DEVEX RESOURCES LIMITED — Interim / Quarterly Report 2011

Feb 20, 2011

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Uranium Equities Limited and its controlled entities

31 December 2010 half-year financial report

ABN 74 009 799 553

Contents

	Page
Directors’ report	2
Lead auditor’s independence declaration	4
Consolidated interim statement of comprehensive income	5
Consolidated interim statement of changes in equity	6
Consolidated interim statement of financial position	8
Consolidated interim statement of cash flows	9
Notes to the consolidated interim financial statements	10
Directors’ declaration	14
Independent review report	15

1

Directors’ report

The directors present their report together with the consolidated financial report for the half-year ended 31 December 2010 and the auditor’s review report thereon.

Directors

The directors of the company at any time during or since the end of the half-year are:

Non-executive

Anthony W Kiernan Non-Executive Chairman Timothy R B Goyder Non-Executive Director Executive Bryn L Jones Managing Director

All Directors held office during course of the half year and since the end of the prior financial year.

Review of operations

Exploration

• Reverse Circulation (RC) drilling on the West Arnhem Joint Venture (UEQ 40%:Cameco Australia 60%) operated by Cameco intercepted high grade uranium mineralisation at the U40 Prospect, 10km eastnorth-east of the historic Nabarlek Uranium Mine. Follow up diamond drilling returned the following significant downhole results in the twinned and scissor holes (See ASX Announcement 16 Dec 2010) : NAD7492 6.8m @ 6.71% U3O8 from 75m

  • NAD7493 4.8m @ 1.85% U3O8 from 80.4m

• In addition, laboratory results have also revealed that the uranium mineralisation is associated with elevated levels of gold, copper, palladium and platinum and anomalous heavy rare earth elements.

• Significant intercepts were also returned at the Coopers Prospect on the West Arnhem Joint Venture from RC drilling. Mineralisation remains open and will be followed up in the 2011 field season.

• RC drilling on the 100% owned Nabarlek Mineral Lease was conducted late in the half to target anomalies indentified by drilling earlier in the field season. Results were encouraging, particularly at the Clapstick and Boomerang prospects with follow up target drilling also planned for 2011.

• The company’s strategic landholding in the Frome Basin was consolidated through establishing a Joint Venture with Cauldron Energy on the West Lake Frome Project. Including 100% owned tenements, the company’s total landholding in this highly prospective region is now 2,397km[2] . Beverley and Four Mile style deposits will be targeted by drilling planned for the coming year.

• A heli-assisted diamond drilling program was completed on the Headwaters Project (in Joint Venture with Vale S.A.) targeting Westmoreland-style mineralisation. Laboratory assays from selected intervals are pending.

PhosEnergy - Uranium Extraction Technology

• In July 2010 Cameco Corporation (TSX:CCO, NYSE:CCJ) invested the second of four staged investments in the development and commercialisation of the PhosEnergy Process, taking the total investment to US$7.5 million.

• Continuous bench scale testwork was carried out at ANSTO (Australian Nuclear Science and Technology Organisation) for 27 days during the half on phosphate samples from three separate fertiliser production facilities.

• Following extensive testing and development work, estimated operating cash costs for a 1 million tonne P2O5 per annum phosphate production facility operating in the USA have reduced from US$25-30 per pound U3O8 to US$20-25 per pound U3O8.

• The design of a fully integrated and process controlled 150L/h demonstration plant was completed during the half and construction is well underway. The demonstration plant is designed to test the efficacy of the PhosEnergy Process under industrial conditions.

• Completion of the demonstration plant, being constructed in Adelaide, is planned for Q1 2011. The plant is designed to be completely transportable and will be deployed initially with a phosphate fertiliser producer in North America with which the company has a non-binding agreement.

2

Lead auditor’s independence declaration under section 370C of the Corporations Act 2001

The lead auditor’s independence declaration is set out on page 4 and forms part of the Directors’ report for the half-year ended 31 December 2010.

Dated at Adelaide 21 February 2011.

Signed in accordance with a resolution of the directors:

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Bryn Jones Managing Director

3

ABCD

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Uranium Equities Limited

I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended 31 December 2010 there have been:

• (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• (ii) no contraventions of any applicable code of professional conduct in relation to the review.

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KPMG

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Derek Meates Partner

21 February 2011

KPMG , an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

4

Uranium Equities Limited and its controlled entities Consolidated interim statement of comprehensive income

For the six months ended Option Fee Advisory and Other Income 3 Total Revenue Exploration and evaluation expenditure written off Corporate and Administration expenses Profit/(Loss) on sale of available for sale investments Profit/(Loss) on disposal of a fixed asset Reversal of impairment of available for sale investments 3 Results from Operating Activities Finance Income Finance Costs Net Finance Income Impairment loss on equity accounted investees Share of equity accounted investee losses 3 3 Loss before income tax Income tax expense Loss for the period Other Comprehensive Income Foreign currency translation differences for foreign operations Total Other Comprehensive Income Total Comprehensive Income for the period Loss attributable to: Owners of the company Non-Controlling Interest Loss for the period Total comprehensive income attributable to: Owners of the company Non-Controlling Interest Total Comprehensive Income for the period Earnings per share Basic loss per share attributable to ordinary equity holders (cents per share) Diluted loss per share attributable to ordinary equity holders (cents per share)	31 Dec 2010 31 Dec 2009 222,222 18,508 444,444 57,512
	240,730 501,956 (22,878) (749,557) 41 (637) 16,000 (12,430) (872,961) - (2,532) -
	(516,301) 221,237 (54,011) (385,967) 168,830 (134,437)
	167,226 34,393
	(1,299,813) (915,728) (452,966) (299,646)
	(2,564,616) - (1,104,186) -
	(2,564,616) (1,104,186)
	(984,886) 77,471
	(984,886) 77,471
	(3,549,502) (1,026,715)
	(1,856,289) (708,327) (990,534) (113,652)
	(2,564,616) (1,104,186)
	(2,553,206) (996,296) (921,275) (105,440)
	(3,549,502) (1,026,715)
	(0.009) (0.005)
	(0.009) (0.005)

The statement of comprehensive income is to be read in conjunction with the notes to the interim financial statements set out on pages 10 to 13.

5

Uranium Equities Limited and its controlled entities Consolidated interim statement of changes in equity

For the six months ended 31 December 2010

Attributable to equity holders of the Group

Balance at 1 July 2010 Total Comprehensive income for the period Profit or Loss Other Comprehensive income Foreign Currency Translation differences for foreign operations Total Other Comprehensive income Total Comprehensive Income for the period Transactions with owners, recorded directly to equity Share-based payment transactions Total Contributions by and distributions to owners Total changes in ownership interest in subsidiaries Total transactions with owners Balance at 31 December 2010	Note	Share capital Share Option Reserve Translation Reserve Accumulated Losses Total Non-Controlling Interest Total Equity $ $ $ $ $ $ $
		44,997,454 4,993,648 106,372 (28,715,262) 21,382,162 54,955 21,437,117
		- - - (1,856,289) (1,856,289) (708,327) (2,564,616)
		- - (696,917) - (696,917) (287,969) (984,886)
		- - (696,917) - (696,917) (287,969) (984,886)
		- - (696,917) (1,856,289) (2,553,206) (996,296) (3,549,502)
		- 251,033 - - 251,033 - 251,033
		- 251,033 - - 251,033 - 251,033
		- - - 3,965,677 3,965,677 1,973,271 5,938,948
		- 251,033 - 3,965,677 4,216,710 1,973,271 6,189,981
		44,997,454 5,244,681 (590,545) (26,605,874) 23,045,666 1,031,930 24,077,596

6

Uranium Equities Limited and its controlled entities Consolidated Interim Statement of Changes in Equity (continued)

For the six months ended 31 December 2009

Attributable to equity holders of the Group

Note Balance at 1 July 2009 Total Comprehensive income for the period Profit or Loss Other Comprehensive income Foreign Currency Translation differences for foreign operations Total Other Comprehensive income Total Comprehensive Income for the period Transactions with owners, recorded directly to equity Share options exercised Conversion of partly paid performance shares to ordinary shares Share-based payment transactions Total Contributions by and distributions to owners Total changes in ownership interest in subsidiaries Total transactions with owners Balance at 31 December 2009	Share capital Share Option Reserve Translation Reserve Accumulated Losses Total Non-Controlling Interest Total Equity $ $ $ $ $ $ $ 43,068,654 4,899,880 - (30,126,149) 17,842,385 - 17,842,385
	- - - (990,534) (990,534) (113,652) (1,104,186) - - 69,259 - 69,259 8,212 77,471
	- - 69,259 - 69,259 8,212 77,471
	- - 69,259 (990,534) (921,275) (105,440) (1,026,715)
	852,500 1,076,300 - - - 71,951 - - - - - - 852,500 1,076,300 71,951 - - - 852,500 1,076,300 71,951
	1,928,800 71,951 - - 2,000,751 - 2,000,751
	- - - 2,408,664 2,408,664 285,591 2,694,255
	1,928,800 71,951 - 2,408,664 4,409,415 285,591 4,695,006
	44,997,454 4,971,831 69,259 (28,708,019) 21,330,525 180,151 21,510,676

7

Uranium Equities Limited and its controlled entities Consolidated interim statement of financial position

Note Current assets Cash and cash equivalents 1(b) Trade and other receivables Financial assets Total current assets Non-current assets Financial assets Investments in equity accounted investees 5 Exploration and evaluation assets Property, plant and equipment Total non-current assets Total assets Current liabilities Trade and other payables Deferred income Provisions Employee benefits Total current liabilities Non-current liabilities Provision Employee Benefits Total Non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity attributable to equity holders of the company Non-controlling interest 4 Total Equity	Consolidated 31 Dec 2010 30 Jun 2010 9,685,175 10,555,254 265,610 573,960 - 10,667
	9,950,785 11,139,881
	32,038 45,804 - - 16,022,046 13,185,912 383,295 408,181
	16,437,379 13,639,897
	26,388,164 24,779,778
	421,651 716,357 - 222,222 216,066 1,016,830 147,397 125,385
	785,114 2,080,794
	1,475,675 1,226,995 49,779 34,872
	1,525,454 1,261,867
	2,310,568 3,342,661
	24,077,596 21,437,117
	44,997,404 44,997,404 4,654,136 5,100,020 (26,605,874) (28,715,262)
	23,045,666 21,382,162 1,031,930 54,955
	24,077,596 21,437,117

The statement of financial position is to be read in conjunction with the notes to the interim financial statements set out on pages 10 to 13.

8

Uranium Equities Limited and its controlled entities Consolidated interim statement of cash flows

For the six months ended

Cash flows from operating activities Cash receipts from operations Cash paid to suppliers and employees Interest paid Interest received Income tax received Net cash used in operating activities Cash flows from investing activities Proceeds from sale of investments Payments for investments Consideration received for non-controlling interest Payments for mining exploration and evaluation and rehabilitation Acquisition of property, plant and equipment Net cash used in investing activities Net proceeds from issue of shares Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 July Effect of exchange rate fluctuations on cash held Cash and cash equivalents at 31 December	31 Dec 2010 31 Dec 2009 - 2,094,172 (432,198) (619,112) (18,526) (17,211) 239,070 163,806 179,748 111,164
	(31,906) 1,732,819
	26,707 - (2,215,542) (947,079) 5,938,947 2,694,256 (3,576,000) (1,136,566) (26,421) (72,491)
	147,691 538,120
	- 1,916,611
	- 1,916,611
	115,786 4,187,550 10,555,253 8,750,004 (985,864) (77,509)
	9,685,175 12,860,045

This statement of cash flows is to be read in conjunction with the notes to the interim financial statements set out on pages 10 to 13.

9

Notes to the consolidated interim financial statements

1. Significant accounting policies

Uranium Equities Limited (the “Company”) is a company domiciled in Australia. The consolidated interim financial report of the Company for the six months ended 31 December 2010 comprises the Company and its subsidiaries (together referred to as the “consolidated entity”).

(a) Statement of Compliance

The consolidated interim financial report is a general purpose financial report which has been prepared in accordance with AASB 134: Interim Financial Reporting and the Corporations Act 2001.

The consolidated interim financial report does not include all of the information required for a full annual financial report, and should be read in conjunction with the consolidated annual financial report of the consolidated entity as at and for the year ended 30 June 2010.

The consolidated annual financial reports of the entity for the year ended 30 June 2010 is available from Level 5, 29 King William Street, Adelaide, SA 5000 or on the Company’s website (www.uel.com.au).

This consolidated interim financial report was approved by the Board of Directors on 21 February 2011.

(b) Basis of Preparation

The accounting policies applied by the Company in this consolidated interim financial report are the same as those applied in its consolidated financial report as at and for the year ended 30 June 2010. None of the Australian Accounting Standards or interpretations available for early adoption have been adopted by the Company, as none have a significant impact on the consolidated entity.

The financial report has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. As at 31 December 2010 the consolidated entity had accumulated losses of $26.6 million, however net assets are $24.1 million and the Directors believe the consolidated entity has sufficient cash and cash equivalents of $9.7 million to pay its debts as and when they fall due and to fund near term anticipated exploration and corporate activities. The cash balance includes $3.2 million held in UFP Investments LLC, a majority owned US subsidiary, to be utilised for expenditure on the PhosEnergy process, and $1.8 million restricted by a performance bond against the Nabarlek Mineral Lease rehabilitation obligation.

It is the intention of the Directors to continue to explore the consolidated entity's areas of interest for which rights of tenure are current. The Directors consider that the consolidated entity has the ability to fund its projects through a combination of use of existing cash, joint venture arrangements and access to the equity market if necessary. The Directors will take the appropriate action to ensure these funds are available as and when they are required.

10

Notes to the consolidated interim financial statements

2. Segment reporting

PhosEnergy Exploration 2010 2009 2010 2009 Segment revenue - - 222,222 444,444 Unallocated revenue Total revenue Segment result (2,227,741) (781,394) 199,345 432,015 Unallocated income & expenses Loss before income tax Segment assets 3,245,424 1,710,981 16,022,046 12,322,863 Unallocated assets Total assets	Consolidated 2010 2009 222,222 444,444 18,508 57,512
	240,730 501,956
	(2,028,396) (349,379) (536,220) (754,807)
	(2,564,616) (1,104,186)
	19,267,470 14,033,844 7,120,694 11,971,560
	26,388,164 26,005,404

The consolidated entity comprises the following two reportable segments which are the group’s strategic business units:

(i) PhosEnergy – development of uranium extraction technology from phosphoric acid (ii) Exploration – brownfields and greenfields mineral exploration

The PhosEnergy Process is being developed in Australia with business development being pursued internationally. Exploration activities are based in Australia, mainly in the Northern Territory, South Australia and Western Australia.

The Exploration segment revenue represents the option fee referred to in Note 3.

3. Loss before income tax expense

The following revenue and expense items are relevant in explaining the financial performance for the half- year: (a) Option Fee	2010 2009 $ $ 222,222 444,444

In November 2009 the Company announced that Mitsui & Co. Ltd (“Mitsui”) had been granted an option (“the Option”) to invest in the strategic Nabarlek Project.

Under the terms of the agreement Mitsui paid a non-refundable $2,000,000 option fee for the right to purchase a stake in the Nabarlek Project and receive any project data generated over the option period to 31 July 2010. The Option fee has been pro-rated over the option period on a straight line basis in accordance with AASB 118 “Revenue”. Any remaining balance not taken to profit in the period has been recorded as Deferred Income in the Statement of Financial Position.

The option period was subsequently extended to 31 August 2010. On 31st August 2010 the Company announced that the option had not been exercised. Mitsui advised that its decision was not based on an assessment of the Nabarlek Project as such, but forms part of a global review of its resources investment strategy.

11

Notes to the consolidated interim financial statements

3. Loss before income tax (continued)

3. Loss before income tax (continued)
(b) Corporate administrative expenses Accounting fees Annual report costs ASX fees Depreciation and amortisation Insurance Legal fees Marketing Personnel expenses Printing and stationery Rent and outgoings Share registry Travel and accommodation Recruitment Other (c) Impairment loss on equity accounted investees Share of equity accounted investee losses	2010 $ 2009 $ (27,795) (29,153) (16,270) (15,934) (25,531) (42,525) (41,762) (44,411) (30,824) (30,050) (41,746) (42,082) (7,235) (8,124) (403,743) (503,148) (2,219) (1,670) (7,649) (5,219) (8,922) (12,986) (29,715) (60,863) (82,077) - (24,069) (76,796)
	(749,557) (872,961)
	(1,299,813) (452,966) (915,728) (299,646)

The company is currently investing in the development of uranium extraction technology from phosphoric acid (‘the PhosEnergy Process’) via Urtek LLC, a USA based company. UFP Investments LLC, the company holding the investment, increased its equity in Urtek from 43% to 49% in accordance with the Urtek Earn-in Agreement. Funding for the investment made during the half year was received from Cameco Corporation (see Note 4 below).

As the technology being developed by Urtek LLC is currently in the research phase, the company has recognised impairment losses in relation to the balance of investment in Urtek LLC, after taking into account the share of Urtek losses for the half year. The impairment for the prior period of $761,076 was reduced by a reimbursement from Cameco of US$250,000 for expenditures up to 30 June 2009.

12

Notes to the consolidated interim financial statements

4. Non-controlling interests

Non-controlling interest	31 Dec 2010 30 Jun 2010 $ $ 1,031,930 54,955

In November 2009 the company announced that Cameco Corporation (TSX:CCO, NYSE:CCJ) (Cameco) will partner in the continued development and commercialisation of the PhosEnergy Process. Through a staged investment of up to US$16.5 million in the continued development and commercialisation of the Process, Cameco have the right to earn up to 70% of UEQ’s right to earn a 90% stake in the technology. Cameco is investing in a USA registered company, UFP Investments LLC which holds the investment in Urtek LLC.

The second payment of US$5.0 million was invested by Cameco into UFP Investments LLC in July 2010, taking Cameco’s interest to 31.8%. These funds are required to be applied towards the development of the PhosEnergy Process under the terms of the agreement.

As the company has control of UFP Investments LLC the entity has been consolidated into the Group’s financial statements with an associated non-controlling interest. The dilution gains made on Cameco’s investments have been recorded against Accumulated Losses, reflecting the fact that non-controlling interests are equity interests.

5. Equity accounted investees

Opening balance Investment in equity accounted investee Share of equity accounted investee losses Impairment losses Closing balance	31 Dec 2010 $ 31 Dec 2009 $ - - 2,215,541 1,060,722 (915,728) (299,646) (1,299,813) (761,076)
	- -

As discussed in note 3(c) and note 4, the consolidated entity owns 49% of Urtek LLC, a company developing technology for the extraction of uranium from phosphoric acid (“the PhosEnergy Process”). Impairment losses have been recognised in relation to the investment as Urtek LLC is still in the research and development phase.

6. Related party transactions

Arrangements with related parties continue to be in place and are consistent with those disclosed on page 63-67 of the 30 June 2010 Annual Report.

On 15 November 2010, Mr Heinrich (CFO and Company Secretary) was issued 250,000 unlisted options exercisable at $0.25 and expiring 15 November 2013 under the Company’s Employee and Consultants Option Plan. The options were immediately vesting.

On 25 November 2010, Messrs Kiernan, Jones and Goyder (Directors) were each issued 1,000,000 unlisted options exercisable at $0.25 and expiring 25 November 2013. The issue of options was approved by shareholders at the Company’s Annual General Meeting on 25 November 2010. The options were immediately vesting.

7. Events after balance sheet date

There has not been any matter or circumstance that has arisen since the end of the reporting period that has significantly affected, or may significantly affect, the operations of the consolidated entity or the state of affairs of the consolidated entity in future periods.

13

Directors’ declaration

In the opinion of the directors of Uranium Equities Limited:

1. the financial statements and notes set out on pages 5 to 13, are in accordance with the Corporations Act 2001 including:

2. (a) giving a true and fair view of the financial position of the consolidated entity as at 31 December 2010 and of its performance, as represented by the results of its operations and cash flows for the half-year ended on that date; and

3. (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

4. there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become due and payable.

Dated at Adelaide on 21 February 2011.

Signed in accordance with a resolution of the directors:

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Bryn Jones Managing Director

14

ABCD

Independent auditor’s review report to the members of Uranium Equities Limited

Report on the financial report

We have reviewed the accompanying half-year financial report of Uranium Equities Limited, which comprises the consolidated statement of financial position as at 31 December 2010, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes 1 to 7 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Group comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year/interim period.

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 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 Group’s financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As auditor of Uranium Equities 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.

KPMG , an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

15

ABCD

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

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 Uranium Equities Limited is not in accordance with the Corporations Act 2001 , including:

• (a) giving a true and fair view of the Group’s financial position as at 31 December 2010 and of its performance for the half-year ended on that date; and

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

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KPMG

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Derek Meates Partner

Adelaide

21 February 2011

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