CULLEN RESOURCES LIMITED — Interim / Quarterly Report 2009

Mar 15, 2009

CULLEN RESOURCES LIMITED

ABN 46 006 045 790

INTERIM FINANCIAL REPORT

AT

31 DECEMBER 2008

Directors' Report

Your directors submit their report for the half-year ended 31 December 2008.

Directors

The names of the company's directors in office during the half-year and until the date of this report are as below. Directors were in office for the entire period.

Dr Denis Clarke, BSc, BA, PhD, FAIMM (Independent 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 its 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 of Beaconsfield Gold NL, and Non-Executive Director of Troy Resources NL and Anglo Australian Resources NL.

Dr Chris Ringrose, BSc, Phd, MBA, MAIMM, MAICD (Managing Director)

Chris Ringrose has been an exploration geologist based mainly in Western Australia since he completed his geology degrees in Scotland in 1982. His career has included experience with EZ, Chevron and Aztec, and prior to joining Cullen, Chris was Exploration Manager with Troy Resources NL for nine years. Chris has also completed an MBA at Deakin University and brings to the Company significant management, exploration and project evaluation experience gained both in Australia and overseas.

Grahame Hamilton, BSc, MSc, MAIG (Non -Executive Director)

Grahame Hamilton, a graduate of the University of NSW, has extensive experience over 30 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 (Non-Executive Director)

John Horsburgh, a graduate of the Royal School of Mines, has over 32 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. He is Executive Chairman of AIM-listed public company Mariana Resources Limited.

Wayne John Kernaghan, BBus, ACA, FAICD, ACIS (Non-Executive Director and Company Secretary)

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 Fellow of the Australian Institute of Company Directors. Mr Kernaghan is also a Director of Gulf Resources Limited.

Directors' Report (continued)

Principal Activities

The principal activity for the consolidated entity during the course of the half-year was mineral exploration. 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 consolidated entity for the half-year was \$1,953,148 [2007: Loss of \$667,359].

Review of Operations

During the half-year under review, the consolidated entity continued its mineral exploration activities including: project generation, database reviews, field sampling and drilling programmes, and farm-out of projects. The consolidated entity's activities, including Joint Venture managed projects, were focused in Western Australia with additional projects in New South Wales, Northern Territory, South Australia and Queensland as follows:

• Ashburton Province, WA (Red Hill JV, Hardey Junction JV, Mt Stuart JV, $\bullet$ Wyloo JV, Paraburdoo JV and Tunnel Creek JV - gold, uranium and /or iron ore projects)
• North Eastern Goldfields, WA (Gunbarrel and Irwin Bore, gold and nickel JV projects)
• Eastern Goldfields, WA (Killaloe and Woodcutters, gold and nickel projects)
• Forrestania, WA (gold and nickel JV project)
• Central Lachlan Fold Belt, NSW (Minter tungsten project)
• $\bullet$ Mt Isa Region, Queensland (Duchess copper-gold project)

In addition the consolidated entity continued exploration and evaluation of tenements and applications in its portfolio of properties for uranium in Western Australia and the Northern Territory.

The consolidated entity will continue to identify and evaluate both advanced and greenfield projects throughout Australia, and in selected overseas locations. The consolidated entity's portfolio is under continual evaluation to focus on projects likely to result in an economic mineral deposit.

Cullen Resources Limited ABN 46 006 045 790

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Auditor's Independence Declaration

We have obtained an independence declaration from our auditors, Ernst & Young, which follows the Directors Report.

Signed in accordance with a resolution of the directors.

Lingvil

C. Ringrose Director

Perth 16 March 2009

Ernst & Young Building 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 www.ey.com/au

Auditor's independence declaration to the Directors of Cullen Resources Limited

In relation to our review of the financial report of Cullen Resources Limited for the half-year ended 31 December 2008, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young

Ernst & Young

Palmer JC Partner Perth 16 March 2009

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Consolidated Balance Sheet at 31 December 2008

	31 December 2008 \$	30 June 2008 \$
Current Assets Cash and cash equivalents Trade and other receivables	5,832,235 6,127	7,426,212 49,728
Total Current Assets	5,838,362	7,475,940
Non Current Assets Other financial assets Plant & equipment Exploration and evaluation (note 4)	20,000 41,467 4,774,934	100,000 56,988 5,214,517
Total Non Current Assets	4,836,401	5,371,505
Total Assets	10,674,763	12,847,445
Current Liabilities Trade and other payables Provisions	107,823 60,939	419,498 65,830
Total Current Liabilities	168,762	485,328
Non Current Liabilities Provisions Total Non Current Liabilities	21,224 21,224	18,097 18,097
Total Liabilities	189,986	503,425
Net Assets	10,484,777	12,344,020
Equity Contributed equity (note 5) Reserves Accumulated losses	31,524,656 626,800 (21,666,679)	31,524,656 532,895 (19, 713, 531)
Total Equity	10,484,777	12,344,020

Consolidated Income Statement
for the half-year ended 31 December 2008

	31 December 2008 \$	31 December 2007 \$
Revenue and other income (note 3) Rent expense Salaries and consultant expense Share based payments expense Compliance costs Exploration and evaluation expense Depreciation expense Administration expense Other expenses	269,761 (20, 210) (194, 657) (93, 905) (79, 500) (1,792,858) (15, 521) (6, 538) (19, 721)	17,554 (28, 153) (132, 931) (188, 772) (145, 198) (66, 048) (14, 178) (48, 581) (61, 052)
Loss before income tax expense	(1,953,148)	(667, 359)
Income tax expense
Net loss attributed to parent	(1,953,148)	(667, 359)
Basic loss per share (cents per share)	(0.4)	(0.1)
Diluted loss per share (cents per share)	(0.4)	(0.1)

Consolidated Cash Flow Statement for the half-year ended 31 December 2008

	31 December 2008 \$	31 December 2007 \$
Cash flows from operating activities
Payments to suppliers and employees Interest received and other expenses Net cash flows used in operating activities	(587, 226) 266,524 (320, 702)	(532, 048) 17,554 (514, 494)
Cash flows from investing activities Payments for exploration activities Payment for plant and equipment Refund of security deposits Net cash flows used in investing activities	(1, 353, 275) 80,000 (1, 273, 275)	(543, 232) (2,400) (545, 632)
Cash flows from financing activities
Proceeds from issue of shares Share issue expenses Net cash flows from financing activities		7,575,000 7,575,000
Net (decrease)/increase in cash and cash equivalents	(1, 593, 977)	6,514,874
Cash and cash equivalents at beginning of the financial period	7,426,212	1,802,054
Cash and cash equivalents at end of the financial period	5,832,235	8,316,928

Consolidated Statement of Changes in Equity
for the half-year ended 31 December 2008

	Contributed Equity	Reserves \$	Accumulated Losses \$	Total Equity S
At 1 July 2007	23,949,656	161,652	(17, 398, 780)	6,712,528
Loss for the period			(667, 359)	(667, 359)
Total income / (expense) for the Period			(667, 359)	(667, 359)
Issue of share capital	7,575,000			7,575,000
Share issue costs
Share based payments		188,772		188,772
At 31 December 2007	31,524,656	350,424	(18,066,139)	13,808,941
At 1 July 2008	31,524,656	532,895	(19, 713, 531)	12,344,020
Loss for the period			(1,953,148)	(1,953,148)
Total income / (expense) for the Period			(1,953,148)	(1,953,148)
Share based payments		93,905		93,905
At 31 December 2008	31,524,656	626,800	(21,666,679)	10,484,777

Notes to the Half-Year Financial Statements For the half-year ended 31 December 2008

Note 1 Corporate Information

The condensed financial report of Cullen Resources Limited (the Company) for the half-year ended 31 December 2008 was authorised for issue in accordance with a resolution of the directors on 16 March 2009. Cullen Resources Limited is a company incorporated in Australia and limited by shares, which are publicly traded on the Australian Stock Exchange.

Note₂ Summary of Significant Accounting Policies

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half-year financial report should be read in conjunction with the annual Financial Report of Cullen Resources Limited as at 30 June 2008.

It is also recommended that the half-year financial report be considered together with any public announcements made by Cullen Resources Limited and its controlled entities during the half-year ended 31 December 2008 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

$(a)$ Basis of preparation

The half year financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, and AASB 134 "Interim Financial Reporting". The half-year financial report has been prepared on a historical cost basis.

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

$(b)$ Significant accounting policies

The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 30 June 2008.

Basis of consolidation $(c)$

The half-year consolidated financial statements comprise the financial statements of Cullen Resources Limited and its subsidiaries as at 31 December 2008 ("the consolidated entity").

$(d)$ Change in Accounting Policy

Since 1 July 2008 Cullen Resources Limited and its subsidiaries have adopted Standards and Interpretations mandatory for annual periods beginning on 1 July 2008. Adoption of these Standards and Interpretations did not have any material effect on the financial position or performance of the consolidated entity.

Note₃ Revenue and other income

Loss before income tax has been determined after:

	31 December 2008	31 December 2007
Revenue and other income
Interest revenue	266,524	17,554
Other income	3,237
	269,761

Exploration and Evaluation Note 4

	31 December 2008	31 December 2007
1 July	5,214,517	4,984,382
Additions	1,353,275	543,232
Written off during the period	(1,792,858)	(66, 048)
31 December	4,774,934	5,461,566

The recoverability of the carrying amount of defined exploration and evaluation expenditure is dependent on successful development and commercial exploration or alternatively by the sale of the respective areas of interest.

The recoverable value estimation is based on fair value less costs to sell as determined by management taking into consideration future prospectivity of the exploration tenements the deferred exploration costs are attached to.

Notes to the Half-Year Financial Statements For the half-year ended 31 December 2008 (cont'd)

Note 5 Contributed Equity

Contributed Equity	31 December 2008	31 December 2007
Ordinary shares (issued and fully paid)* 554,839,763 (31 December 2007: 554,839,763) 31,524,656		31,524,656

Movement in issued shares for the half-year

	31 December 2008		31 December 2007
	Number of Shares	\$	Number of Shares	\$
Beginning of the financial period:	554,839,763	31,524,656	474,039,763	23,949,656
Issued at 4.0 cents each			8,000,000	320,000
Issued at 5.0 cents each	-		500,000	25,000
Issued at 10.0 cents each			72,300,000	7,230,000
Share issue expenses
End of the financial period:	554,839,763	31,524,656	554,839,763	31,524,656

* Fully paid ordinary shares carry one vote per share and carry the right to dividends.

No share options have been issued in the period.

Note 6 Segment Information

The consolidated entity operated during the period in one geographical segment, being Australia. The consolidated entity operated in one business segment being exploration and evaluation of mineral resources.

Note 7 Contingent Liabilities

There are no known contingent liabilities. There have been no changes in contingent liabilities or contingent assets since the last annual reporting date.

Note 8 Events subsequent to Balance Date

There are no known events subsequent to balance date that would have a material effect on these financial statements.

Note 9 Commitments

The consolidated entity has committed to expend approximately \$925,000 (30 June 2008: \$1,630,000) in the current six months in respect to the Mt Stuart Joint Venture Cullen Resources Limited ABN 46 006 045 790

CULLEN RESOURCES LIMITED

Directors' Declaration

In accordance with a resolution of the directors of Cullen Resources Limited, I state that:

In the opinion of the directors:

• the financial statements and associated notes of the consolidated entity are in $(a)$ accordance with Corporations Act 2001 including;
• give a true and fair view of the financial position as at 31 December 2008 $(i)$ and the performance for the half-year ended on that date of the consolidated entity; and
• comply with Accounting Standard AASB 134 "Interim Financial Reporting" $(ii)$ and the Corporations Regulations 2001; and

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there are reasonable grounds to believe that the company will be able to pay its $(b)$ debts as and when they become due and payable.

On behalf of the Board

ingrok

C Ringrose Director

Perth 16 March 2009

Ernst & Young Building 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 www.ey.com/au

To the members of Cullen Resources Limited

Report on the condensed half-year financial report

We have reviewed the accompanying half-year financial report of Cullen Resources Limited, which comprises the balance sheet as at 31 December 2008, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date, other selected explanatory notes and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors' responsibility for the half-year financial report

The directors of the company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2008 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Cullen Resources Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enguiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor's Independence Declaration, a copy of which is included in the Directors' Report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Cullen Resources Limited is not in accordance with the Corporations Act 2001, including:

• giving a true and fair view of the consolidated entity's financial position as at 31 December 2008 and $i)$ of its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations ii) Regulations 2001.

Ernst & Young

Ernst & Young

J C Palmer Partner Perth 16 March 2009