CULLEN RESOURCES LIMITED — Interim / Quarterly Report 2013

Mar 13, 2013

CULLEN RESOURCES LIMITED

ABN 46 006 045 790

FINANCIAL REPORT

FOR THE HALF YEAR ENDED

31 DECEMBER 2012

Directors' Report

Your directors submit their report for the half-year ended 31 December 2012 for Cullen Resources Limited ('the company or Cullen").

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) Dr Chris Ringrose, BSc, PhD, MBA, MAIMM, MAICD (Managing Director) Grahame Hamilton, BSc, MSc, MAIG (Non -Executive Director) John Horsburgh, BSc MSc, FAIMM (Non-Executive Director) Wayne John Kernaghan, BBus, ACA, FAICD, ACIS (Non-Executive Director & Company Secretary)

Principal Activities

The principal activity for the economic 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 economic entity for the half-year was \$1,042,317 after income tax [2011: Loss of $$1,130,075$ ].

Review of Operations

Cullen is a minerals exploration company seeking deposits of gold, nickel, coal, copper, uranium and iron ore either in its own right, or managed by other partners in Joint Ventures.

During the half-year under review, the Company continued its mineral exploration activities including: proiect generation, database reviews, field mapping and geochemical surveying, and drilling. Company exploration activities, including Joint Venture managed projects, were focused in Western Australia with additional activities in New South Wales and Queensland as follows:

• Ashburton Province, WA (Hardey Junction JV, Mt Stuart JV, Wyloo JV, Paraburdoo JV and $\bullet$ Kunderong /Saltwater Pool JVs - gold, uranium and /or iron ore projects)
• North Eastern Goldfields, WA (Mt Eureka gold and nickel project) $\bullet$
• Eastern Goldfields, WA (Killaloe JV gold and nickel project) $\bullet$
• Murchison Province, WA (North Tuckabianna gold and copper project)
• Forrestania, WA (Forrestania JV gold and nickel project) $\bullet$
• Central Lachlan Fold Belt, NSW (Minter tungsten project) $\bullet$
• Eromanga, Millungera and Galilee Basins, NW Queensland coal and copper gold projects. $\bullet$

Also during the half year the Company continued first pass exploration and project generation activities in Namibia, Sweden and Finland. Also overseas, Cullen completed a first pass drilling test of an EM anomaly at the "TL Property" project in south-east British Columbia in a search for base metals and following on from a first pass trenching programme Cullen had conducted which discovered high-grade zinc mineralisation at surface.

Directors' Report (continued)

Cullen will continue to identify and evaluate both advanced and "grass roots" projects throughout Australia and in selected overseas locations. Cullen's portfolio is under continual evaluation to focus on projects likely to result in discovery of an economic mineral deposit.

Events Subsequent to Reporting Date

There are no known events subsequent to reporting date that would have a material effect on these financial statements other than the company on $1$ March 2013 entering into an agreement with a stockbroker for the raising of \$2.2m (before expenses) via a placement to sophisticated and professional investors.

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.

Kingon

C. Ringrose Director

Perth 14 March 2013

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 2012, 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

P McIver Partner Perth 14 March 2013

Consolidated Statement of Financial Position
for the half-year ended 31 December 2012

	Note	Consolidated 31 December 2012 \$	Consolidated 30 June 2012 \$
Current Assets
Cash and cash equivalents	9	1,409,627	2,459,240
Trade and other receivables		29,591	144,015
Total Current Assets		1,439,218	2,603,255
Non Current Assets
Other financial assets	4	32,400	32,400
Plant and equipment		5,610	5,974
Exploration and evaluation	5	4,256,158	3,751,958
Total Non Current Assets		4,294,168	3,790,332
Total Assets		5,733,386	6,393,587
Current Liabilities
Trade and other payables		713,616	814,465
Provisions		118,772	143,597
Total Current Liabilities		832,388	958,062
Non Current Liabilities Provisions		24,016
			22,226
Total Non Current Liabilities		24,016	22,226
Total Liabilities		856,404	980,288
Net Assets		4,876,982	5,413,299
Equity Equity attributable to equity holders of the Parent
Issued capital	6	37,111,266	36,605,266
Share based payment reserve		1,280,125	1,280,125
Accumulated losses		(33,514,409)	(32, 472, 092)
Total Equity		4,876,982	5,413,299

$\bar{z}$

Consolidated Statement of Comprehensive Income for the half-year ended 31 December 2012

	Note	Consolidated 31 December 2012 \$	Consolidated 31 December 2011 \$
Revenue Other income Rent Salaries and consultants' fees Compliance expenses Impairment of exploration expenditure5 Depreciation Impairment of available for sale investments Other expenses	3 3	35,120 140,557 (21, 714) (134, 452) (146, 400) (744, 280) (2,984) (168, 164)	20,517 98,000 (19, 531) (189, 324) (92, 055) (813, 433) (2,938) (6, 845) (124, 466)
Loss before income tax benefit/(expense) Income tax benefit/(expense)		(1,042,317)	(1, 130, 075)
Net loss Other comprehensive income		(1,042,317)	(1, 130, 075)
Items that maybe re-classified subsequently to profit and loss Net change in fair value of available for			10,000
sale assets (net of income tax) Total comprehensive income for the period		(1,042,317)	(1, 120, 075)
Basic loss per share attributable to ordinary equity holders of the parent (cents per share)		(0.15)	(0.18)
Diluted loss per share attributable to ordinary equity holders of the parent (cents per share)		(0.15)	(0.18)

Consolidated Statement of Cash Flows for the half-year ended 31 December 2012

	Note	Consolidated 31 December 2012 \$	Consolidated 31 December 2011 \$
Cash flows from operating activities
Cash payments in the course of operations Interest received		(339, 313) 35,120	(190, 447) 20,517
Net cash flows used in operating activities		(304, 193)	(169, 930)
Cash flows from investing activities Payments for exploration & evaluation Payment for plant and equipment Proceeds from sale of financial assets Net cash flows used in investing activities		(1,248,800) (2,620) (1, 251, 420)	(1,073,851) 280,000 (793,851)
Cashflow from financing activities Proceeds from issue of shares Share issue costs Net cash flows from financing activities		506,000 506,000
Net increase/(decrease) in cash and cash equivalents		(1,049,613)	(963, 781)
Cash and cash equivalents at beginning of the financial period		2,459,240	2,632,257
Cash and cash equivalents at end of the financial period	9	1,409,627	1,668,476

Consolidated Statement of Changes in Equity for the half-year ended 31 December 2012

	Contributed Equity	Available for sale reserve	Share Based Payment reserve	Accumulated Losses	Total Equity
	\$	\$	\$	\$	\$
At 1 July 2011	34,610,266	(20.000)	1,280,125	(29, 822, 246)	6,048,145
Loss for the period				(1, 130, 075)	(1, 130, 075)
Other comprehensive income		10,000			10,000
Total comprehensive Income for the period		10,000		(1,130,075)	(1, 120, 075)
At 31 December 2011	34,610,266	(10,000)	1,280,125	(30,952,321)	4,928,070

At 1 July 2012	36,605,266	1,280,125	(32, 472, 092)	5,413,299
Loss for the period Other comprehensive Income (net of tax)			(1,042,317)	(1,042,317)
Total comprehensive Income for the period			(1,042,317)	(1,042,317)
Issue of share capital Share issue costs (net of tax)	506,000			506,000
At 31 December 2012	37,111,266	1,280,125	(33, 514, 409)	4,876,982

Notes to the Half-Year Financial Statements for the half-vear ended 31 December 2012

Note 1 Corporate Information

The financial report of Cullen Resources Limited and its subsidiaries ("the consolidated entity") for the half-year ended 31 December 2012 was authorised for issue in accordance with a resolution of the directors on 14 March 2013. Cullen Resources Limited is a company incorporated in Australia and limited by shares, which are publicly traded on the Australian Stock Exchange,

Note 2 Basis of Preparation & Accounting Policies

Basis of preparation $(a)$

This general purpose condensed financial report for the half year ended 31 December 2012 has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001. The half-year financial report has been prepared on an historical cost basis.

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

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.

It is recommended that the half-year financial report should be read in conjunction with the annual Financial Report of Cullen Resources Limited as at 30 June 2012 and considered together with any public announcements made by Cullen Resources Limited and its controlled entities during the half-year ended 31 December 2012 in accordance with the continuous disclosure obligations of the ASX listing rules.

$(b)$ New and Amending Accounting Standards and Interpretations

The Group has adopted AASB 2011-9 Amendments to Australian Accounting Standards -Presentation of Other Comprehensive Income effective 1 July 2012 which did not have a significant impact on the financial statements or performance of the Group.

The Group did not adopt any other new and/or revised Standards, Amendments and Interpretations from 1 July 2012 which had an effect on the financial position or performance of the Group.

$(c)$ 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 2012.

Notes to the Half-Year Financial Statements for the half-year ended 31 December 2012

Note 3 Revenue & Other Income

Loss before income tax has been determined after:

	31 December 2012 S	31 December 2011 S
Revenue and other income
Interest revenue	35,120	20,517
Profit on sale of financial assets		98,000
Research and development grant	140,557
	175,677	118,517

Other Financial Assets Note 4

	31 December 2012	30 June 2012 5
Security deposits	32,400	32,400
	32,400	32,400

Notes to the Half-Year Financial Statements for the half-year ended 31 December 2012 (cont'd)

Note 5 Exploration & Evaluation

	31 December 2012 S	30 June 2012 S	31 December 2011 \$
Costs carried forward in respect of areas of
interest in the exploration and evaluation phase
Opening balance	3,751,958	3,402,920	3,142,502
Expenditure incurred	1,248,480	1,545,591	1,073,851
Impairment during the period	(744,280)	(1, 196, 553)	(813, 433)
Closing balance	4,256,158	3,751,958	3,402,920

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

Impairment $(a)$

The directors have reviewed all exploration projects for indicators of impairment in light of approved budgets. Where substantive expenditure is neither budgeted or planned the area of interest has been written down to its fair value less costs to sell. In determining fair value less costs to sell the directors had regard to the best evidence of what a willing participant would pay in an arm's length transaction. Where no such evidence was available, areas of interest were written down to nil pending the outcome of any future farm out arrangement. The Company will continue to look to attract farm-in partners and/or recommence exploration should circumstances change.

Note 6 Contributed Equity

Contributed Equity	31 December 2012	30 June 2012
		S
718,389,431 Ordinary shares
(issued and fully paid) $*$
$(30$ June 2012 : 693,089,431)	37,111,266	36,605,266

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

Movement in issued shares for the half year:

	31 December 2012		30 June 2012
	Number of Shares	\$	Number of Shares	\$
Beginning of the financial period: Movement: Issued at 4.5 cents each	693,089,431	36,605,266	623,089,431 70,000,000	34,610,266 2,100,000
Issued at 2.0 cents each	25,300,000	506,000
Less share issue expenses (net of tax)				(105,000)
End of the financial period:	718,389,431	37,111,266	693,089,431	36,605,266

During the period no options were issued, exercised or lapsed.

Notes to the Half-Year Financial Statements for the half-year ended 31 December 2012 (cont'd)

Note 7 Available for Sale Reserve

This relates to the movement in the fair valuation of financial assets	31 December 2012 \$	30 June 2012 \$	31 December 2011 \$
Beginning of the financial period Net change in fair value of financial assets		(10,000)	(20,000)
during the period		10,000	10,000
Release of unrealised loss reserve due to impairment
End of the financial period			(10.000)

Note 8 Share Based Payments

There were no share based payments for the period ended 31 December 2011 and 31 December 2012. There was no share based payments during either the current half year or during the year ended 30 June 2012.

Note 9 Cash & Cash Equivalents

For the purpose of the half-year cash flow statement, cash and cash equivalents are comprised of the following:

	31 December 2012 \$	30 June 2012 s	31 December 2011 \$
Cash at Bank and in Hand Short Term Deposits	1,409,627	2,459,240	637,814 1,030,662
	1,409,627	2,459,240	1,668,476

Note 10 Operating Segments

For management purposes, the Company is organised into one main operating segment, which involves the exploration of minerals in Australia. All of the Company's activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Maker) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Consolidated entity as a whole.

Notes to the Half-Year Financial Statements for the half-year ended 31 December 2012 (cont'd)

Note 11 Dividends Paid or Provided for on Ordinary Shares

No amounts have been paid, declared or recommended by Cullen Resources Limited by way of dividend since the commencement of the half-year, and up to the date of this report.

Note 12 Contingent Liabilities

There are no contingent liabilities at 31 December 2012. (30 June 2012: Nil)

Events Subsequent to Reporting Date Note 13

There are no known events subsequent to reporting date that would have a material effect on these financial statements other than the company on 1 March 2013 entering into an agreement with a stockbroker for the raising of \$2.2m (before expenses) via a placement to sophisticated and professional investors.

Note 14 Commitments

The Consolidated entity has the following minimum expenditure commitments to keep its tenements and ownership interests in good standing over the next year:

• \$520,000 for the Mt Stuart Joint Venture; and
• \$507,000 for other tenements.

The aggregate lease expenditure contracted for at reporting date but not provide for is \$45,084 which is for the lease of the premises for the period 1 January 2013 to 31 January 2014.

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 accordance $(a)$ with Corporations Act 2001 including;
• give a true and fair view of the financial position as at 31 December 2012 and the $(i)$ performance for the half year ended on that date of the consolidated entity; and
• comply with Accounting Standard AASB 134 "Interim Financial Reporting" and the $(ii)$ Corporations Regulations 2001; and
• there are reasonable grounds to believe that the company will be able to pay its debts as $(b)$ and when they become due and payable.

On behalf of the Board

Chingson

C Ringrose Director

Perth 14 March 2013

Independent Auditor's Review Report

To the members of Cullen Resources Limited,

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Cullen Resources Limited which comprises the statement of financial position as at 31 December 2012, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, 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 of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

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 a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the 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 2012 and its performance for the halfyear 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 enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We 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 half-year financial report of Cullen Resources Limited is not in accordance with the Corporations Act 2001, including:

• a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and
• b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Ernst & Young

P McIver Partner Perth 14 March 2013