CZR RESOURCES LTD — Interim / Quarterly Report 2013

Mar 11, 2013

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES ABN 91 112 866 869

CONSOLIDATED HALF-YEAR FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

TABLE OF CONTENTS

Corporate Directory ........................................................................................................................................... 3 Directors’ Report ................................................................................................................................................ 4 Auditor’s Independence Declaration ................................................................................................................ 13 Consolidated Statement Profit or Loss and Other Comprehensive Income .................................................... 14 Consolidated Statement of Financial Position ................................................................................................. 15 Consolidated Statement of Changes in Equity ................................................................................................ 16 Consolidated Statement of Cash Flow ............................................................................................................ 17 Notes to the Consolidated Financial Statements ............................................................................................ 18 Directors’ Declaration ...................................................................................................................................... 24 Independent Auditor’s Review Report ............................................................................................................. 25

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

CORPORATE DIRECTORY

DIRECTORS

Adam Sierakowski (Chairman) Stephen Lowe Robert Ramsay

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 2012

DIRECTORS’ REPORT

Your directors submit the financial report of the consolidated group for the half-year ended 31 December 2012.

DIRECTORS

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

Adam Sierakowski (Chairman) Stephen Lowe Robert Ramsay (Appointed 20 December 2012) Kwong Choon (Eddie) Soong (Resigned 20 December 2012)

REVIEW OF OPERATIONS

In 2012, the Company acquired an 85% ownership of three projects: Yarraloola Iron-Ore Project in the western part of the Hamersley Basin (Zanthus Resources Pty Ltd), Earaheedy Basin Manganese Project on the north-eastern margin of the Yilgarn (KingX Pty Ltd) and the Buddadoo Iron-titanium Project in the Midwest of Western Australia (Buddadoo Metals Pty Ltd). In each case, the projects report occurrences of ore-grade mineralization and cover additional areas of untested highly-prospective geology. The key Midwest and Pilbara tenements are exceptionally well located in respect of existing and planned infrastructure. In the period, exploration activity had been undertaken on each of the projects. Brief details are as follows:

Yarraloola Iron-Ore Project - Zanthus Resources Pty Ltd (“Zanthus”)

Location

Zanthus holds seven contiguous granted exploration tenements, two granted prospecting licenses and one prospecting license application in the Pilbara’s iron-producing Hamersley Basin (Table 1). The tenements are adjacent to the North West Coastal Highway and 120 kilometres southwest of Karratha and the Port of Dampier. Established infrastructure traverses the tenements, including the Robe River Railway and the Dampier-Bunbury gas pipeline. The proposed railway for the Australian Premium Iron (API) Joint Venture is expected to cross through the tenements and continue to the proposed Anketell Port, west of Cape Lambert. Recently, Buckland Transport (a subsidiary of ASX-listed, Iron-ore Holdings Ltd) has made an application for miscellaneous licences to cross the Zanthus tenements and allow development of a haul-road from their mineral resources in the Bungeroo Valley to a new port at Cape Preston East.

Table 1.Zanthus Resources Pty Ltd (100% Coziron) tenement schedule for the Yarraloola Project.

Lease	Type	Area	Area Type
E08/1060	Exploration License	2	Blocks
E08/1684	Exploration License	141	Blocks
E08/1685	Exploration License	141	Blocks
E08/1686	Exploration License	148	Blocks
E08/1824	Exploration License	3	Blocks
E08/1825	Exploration License	5	Blocks
E08/1826	Exploration License	24	Blocks
P08/0529	ProspectingLicense	150.552	Hectares
P08/0530	ProspectingLicense	100.204	Hectares
P08.0669	ProspectingLicense application	25.62	Hectares

Geology and Mineralization

The Zanthus tenements are prospective because they cover part of the Hamersley Basin in the Pilbara. This is one of the major iron-ore producing regions of the World hosting larger, high-grade mines and deposits over an area of 400km by 150km. Most ore is derived from units of Banded iron-formation (BIF) which are sediments within the Hamersley Group. Within the BIF, there are two distinct ore-types. (1) Lumpy, high-grade goethite-martite that can be screened and shipped directly from port and is commonly referred to as DSO. (2) Magnetite which is upgraded by crushing, grinding and magnetic concentration prior to shipping. Another significant source of iron-ore in the Pilbara is the younger accumulations of sedimentary iron deposited as Channel Iron Deposit (CID) which can extend beyond the Hamersley Basin.

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

In the Hamersley Basin, the main economic rock units for DSO and magnetite are the Brockman and Marra Mamba Iron Formations. At Yarraloola, early stage exploration identified BIF outcrop with Fe>50% showing prospectivity for DSO. In addition, the airborne aeromagnetic-radiometric responses from the tenements indicate that Brockman, Marra Mamba and some less well characterized iron-formations extend across the Yarraloola tenement package for more some 50km and highlight the prospectivity for magnetite deposits.

In addition to the DSO and magnetite prospectivity the Yarraloola tenements are also very prospective for the discovery of CID mineralization. The Warramboo, Mesa A and Mesa J CID Mines operated by Rio Tinto Ltd with combined annual production in excess of 30Mtpa and the undeveloped Mesas B-F, Mesas H-K, Jewel, Cochrane, Ken’s Bore, Cardo Bore East and Upper Cane CID deposits are located adjacent to the Zanthus tenements. ASX-listed Red Hill Iron Ore Ltd also owned the rights to CID-only exploration in the western half of E08/1685 during 2011-2012 (Figure 2). Red Hill now has beneficial ownership of an inferred resource of 71Mt of ore at 54.1% Fe[1] in two deposits which are covered by mining lease applications M08/499 and M08/500.

Work Programmes and Results

In May-June of 2012 a total of 65 vertical RC holes for 4090m were drilled mostly into seven different iron-rich targets to establish the setting, geology and potential for mineralization. The assay results from the drilling identified some intervals with DSO-grade mineralization that require follow-up. In addition, assaying for gold and associated base-metals in intervals of graphitic shales intersected in some drill-holes identified intervals of anomalous mineralization.

In addition to the drilling, mapping, rock-chip and soil-sampling have focussed on the identification and prioritization of targets for DSO goethite-haematite, CID, magnetite and gold and base-metals mineralization. Announced results have identified high-grade goethite-haematite mineralization at the Cattle Grid target, at least four new areas where CID-style mineralization is reported and discovered outcrop of magnetite ironformation hosted within the Ashburton Trough which is outside of the Hamersley Basin (Fig 3). Soil-sampling over an area of shallow, historical, gold-workings within rocks of the Fortescue Basalt which underlie the ironformations of the Hamersley Basin has also resulted in the delineation of the 2 by 1km Cobblers Gold Anomaly with a peak value Au of 1.75g/t. Follow-up work on all the targets is being planned.

1 Details of the Red Hill Iron Limited (ASX: RHI) resource were taken from their ASX announcement dated 29 October 2010 and released to the ASX 1 November 2010

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

Maps showing the Tenement locations, infrastructure and geology are shown in Figures 1 and 2.

Figure 1 – Regional Infrastructure, Geology and Location

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

Figure 2 – Yaraloola Tenement Map

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

Figure 3 Yarraloola tenements with mineralization targets (ASH = Ashburton Magnetite, BLG = Boolgeeda haematite/magnetite, BRO = Brockman Magnetite, CID = Channel Iron Deposits HGO = High-grade haematite.)

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

Earaheedy Manganese Project - KingX Pty Ltd

Location

The Earaheedy Manganese Project consists of 4 granted and 8 contiguous pending tenements (Table 2) covering about 120kms of the southern Earaheedy Basin on the margin of the Yilgarn craton about 130kms northeast of Wiluna, as shown in Figures 4 and 5.

Table 2. KingX Pty Ltd (100% Coziron) tenement schedule for the Earaheedy

Project.

Lease	Status	Area	Area Type
E38/2213	Granted	70	Blocks
E38/2211	Granted	70	Blocks
E38/2212	Application	70	Blocks
E38/1433	Application	70	Blocks
E38/1434	Granted	69	Blocks
E38/1435	Application	70	Blocks
E38/1436	Application	70	Blocks
E53/1437	Granted	70	Blocks
E38/1622	Application	70	Blocks
E38/1623	Application	70	Blocks
E38/1624	Application	70	Blocks
E69/2573	Application	196	Blocks
	Total Holdings	965	Blocks

Geology and Mineralization

The Earaheedy Basin is a Palaeoproterozoic sequence of clastic and chemical sediments which on-lap the crystalline rocks of the Yilgarn Block. Overlying a thin sequence of conglomerates and sandstones is an interval of pelletal iron-formations which then pass upwards into a sequence of carbonates. The transition from iron-rich to carbonate rich rocks is marked by a zone of manganese-rich sedimentation. In southern Africa, a similar sequence of rocks in the Kalahari Basin hosts wide-spread deposits of high-grade manganese which were further enriched by hydrothermal processes associated with the dewatering of the basin.

Although the Earaheedy Basin is regarded as being very analogous to the Kalahari Basin with respect to age, depositional and tectonic history, the region has seen little systematic exploration to date.

Work Programmes and Results

A 400km[2] , low-level airborne magnetic-radiometric survey was completed over portions of E53/1437 and E38/2213 and all of E38/2212. The data has been processed and targets have been generated for follow-up.

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

Figure 4 – Simplified Geology and Location of the Earaheedy Project

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Figure 5 – King X, Earaheedy Project Tenement Map

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

Buddadoo Project – Buddadoo Metals Pty Ltd

Location

The project consists of a single exploration license E59/350, located 180kms east of Geraldton and 70kms from existing railway at either Morawa or Pindar and the northern portion of the tenement is crossed by a bitumen-surface road from Yalgoo. See Figure 6 below.

Geology and Prospectivity

The Buddadoo tenement covers part of the Mullewa Greenstone belt and the adjacent granites and granitic gneisses of the Yilgarn Cratonic Block. Intruding the greenstone sequence is an 8.6km long and 2.4 km wide sequence of gabbroic rocks termed the Buddadoo Complex. Mineralization is reported in at least three different settings at Buddadoo and the.

1. Vanadiferous and titaniferous magnetite bands which are laterally persistent along the eastern side of the complex and up to 1m thick are hosted by the Buddadoo Igneous Complex.

2. Copper and gold mineralization is reported in the felsic and mafic rocks of the Mullewa Greenstone Belt.

3. Uranium radiometric anomalies are associated with the sediments surrounding the broad salt-flat dominated drainage systems which cross the central part of the tenement.

Work Programmes and Results

Coziron has completed a small programme of mapping, soil and rock-chip sampling over prospective target zones. Results will be reported when they are available.

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Figure 6 – Buddadoo Location
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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ REPORT (Continued)

Agam Iron Sands Project, Indonesia

Following a decision to focus on the Company’s newly acquired Western Australian projects, the Company has withdrawn from the Agam Iron Sands project at no cost.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Other than as outlined in the review of operations, there were no significant changes in the state of affairs of the Group during the half year.

SUBSEQUENT EVENTS

There has been no significant events subsequent to the end of the reporting period.

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 for the halfyear ended 31 December 2012 is set out on page 13.

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

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Adam Sierakowski Chairman

Dated this11th day of March 2013

The information in this report that relates to mineral resources and exploration results is based on information compiled by Rob Ramsay BSc(Hons), MSc PhD. Rob Ramsay is a Member of the Australian Institute of Geoscientists and full-time Consultant Geologist for Coziron and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Rob Ramsay has given his consent to the inclusion in this report of the matters based on the information in the form and context in which it appears.

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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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11 March 2013

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

Dear Sirs,

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

As lead auditor for the review of Coziron Resources Limited for the half-year ended 31 December 2012, 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 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

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 2012

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

(a) Note Revenue Exploration costs Employee benefits expense Compliance and professional fees Depreciation Stamp duty on acquisition of subsidiaries Occupancy costs Administration expenses Gain on deconsolidation of subsidiary 6 Loss before income tax 2 Income tax expense (Loss) from continuing operations after related income tax expense for the half year attributable to members of Coziron Resources Limited Other comprehensive income Total comprehensive loss attributable to the members of Coziron Resources Limited (Loss) per share for the half year attributable to members of Coziron Resources Limited Basic loss per share (cents) Diluted loss per share (cents)	Half-Year 31 December 2012 $ Half-Year 31 December 2011 $ 28,678 82,412 (716,885) - (80,201) (77,400) (342,646) (125,438) (2,453) - (650,000) - (15,000) (12,463) (39,558) (26,018) 148,000 -
	(1,670,065) (158,907) - -
	(1,670,065) (158,907) - -
	(1,670,065) (158,907)
	(0.24) (0.04) (0.24) (0.04)

The above statement of profit or loss and other comprehensive income 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 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

Note ASSETS Current Assets Cash and cash equivalents Trade and other receivables Prepayments 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 4 Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 5 Accumulated losses TOTAL EQUITY	As At 31 December 2012 $ As At 30 June 2012 $ 1,622,259 3,204,911 256,457 142,421 5,912 -
	1,884,628 **3,347,332 **
	38,142 - 12,746,804 -
	12,784,946 -
	14,669,574 **3,347,332 **
	2,632,746 2,644,439
	2,632,746 2,644,439
	2,632,746 2,644,439
	12,036,828 702,893
	16,252,200 3,248,200 (4,215,372) (2,545,307)
	12,036,828 702,893

The above consolidated statement of financial position 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 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

Balance at 1 July 2012 Total comprehensive loss for the half-year Shares issued – Placement Shares issued – Acquisition Share issue costs Balance at 31 December 2012 Balance at 1 July 2011 Total comprehensive loss for the half-year Balance at 31 December 2011	Ordinary Shares Share Issue Costs Accumulated Losses Total Equity $ $ $ $ 3,340,450 (92,250) (2,545,307) 702,893 - - (1,670,065) (1,670,065) 2,067,000 - - 2,067,000 11,060,000 - - 11,060,000 - (123,000) - (123,000)
	16,467,450 (215,250) (4,215,372) 12,036,828
	3,340,450 (92,250) (465,539) 2,782,661 - - (158,907) (158,907)
	3,340,450 (92,250) (624,446) 2,623,754

The above consolidated 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 2012

CONSOLIDATED STATEMENT OF CASH FLOW FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Payment for exploration expenditure Interest received Net cash flows used in operating activities Cash flows from investing activities Acquisition of plant and equipment Acquisition of subsidiary net of cash acquired Proceeds on sale of subsidiaries 7 Payment for exploration tenements Net cash flows used in investing activities Cash flows from financing activities Proceeds from issue of ordinary shares Payment of share issue costs Net cash flows used in financing activities Net increase/(decrease) 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 2012 $ Half-Year 31 December 2011 $ - - (505,818) (256,294) (982,386) -
	30,170 63,247
	(1,458,034) (193,047)
	(40,596) - 30,582 - 1 - (4,000) -
	(14,013) -
	12,395 - (123,000) -
	(110,605) -
	(1,582,652) (193,047) 3,204,911 2,420,255
	1,622,259 2,227,208

The above consolidated statement of cash flow 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 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

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 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 2012 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 Group’s annual financial report for the financial year ended 30 June 2012 other than the Group’s policy in relation to exploration and evaluation costs in relation to mineral exploration. The Group’s revised policy is shown below.

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.

Exploration and evaluation

Exploration and evaluation costs including costs of studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities along with those for general and administrative costs are expensed in the period they are incurred. Acquisition costs of acquiring are capitalised until the viability of the area of interest is determined. Those acquisition costs are carried forward when the following conditions are satisfied:

• (i) the rights to tenure of the area of interest are current; and

• (ii) at least one of the following conditions is also met:

• a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

• b) exploration and evaluation activities in the area of interest have not at the balance 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 are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

Going Concern

This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

The Group has incurred a net loss after tax for the half year ended 31 December 2012 of $1,670,065 (2011: 158,907) and experienced net cash outflows from operating activities of $1,458,034 (2011: 193,047). At 31 December 2012, the Group had current assets of $1,884,628 (30 June 2012: $3,347,332).

The Directors believe there are sufficient funds to meet the Group’s working capital requirements and as at the date of this report the Group believes it can meet all liabilities as and when they fall due. However the Directors recognise that additional funding either through the issue of further shares, convertible notes or a combination of both will be required for the Group to continue to actively explore its mineral properties.

The Directors have reviewed the business outlook and the assets and liabilities of the Group and are of the opinion that the use of the going concern basis of accounting is appropriate as they believe the Group will continue to be successful in securing additional funds through debt or equity issues or partial sale of its mineral properties as and when the need to raise working capital arises.

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

The financial report does not include any adjustments that may be necessary if the Group is unable to continue as a going concern.

2. LOSS BEFORE INCOME TAX The following revenue and expense items are relevant in explaining the financial performance for the half-year: Interest revenue	Half-Year 31 December 2012 $ Half-Year 31 December 2011 $ 28,315 80,320

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

3. 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: Acquisition of Zanthus Resources Pty Ltd Acquisition of KingX Pty Ltd Acquisition of Buddadoo Metals Pty Ltd Acquisition of tenements Less: Exploration expenditure written off in the period Closing Balance	31 December 2012 $ 30 June 2012 $ - 519,834 8,559,312 - 3,347,382 - 836,110 - 4,000 - - (519,834)
	12,746,804 -

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.

The acquisition of Zanthus Resources Pty Ltd, Buddadoo Metals Pty Ltd and KingX Pty Ltd are not considered to be a business combination as it does not meet the criteria as set out in AASB 3 Business Combinations. This transaction has been treated as an acquisition of assets, predominantly exploration expenditure

4. TRADE AND OTHER PAYABLES

Trade payables Accruals Employee entitlements Other payables	31 December 2012 $ 30 June 2012 $ 144,904 569,834 667,000 20,000 11,884 - 1,808,958 2,054,605
	2,632,746 2,644,439

Other payables at reporting date represent amounts payable to the Creasy Group under the terms of the acquisition of Zanthus Resources Pty Ltd, Buddadoo Metals Pty Ltd and KingX Pty Ltd. The amount represents prior exploration expenditure by the Creasy Group on the projects acquired by the Company. The amount is only payable subject to ASX approval and the Company raising a minimum of $7,000,000 by 30 June 2013. In the event that the Company has not raised $7,000,000 by 30 June 2013 the date may be extended to 30 June 2014 or the amount reimbursed through the issue of Shares.

Other payables in the comparative period relate to the funds received for the issue of shares that were unissued at the reporting date. The shares were issued to applicants on the 20[th] of September 2012. Had Coziron Resources Limited not issued the shares it would have been required to repay the funds to applicants.

5. ISSUED CAPITAL Ordinary shares	Consolidated Group As At 31 December 2012 $ As At 30 June 2012 $ 16,252,200 3,248,200

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COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

6. SHARE BASED PAYMENTS

Shares provided in respect of acquisition of: Zanthus Resources Pty Ltd KingX Pty Ltd Buddadoo Metals Pty Ltd Total share based payments	7,710,000 3,080,000 270,000
	11,060,000

The acquisition of Zanthus, KingX and Buddadoo is accounted as a share based payment under AASB 2. A share based payment transaction arises whereby Coziron Resources Limited has issued 500 million shares in exchange for the net assets of Zanthus, KingX and Buddadoo. The amount recognised as issued equity instruments in the consolidated financial statements has been determined by adding the share based payment to the issued capital of Coziron Resources Limited on the date of the acquisition. The value of the share based payment is based on the fair value of the acquisitions as determined by an external valuation that was performed during the acquisition process.

No other share based payment transactions were entered into during the period and at the time of this report the Group does not have a formal employee option plan in place.

7. DISCONTINUED OPERATION

On 11 December 2012 the Company announced it had terminated the Cooperation Agreement with PT Galian Endapan Buana. In conjunction with the termination of the Cooperation Agreement the Company has disposed of its interest in its two subsidiary companies PT Coziron Copper International and PT Coziron Pertambangan on 13 December 2012.

Consideration received or receivable

The Company received consideration of $1 in relation to the disposal of its shares in PT Coziron Copper International and PT Coziron Pertambangan.

Net assets at date of sale

The carrying amount of assets and liabilities as at the date of sale (13 December 2012) were

Property, plant and equipment Deferred exploration and evaluation expenditure Other receivables Trade creditors Net assets	December 2012 $
	- - -
	(148,000)
	(148,000)

21

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

Net cash inflow on disposal

The cash inflow on disposal is as follows:

Cash and cash equivalents consideration received or receivable Net cash and cash equivalents disposed of Net cash inflow on disposal (refer statement of cash flows)	31 December 2012 $
	1 -
	1

Financial performance and cash flow information

The financial performance and cash flow information presented are for the period ended 13 December 2012.

Financial performance from discontinued operation Revenue Expenses Gross profit/(loss) Loss recognised on the remeasurement to fair value Loss before tax from discontinued operations Income tax benefit Loss for the year from discontinued operations Profit attributable to owners of the parent relates to: Profit from continuing operations Profit from discontinued operations Cash flows from discontinued operations Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities	December December $ 2012 $ 2011
	- - - -
	- - - -
	- - - -
	- -
	(1,670,065) (158,907) - -
	(1,670,065) (158,907)
	- - - - - -
	- -

8. SEGMENT INFORMATION

The Group operates predominantly in one geographical segment, being Western Australia, and in one industry, being mineral exploration. The reporting segment is represented by the primary statements forming this financial report.

22

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

9. CONTINGENT LIABILITIES

As at the date of the report, the Directors are not aware of any material contingent liabilities that would require disclosure.

10. RELATED PARTY TRANSACTIONS

Transactions with related parties

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

Accounting, office and company secretarial services# Legal and corporate advisory fees paid# Consultancy fees *	Consolidated Group Half-Year 31 December 2011 $ Half-Year 31 December 2011 $ 84,942 58,233 150,017 51,722 128,750 -

These fees were paid to Price Sierakowski Pty Ltd, Trident Capital Pty Ltd and Trident Management Services Pty Ltd which are director related entities of Mr Adam Sierakowski.

• Consultancy fees were paid to Robert Ramsay for geological consulting services provided.

11. SUBSEQUENT EVENTS

There has been no significant events subsequent to the end of the reporting period.

23

COZIRON RESOURCES LIMITED & CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

DIRECTORS’ DECLARATION FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

The directors of the Company declare that:

1. The financial statements and notes, as set out on pages 14 to 23:

2. (a) comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

3. (b) give a true and fair view of the economic entity’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date.

4. 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 11th day of March 2013

24

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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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 consolidated statement of financial position as at 31 December 2012, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising a statement of significant 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 end or from time to time during the half-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 that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal 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 half-year 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 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 review 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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Emphasis of Matter

Without modifying our conclusion, we draw attention to the Consolidated Statement of Profit & Loss and Other Comprehensive Income in the half-year financial report which indicates that Coziron Resources Limited incurred a net loss of $1,670,065 during the half-year ended 31 December 2012. 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 disclosing entity’s ability to continue as a going concern and therefore, the disclosing entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

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 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 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 Corporations Regulations 2001 .

BDO Audit (WA) Pty Ltd

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Phillip Murdoch Director

Perth, Western Australia Dated this 11[th] day of March 2013