $(a)$ each shareholder entitled to attend and vote may vote in person or by proxy, attorney or representative;
• $(b)$ on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote (save that where a shareholder has appointed more than one person as proxy, attorney or representative, none of the proxies, attorneys or representatives is entitled to vote, and where a shareholder is present in more than one capacity, that shareholder is entitled only to one vote); and
• $(c)$ on a poll, every person present who is a shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share (but in respect of partly paid shares, shall have such number of votes as bears the same proportion of the amount paid up (not credited) or agreed to be considered as paid up on the total issue price of that share at the time the poll is taken bears to the total issue price of the share).

13.1.2 Rights on Winding Up

Subject to the rights of holders of shares with special rights in a winding up (at present there are none) and the Constitution of the Company, on a winding up of the Company all assets that may be legally distributed among members will be distributed in proportion to the number of shares held by them, irrespective of the amount paid-up or credited as paid up on the shares.

13.1.3 Transfer of Shares

Subject to the constitution of the Company, the Corporations Act and any other laws and the Listing Rules, Shares are freely transferable.

13.1.4 Future Increases in Capital

The allotment and issue of any Shares is under the control of the Board. Subject to the requirements of the Listing Rules, the Constitution of the Company and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

13.1.5 Variation of Rights

Under the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of shareholders, vary or abrogate the rights attaching to shares. If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the sanction of a special resolution of the Company and with the consent in writing of the holders of three-quarters of the issued shares of that class or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

13.1.6 Dividend Rights

Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there are none), the profits of the Company that the Directors determine to distribute by way of dividend are divisible among the holders of ordinary Shares and is payable on each Share on the basis of the proportion which the amount paid is of the total amounts paid, agreed to be considered to be paid or payable on the Share. No amount paid on a Share in advance of calls is to be treated as paid on that Share.

13.2 Terms and Conditions of the Options

The Options currently on issue in the Company have been issued on the following terms and conditions:

• 1) The Options are exercisable at any time prior to 5.00pm WST 28 February 2011 (the Expiry Date). Options not exercised on or before the Expiry Date will automatically lapse.
• 2) The Options may be exercised wholly or in part by completing a notice of exercise of options in a form approved by the Company (Notice of Exercise) to be delivered to the Company's registered office and received by it any time prior to the Expiry Date. A summary of the terms and conditions of the Options including the Notice of Exercise will be sent to all holders of Options when the Options are issued.
• 3) The Options entitle the holder to subscribe (in respect of each Option held) for one fully paid ordinary Share at an exercise price per Option of 20 cents.
• 4) Upon the exercise of the Options and receipt of all relevant documents and payment, Shares will be issued ranking pari passu with the then issued Shares. If at the date of exercise of the Options the Shares of the Company are quoted on the ASX, the Company will apply to ASX to have the Shares so issued granted Official Quotation.
• 5) Any Notice of Exercise received by the Company on or prior to the Expiry Date will be deemed to be a Notice of Exercise as at the last Business Day of the month in which such notice is received.
• 6) There are no participating entitlements inherent in the Options to participate in new issues of capital, which may be offered to Shareholders during the currency of the Options. Prior to any

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new pro rata issue of securities to Shareholders, holders of Options will be notified by the Company and will be afforded 10 Business Days before the Record Date (as defined in the Listing Rules to determine entitlements to the issue), to exercise Options.

• 7) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the Expiry Date, the number of Options or the exercise price of the Options or both shall be reconstructed (as appropriate) in a manner which will not result in any benefits being conferred on holders of Options which are not being conferred on Shareholders and (subject to the provisions with respect to rounding of entitlements as sanctioned by the meeting of Shareholders approving the reconstruction of capital), in all respects, the terms for the exercise of Options shall remain unchanged. For these purposes, the rights of the Option Holder may be changed from time to time to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganization.
• 8) The Options may be transferred at any time prior to the Expiry Date.
• 9) Shares issued pursuant to the exercise of an Option will be issued not more than 14 days after the Notice of Exercise

$13.3$ Summary of Material Contracts

$13.3.1$ Management Services Contract

A Management Services Contract between the Company and Princebrook Pty Ltd (a company of which Gregory Solomon and Douglas Solomon are directors and shareholders) pursuant to which Princebrook Pty Ltd will provide office accommodation, accounting, company secretarial, secretarial and management services to the Company at a cost of \$12,500.00 per month (plus GST) ("the Fee") (subject to adjustment in accordance with changes in the consumer price index) plus a monthly administration fee of 5% of the Fee, to cover out of pocket expenses. This contract is for 5 years commencing on the first day of the month in which the Company is admitted to the Official List of the ASX, with a five year option, but is terminable, inter alia, by either party giving three months notice to the other party at any time.

13.3.2 Agreement with Tasman

Pursuant to an agreement made between the Company and Tasman dated 2 April 2007 ("the Tasman" Agreement):

• $\mathbf{1}$ . Tasman has, subject to paragraph 17 below, assigned to the Company a one hundred percent $(100\%)$ interest in:
• in the case of those tenements the subject of the WCP Agreement, any Neoproterozoic and $1.1$ vounger sediment hosted uranium, thorium or other radio-active mineralisation which may be discovered (where the in ground valuation of the uranium, thorium or other radio-active mineralisation in any JORC Compliant Resource is at least 50% of the value of any poly metallic deposit); and
• $1.2$ in the case of all of Tasman's other South Australian tenements, all uranium mineralisation which may be discovered (where the in-ground valuation of the uranium, thorium or other radioactive mineralisation in any JORC Compliant Resource is at least 50% of the value of any poly metallic deposit), however expressly excluding, in the case of EL3307 a 13km² area which is prospective for epithermal gold-base metal mineralisation,

("the Included Minerals") and the mineral rights in respect of the Included Minerals ("the Included Mineral Rights"), free of all Encumbrances.

• For the purposes of paragraph 1 above, Tasman holds the Included Minerals and the Included $2.$ Mineral Rights in all of the tenements specified in paragraph 1 ("the Tenements"), and all other rights of any kind whatsoever attaching thereto, upon trust for the Company absolutely and will deal with the Included Minerals and the Included Minerals Rights in the Tenements and all other rights of any kind whatsoever attaching thereto only as directed in writing by the Company from time to time.
• On the Company completing a Bankable Feasibility Study in respect of the Included Minerals on $\overline{3}$ . any part of the area the subject of the Tenements, the Company may require that Tasman transfer to the Company Tasman's registered interest in the Tenement(s) the subject of the Bankable Feasibility Study, unless and except if Tasman has already completed a Bankable Feasibility Study for Excluded Minerals (being all minerals other than the Included Minerals) over the same area.
• In the event that Tasman is required to transfer to the Company any of its registered interest in $4.$ any of the Tenement(s) pursuant to paragraph 3 above, the Company will thereafter hold the Excluded Minerals and the mineral rights in respect thereof ("the Excluded Mineral Rights") in the said Tenement(s) and all other rights of any kind whatsoever attaching thereto upon trust for Tasman absolutely and will deal with the Excluded Minerals and the Excluded Minerals Rights and all other rights of any kind whatsoever attaching thereto only as directed in writing by Tasman from time to time.
• $5.$ The Company is required to contribute:-
• $5.1$ 100% of any fees, rents, rates and other monies payable under the Mining Act 1978 (SA) ("the MA") by Tasman in respect of the tenements listed in paragraph 1.1 above at any time (however expressly excluding, for the avoidance of doubt, any such fees, rents, rates and other monies paid by WCP Resources under the WCP Agreement); and
• $5.2$ 50% of any fees, rents, rates and other monies payable under the MA by Tasman in respect of the Tenements listed in paragraph 1.2 above at any time.
• 1. The Company and Tasman shall each be entitled to spend such money on exploration, development and mining on the Tenements as it considers appropriate in its sole and absolute discretion, and neither party shall be required to spend any minimum amount in any period, including any such amount as may be required to keep the Tenements in good standing at any time. Neither party shall be liable to the other party for any loss suffered or incurred by that other party arising out of or in connection with the loss of the Tenements in the event that such amount as may be required to keep the Tenements in good standing at any time is not spent on the Tenements.
• $\overline{7}$ . The Company will liaise with and consult with Tasman and will keep it fully informed as to, and will obtain its prior consent (not to be unreasonably withheld) to, the nature, location, timing and conduct of any exploration for Included Minerals (including any drilling) on the Tenements.
• 1. The Company must manage and conduct all exploration undertaken by it on the Tenements with the skill, diligence and care normally exercised by qualified persons in the performance of comparable work and in accordance with accepted industry methods and practices and is to conduct all of its activities on the area the subject of the Tenements in accordance with good mining practices and comply with all Acts and Regulations which apply to the Tenements.

XX

• $\mathbf{Q}$ Tasman is responsible for:
• lodging or causing to be lodged all reports on the Tenements that fall due for lodgement 9.1 under, and doing or causing to be done all acts, matters or things required by, the MA:
• $9.2$ subject to paragraph 6 above, paying or causing to be paid all fees, rents, licences, rates and other monies levied or assessed upon the Tenements under the MA and any local government rates and fees; and
• 9.3 prosecuting or causing to be prosecuted any applications for Tenements through to grant,

and has agreed to indemnify and keep indemnified the Company against any loss suffered or incurred by the Company in respect of any breach thereof by Tasman.

• In the event that the Company becomes the registered holder of Tasman's registered interest in $10₁$ any Tenement(s) in the circumstances contemplated in paragraphs 3 and 4 above, the Company shall undertake the obligations under paragraph 9 above in lieu of Tasman in respect of the said Tenement(s) (and Tasman shall be released from all such obligations and the Company must indemnify Tasman against any loss suffered or incurred by Tasman arising out of or in connection with the loss of the Tenements (or any of them) to the extent to which the same is caused or contributed to by or which is a result of the failure of the Company to comply with its responsibilities).
• $11.$ If the Company proposes to dispose of all or any part of its interest in the Included Mineral Rights to a third party it must first comply with certain pre-emptive rights set out in the Tasman Agreement.
• $12.$ Tasman has provided certain usual representations and warranties to the Company in relation to the Tenements and has agreed to indemnify and keep indemnified the Company against any loss suffered or incurred by the Company in respect of any breach by Tasman thereof.
• $13.$ The Tenements (or any of them) may not be surrendered or relinquished, or not renewed, unless with the written consent of both parties (other than a compulsory partial surrender required by the Mining Act of which not less than twenty (20) Business Days written notice has been given by the then-registered holder of the Tenement to the other party).
• The Company may only make a decision to establish a commercial mining operation on the area $14.$ the subject of the Tenements based on a Bankable Feasibility Study undertaken in accordance with the Tasman Agreement and which recommends the establishment of a mining operation.
• 1. Tasman has agreed to indemnify the Company and its officers, directors, employees, agents or contractors against any loss suffered or incurred by them arising out of, or in connection with:
• 15.1 any act, default or omission (including negligence, breach of contract or breach of statute) in relation to the Tenements by Tasman, anyone acting on Tasman's behalf, or its officers, directors, employees, agents or contractors; or
• 15.2 the exercise by Tasman of its Excluded Mineral Rights.
• The Company has agreed to indemnify Tasman and its officers, directors, employees, agents or 16. contractors, against any loss suffered or incurred by them arising out of, or in connection with:
• 16.1 any act, default or omission (including negligence, breach of contract or breach of statute) in relation to the Tenements by the Company, anyone acting on the Company's behalf, or its officers, directors, employees, agents or contractors: or

16.2 the exercise by the Company of its Included Mineral Rights.

• $17.$ If the performance of any provision of the Tasman Agreement requires the consent of the Minister under the MA or compliance with any law, regulation or order of any governmental agency or any dealing with a Tenement under the agreement constitutes a transfer or other dealing for which the consent of the Minister, the director of mines or a person acting with the authority of the Minister or the director of mines, is required under the MA, such performance or transfer will be subject to and conditional upon such consent being first obtained and compliance with such law, regulation or order.
• 1. The Company and Tasman have agreed to co-operate and co-ordinate their activities on the Tenements in good faith so as not to conflict or interfere with the activities of the other party within the area the subject of the Tenements, and to give a notice to the other party setting out the nature and location of any activities which it proposes to undertake on the Tenements. The parties have also agreed on a procedure for establishing priority of mining of Included Minerals and Excluded Minerals over the same area, which is based on the estimate of the recoverable value of the respective mineral resource situated within the proposed area to be mined.
• 1. The parties have agreed that if Tasman, under the WCP Agreement, can only do an act, matter or thing if it first obtains WCP Resources' consent, the ability of Tasman to do that act, matter or thing shall be conditional upon Tasman procuring the said consent. For the avoidance of any doubt, if Tasman cannot obtain WCP Resources' consent when required, or is otherwise prohibited from doing, or not permitted to do, any act, matter or thing under the WCP Agreement, nothing in the Tasman Agreement shall require Tasman to do or cause to be done that act, matter or thing, and Tasman shall not be in breach of the Tasman Agreement (or have any liability to the Company) for failing to do or cause to be done that act, matter or thing. The Tasman Agreement shall be construed so that the Company is not conferred any right or entitlement which is inconsistent with any right or entitlement conferred on WCP Resources under or by virtue of the WCP Agreement. Nothing in the Tasman Agreement will render Tasman responsible for any act or omission of WCP Resources.

13.3.3 Deed of Covenant with WCP Resources Ltd

Pursuant to a deed made between the Company, Tasman and WCP Resources dated 2 April 2007:

• $\mathbf{1}$ . the Company has covenanted and agreed to duly observe, perform, fulfil and keep all of the terms, covenants, conditions, stipulations and agreements contained in Part D of the WCP Agreement which on the part of an Excluded Mineral Rights Holder under the WCP Agreement in respect of the uranium rights granted to the Company under the Tasman Agreement ought to be observed, performed, fulfilled and kept in as full and ample a manner as if the Company had been expressly named as an Excluded Mineral Rights Holder (and thus also a Rights Party) in the WCP Agreement;
• $2.$ Tasman and WCP Resources have covenanted and agreed that the Company will be entitled to all of the rights and entitlements conferred on an Excluded Mineral Rights Holder (and, in that capacity, as a Rights Holder) pursuant to Part D of the WCP Agreement in relation to the uranium rights granted to it under the Tasman Agreement in as full and ample a manner as if the Company had been expressly named as an Excluded Mineral Rights Holder (and thus also a Rights Party) under the WCP Agreement;
• 1. the Company and Tasman have agreed that, to the extent that any provision in the Tasman Agreement is inconsistent with, or requires an outcome which is inconsistent with, the

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requirements of Part D of the WCP Agreement, Part D of the WCP Agreement shall prevail to the extent of any such inconsistency.

Pursuant to Part D of the WCP Agreement, Tasman (as the holder of the Excluded Mineral Rights) and WCP Resources (as the holder of the Included Mineral Rights) have agreed to co-operate and coordinate their activities on the tenements the subject of the WCP Agreement in good faith so as not to conflict or interfere with the activities of any other party within the project area, and to give a notice to each other party setting out the nature and location of any activities which it proposes to undertake on the said tenements. Tasman and WCP Resources have also agreed on a procedure for establishing priority of mining of Included Minerals and Excluded Minerals over the same area, which is based on the estimate of the recoverable value of the respective mineral resource situated within the proposed area to be mined. In addition, each Excluded Mineral Rights Holder has agreed to indemnify each Included Mineral Rights Holder and, during the sole funding period, WCP and their respective officers, directors, employees, agents or contractors, against any loss suffered or incurred by them arising out of or in connection with:-

• $\mathbf{1}$ . any act, default or omission (including negligence, breach of contract or breach of statute) in relation to the said tenements by the Excluded Minerals Holder, anyone acting on the Excluded Mineral Holder's behalf, or their respective officers, directors, employees, agents or contractors; or
• $2₁$ the exercise by the Excluded Minerals Holder of its Excluded Mineral Rights.

A similar indemnity has been provided by the Included Mineral Rights Holder in favour of the Excluded Mineral Rights Holder.

13.3.4 Engagement of Taylor Collison Limited

A contract between the Company and Taylor Collison Limited (comprised by the acceptance by the Company on 26 March 2007 of all of the terms and conditions contained in a letter from Taylor Collison Ltd dated 23 March 2007) pursuant to which Taylor Collison Limited will act as sponsoring broker and broker to the Issue in exchange for:

• a management fee of $1\%$ of the total funds raised; (a)
• $(b)$ a handling fee of 5% of the total funds raised less all funds raised pursuant to Tasman Priority Applications (Taylor Collison is to run a book build and negotiate fees payable to other Australian Financial Services licensees who procure the subscription for any Shares under this Prospectus, which shall be payable out of this fee); and
• $(c)$ 1 million unlisted Options exercisable at any time up to and including 3 years after the date of the grant of the Options (subject to ASX escrow) at an exercise price of \$0.20 per Share,

("the Fees"). The Fees are payable within 7 days after the allotment of the Shares under this Prospectus. Pursuant to the contract, the Company is required to indemnify Taylor Collison Ltd, its officers, employees, agents and advisers and to keep the same indemnified against all liability and loss arising from, and all costs, charges and expenses incurred in connection with, the issue of this Prospectus or the proposed allotment or issue of the Shares by the Company, any statement in this Prospectus that is false or misleading, or any omission from this Prospectus, any conduct by a person in connection with the issue of this Prospectus or proposed allotment or issue of the Shares by the Company that is false or misleading or deceptive or likely to mislead or deceive or any conduct by a person that was engaged in the contravention of a provision of part 7.11 or part 7.12 of the Corporations Act or any other applicable law in connection with this Prospectus or the proposed allotment or issue of the Shares by the Company, except to the extent that such liability and loss was the result of Taylor Collison Ltd's negligence or wilful misconduct, breach of contract and/or fraud, which had or was likely to have a material adverse affect on the prospects of the Issue. Either party may terminate the contract by giving seven days written notice.

Interests of Directors 13.4

Other than as set out below or as set out elsewhere in this Prospectus, no Director has, or had within two years before lodgement of this Prospectus with the ASIC, any interest in:-

• the promotion or formation of the Company; $(a)$
• $(b)$ property acquired or proposed to be acquired by the Company in connection with its promotion or formation or the offer of Shares under this Prospectus; or
• the offer of Shares under this Prospectus. $(c)$

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any Director other than as set out below:

• to induce them to become, or to qualify them, as a Director; or $(a)$
• for services rendered by them in connection with the formation or promotion of the Company $(b)$ or the offer of Shares under this Prospectus.

Shareholding and Optionholding of Directors $13.4.1$

The Shares and Options in the Company held by the Directors as at the date of this Prospectus are as follows:-

Director	No. of Shares	No. of Options(1)
Gregory Solomon	Nil	Nil
Douglas Solomon	Nil	Nil
Guy Le Page	Nil	Nil

Note(1): As set out in section 3.12 of this Prospectus, the Company proposes, subject to receiving shareholder approval at an extraordinary general meeting to be convened after this Prospectus has closed, to issue 1,000,000 Options to each of its current Directors in consideration of services which they have, and will subsequently, provide to the Company.

The Directors hold a relevant interest in shares and options of Tasman Resources of which Fission, as at the date of this Prospectus, is a subsidiary. The Directors' relevant interests are as follows:

Director	Note	No. of Shares	No. of Options
Gregory Solomon		17,301,630	961,203
Douglas Solomon		17,300,281	961,128
Guy Le Page		912,126	50,674

• Note 1 All shares and options are either held by or on behalf of a superannuation fund, a family trust associated with Gregory Solomon or by him personally.
• Note 2 All shares and options are either held by or on behalf of a superannuation fund, a family trust associated with Douglas Solomon or by him personally.

Note 3 All shares and options are held by or on behalf of a company associated with Guy Le Page.

Nothing in this Prospectus will be taken to preclude any of the Directors, officers or employees of the Company or Tasman or any of their subsidiary companies from applying for Shares on the same terms as are offered pursuant to this Prospectus.

13.4.2 Directors Remuneration

Directors' fees not exceeding an aggregate of \$500,000 per annum have been approved by the Directors. Levels of these fees may be varied by the Company in general meeting according to the Company's constitution at any time. The Company is currently paying non-executive directors fees of \$36,000 plus superannuation per annum for each non-executive director.

The remuneration of any executive director will be determined by the Directors and may be paid by way of fixed salary or based on agreed hourly rates according to time spent, up to an agreed maximum amount. At the date of this Prospectus, the Directors have resolved to pay to Gregory Solomon an initial annual fee of \$180,000 plus superannuation for acting as executive chairman.

13.4.3 Directors' And Officers' Indemnity

In accordance with the Constitution and to the extent permitted by law, the Company must indemnify each Director and other officers of the Company out of the assets of the Company against any liability incurred by them in or arising out of the conduct of the business of the Company or in or arising out of the discharge of the duties of the officer, unless the liability was incurred by the officer through his or her own dishonesty, negligence, lack of good faith or breach of duty. The Directors are currently making arrangements to put in place directors and officers insurance.

13.4.4 Other Interests of Directors

Gregory Solomon and Douglas Solomon are partners in the legal firm Solomon Brothers that will receive legal fees of approximately \$50,000 (plus GST) for services performed in relation to the preparation of the solicitor's report on the Western Australian tenements and this Prospectus (including associated with the due diligence of this Prospectus).

Further, the Company uses the services of Princebrook Pty Ltd, a company of which Gregory Solomon and Douglas Solomon are shareholders and directors, to provide all office, accommodation, use of office equipment, accounting, secretarial and management services to the Company at a current cost of \$12,500.00 per month (plus GST) ("the Fee") plus a monthly administration fee of 5% of the Fee, to cover out of pocket expenses. The contract is for 5 years commencing on the first day of the month in which the Company is admitted to the Official List of the ASX, with a 5 year option, but is terminable, inter alia, by either party giving three months notice to the other party at any time.

Guy Le Page is a director of and beneficial shareholder in RM Capital Pty Ltd, an Australian Financial Services Licensee, which will receive normal professional fees for consultancy services provided to the Company and will also receive commission, through negotiation with Taylor Collison Ltd, in respect of any Shares which it arranges to be issued pursuant to this Prospectus.

13.5 Interests of Named Persons

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, promoter or stockbroker to the Company or Broker to the Issue has, or had within two years before lodgement of this Prospectus with the ASIC, any interest in:

• $(a)$ the formation or promotion of the Company;
• $(b)$ any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the offer of Shares under this Prospectus; or
• $(c)$ the offer of Shares under this Prospectus,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services rendered by him in connection with the formation or promotion of the Company or the offer of Shares under this Prospectus.

Solomon Brothers, Solicitors, a firm of which Gregory Solomon and Douglas Solomon are partners, will receive professional fees of approximately \$50,000 for legal work undertaken by them in connection with the Solicitor's Report on the Western Australian tenements and this Prospectus and for work performed in relation to the due diligence process. In addition, Solomon Brothers have received, and may in the future receive, legal fees for legal advice provided to the Company, Tasman and any of their related bodies corporate in the normal course of business.

David Tonkin & Associates will receive professional fees of approximately \$18,500.00 for the provision of the Independent Geological Consultant's Report on the South Australian tenements and in addition may receive consultancy fees for general consultancy services provided to the Company in the normal course of business.

Al Maynard & Associates will receive professional fees of approximately \$15,000.00 for the provision of the Independent Geological Consultant's Report on Western Australian Tenements and in addition may receive consultancy fees for general consultancy services provided to the Company in the normal course of business.

Minter Ellison, solicitors, will receive professional fees of approximately \$8,000.00 for legal work undertaken by them in connection with the Independent Solicitor's Report on South Australian Tenements

Bentleys MRI Perth, Accountants, will receive professional fees of approximately \$5,000.00 for accounting work undertaken by them in connection with the Investigating Accountant's Report. In addition, Bentleys MRI Perth, as the current auditors of the Company and Tasman, will in the future receive accountancy fees for audit services provided to the Company and Tasman and any of their related bodies corporate in the normal course of business.

Taylor Collison is acting as Broker to the Issue and will receive a management fee of 1% of all funds raised under this Prospectus and handling fees equal to 5% of the value of all funds raised under this Prospectus (less funds raised under Tasman Priority Applications and fees paid by it to holders of Australian Financial Services licenses who procure subscriptions for Shares under this Prospectus).

13.6 Consents

The following persons have consented to the inclusion of the following statements and reports identified in this Prospectus as being statements and reports made by that person, in the form and context in which they are included, and have not withdrawn that consent before lodgement of this Prospectus with the ASIC:

• David Tonkin & Associates Independent Geological Consultant's Report on South Australian $(1)$ Tenements
• Al Maynard & Associates Independent Geological Consultant's Report on Western $(2)$ Australian Tenements.
• Minter Ellison Independent Solicitor's Report on South Australian Tenements. $(3)$
• Solomon Brothers Solicitor's Report on Western Australian Tenements. $(4)$
• $(5)$ Bentleys MRI Perth - Investigating Accountants Report

To the maximum extent permitted by law, the persons referred to above expressly disclaim and take no responsibility for any part of this Prospectus other than the reports referred to above and the statements identified in this Prospectus as being made by that person. The following persons have consented to being named in the Prospectus but have not made any statements that are included in the Prospectus or statements identified in this Prospectus as being based on any statements made by those persons and take no responsibility for any part of the Prospectus other than their consent to be named in the Prospectus, and have not withdrawn their consent before the lodgement of this Prospectus with the ASIC:-

• $(1)$ Taylor Collison as Broker to the Issue;
• Solomon Brothers as Solicitors to the Company; and $(2)$
• Advanced Share Registry Services as Share Registry. $(3)$

$13.7$ Expenses of the Issue

It is estimated that up to approximately \$425,000.00 will be payable by the Company in respect of broking, legal, expert, printing and other costs arising from this Prospectus and the Issue if the Offer is fully subscribed (excluding oversubscriptions), as follows:

ASX quotation fee Legal and other expert fees and expenses Brokers' fees	\$ S S.	33,447.70 100,000.00 240,000.00	(maximum) (based on the maximum
Other expenses (printing, distribution, share \$ registry and miscellaneous expenses)		49,542.30	subscription of \$4,000,000) (1)
Total		425,000.00

Note (1): This assumes that no funds are raised under this Prospectus pursuant to the Tasman Priority Applications.

If the minimum subscription only is obtained it is estimated that the costs of the Offer will be reduced by at least \$60,000.00. If the Offer is fully oversubscribed it is estimated that the costs of the Offer will increase by approximately \$120,000.00.

13.8 Taxation

The acquisition and disposal of Shares in Fission will have tax consequences that will differ depending upon the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and generally. To the maximum extent permitted by law, Fission, its officers and each of their respective advisers accept no liability or responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

13.9 Exposure Period

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in the Prospectus and, in those circumstances, any Application that has been received may need to be dealt with in accordance with section 724 of the Corporations Act. Applications for Shares under this Prospectus will not be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge Applications prior to the expiry of the Exposure Period.

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13.10 Electronic Prospectus

Pursuant to Class Order 00/044 the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or an electronic application form, subject to compliance with certain conditions. If you have received this Prospectus as an Electronic Prospectus, you must ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please e-mail the Company at mailroom@fissionenergy.com.au and the Company will send you, free of charge, either a hard copy or a further electronic copy of the Prospectus or both. Alternatively, you may wish to obtain a copy of the Prospectus from the Company's website at www.fissionenergy.com.au. The Company reserves the right not to accept an Application Form from a person if it has reason to believe that, when that person was given access to the electronic copy of the Application Form, it was not provided together with the Electronic Prospectus and any relevant supplementary or replacement Prospectus or any of those documents were incomplete or altered. The electronic version of this Prospectus should only be viewed by persons receiving it within Australia. Applicants using the Application Form attached to the electronic version of this Prospectus must be located in Australia.

13.11 Litigation

The Company is not involved in any litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company.

13.12 Employee Share Option Plan

As an incentive to employees of the Company or its related bodies corporate, the Company has adopted a scheme called the Fission Energy Employee Option Scheme ("Scheme"). The purpose of the Scheme is to give employees and directors of the Company and its related bodies corporate an opportunity, in the form of Options, to subscribe for Shares in the Company. The Directors consider the Scheme will enable the Company and its related bodies corporate to retain and attract skilled and experienced employees and directors and provide them with the motivation to make the Company more successful.

As at the date of this Prospectus, the Directors have resolved, subject to the successful allotment of Shares under this Prospectus and the listing of the Company on the ASX, to issue 1,500,000 Options (in total) under the Scheme to three employees of Tasman, a related body corporate of the Company. Each of these Options will entitle the holder to subscribe for one Share in the Company, on the following terms and conditions:

• in the case of each employee, 200,000 Options will yest on the date of the grant of the Options. $(a)$ 150,000 Options will vest on the first anniversary of the date of the grant of the Options and 150,000 Options will vest on the second anniversary of the date of the grant of the Options, and the Options may only be exercised after they have vested; and
• $(b)$ the Options will be exercisable at any time after they have vested and prior to 31 March 2011 at a price of 20 cents per Option.

A summary of the terms and conditions of the Scheme is set out below:

Participants in the Scheme 13.12.1

The Board may offer free Options to persons ("Eligible Persons") who are:

• full-time or part-time employees; or
• directors or officers.

of the Company or of a related body corporate of the Company.

Upon receipt of such an offer, the Eligible Person may nominate another person acceptable to the Board to be issued with the Options under the Scheme.

In accordance with Listing Rule 10.14, Options under the Scheme can only be issued to directors, and/or associates of the directors, with the approval of the holders of ordinary securities.

13.12.2 Terms of Options

There is no issue price for the Options. The exercise price for the Options will be:

• 20 cents; or
• any greater price determined by the Board at the time the Options are granted.

Shares issued on exercise of Options will rank equally with other ordinary shares of the Company (subject to any restrictions imposed by the Board at the time of grant of the Options which must be satisfied before a Share acquired as a result of the exercise of the Option by the holder can be sold, transferred or otherwise dealt with by the holder).

Options may not be transferred or encumbered or otherwise disposed of without the approval of the Board. Ouotation of Options on ASX will not be sought. However, the Company will apply to ASX for official quotation of the Shares issued on the exercise of the Options.

13.12.3 Restrictions on Issue and Exercise of Options

The Board may not offer Options under the Scheme if the total number of shares which would be issued were each Option accepted, together with the number of shares of the same class or Options to acquire such shares issued pursuant to all employees or executive share schemes during the previous five years, exceeds 5% of the total number of issued shares in that class as at the date of the offer.

Options may only be issued or exercised within the limitations imposed by the Corporations Act and the ASX Listing Rules.

Options may be issued which impose conditions that will result in the Options lapsing if those conditions are satisfied and may also be issued with restrictions on the disposal of shares acquired by an option holder as a result of the exercise of the Options.

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13.12.4 Exercise of Options

Options may be exercised during the period determined by the Board at the date of grant of the Options.

If an Eligible Person leaves the employment of the Company or of a related body corporate of the Company:-

• (i) due to their resignation: or
• (ii) because of retirement at or after 60 years of age, permanent disablement, retrenchment, death.

the Options may be exercised (in the case of paragraph (i) above, except those Options which have not vested) within 30 days (or three months in the case of death), unless the Board determines otherwise. If not exercised in that time, the Options lapse.

If an Eligible Person leaves the employment of the Company or of a related body corporate of the Company due to their resignation all Options which have not vested at the date of resignation will lapse.

If any Eligible Person acts fraudulently or dishonestly then, at the Board's discretion, Options issued to that person will lapse.

Unexercised Options will automatically lapse upon expiration of the exercise period.

$13125$ Participation in Future Issues

The holders of Options will only participate in new issues, including bonus issues, if they have exercised the Options at that time and provided such exercise is permitted by the terms of the Option.

If the Company makes a bonus issue of securities to ordinary shareholders, each unexercised Option will, on exercise, entitle its holder to receive additional shares.

If the Company makes a pro rata rights issue of ordinary shares for cash to its ordinary shareholders, then there is provision for adjustment of the exercise price of unexercised options to reflect the diluting effect of the issue.

13.12.6 Capital Reconstruction

In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.

13.12.7 Right of Company to cash out the options

The Board may determine within 7 days of the exercise of an Option not to allot or issue shares under the Option but to refund the tendered exercise price for the Option and either to pay to the option holder an amount equal to the difference between the market price of the shares as at the date of exercise and the exercise price of the Option, or issue that number of shares having a market value at the date of exercise of the Option equal to the difference
between the market price of the shares as at the date of exercise and the exercise price for the Option.

$14.$ GLOSSARY NAMES AND TERMS

Applicant means a person who submits an Application;

Application means a valid application to subscribe for Shares:

Application Form means the application form attached to and forming part of this Prospectus;

Application Moneys means the sum of twenty cents (\$0.20) per Share payable on submission of an Application pursuant to this Prospectus;

ASIC means Australian Securities and Investments Commission:

ASTC means ASX Settlement and Transfer Corporation Pty Ltd (A.C.N 008 504 532):

ASX means ASX Limited (A.C.N 008 624 691):

Board means the board of Directors unless the context indicates otherwise;

Broker to the Issue means Taylor Collison Limited;

Business Day means a day (other than a Saturday or Sunday) on which banks are open for business in Perth, Western Australia;

CHESS means ASX Clearing House Electronic Subregistry System

Closing Date means the date on which the Offer closes;

Company means Fission Pty Ltd A.C.N. 119 057 457;

Corporations Act and Act means the Corporations Act (2001) (Cth) of Australia;

Directors means the directors of the Company from time to time;

Dollars or \$ means Australian dollars unless otherwise stated;

Fission or Fission Energy means Fission Energy Ltd A.C.N. 119 057 457;

Exposure Period means the period of 7 days after the date of lodgement of this Prospectus, which period may be extended by the ASIC by not more that seven days pursuant to section 727(3) of the Corporations Act:

Glossary means this glossary;

Issue means the issue of Shares pursuant to this Prospectus;

Listing Rules means the Listing Rules of the ASX;

Offer means the offer of Shares pursuant to this Prospectus;

Offer Period means the period commencing on the Opening Date and ending on the Closing Date;

Official List means the Official List of the ASX;

Page 134 | Fission Energy Ltd Prospectus 2007

Opening Date means the date on which the Offer opens:

Option means an option to acquire a Share in the Company:

PIRSA means Primary Industries and Resources South Australia:

Prospectus means this Prospectus dated 11 April 2007 for the issue of up to 20 million Shares (excluding oversubscriptions), and includes any electronic or online version of this Prospectus;

Ouotation means quotation of the Shares on the ASX;

Securities means shares and/or options:

Share means one fully paid ordinary share in Fission Energy Ltd;

Shareholder means the holder of Shares:

Tasman Agreement means the agreement between Tasman Resources and the Company dated 2 April 2007, a summary of the terms and conditions of which is contained in section 13.3.2 of this Prospectus;

Tasman Priority Application means a valid application to subscribe for Shares under this Prospectus made by a Tasman Shareholder on a Tasman Priority Application Form;

Tasman Priority Application Form means the personalised application form to be sent to each person who is a Tasman Shareholder accompanied by this Prospectus;

Tasman Resources and Tasman means Tasman Resources NL A.C.N 009 253 187;

Tasman Shareholders means the persons recorded as shareholders of Tasman in Tasman's register of shareholders at midnight on the third business Day after the date of this Prospectus;

WCP and WCP Resources means WCP Resources Ltd (A.C.N. 002 664 495).

WCP Agreement means the farm-in and joint venture agreement between Tasman and WCP dated 12 February 2007 pursuant to which WCP has the right to earn up to a 65% interest in ELs 2989, 3109, 3140, 3175, 3174, 3177, 3209, 3261, 3449 and 3634 in respect of:

• subject to paragraph (b), those minerals which occur within the pre-Neoproterozoic basement which $(a)$ underlies and/or is older than the Neoproterozic sequences that belong to the Adelaidean rift system. For the avoidance of doubt, this includes minerals that occur within the fluvial sedimentary sequence that comprises the Mesoproterozoic Pandurra Formation:
• does not include all Neoproterozoic and younger sediment hosted mineralisation, which phrase (b) includes but is not limited to gold and/or base metal mineralisation commonly described as Mississippi Valley Type Mineralisation, Sedex Type Mineralisation, or Sandstone Hosted mineralisation, roll-front uranium mineralisation and diamonds.

×

WST means Western Standard Time, Perth, Western Australia.

$15.$ GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS

acid volcanics	Silica (quartz) rich volcanic rocks
aircore (AC) drilling	A drilling process that recovers unconsolidated and semi consolidated rock as small core and fragmented rock samples
alluvial	Transported and deposited by water.
alluvium	Unconsolidated sand, silt, clay or similar material deposited comparatively recently by running water
anomalies anomalous	Unusual geological, geophysical or geochemical responses that may indicate areas of interest or targets for mineral deposits Outlining a zone of potential exploration interest but not necessarily of commercial significance.
Anomaly	Value higher or lower than the expected or norm.
anticline	Upward arching fold of rock strata (antonym $=$ syncline)
aquifer	Body of rock containing groundwater that could be moving
Archaean	The oldest rocks of the Precambrian Era, prior to 2500 million years.
assay	Chemical analysis of geological material
auger drilling	A drilling process using a spiral auger to drill and sample generally unconsolidated sediments to shallow depths
axial plane	A plane which joins the hinge lines of successive beds in a fold
axis	Hinge-line of a fold
background	Normal levels or responses expected in a geoscientific survey
basal	Lowermost, usually oldest sedimentary unit or part of unit
basalt	A fine-grained volcanic rock composed primarily of plagioclase feldspar and mafic minerals
basement	The igneous and metamorphic crust of the earth underlying surface sediments
bedding	A rock surface parallel to the surface of deposition
bedrock	Solid, fresh rock beneath surficial soil , clay etc
breccia	Rock containing broken fragments of other rocks, cemented by finer material
calcareous	Containing appreciable amounts of calcium carbonate
calcrete	A near surface accumulation containing and often cemented by calcium carbonate
carbonaceous	Rock containing the remains of organic material or elemental carbon
carnotite	A yellow to greenish yellow uranium-bearing mineral
catchment area	Area which a particular watercourse derives its runoff from
channel	A current, abandoned or buried watercourse, now composed of stream deposits of sand, gravel, clay etc
cleavage	The tendency of a rock and minerals to split along closely spaced, parallel planes
co-magmatic	Formed from the same igneous (magmatic) event
conductivity	Electrical conductivity of a rock unit, determined by its composition
conductors	Geological units that show a relatively high conductivity compared with surrounding rocks

conglomerate	Sedimentary rock composed largely of other rock fragments greater than 2mm in diameter
Corunna Conglomerate	Formal name for a particular Mesoproterozoic age sedimentary rock unit (conglomerate)
cps	Counts per second
craton	A major structural unit of the earth's crust
crystalline	Composed of crystals
dip	The angle at which a rock layer, fault of any other planar structure is inclined from the horizontal
domain	The areal extent of given lithology or environment.
electromagnetic (EM) survey	Geophysical survey which measures the conductivity of rocks
enzyme leach	A specialised analytical technique for soil samples
epithermal	Formed by heated, usually saline waters derived from hot spring activity and volcanic activity
facies	Different types of sedimentary rocks that were formed at approximately the same time and in the same general depositional area
farm-in	Joint venture where a company earns an interest in a tenement by conducting exploration
fault	A fracture in rocks on which there has been movement on one of the sides relative to the other, parallel to the fracture
felsic	Descriptive of light coloured rock containing an abundance of the minerals quartz and feldspar
fluvial	Formed from flowing water
fold	A bend in the rock strata or planar structure
galena	A grey/blue mineral consisting of lead and sulphur
Gawler Craton	Geological region in South Australia containing rocks of between about 2,800 and 1,000 million years old
Gawler Range Volcanics	Formal name for extensive body of Mesoproterozoic aged volcanic rocks occurring in South Australia
geochemical survey	Techniques that measure the natural chemical composition of rocks
geophysical survey	Techniques that use natural physical properties of rocks, such as density, conductivity, radioactivity and magnetism
geophysics	Study of the earth by quantitative physical methods
gneiss	Layered metamorphic rock with compositional banding of light and dark minerals often of granitic composition
grab sample	A geological sample usually taken somewhat randomly of an outcrop, rockpile or other geological material
granite/granitic	A coarse-grained igneous rock composed of quartz, mica and feldspar
granitoid	A general term used to describe intrusive rocks of granite-like composition
gravity	Measurement of variations in the earth's gravity due to variable densities of nearby rocks
greenstones	General term for belts of rocks consisting largely of altered or metamorphosed basic igneous rocks such as basalt
GSWA	Geological Survey of Western Australia
gypsiferous	Containing appreciable amounts of the mineral gypsum, a hydrated calcium sulphate

haematite	A red, grey or brown mineral containing iron and oxygen
hematitic	Containing significant amounts of the mineral haematite
HoistEM	Helicopter-based electromagnetic survey
igneous	Rock which was originally formed in a molten or liquid state
incised	Cut into, by a stream
in-situ leaching	Commercial process for the recovery of valuable materials (eg uranium) by circulating fluids within rocks underground and recovering the materials chemically from the fluids at surface
interbeds	Different layers of sedimentary rock
intercept	A particular zone intersected in a drill hole
IOCG, IOCGU deposits	Iron oxide copper gold (uranium) deposits such as Olympic Dam
IP survey	Electrical geophysical survey (Induced Polarisation) designed to detect disseminated minerals such as sulphides
joint venture	A partnership between two or more companies which have interests in exploring a particular mineral tenement
lacustrine	Pertaining to lake waters
lag	Residual accumulation of dense or hard fragments remaining on the surface after the finer material has been removed by wind or water
laterite	Highly weathered soil or other material, usually rich in iron oxides
lignite	Poorly consolidated, low rank coal
mafic	A loosely used group-name for silicate minerals that are rich in iron and magnesium, and for rocks in which these minerals are abundant
magnetics	Measurement of variations in the earth's magnetic field due to variations in the composition of nearby rocks
malachite	A bright green copper carbonate mineral
Mesoproterozoic	Geological period from about 1,600 to 1,000 million years ago
Mesozoic	Geological period from about 250 to 66.5 million years ago
metamorphic	Rock which has been altered in composition or texture by the effects of heat and/or pressure
metamorphism	The mineralogical, structural and chemical changes induced within solid rocks through the actions of heat, pressure or the introduction of new chemicals. Rocks so altered are prefixed "meta" as in "metabasalt"
mineralisation	Naturally occurring accumulation of minerals that may have some commercial value under particular circumstances
Neoproterozoic	Geological period from about 1,000 to 540 million years ago
ore	A mixture of minerals, host rock and waste material which is expected to be mineable at a profit
orebody	A continuous, well - defined mass of ore
orogen	A linear or arcuate region that has been subject to folding and other deformation
outcrop	The surface expression of a rock layer (verb: to crop out)
outcropping	Exposed at the surface
oxidised	Rocks that have undergone prolonged exposure to (often atmospheric) oxygen
palaeochannel	An ancient channel
palaeodrainages	Routes of ancient drainage channels

Palaeoproterozoic	Geological period from about 2,500 to 1,600 million years ago
palaeovalley	An ancient valley
partial leach	A specialised analytical technique for soil samples
permeable	A rock or material able to transmit water relatively easily
Permian	Geological period from about 290 to 250 million years ago
pitch	The angle between the axis of the oreshoot and the strike of the vein
pitchblende	A massive brown to black variety of uraninite
playa lake	Shallow, intermittent lake in an arid or semiarid region
Precambrian	Geological period from greater than about 4,000 to 540 million years ago
primary	Original
probing	Testing a rock or other material by passing an instrument into it, usually via a drill hole
pyritic	Containing the mineral pyrite or iron sulphide, FeS2
quartz	Common naturally occurring mineral with a chemical formula SiO2
quartzite	Rock composed almost entirely of quartz grains
Quaternary	Geological period younger than about 1.6 million years
RAB drilling	Rotary air blast drilling; percussion drilling utilizing basic sample retrieval between the drill rods and the walls of the drill hole
radiogenic	Containing radioactive minerals
radiometric	A geophysical survey technique relying on natural radioactivity to detect uranium, thorium etc
radon emanometer survey	Geophysical survey that measures the concentration of radon, a gaseous product from natural radioactive decay
RC percussion drilling	Reverse Circulation percussion (drilling)
reconnaissance	Early stage (exploration) involving mainly ground-based field inspection, sampling etc
redbeds	A particular class of red and/or brown oxidized (haemetite-bearing) sedimentary rocks
redox fronts	The boundary between relatively oxidized and reduced rocks
reduced	Rocks that have formed under conditions lacking an abundant source of oxygen and may be prospective for uranium mineralisation
refraction seismic	Geophysical technique that uses refracted sound waves
remote sensing imagery	Mapping of characteristics of the earth's surface by use of data from satellites
Reserve	In-situ mineral occurrence which has had mining parameters applied to it, from which valuable or useful minerals may be recovered.
Resource	In-situ mineral occurrence from which valuable or useful minerals may be recovered, but from which only a broad knowledge of the geological character of the deposit is based on relatively few samples or measurements.
roll front uranium	A type of uranium deposit formed at the boundary between reducing and oxidizing environments (redox) in moving groundwater
saprolite	Weathered rock in which the original rock textures are still recognisable
scanning electron microscope	Microscope capable of very high magnification and chemical analysis

schist	A strongly layered, crystalline, metamorphic rock
scintillometer	Instrument for detecting radioactivity
sediment, sedimentary rock	Rocks formed by the deposition of solids from water
shear (zone)	A zone in which shearing has occurred on a large scale so that the rock is crushed and brecciated
silicified	Containing a high proportion of silicon dioxide
soil sampling	Systematic collection of soil samples at a series of different locations in order to study the distribution of soil geochemical values
source rocks	Rocks considered to be the original source for metals that may have been subsequently transported and deposited to form a mineral deposit
strike	The direction or bearing of the outcrop of an inclined bed or structure on a level surface
Stuart Shelf	Geological region in South Australia, consisting predominantly of flat to gently dipping Precambrian sedimentary rocks
subcrop	The surface expression of a mostly concealed rock layer
sub-volcanic	Refers to geological processes or features beneath the surficial features of a volcano
syncline	A fold where the rock strata dip inwards towards the axis (antonym: anticline)
TEMPEST	Airborne geophysical survey that indirectly measures the conductivity of rocks by passing a current through the rocks and measuring the decay (drop) in induced current with time
terrane	A formation or group of formations defining a particular geological period
Tertiary	A relatively young geological period from about 66.5 to 1.6 million years ago
thermal imagery	Images or pictures which display small variations in temperature of material at the earth's surface
thorite	A brown, black or orange/yellow thorium-bearing mineral
torbernite	A green mineral containing about 48% uranium
track etch	Uranium exploration technique involving detection of uranium by measuring decay trails (tracks) at surface localities
tributaries	Small streams that join to form larger ones
$U_3O_8$ equivalent	Uranium concentration determined indirectly by measuring the radioactivity of a sample, or often an interval in a drill hole
unconformity	Lack of parallelism between rock strata in sequential contact, caused by a time break in sedimentation
unconformity-style uranium deposit	A particular style of widely recognized uranium deposits formed close to important geological unconformities (eg Ranger and Jabiluka in NT, Australia
uraniferous	Uranium bearing
uraninite	A black, brown or steely grey mineral containing uranium and oxygen
vein	A narrow intrusive mineral body
Weathering	A process of chemical change to rocks brought about by their exposure to oxygen and water.
Yilgarn Craton	Geological region in Western Australia containing rocks of at least 2,500 years old

ABBREVIATIONS
g	gram
kg	kilogram
km	kilometre
$km^2$	square kilometre
m	metre
mm	millimetre
Мt	million tonnes
	tonne

16. CONSENT BY DIRECTORS

Each of the Directors of Fission Energy Ltd has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act.

Dated the 11^th day of April 2007

Gregan Tron

Signed for and on behalf of Fission Energy Ltd By Gregory Howard Solomon (Chairman)

Application Form

FISSION ENERGY LTD A C N 110 BS7 457

	Broker/Dealer Stamp																		Only				Share Registrar Use
HIN																Adviser Code					Broker Code
	(office use)
	Before completing this Application Form, you should read the Prospectus dated 11 April 2007 and the instructions overleaf. No applications will be accepted later than 5.00pm (WST) 1 June 2007
													PLEASE READ ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM
	I/we apply for												Shares in Fission Energy Ltd at 20 cents per Share
	or such lesser number of Shares which may be allocated to me/us by the Directors. I/We lodge full application monies
	S						0.		$\overline{0}$				(Cheques to be payable to "Fission Energy Ltd Share Account")
	Full name (Title, given name(s) & surname or company name)
lC.
	Joint applicant #2
	Joint applicant #3
	Postal address Street number				Street name
D.
	Suburb/town								State			Post code
	Contact name												Home telephone number				Work telephone number
	ACN/ARBN (for companies only)										E-mail address
G	Tax file number or exemption								Applicant #2								Applicant #3
	Payment Details
	Please enter details of the cheque $(s)$ that accompany this application Cheque details
ŀГ		Drawer						Bank					Branch							Amount of cheque
		Drawer						Bank					Branch							Amount of cheque

• $\mathbf{1}$ . I/We declare that by lodging this Application Form, I/we represent and acknowledge that I/we have received, read and understood the Prospectus to which this Application Form relates. I/We hereby authorise the Company to complete and execute any document necessary to effect the allotment and issue of any Shares to me/us.
• $2.$ By lodging this Application Form, I/we declare that this application is completed and lodged according to the Prospectus and that all statements made by me/us are complete and accurate.
• $3.$ I/We also declare that this Application Form is completed according to this declaration and agree to be bound by the terms and conditions set out in the Prospectus and the Constitution of Fission Energy Ltd.
• I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Shares in $\overline{4}$ . Fission and that no notice of acceptance of the application will be provided.

NO SIGNATURE IS REQUIRED

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 11 APRIL 2007.

TREATMENT OF APPLICATION

The return of an Application Form with your cheque for the application money will constitute your offer to purchase or subscribe for Shares. If your Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be treated as valid.

The decision of the Company as to whether to treat your application as valid and how to construe, amend or complete it shall be final. The decision on the number of Shares to be allocated to you shall also be final. You will not, however, be treated as having offered to purchase more Shares than is indicated on the Application Form.

Applicants whose application are not accepted, or are Accepted in respect of a lower number of Shares than the number applied for, will receive a refund of all or part of their application money without interest, as applicable.

CORRECT FORMS OF REGISTRABLE NAMES

Т

Only legal entities may be registered as holders of the Shares. Applications must be in the full name(s) of natural persons, companies or other legal entities. Shares cannot be registered in the name of a trust and no trus registrable name may be included by way of account description if completed exactly as described in the examples of correct forms of registrable names below.

TYPE OF INVESTOR	CORRECT FORM	EXAMPLES OF INCORRECT FORM
Individuals
Give full name - not initials	JOHN FRED WILLIAMS	J. F. Williams
Persons under the age of 18
Do not use the name of the minor, use	MICHAEL JOHN WILSON &	Andrew Wilson
$name(s)$ of parent(s)/guardian(s)	SARAH JANE WILSON
Companies
Use company title, not abbreviations	JOHN WILLIAMS PTY LTD	J. Williams Co. John Williams P/L
Trusts
Do not use the name of the trust, use	JOHN FRED WILLIAMS	John Williams Family Trust
$name(s)$ of trustee(s)
Deceased Estates
Do not use the name of deceased, use	JANE MARY MCDONALD	Estate of the Late John Smith
personal names of executor(s)
Partnerships
Do not use the name of partnership, use	SARAH JANE WILSON &	Sarah Wilson & Son
personal names of partners	MICHAEL JOHN WILSON
Clubs/Unincorporated Bodies Do not use name of clubs etc, use personal	JOHN FRED WILLIAMS	ABC Tennis Association
names of office bearer(s)
Superannuation Fund
Do not use name of fund use name(s) of	SARAH WILSON PTY LTD	Sarah Wilson Pty Ltd
trustee(s)	$\leq$ SUPER FUND A/C>	Superannitation Fund
How to complete the Application Form
Please complete all relevant sections of the Application Form in BLOCK LETTERS. These instructions are cross-referenced to each
section of the Form.
Insert the Number of Shares you wish to apply for in Section A. The application must be for a minimum of 10,000 Shares and thereafter must be in multiples

Á	Insert the Number of Shares you wish to apply for in Section A. The application must be for a minimum of 10,000 Shares and thereafter must be in multiples of 1,000 Shares.
В	Insert your application money be multiplying the number of Shares by 20 cents per share in Section B.
€	Enter the Full Name(s) and Title(s) of all legal entities that are to be recorded as the registered holder(s) of the Shares. You should refer to the back of the Application Form for the correct forms of name which can be registered. Applications using the wrong form of name may be rejected. Up to three joint Applicants may register. An account designation may be entered on the last line of this section. It should be contained within $\sim$ brackets
	with $A/C$ at the end eg $\leq$ SUPER FUND $A/C$ .
$\mathbf{D}$	Enter your Postal Address for all correspondence. All communications to you from Fission Energy Ltd will be mailed to the person(s) and address as shown. For joint applications, only one address can be entered.
E	Please insert your Telephone Number(s) and contact name in ease there are irregularities with your application.
F	If the applicant is a company, insert A.C.N. or A.R.B.N.
G	Enter the tax file number(s) of the applicants. With a joint holding, only the tax file number of two holders are required.
Н	Make your cheque(s) or bank draft(s) payable to " Fission Energy Ltd Share Account " in Australian currency. Your cheque(s) or bank draft(s) must be ٠ drawn on an Australian bank. Attach your cheque(s) or bank draft(s) to the Application Form where indicated. ٠ Complete the details of your cheque(s) or bank draft(s) in this section,
	LODGEMENT OF APPLICATIONS
	Insert your Application Form and cheque(s) and mail or deliver your complete application to:
	Fission Energy Ltd Share Registry
	c/- Advanced Share Registry c/- Advanced Share Registry OR. PO Box 1156
	110 Stirling Highway Nedlands WA 6009 Nedlands WA 6909
	Applications must be received at the above address by 5.00pm WST on 1 June 2007 (subject to the right of the Company to close the Offer early).