CULLEN RESOURCES LIMITED — Interim / Quarterly Report 2003

Mar 6, 2003

ACN 006 045 790

HALF-YEAR FINANCIAL REPORT

AT

31 DECEMBER 2002

Directors' Report

The directors present the financial report of the economic entity at 31 December 2002 including the consolidated statement of financial position as at 31 December 2002 and the statement of financial performance and statement of cashflows for the half-year then ended and report as follows:

Directors

The directors of the company in office during the half year and until the date of this report are:

Dr Denis Clarke BSc, BA, PhD, FAIMM (Non-Executive Chairman)

Denis Clarke has more than 30 years experience in exploration and mining operations. Over 15 years with Plutonic Resources ("Plutonic"), he contributed significantly at the General Manager level to it's success as it developed from a small explorer in 1983 to one of Australia's largest gold miners prior to its take-over in 1998 in a transaction which valued Plutonic at \$1 billion. Dr. Clarke at various times managed the exploration, finance, administration and corporate divisions. He brings to the Board broad technical, financial, administrative and corporate experience and a wide range of industry contacts. Currently Dr. Clarke is Non-Executive Chairman or Non-Executive Director of three other listed companies.

Grahame Hamilton BSc, MSc, MAIG (Executive Director)

Grahame Hamilton, a graduate of the University of NSW, has extensive experience over 28 years in exploration, corporate and project management. He has wide ranging expertise in project evaluation. Between 1994 and 1996 he managed the Brocks Creek exploration, environmental impact statement, feasibility study, mine development and construction for Solomon Pacific Resources NL. Before Solomon, Grahame worked with Getty Oil Development Co-minerals division as Queensland Manager.

John Horsburgh BSc MSc, FAIMM (Executive Director)

John Horsburgh, a graduate of the Royal School of Mines, has over 30 years industry experience including 11 years with Solomon Pacific Resources NL. Prior to this he gained extensive experience in Australia and overseas with Getty Oil Development Co., Billiton and RTZ Group.

Wayne John Kernaghan (Executive Director)

Wayne Kernaghan is a member of the Institute of Chartered Accountants in Australia with a number of years experience in various areas of the mining industry. He is also a member of the Australian Institute of Company Directors.

Principal Activities

The principal activities for the economic entity during the course of the half year were gold exploration and general investment. There was no significant change in the nature of the economic entity during the half year.

Results for the half-Year

The loss of the economic entity for the half-year was \$227,153 [2001: \$319,748].

Review of Operations

Exploration in the half-year has focused on the economic entity's three main projects, being:

• The Ashburton Gold project in W.A. $\bullet$
• The Gunbarrel Gold Project in W.A. (comprising the White Well and Eureka group of ٠ tenements).
• The Killaloe project in WA. $\bullet$

State of Affairs

In the opinion of the directors there were no significant changes in the state of affairs of the economic entity that occurred during the half-year under review.

Dated at Sydney this 6^th day of March 2003.

Signed in accordance with a resolution of the directors

J Horsburgh Director

W J Kernaghan Director

Statement of Financial Position at 31 December 2002

	Consolidated 31 December 2002 \$	Consolidated Consolidated 30 June 2002 \$	31 December 2001 \$
Current Assets
Cash Assets	1,458,707	2,705,319	564,384
Total Current Assets	1,458,707	2,705,319	564,384
Non Current Assets
Other Financial Assets (note 6)	107,000	107,000	19,000
Property & Equipment	20,130	24,108	28,228
Other - Exploration	3,479,109	2,517,200	3,460,169
Total Non Current Assets	3,606,239	2,648,308	3,507,397
Total Assets	5,064,946	5,353,627	4,071,781
Current Liabilities
Payables	11,385	84,025	162,785
Provisions	24,502	13,390	12,569
Total Current Liabilities	35,887	97,415	175,354
Total Liabilities	35,887	97,415	175,354
Net Assets	5,029,059	5,256,212	3,896,427
Equity
Contributed Equity	16,957,639	16,957,639	16,059,539
Accumulated Losses	(11, 928, 580)	(11, 701, 427)	(12, 163, 112)
Total Equity	5,029,059	5,256,212	3,896,427

Statement of Financial Performance for the half-year ended 31 December 2002

	31 December 2002 S	Consolidated Consolidated 31 December 2001 S
Revenues from ordinary activities (note 3)	51,759	21,639
Rent	(27,082)	(29, 878)
Salaries and Consultants	(111, 163)	(165, 598)
Compliance	(49, 416)	(47,161)
Exploration expenditure written off		(31,280)
Other expenses from ordinary activities	(91,251)	(67, 470)
Loss from ordinary activities before income tax expense	(227, 153)	(319,748)
Income tax relating to ordinary activities
Net loss from ordinary activities after income tax expense	(227, 153)	(319,748)
Total changes in equity other than those resulting from transactions with owners as owners	(227, 153)	(319,748)
Basic earnings/(loss) per share (cents per share)	(0.1)	(0.1)
Diluted earnings/(loss) per share (cents per share)	(0.1)	(0.1)

Statement of Cash Flows for the half-year ended 31 December 2002

	Consolidated 31 December 2002 \$ Inflows/ (Outflows)	Consolidated 31 December 2001 \$ Inflows/ (Outflows)
Cash flows from operating activities
Cash payments in the course of operations Interest received	(336, 462) 51,759	(232, 673) 17,018
Net cash flows from operating activities	(284,703)	(215, 655)
Cash flows from investing activities Payments for exploration Payment for property, plant & equipment	(961, 909)	(388, 299) (9,573)
Net investing cash flows	(961,909)	(397, 872)
Net decrease in cash held	(1,246,612)	(613, 527)
Cash at beginning of the financial period	2,705,319	1,177,911
Cash at end of the financial period	1,458,707	564,384

Notes to the Financial Report For the half-year ended 31 December 2002

Basis of Preparation of Half-year Financial Statements Note 1

This general purpose consolidated financial report has been prepared for the half-year ended 31 December 2002 and is the consolidated financial report of the company, Cullen Resources Limited, and entities controlled at the end of, or during the half-year. These financial statements have been made out in accordance with applicable Australian accounting standards including AASB 1029: "Interim Financial Reporting", other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) and the Corporations Act 2001. It is recommended that this Report should be read in conjunction with the 30 June 2002 Annual Report of Cullen Resources Limited and any public announcements made by Cullen Resources Limited and its controlled entities during the half-year in accordance with the continuous disclosure obligations of the Corporations Act 2001 and Australian Stock Exchange Listing Rules.

The accounting policies adopted are consistent with those of the previous financial year and corresponding half-year. The half year financial report has been prepared in accordance with the historical cost convention.

The notes to the financial statements do not include all information normally contained within notes to an annual financial report.

Other Assets-Exploration Note 2

The ultimate recoupment of capitalised expenditure relating to areas of interest in the exploration/evaluation phase is dependent upon the successful development and commercial exploitation or, alternatively, sale of the respective areas of interest and the consolidated entity's ability to continue to meet the financial obligations to maintain the areas of interest. Successful development and commercial exploitation is dependant upon the consolidated entity's ability to raise further equity funds and/or enter into joint venture arrangements.

Notes to the Financial Report
For the half-year ended 31 December 2002

Loss Before Income Tax Note 3

Loss before income tax has been determined after:

	31 December 2002 S	31 December 2001 S
(a) Crediting as revenue Interest from other persons	51,759	17,018
(b) Charging as expense: Exploration expenditure written off
Note 4 Contributed Equity
Issued capital
268, 752, 376 (2001: 272, 352, 376)	16,957,639	16,059,539
Movement in issued shares for the half year
Opening number of shares on issue Issued at 2 cents for the acquisition of	268,752,376	241,102,376
tenements		1,250,000
Closing number of shares on issue	268,752,376	242,352,376

Note 5 Segment Information

Geographical segments	Australia		Russia		Consolidated
	2002 S	2001 \$	2002 S	2001 \$	2002 \$	2001 S
Revenue outside the economic entity	51.759	21.639			51.759	21.639
Segment results	-53)	(319.748)			الحيا	319 748)

The consolidated entity operated during the period in one geographical segment, Australia, having ceased operations in Russia in the previous financial year. The consolidated entity operated in one business segment being minerals exploration.

Note 6 Other Financial Assets

Non current	31 December 2002	31 December 2001
Shares quoted on stock exchanges	B7 AAC	.00P

The market value of the listed shares at 31 December 2002 was \$935,666 (2001: \$19,000).

Note 7 Subsequent Events

Since the end of the period the economic equity has sold shares quoted on stock exchanges with a carrying value of \$48,000 for \$523,938. Their sales have realised a profit of \$475,938.

Directors' Declaration

The directors declare that:

• $(a)$ the financial statements and associated notes comply with Accounting Standard AASB 1029 "Interim Financial Reporting" and the Corporations Regulations 2001;
• the financial statements and notes give a true and fair view of the financial $(b)$ position as at 31 December 2002 and performance of the consolidated entity for the half-year then ended; and
• in the directors' opinion, there are reasonable grounds to believe that the $(c)$ consolidated entity will be able to pay its debts as and when they become due and payable.

Made in accordance with a resolution of the directors.

J Horsburgh Director

W J Kernaghan Director

Sydney 6 March 2003

EII FRNST & YOU INC.

The Ernst & Young Building 321 Kent Street Sydney NSW 2000 Australia

■ Tel 61 2 9248 5555 Fax 61 2 9262 6565 DX Sydney Stock Exchange 10172

GPO Box 2646 Sydney NSW 2001

INDEPENDENT REVIEW REPORT

To the members of Cullen Resources Limited

Scope

We have reviewed the financial report of Cullen Resources Limited for the half-vear ended 31 December 2002, set out on pages 4 to 10, including the Directors' Declaration. The financial report includes the consolidated financial statements of the consolidated entity comprising Cullen Resources Limited and the entities it controlled at the end of the half-year or from time to time during the half-year. The company's directors are responsible for the financial report. We have conducted an independent review of the financial report in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with Accounting Standard AASB 1029 "Interim Financial Reporting" and other mandatory professional reporting requirements in Australia and statutory requirements and in order for the company to lodge the financial report with the Australian Securities and Investments Commission.

Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. Our review was limited primarily to inquiries of the disclosing entity's personnel and analytical review procedures applied to financial data. 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. We have not performed an audit and, accordingly, we do not express an audit opinion.

Review Statement

As a result of our review, we have not become aware of any matter that makes us believe that the half-year financial report of Cullen Resources Limited is not in accordance with:

• the Corporations Act 2001, including: $(a)$
• (i) giving a true and fair view of the consolidated entity's financial position as at 31 December 2002 and its performance for the half-year ended on that date; and
• (ii) complying with Accounting Standard AASB 1029 "Interim Financial Reporting", and the Corporations Regulations 2001;
• $(b)$ other mandatory professional reporting requirements in Australia.

Exast & Young

Ernst & Young

Peter A Markey Partner

Sydney 6 March 2003