CZR RESOURCES LTD — Interim / Quarterly Report 2011

Feb 23, 2011

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES ABN 91 112 866 869

CONSOLIDATED HALF-YEAR FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

TABLE OF CONTENTS

Corporate Directory.......................................................................................................................................... 3 Directors’ Report .............................................................................................................................................. 4 Auditor’s Independence Declaration ................................................................................................................ 6 Consolidated Income Statement ..................................................................................................................... 7 Consolidated Balance Sheet........................................................................................................................... 8 Consolidated Statement of Changes in Equity................................................................................................ 9 Consolidated Cash Flow Statement.............................................................................................................. 10 Notes to the Financial Statements ................................................................................................................. 11 Directors’ Declaration..................................................................................................................................... 16 Independent Auditor’s Review Report............................................................................................................ 17

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

CORPORATE DIRECTORY

DIRECTORS

Stephen Lowe Adam Sierakowski Kwong Choon (Eddie) Soong

COMPANY SECRETARY

Stephen Hewitt-Dutton

PRINCIPAL OFFICE

Level 24 44 St George’s Terrace PERTH WA 6000 Telephone: (08) 6211 5099 Facsimile: (08) 9218 8875

REGISTERED OFFICE

Level 24 44 St George’s Terrace PERTH WA 6000 Telephone: (08) 6211 5099 Facsimile: (08) 9218 8875 Website: www.coziron.com

AUDITORS

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Telephone: (08) 6382 4600 Facsimile: (08) 6382 4601

SHARE REGISTRAR

Security Transfer Registrars Alexandria House, Suite 1 770 Canning Highway Applecross, Western Australia 6153 Telephone: (08) 9315 2333 Facsimile: (08) 9315 2233

STOCK EXCHANGE LISTING

Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: CZR

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

DIRECTORS’ REPORT (Continued)

Your directors submit the financial report of the consolidated group for the half-year ended 31 December 2010.

These Financial Statements cover the period from 1 July 2010 to 31 December 2010. On 7 July 2010 the Directors of the Company appointed David Hurt and Chris Williamson of WA Insolvency Solutions Pty Ltd, as joint and several Administrators of the Company. The Company was subject to a Deed of Company Arrangement under which all debts were extinguished and which facilitates the Company being recapitalised and reinstated to quotation on the Australian Securities Exchange (ASX). These Financial Statements report results and the financial position that are not representative of the position of the Company following the recapitalisation and should not be used as the basis for any decision about the Company or its prospects.

For additional information, please refer to Note 11 regarding events subsequent to balance date.

DIRECTORS

The names of directors who held office during or since the end of the half-year:

Stephen Lowe (appointed 21 October 2010) Adam Sierakowski (appointed 21 October 2010) Kwong Choon (Eddie) Soong (appointed 11 February 2010) Richard Teng Beng Tan (resigned 21 October 2010) Sin Hin Lim (Appointed 1 December 2009 and resigned 21 October 2010)

REVIEW OF OPERATIONS

During the period the Company did not operate other than to further the Administration process and commence the recapitalisation.

At a meeting of Creditors held on 12 October 2010, the creditors resolved that the Company enter into a Deed of Company Arrangement (“DOCA”), which was executed on 20 October 2010.

The Company has successfully raised $400,000 under Convertible Loan Deeds, with a further $400,000 being raised subsequent to the balance date. The convertible loans will convert into 160,000,000 fully paid ordinary shares following approval at a general meeting of the shareholders to be held on or before 31 January 2011.

The proceeds of the convertible loans have been used to effectuate the DOCA and pay the costs associated with the recapitalisation. Effectuation of the DOCA achieved through the payment of $215,000 to the Deed Administrators in satisfaction of all creditors’ claims. This occurred on 3 November 2010, and control of the Company was returned to the Directors.

The Company applied to ASIC and received an extension of time to hold the 2010 Annual General Meeting. The Company held the 2010 Annual General Meeting on 31 January 2011. At the meeting, members passed all resolutions approving the following to facilitate completion of the recapitalisation:

• Consolidation of capital at 1 for 2;

• Appointment of Directors;

• Issue of 160,000,000 ordinary shares to investors on conversion of the loan under the Convertible Loan Deed; and

• Issue of up to 250,000,000 ordinary shares at 1c each pursuant to the Prospectus to raise $2,500,000;

• On 31 January 2011 the Company lodged a prospectus with the ASIC in relation to the raising of $2,500,000.

The Company maintains its interest in the AGAM Iron Sands project, located on the island of Sumatra. The project comprises two licences totalling 3,960 hectares. The two licences are situated approximately 100 kms north-west of Padang, the capital city of West Sumatra. The licences are located on the coastal plains within a few hundred metres of the shoreline. The northernmost tenement has been the focus for exploration of iron rich sands. The concentrations of heavy mineral sands, principally magnetite, occur as distinct bands of varying thicknesses within a sequence of silt, sand and gravel beds below surface.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

DIRECTORS’ REPORT (Continued)

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Company during the half year.

SUBSEQUENT EVENTS

The Company has raised $800,000 by way of Convertible Loan Deeds. From these funds the Company paid $215,000 to the Deed Administrator in full settlement of the Company’s obligations under the DOCA. The final effectuation of the DOCA has occurred with the final dividend to creditors being declared and paid on 2 February 2011.

On 31 January 2011 the Company lodged a prospectus with the ASIC to raise $2,500,000 through the issue of 250,000,000 fully paid ordinary shares at $0.01 per share. On 10 February 2011 the Company closed the capital raising having received applications in excess of the maximum subscription of $2,500,000. The Company has allotted the shares under the prospectus and been advised by the ASX that its shares will be reinstated to official quotation on the ASX.

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 for the halfyear ended 31 December 2010 is set out on page 6.

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

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Adam Sierakowski Chairman

Dated this 23rd day of February 2011

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38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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23 February 2011

The Directors Coziron Resources Limited Level 24, 44 St George’s Terrace PERTH WA 6000

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PHIL MURDOCH TO THE DIRECTORS OF COZIRON RESOURCES LIMITED

As lead auditor of Coziron Resources Limited for the half-year ended 31 December 2010, I declare that to the best of my knowledge and belief, there have been:

• No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Coziron Resources Limited and the entities it controlled during the period.

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Phillip Murdoch Director

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BDO Audit (WA) Pty Ltd Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

(a) Note Revenue Employee benefits expense Compliance and professional fees Depreciation Loss on sale of fixed assets Impairment of property plant and equipment Occupancy costs Travel expenses Administration expenses Loss before income tax 2 Income tax expense Loss and total other comprehensive income for the period Loss and total comprehensive income attributable to the members of Coziron Resources Limited Overall operations Basic loss per share (cents) Diluted loss per share (cents)	Half-Year 31 December 2010 $ Half-Year 31 December 2009 $ 1,448 9,547 (540) (8,110) (320,827) (66,190) (10,391) (13,453) (35,648) (20,878) (13,968) - (38,388) (34,761) - (1,722) (101,897) (15,379)
	(520,211) (150,942) - -
	(520,211) (150,942)
	(520,211) (150,942)
	(0.58) (0.20) (0.58) (0.20)

The above income statement should be read in conjunction with the accompanying notes.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2010

Note ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Total Current Assets Non-Current Assets Property, plant and equipment Exploration assets 3 Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 5 Unsecured loans 6 Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 7 Reserves Accumulated losses TOTAL EQUITY	As At 31 December 2010 $ As At 30 June 2010 $ 168,125 57,922 78,029 40,332 - -
	246,154 98,254
	- 60,007 519,834 519,834
	519,834 579,841
	765,988 678,095
	484,736 276,632 453,000 53,000
	937,736 329,632
	937,736 329,632
	(171,748) 348,463
	6,628,614 6,628,614 - - (6,800,362) (6,280,151)
	(171,748) 348,463

The above balance sheet should be read in conjunction with the accompanying notes.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

Balance at 1 July 2009 Total comprehensive income for the half-year Balance at 31 December 2009 Balance at 1 July 2010 Total comprehensive income for the half-year Balance at 31 December 2010	Ordinary Shares Options Retained Earnings Total Equity $ $ $ $ 6,195,506 317,608 (5,948,863) 564,251 - - (150,942) (150,942)
	6,195,506 317,608 (6,099,805) 413,309
	6,311,006 317,608 (6,280,151) 348,463 - - (520,211) (520,211)
	6,311,006 317,608 (6,800,362) (171,748)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Net cash flows used in operating activities Cash flows from investing activities Acquisition of plant and equipment Proceeds on sale of property and equipment Payment for exploration expenditure Net cash flows used in investing activities Cash flows from financing activities Proceeds from borrowings Proceeds from issue of ordinary shares Proceeds from exercise of options Net cash flows provided by financing activities Net increase in cash held Cash and cash equivalents at the beginning of the half-year Cash and cash equivalents at the end of the half-year	Half-Year 31 December 2010 $ Half-Year 31 December 2009 $ - 9,000 (291,245) (137,657) 1,448 547
	(289,787) (128,110)
	- - - 24,200 - -
	- 24,200
	400,000 133,000 - - - -
	400,000 133,000
	110,203 29,090 57,922 75,328
	168,125 104,418

The above cash flow statement should be read in conjunction with the accompanying notes.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

1. STATEMENT OF SIGNIFICANT ACCOUNT POLICIES

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 years presented, unless otherwise stated.

Basis of Preparation

The half-year consolidated financial statements are a general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standard AASB 134 Interim Financial Reporting , Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2010 and any public announcements made by Coziron Resources Limited and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 .

The half-year report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the group as in the full financial report.

The accounting policies and methods of computation adopted in the preparation of the half-year financial statements are consistent with those adopted and disclosed in the company’s annual financial report for the financial year ended 30 June 2010.

It has been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies.

Reporting basis and conventions

The half-year statements have been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Going concern

The Company has incurred a net loss after tax for the half year ended 31 December 2010 of $520,211 (2009:$150,942) and at 31 December 2010, the Company had a net asset deficiency of $171,748 (30 June 2010: net assets of $348,463).

On 7 July 2010 the Directors of the Company appointed David Hurt and Chris Williamson of WA Insolvency Solutions Pty Ltd, as joint and several Administrators of the Company. At a meeting of the Company’s creditors on 12 October 2010, the creditors resolved to approve the execution of a Deed of Company Arrangement (DOCA) which was subsequently executed on 20 October 2010. The Company has raised a total of $800,000 by way of convertible loan deeds and $2,500,000 through a prospectus lodged with ASIC. The DOCA was fully effectuated on 23 February 2011 and the Company has completed its recapitalisation.

The Company has applied to be reinstated to the ASX at which time the funds raised via the prospectus will be available to the company for working capital and to fund the Company’s exploration of it’s mineral assets.

The Directors believe there are sufficient funds to meet the Company’s working capital requirements and as at the date of this report the Company believes it can meet all liabilities as and when they fall due. Accordingly, the accompanying financial statements have been prepared on a going concern basis.

Should the directors not achieve the matters set out above, there is uncertainty whether the Company will continue as a going concern and therefore whether it will realise its assets and liabilities in the normal course of business.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

2. LOSS BEFORE INCOME TAX

The following revenue and expense items are relevant in explaining the financial performance for the half-year: Interest revenue 3. PROPERTY, PLANT AND EQUIPMENT Leasehold improvements At cost Accumulated amortisation Total land and buildings Plant and equipment At cost Accumulated depreciation Impairment charges Total plant and equipment Total non-current property, plant and equipment	Half-Year 31 December 2010 $ Half-Year 31 December 2009 $ 1,448 8,683
	31 December 2010 $ 30 June 2010 $
	- 54,543 - (15,979)
	- 41,940
	54,697 54,697 (40,729) (33,254) (13,968)
	- 21,443
	- 60,007

Reconciliations

Reconciliations of the carrying amounts of each class of property, plant & equipment at the beginning and end of the current and previous financial year are set out below:

Total Leasehold Improvements Carrying amount at beginning of period Additions Disposals Depreciation Carrying amount at end of period Total Plant & Equipment Carrying amount at beginning of period Additions Disposals Impairment charges Depreciation Carrying amount at end of period	Consolidated Group Half-Year 31 December 2010 $ 30 June2010 $ 38,564 45,370 - - (35,648) - (2,916) (6,806)
	- 38,564
	21,443 92,517 - - (55,773) (13,968) - (7,475) (15,301)
	- 21,443

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

4. EXPLORATION ASSETS

A reconciliation of the movements in the capitalised exploration assets per tenement or exploration right is detailed below:

Opening balance at the beginning of the half-year Add: Exploration expenditure capitalised during the period Less: Exploration expenditure written off in the period Closing Balance	31 December 2010 $ 30 June 2010 $ 519,834 519,834 - - - -
	519,834 519,834

Exploration costs are only carried forward to the extent that they are expected to be recouped through the successful development or sale of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

In addition, the group has material mining exploration rights in Indonesia which are the subject of contractual requirements to undertake continuous work throughout the period. The group has received correspondence from the local Indonesian mining authorities and the Directors are reviewing all the group’s rights to explore, to determine if projects are economically viable and should be maintained. If the directors believe that the projects are not viable to continue exploring these tenements, this will result in a write off of the existing Exploration Assets in the next period.

5. TRADE AND OTHER PAYABLES

Payables subject to the Deed of Company Arrangement Trade Payables Accruals Other Payables	31 December 2010 $ 30 June 2010 $ 114,996 - 321,262 148,000 27,000 118,151 21,478 10,481
	484,736 276,632

At a meeting of the Company’s creditors on 12 October 2010, the creditors resolved to approve the execution of a Deed of Company Arrangement (DOCA) which was subsequently executed on 20 October 2010. Under the DOCA the Company’s admitted debts, and the administrator’s costs, are extinguished by the payment of $215,000 by the Company to the creditors. The Company satisfied its payment of $215,000 to the administrator on 3 November 2010. The following amounts were extinguished upon final effectuation of the DOCA:

Payables subject to the Deed of Company Arrangement Northsky Holdings Pty Ltd (included in unsecured loans, see note 6) Australian Glamour Pty Ltd (included in unsecured loans, see note 6) Total Creditors extinguished through the DOCA	114,996 42,000 11,000
	166,996

On 2 February 2011 the Administrator finalised the administration with the declaration of dividend to the creditors and payment was made on that date. As at the date of signing of these accounts, the Company is no longer subject to the DOCA.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

6. UNSECURED LOANS

Convertible Notes (i) Northsky Holdings Pty Ltd Australian Glamour Pty Ltd	Half-Year 31 December 2010 $ 30 June 2010 $ 400,000 - 42,000 42,000 11,000 11,000
	453,000 53,000

1 Subject to the Deed of Company Arrangement (refer Note 5).

(i) Terms and conditions of the convertible notes:

• notes are convertible at the Noteholder’s election

• each Note will convert into New Shares at an issue price of $0.005 per New Share

• the Notes will be redeemed in full (but without any interest) on the earlier of:

• that date that is 6 months after the date on which the Advance is received by the Company;

• the termination of the Recapitalisation Proposal; and

• Shareholders failing to approve the Resolutions to implements the Recapitalisation Proposal.

7. ISSUED CAPITAL Ordinary shares Options Movements in options on issue Date Details 1 July 2009 Opening balance 31 December 2009 Expiration of remaining listed options 31 December 2009 Closing balance Date Details 3 March 2010 Issue of 5c options as part of placement 31 December 2010 Closing balance	Consolidated Group As At 31 December 2010 $ As At 30 June 2010 $ 6,311,006 6,311,006 317,608 317,608
	6,628,614 6,628,614
	Number $ 3,250,000 317,608 (3,250,000) -
	- 317,608
	Number $ 1,155,000 317,608
	1,155,000 317,608

8. SEGMENT INFORMATION

The Company operates predominantly in one geographical segment, being Indonesia, and in one industry, being mineral exploration.

9. CONTINGENT LIABILITIES

Subsidiaries in Indonesia have no insurance. If there is any claim of whatsoever nature, the company would have to satisfy such claim. As at the date of the report, the Directors are not aware of any material contingent liabilities that would require disclosure.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

10. RELATED PARTY TRANSACTIONS

Transactions with related parties

The following transactions occurred with related parties during the half-year:

Management fees received from related parties* Legal and corporate advisory fees paid #	Consolidated Group Half-Year 31 December 2010 $ Half-Year 31 December 2009 $ - 9,000
	177,926 -

• These fees are received from Integrated Rubber Industries Limited, a company with common directors. # These fees were paid to Price Sierakowski Pty Ltd and Trident Capital Pty Ltd, both of which are director related entities of Mr Adam Sierakowski.

11. SUBSEQUENT EVENTS

The Company has raised $800,000 by way of Convertible Loan Deeds. From these funds the Company paid $215,000 to the Deed Administrator in full settlement of the Company’s obligations under the DOCA. On 2 February 2011 the Administrator finalised the administration with the declaration of dividend to the creditors and payment was made on that date. As at the date of signing of these accounts, the Company is no longer subject to the DOCA.

On 31 January 2011 the Company lodged a prospectus with the ASIC to raise $2,500,000 through the issue of 250,000,000 fully paid ordinary shares at $0.01 per share. On 10 February 2011 the Company closed the capital raising having received applications in excess of the maximum subscription of $2,500,000. The Company has allotted the shares under the prospectus and been advised by the ASX that it will be reinstated to official quotation on the ASX.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

DIRECTORS’ DECLARATION FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

The directors of the Company declare that:

1. The financial statements and notes, as set out on pages 7 to 15:

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

3. (b) give a true and fair view of the economic entity’s financial position as at 31 December 2010 and of its performance for the half-year ended on that date.

4. Whilst drawing attention to the disclosure in Note 1 of the financial report, in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

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Adam Sierakowski Chairman

Dated this 23[rd] day of February 2011

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Tel: +8 6382 4600 38 Station Street Fax: +8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF COZIRON RESOURCES LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Coziron Resources Limited, which comprises the statement of financial position as at 31 December 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the halfyear ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year’s and or from time to time during the year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the disclosing entity are responsible for the preparation of the half-year financial report in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is 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 disclosing entity’s financial position as at 31 December 2010 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 Coziron Resources Limited, 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Coziron Resources Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Basis for Qualified Conclusion

PT Coziron Copper and PT Coziron Pertambangan are controlled entities of Coziron Resources Limited. The accounting records of the controlled entities were not available for audit or review in the prior financial periods. Due to the limitation of scope in relation to the audit of the controlled entities, the 30 June 2010 audit opinion and 31 December 2009 review conclusion for Coziron Resources Limited were disclaimers of opinion. Accordingly, due to the disclaimers of opinion in the prior periods impacting the opening balances for the half year ended 31 December 2010, we do not express an opinion in relation to the comparative financial information included in the financial report nor do we express an opinion on the impacts that the disclaimed information may have had, if any, on the current year statement of comprehensive income or the statement of cash flows.

Qualified Conclusion

Based on our review, which is not an audit, except for the effect of such adjustments, if any, as might have be determined to be necessary had we been able to satisfy ourselves in relation to the comparative information and its impact on the financial report, we have not become aware of any matter that makes us believe that the half-year financial report of Coziron 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 2010 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

Emphasis of Matter

In addition to the conclusion above, we draw attention to Note 1 in the half-year financial report which indicates that Coziron Resources Limited incurred a net loss of $520,211 during the half-year ended 31 December 2010 and, as of that date, the consolidated entity’s liabilities exceeded its assets by $171,748. Subsequent to the end of the period, the entity has raised capital via a prospectus which will be available pending reinstatement to the ASX which is currently under application. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a going concern and as such realise its assets and settle its liabilities in the normal course of business and at the amount stated in the financial statements.

BDO Audit (WA) Pty Ltd

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Phillip Murdoch Director

Perth, Western Australia Dated this 23[rd] day of February 2011