FENIX RESOURCES LTD — Interim / Quarterly Report 2011

Mar 10, 2011

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EMERGENT RESOURCES LIMITED

ABN 68 125 323 622

Interim Financial Report

For The Half-Year Ended 31 December 2010

Emergent Resources Limited ABN 68 125 323 622

Contents

	Page
Directors’ Report	3
Auditor’s Independence Declaration	6
Statement of Comprehensive Income	7
Statement of Financial Position	8
Statement of Changes in Equity	9
Statement of Cash Flows	10
Notes to the Interim Financial Statements	11
Directors’ Declaration	16
Independent Review Report	17

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Report

The Directors present their interim financial report of Emergent Resources Limited for the half-year ended 31 December 2010.

Directors

The following persons were directors of Emergent Resources Limited at any time during the half-year and up to the date of this report:

Wolfgang Fischer (Executive Chairman) (appointed 1 October 2010) Robert Boylan (Non-Executive Director) (appointed 9 September 2010) Nicholas Martin (Non-Executive Director) (appointed 24 February 2011) Former directors Garry Hemming (Managing Director) (resigned 7 October 2010) Kevin Judge (Non-Executive Director) (resigned 7 October 2010) George McMaster (Non-Executive Chairman) (resigned effective 28 February 2011)

Executive and management

Nathan Lude (Chief Executive Officer) (appointed 7 October 2010) Kevin Hart (Company Secretary)

Review of Operations

The net loss after income tax for the half-year was $803,516 (31 December 2009: $1,234,389).

At the end of the half-year the Company had $2,477,992 (30 June 2010: $879,407) in cash and at call deposits. Capitalised mineral exploration and evaluation expenditure is $9,297,993 (30 June 2010: $7,730,123).

Expenditure was principally focused on exploration for and the resource development of magnetite and hematite iron deposits in Western Australia.

The following significant developments were reported by the Company during the half year period:

Corporate Developments

• On 16 September 2010 the Company advised that it would not be proceeding with its proposed $200m Joint Venture agreement with Beijing China Metallurgical Investment Co Limited (CMIC) in relation to the development of Emergent’s Beyondie Iron Project.

• During the half-year there were a number of significant Board and Management appointments as follows:

Robert Boylan - Non-Executive Director effective 9 September 2010

Mr Boylan is a successful businessman and has over 38 years experience in investing, developing and operating businesses associated with the property sector. He has a Masters of Urban Development and Sustainability from Bond University and is a member of the Australian Institute of Valuers.

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Report

Corporate Developments (Continued)

Wolfgang Fischer - Executive Chairman effective 1 October 2010

Mr Fischer has recently joined the board and has more than 35 years of top level experience in the Australian and international natural resources industry. He has held executive management and Board positions in a range of operational and corporate roles with several large and successful international petroleum, and exploration and development companies. Mr Fischer has a strong background on corporate governance standards, and has had considerable mineral and petroleum project management experience from project start-up to production and operating joint ventures.

Mr Nick Martin – Non Executive Director effective 24 February 2011

With a 1st class Honours in geology from Adelaide University, Mr Martin began his career in 1991 working as a geologist undertaking regional exploration and near mine resource development for gold, base metal, mineral sands and gem projects and mines in Australia and Indonesia for a number of leading mining companies. After obtaining an MBA in 1998, Mr Martin spent 10 years in investment banking focused on the resource sector holding senior position with N M Rothschild & Son (Australia), Westpac Banking Corporation, WestLB AG and Natixis Australia Ltd. His roles included the execution of structured project and mezzanine financing on minerals projects in Australia, New Zealand and Emerging Asia-Pacific markets. Currently, Mr Martin provides strategic investment advice aimed at linking Chinese metal consumers and investors with mining assets globally.

Mr Nathan Lude - Chief Executive Officer effective 7 October 2010

Mr Lude is director of a number of unlisted companies and is a successful businessman with over 14 years experience in investing, developing and operating businesses associated with the asset management industry. He has a Bachelor of Business Marketing and a Masters Degree in Business Administration (Bond University). Mr Lude’s business skills are focused on developing and implementing effective business systems and operational procedures, financial controls and the management of business operations. Mr Lude has the ability and management experience to play a leading role in the development of Emergent as it enters a new phase

• During the half year ended 31 December 2010 the company entered into a Subscription and Underwritting Agreement with Casimir Capital Asia Pacific Pty Ltd pursuant to which Casimir agreed to underwrite the exercise of all the options quoted on the ASX not exercised by 30 September 2010. On the 14 October 2010 the company announced that Casimir had completed its underwriting commitment. The Company’s issued capital as at 31 December 2010 totals 80,076,767 fully paid shares.

Exploration Developments

• On 14 September 2010 the company announced the commencement of Reverse Circulation drilling at the identified zone of hematite-enrichment in E52/2215. The results were reported in late December.

• On 9 November 2010 the Company announced that it had completed a detailed mineral mapping and alteration study of its Glengarry base metals assets and outlined several surface base metal and uranium targets for early exploration. The company now plans to commence field exploration activities in support of the study results in the near future.

• On 15 December 2010 the company announced that it completed 4,684 metres of Aircore Drilling targeting the occurrence of near-surface hematite at two prospective targets: one in E52/1806, the other some 20km east along strike and drilled in E52/2215.

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Report

Exploration Developments (Continued)

• On the 24 December 2010 the company announced that it had completed drilling seven diamond core holes totalling 883 metres, aimed at advancing the company’s metallurgical and development program. The samples will be analysed to establish the optimum processing pathways and iron products available from the near surface detrital hematite and the weathered transitional materials that overlie the JORC inferred magnetite ore body. Successful metallurgical testing of the gravels and transitional ore has the potential to add significant additional mineable resources to the existing inferred resources.

Events occurring after the balance sheet date

There has not arisen in the interval between the end of the period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on page 6.

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

Dated at Sydney this 11[th] day of March 2011

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Wolfgang Fischer Executive Chairman

Competent Persons Statement

Technical information in this report has been prepared under the supervision of Mr Jonathan King, Chief Geologist for the company and a member of the Australasian Institute on Mining and Metallurgy (AusIMM). Mr King has sufficient experience which is relevant to the style of mineralisation 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” (the JORC Code). Mr King consents to the inclusion in this report of the Information, in the form and context in which it appears.

The information in this statement that relates to Mineral Resources and Exploration Targets is based on information compiled by Sharron Sylvester who is a full time employee of AMC Consultants Pty Ltd and a Member of the Australian Institute of Geoscientists and has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration to qualify as a Competent Person as defined in the JORC Code (2004). Sharron consents to the inclusion of this information in the form and context in which it appears.

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Grant Thornton Audit Pty Ltd ABN 94 269 609 023

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E admin.wa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration To The Directors of Emergent Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Emergent Resources Limited for the half-year ended 31 December 2010, I declare that, to the best of my knowledge and belief, there have been:

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

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

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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J W Vibert Director – Audit and Assurance

Perth, 11 March 2011

Grant Thornton Audit Pty Ltd ACN 130 913 594, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation.

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Emergent Resources Limited ABN 68 125 323 622

Statement of Comprehensive Income For the half-year ended 31 December 2010

Note Continuing Operations Interest income Administration expenses Employee expenses Corporate expenses Occupancy expenses Marketing expenses Financing expenses Depreciation expenses 3 Exploration costs written off and expensed 3 Loss before income tax Income tax benefit – research and development tax concession Net loss for the period Other comprehensive Income Total comprehensive income for the period Loss per share Basic loss per share (cents) Diluted loss per share (cents)	31 December 2010 31 December 2009 $ $ 44,072 59,316 (314,613) (407,242) (379,995) (112,417) (89,567) (141,534) (35,002) (25,959) (22,247) (61,244) - (20) (5,527) (6,875) (637) (718,494)
	(803,516) (1,414,469) - 180,080
	(803,516) (1,234,389)
	- -
	(803,516) (1,234,389)
	(1.2) (2.6) (1.2) (2.6)

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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Emergent Resources Limited ABN 68 125 323 622

Statement of Financial Position As At 31 December 2010

Current assets Cash and cash equivalents Trade and other receivables Other current assets Total current assets Non-current assets Property, plant and equipment Capitalised mineral exploration and evaluation expenditure Other non-current assets Total non-current assets Total assets Current liabilities Trade and other payables Employee benefits liability Total current liabilities Total liabilities Net assets Equity Issued capital 4 Equity based payment reserve Option reserve 5 Accumulated losses Total equity	31 December 2010 30 June 2010 $ $ 2,477,992 879,407 50,873 17,296 4,000 -
	2,532,865 896,703
	54,424 49,731 9,297,993 7,730,123 53,111 18,002
	9,405,528 7,797,856
	11,938,393 8,694,559
	327,564 532,430 53,715 42,195
	381,279 574,625
	381,279 574,625
	11,557,114 8,119,934
	15,122,969 10,873,552 202,029 - - 210,750 (3,767,884) (2,964,368)
	11,557,114 8,119,934

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

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Emergent Resources Limited ABN 68 125 323 622

Statement of Changes in Equity For the half-year ended 31 December 2010

Note Balance at 1 July 2009 Loss for the period Securities issued during the financial period - shares 4 Costs of the issues of securities 4 Balance at 31 December 2009 Balance at 1 July 2010 Loss for the period Transfer from option reserve to share capital on exercise of options 4 Securities issued during the financial period - shares 4 Movement in equity based payments reserve Costs of the issues of securities 4 Balance at 31 December 2010	Issued capital – Ordinary Shares Option reserve Equity based payments reserve Accumulated Losses Total $ $ $ $ $ 4,946,495 210,750 - (1,135,011) 4,022,234 - - - (1,234,389) (1,234,389) 2,867,480 - - - 2,867,480 (147,420) - - - (147,420)
	7,666,555 210,750 - (2,369,400) 5,507,905
	10,873,552 210,750 - (2,964,368) 8,119,934
	- - - (803,516) (803,516)
	210,750 (210,750) - - -
	4,553,652 - - - 4,553,652
	- - 202,029 - 202,029
	(514,985) - - - (514,985)
	15,122,969 - 202,029 (3,767,884) 11,557,114

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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Emergent Resources Limited ABN 68 125 323 622

Statement of Cash Flows For the half-year ended 31 December 2010

Cash flows from operating activities Interest received Payments to suppliers and employees Research and development tax concession received Net cash used in operating activities Cash flows from investing activities Payments for exploration and evaluation Payments for environmental bonds Payments for plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from the issue of securities Payments for transaction costs relating to securities issues Net cash provided by (used in) financing activities Net increase/(decrease) in cash held Cash at the beginning of the period Cash at the end of the period	31 December 2010 31 December 2009 $ $ 44,072 59,316 (883,008) (454,892) - 180,080
	(838,936) (215,496)
	(1,766,517) (25,000) (2,434,216) - (10,220) (19,769)
	(1,801,737) (2,453,985)
	4,553,652 2,865,480 (314,394) (147,420)
	4,239,258 2,718,060
	1,598,585 48,579 879,407 706,750
	2,477,992 755,329

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements For the half-year ended 31 December 2010

Note 1 Basis of preparation of half-year report

This general purpose financial report for the interim half-year reporting period ended 31 December 2010 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

This interim financial report does not include all the disclosure and notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2010 and any public announcements made by Emergent Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

The half year report has been prepared on an accruals basis and is based on historic 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 basis for preparation of financial statements

The entity incurred net losses of $803,516 during the half year ended 31 December 2010 and, for the same period, the operating activity outflows totalled $838,936.

The financial statements have been prepared on the going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. The ability of the Company to continue to adopt the going concern assumption will depend on future successful capital raisings, the successful exploration and subsequent exploitation of the Company’s tenements and/or sale of non-core assets. Should the Company not be successful in raising additional funding by capital raisings or other alternative funding arrangements fail to eventuate, there is material uncertainty as to whether the Company will be able to continue as a going concern. If the Company is unable to continue as a going concern, it will be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts that may be different to those stated in the final report

The directors are cognisant of the fact that future exploration and administration activities may be constrained by available cash assets, and believe that the current cash reserves of the Company are sufficient to fund forecast exploration.

The Directors are confident of securing funds if and when necessary to meet the Company’s obligations as and when they fall due, and consider the adoption of the Going Concern basis to be appropriate in the preparation of these financial statements.

Adoption of new and revised accounting standards

The Group has adopted the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current period.

Impact of new and revised Standards and amendments thereof and Interpretations effective for the current period that are relevant to the Group include:

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements

For the half-year ended 31 December 2010

Note 1 Basis of preparation of half-year report (Continued)

• AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9

In December 2009, the AASB issued AASB 9 Financial Instruments which addresses the classification and measurements of financial assets and is likely to affect the Group’s accounting for its financial assets. The standard is not applicable until 1 January 2013 but is available for early adoption. The Group is yet to assess its full impact. However, initial indications are that it will have no impact on the Group’s financial statements. The Group has yet to decide when to adopt AASB 9.

• Amendments to AASB 5, 8, 101, 107, 117, 118, 136 and 139 as a consequence of AASB 20095 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project

AASB 2009-5 Introduces amendments to Accounting Standards that are equivalent to those made by the IASB under its program of annual improvements to its standards. A number of the amendments are largely technical, clarifying particular terms, or eliminating unintended consequences. Other changes are more substantial, such as the current/non-current classification of convertible instruments, the classification of expenditures on unrecognized assets in the statements of cash flows and the classification of leases of land and buildings.

• AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project

Amends a number of pronouncements as a result of the IASB’s 2008-2010 cycle of annual improvements to provide clarification of certain matters.

The key clarifications include:

• The measurement of non-controlling interests in a business combination;

• Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised AASB 3 Business Combinations (2008);

• Transition requirements for amendments arising as a result of AASB 127 Consolidated and Separate Financial Statements.

The adoption of these amendments, have not resulted in any material changes to the Group’s accounting policies and have no effect on the amounts reported for the current or prior periods.

The consolidated interim financial statements were approved by the Board of Directors on 11 March 2011.

Note 2 Segment information

The Company has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based on aggregating operating segments, where the segments have similar characteristics

The Company’s only material reportable segment for the financial period has been identified as the Beyondie Iron Project in the Mid-West region of Western Australia.

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements For the half-year ended 31 December 2010

Note 2 Segment information (Continued)

Note 2 Segment information (Continued)
Note Capitalised exploration for the period: Beyondie Iron Project Other Result for the period: Beyondie Iron Project Other Total segment assets: Beyondie Iron Project Other Note 3 Loss for the period Loss before income tax includes the following specific expenses: Depreciation Office equipment Plant and equipment Motor vehicles Previously capitalised exploration costs written off	31 December 2010 31 December 2009 $ $ 1,446,419 3,309,620 158,582 163,559 1,605,001 3,473,179 - - (803,516) (1,234,389) (803,516) (1,234,389) 31 December 2010 30 June 2010 $ $ 7,159,486 5,707,744 4,778,907 2,986,814 11,938,393 8,694,558 31 December 2010 31 December 2009 $ $ (4,602) (3,335) (925) (584) - (2,956)
	(5,527) (6,875)
	(637) (718,494)

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements For the half-year ended 31 December 2010

Note 4 Issued capital – Ordinary fully paid shares

Issue price Balance at the start of the period Shares issued on the exercise of options $0.20 Share placement $0.40 Share Placement $0.20 Transfer from option reserve on the exercise of options Share issue costs Balance at the end of the period Note 5 Options Issue price Balance at the start of the period Placement – attaching options Unlisted options issued for corporate advisory services Unlisted options issued to directors and employees Options exercised Transfer to issued capital on the exercise of options Options expired Balance at the end of the period	31 December 2010 31 December 2009 31 December 2010 31 December 2009 No. No. $ $ 57,308,508 42,347,501 10,873,552 4,946,495 17,768,259 1,852,400 3,553,652 370,480 - 6,242,500 - 2,497,000 5,000,000 - 1,000,000 - - - 210,750 - - - (514,985) (147,420)
	80,076,767 50,442,401 15,122,969 7,666,555
	31 December 2010 31 December 2009 31 December 2010 31 December 2009 No. No. $ $ 26,480,259 24,577,501 210,750 210,750 - 3,121,250 - - 1,346,443 - - - 375,000 - - - (17,768,259) (1,852,400) - - - - (210,750) - (5,012,000) - - -
	5,421,443 25,846,351 - 210,750

During the period the Company issued 1,346,443 unlisted options exercisable at 26 cents each in respect of compensation for corporate advisory services provided to the Company.

During the period the Company issued, subsequent to shareholder approval at the Company’s annual general meeting, 375,000 unlisted options to its Executive Chairman, Mr Wolfgang Fischer. The options are subject to various vesting periods and are exercisable at $0.50, $1.00 and $1.50 in equal 125,000 tranches.

Note 6 Dividends

No dividends were paid or proposed during the period.

The Company has no franking credits available as at 31 December 2010 (31 December 2009: Nil).

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements For the half-year ended 31 December 2010

Note 7 Contingencies

(i) Contingent liabilities

There were no material contingent liabilities not provided for in the financial statements of the Company as at the reporting dates, other than:

Native Title and Aboriginal Heritage

Native title claims have been made with respect to areas which include tenements in which the Company has an interest. The Company is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to what extent the claims may significantly affect the Company or its projects. Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain areas in which the Company has an interest.

There has been no change in contingent liabilities since the last annual reporting date.

(ii) Contingent assets

There were no material contingent assets as at the reporting dates.

Note 8 Events occurring after the balance sheet date

There has not arisen in the interval between the end of the period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

Note 9 Parent Company and Subsidiary Information

As at the period ended 31 December 2010, Emergent Resources Limited had 2 wholly owned subsidiary companies, as follows:

Company Name	ACN	Ownership %
Beyondie J/V Operations Pty Ltd	143 225 969	100%
Emergent Exploration Pty Ltd	143 526 336	100%

During the reporting period, both subsidiary companies were dormant and held no assets and had not incurred any liabilities as at the reporting date. Both subsidiary companies were registered in Western Australia. Parent entity and Consolidated entity information is identical during and at the end of the year.

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Declaration

The Directors of Emergent Resources Limited declare that:

• (a) the interim financial statements and notes set out on pages 7 to 15 are in accordance with the Corporations Act 2001, including:

• (i) complying with Australian Accounting Standard AASB134 – Interim Financial Reporting, and the Corporations Regulations; and

• (ii) give a true and fair view of the financial position as at 31 December 2010 and of the performance for the half-year ended on that date of the Company.

• (b) 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 Directors.

Signed at Sydney this 11[th] day of March 2011

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Wolfgang Fischer Executive Chairman

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Grant Thornton Audit Pty Ltd ABN 94 269 609 023

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E admin.wa@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Review Report To the Members of Emergent Resources Limited

We have reviewed the accompanying half-year financial report of Emergent Resources Limited (“Company”), which comprises the consolidated financial statements being 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 half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors’ declaration of the consolidated entity, comprising both the Company 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 Company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410: Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity’s financial position as at 31 December 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.

Grant Thornton Audit Pty Ltd ACN 130 913 594, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation.

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As the auditor of Emergent 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 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 Emergent 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.

Material uncertainty regarding continuation as a going concern

Without qualification to the conclusion expressed above, we draw attention to Note 1 in the financial report which indicates that the consolidated entity incurred a net loss of $803,516 during the half year ended 31 December 2010 and, as of that date, the consolidated entity’s operating cash outflows totalled $838,936. 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 therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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J W Vibert Director - Audit & Assurance

Perth, 11 March 2011

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