FENIX RESOURCES LTD — Interim / Quarterly Report 2012

Mar 12, 2012

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EMERGENT RESOURCES LIMITED

ABN 68 125 323 622

Interim Financial Report

For The Half-Year Ended 31 December 2011

Emergent Resources Limited ABN 68 125 323 622

Contents

	Page
Directors’ Report	3-4
Auditor’s Independence Declaration	5
Statement of Comprehensive Income	6
Statement of Financial Position	7
Statement of Changes in Equity	8
Statement of Cash Flows	9
Notes to the Interim Financial Statements	10-13
Directors’ Declaration	14
Independent Review Report	15

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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 2011.

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 (Non-Executive Chairman, Executive Chairman until 22 December 2011) Nathan Lude (Managing Director) (Appointed 22 December 2011) Francis De Souza (Non-Executive Director) (Appointed 22 December 2011)

Former directors Nicholas Martin (Non-Executive Director) (Resigned 22 December 2011) Stuart Hall (Non-Executive Director) (Resigned 22 December 2011) Geoff Cowie (Non-Executive Director) (Resigned 30 November 2011)

Executive and management

Nathan Lude (Chief Executive Officer) (Appointed Managing Director 22 December 2011) Kevin Hart (Company Secretary)

Review of Operations

The net loss after income tax for the half-year was $343,092 (31 December 2010: $803,516).

At the end of the half-year the Company had $3,592,057 (30 June 2011: $819,685) in cash and at call deposits. Capitalised mineral exploration and evaluation expenditure is $8,371,657 (30 June 2011: $10,377,567).

During the period the main focus of the Company has been on management restructure and advancing the agreement with International Natural Resources Limited to transfer the Company’s non-core assets into a new company, Austrasia International Mining Limited (“Austrasia”), with the intention of listing Austrasia on the Australian Securities Exchange.

An amount of $2,100,000 was reclassified from capitalised mineral exploration and evaluation expenditure to current assets as at 31 December 2011, being assets classified as held for sale in respect of the mineral tenements to be transferred to Austrasia International Mining Limited (Austrasia), pending conditional approval from ASX regarding the admission of Austrasia to the Official List of the ASX.

Significant Changes in the State of Affairs

The following significant changes occurred during the reporting period:

• Placement of 11,813,667 ordinary fully paid shares at 3 cents each on 15 September 2011, raising $354,410;

• Issue of 42,311,665 ordinary fully paid shares on 25 October 2011, pursuant to the nonrenounceable entitlement issue closing on 20 October 2011;

• Issue of 49,811,531 ordinary fully paid shares on 18 November 2011, being shortfall shares pursuant to the non-renounceable entitlement issue closing on 20 October 2011; and

• Placement of 20,244,609 ordinary fully paid shares at 4.2 cents each to International Natural Resources Limited.

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Report

Events occurring after the balance sheet date

Other than the following, 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.

• On 10 February 2012, the Company’s shareholders approved the proposed transfer of exploration assets from the Company to Austrasia, pending Austrasia obtaining conditional approval for admittance to the Official List of the ASX.

• On 15 February 2012, the Company completed the issue of 2,500,000 ordinary fully paid shares to Directors of the Company as compensation for a reduced cash salary component from the period commencing 1 January 2012. 1,500,000 shares were issued to the Managing Director, whilst the Non-Executive Directors each received 500,000 shares.

• On 2 March 2012, the Company issued 2,000,000 unlisted options exercisable at 10 cents each on or before 2 March 2013, to a consultant in relation to the introduction of International Natural Resources Limited as an investor in the Company.

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 5.

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

DATED at Perth this 13[th] day of March 2012

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Nathan Lude Managing Director

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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 info.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 2011, 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 Partner – Audit & Assurance

Perth, 13 March 2012

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 2011

Note Continuing Operations Interest income Gain on disposal of assets Total revenue Administration expenses Employee expenses Corporate expenses Occupancy expenses Marketing expenses Depreciation expenses Impairment of exploration costs Loss before income tax 3 Income tax benefit – research and development tax concession 5 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 2011 31 December 2010 $ $ 9,506 44,072 6,137 -
	15,643 44,072 (121,584) (314,613) (307,772) (379,995) (166,642) (89,567) (43,416) (35,002) (9,379) (22,247) (8,971) (5,527) (213,443) (637)
	(855,564) (803,516) 512,472 -
	(343,092) (803,516)
	- -
	(343,092) (803,516)
	(0.3) (1.2) (0.3) (1.2)

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 2011

Current assets Cash and cash equivalents Trade and other receivables Other current assets Subtotal Assets classified as held for sale 6 Total current assets Non-current assets Property, plant and equipment Capitalised mineral exploration and evaluation expenditure Bonds and deposits 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 Share based payments reserve Accumulated losses Total equity	31 December 2011 30 June 2011 $ $ 3,592,057 819,685 537,177 17,543 - 2,000
	4,129,234 839,228 2,100,000 -
	6,229,234 839,228
	43,017 93,440 8,371,657 10,377,567 57,131 57,023
	8,471,805 10,528,030
	14,701,039 11,367,258
	171,955 414,331 10,911 14,580
	182,866 428,911
	182,866 428,911
	14,518,173 10,938,347
	19,030,198 15,112,849 215,051 217,010 (4,727,076) (4,391,512)
	14,518,173 10,938,347

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 2011

Note 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 share based payments reserve Costs of the issues of securities 4 Balance at 31 December 2010 Balance at 1 July 2011 Loss for the period Transfer from share based payments reserve to accumulated losses on expiry of options Securities issued during the financial period - shares 4 Movement in share based payments reserve Costs of the issues of securities 4 Balance at 31 December 2011	Issued capital – Ordinary Shares Option reserve Share based payments reserve Accumulated Losses Total $ $ $ $ $ 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
	15,112,849 - 217,010 (4,391,512) 10,938,347
	- - - (343,092) (343,092)
	- - (7,528) 7,528 -
	3,968,380 - - - 3,968,380
	- - 5,569 - 5,569
	(51,031) - - - (51,031)
	19,030,198 - 215,051 (4,727,076) 14,518,173

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 2011

Cash flows from operating activities Interest received Payments to suppliers and employees Net cash used in operating activities Cash flows from investing activities Payments for exploration and evaluation Payments for environmental bonds Proceeds from sale of plant and equipment 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 financing activities Net increase/(decrease) in cash held Cash at the beginning of the period Cash at the end of the period	31 December 2011 31 December 2010 $ $ 13,013 44,072 (700,076) (883,008)
	(687,063) (838,936)
	(505,303) (1,766,517) - (25,000) 55,432 - (8,043) (10,220)
	(457,914) (1,801,737)
	3,968,380 4,553,652 (51,031) (314,394)
	3,917,349 4,239,258
	2,772,372 1,598,585 819,685 879,407
	3,592,057 2,477,992

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 2011

Note 1 Basis of preparation of half-year report

This general purpose financial report for the interim half-year reporting period ended 31 December 2011 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 2011 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.

Adoption of new and revised accounting standards

In the half year ended 31 December 2011, the Company has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2011. It has been determined by the Company that, other than for the following new accounting standards adopted during the reporting period, 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 Company accounting policies.

New accounting standards adopted since the end of the last reporting period

The Company has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2011. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Company accounting policies

No retrospective change in accounting policy or material reclassification has occurred requiring the inclusion of a third Statement of Financial Position as at the beginning of the comparative financial period, as required under AASB 101.

The consolidated interim financial statements were approved by the Board of Directors on 12[th] March 2012.

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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 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.

In prior reporting periods the Company had defined the Beyondie Iron Project as a separate reporting segment. During the reporting period there has been a significant reduction in exploration activity at the Beyondie Iron Project, and as at the reporting date exploration assets employed by the Beyondie Iron Project are substantially those of the Company as a whole.

As a result the Company’s only material reportable segment for the financial period has been identified as the Company as a whole and as such the reporting segment is represented by the primary statements forming these financial statements.

Note 3 Loss for the period

Loss before income tax includes the following specific expenses:

Loss before income tax includes the following specific expenses:
Depreciation Office equipment Plant and equipment Impairment of exploration costs	31 December 2011 31 December 2010 $ $ (6,427) (4,602) (2,544) (925)
	8,971 (5,527)
	(213,443) (637)

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 $0.20 Transfer from option reserve on the exercise of options Share placement $0.03 Non-renounceable entitlement issue $0.03 Share placement $0.04 Share issue costs Balance at the end of the period	31 December 2011 31 December 2010 31 December 2011 31 December 2010 No. No. $ $ 80,309,529 57,308,508 15,112,849 10,873,552 - 17,768,259 - 3,553,652 - 5,000,000 - 1,000,000 - - - 210,750 11,813,667 - 354,410 - 92,123,196 - 2,763,696 - 20,244,609 - 850,274 - - - (51,031) (514,985)
	204,491,001 80,076,767 19,030,198 15,122,969

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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 2011

Note 5 Tax concession – research and development

During the reporting period the Company lodged its 2011 income tax return which included a claim amounting to $512,472 in respect of qualifying expenditure incurred during the financial year ended 30 June 2011. The tax concession refund was received by the Company on 10 February 2012.

Note 6 Assets classified as held for sale

Prior to the end of the reporting period the Company agreed, subject to shareholder approval, to transfer a number of non-core exploration licences (disposal tenements) to Austrasia International Mining Limited (Austrasia). Consideration of $2,100,000 for the transfer of assets was agreed to be in the form of 8,000,000 ordinary fully paid shares in Austrasia, on successful admission to the Official List of ASX, and $500,000 in respect of reimbursement for prior exploration expenditure in respect of the disposal tenements.

As at 31 December 2011 the Company has classified the recoverable amount of $2,100,000 from capitalised mineral exploration and evaluation costs to current assets in respect of the proposed disposal of tenements. An amount of $211,021, being the carrying amount of the disposal tenements in excess of the recoverable amount of $2,100,000 as at 31 December 2011, has been written off and expensed as at that date.

Note 7 Dividends

No dividends were paid or proposed during the period.

The Company has no franking credits available as at 31 December 2011 (31 December 2010: Nil).

Note 8 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.

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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 2011

Note 9 Events occurring after the balance sheet date

Other than the following, 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.

• On 10 February 2012, the Company’s shareholders approved the proposed transfer of exploration assets from the Company to Austrasia, pending Austrasia obtaining conditional approval for admittance to the Official List of ASX (Note 6).

• On 15 February 2012, the Company completed the issue of 2,500,000 ordinary fully paid shares to Directors of the Company as compensation for a reduced cash salary component from the period commencing 1 January 2012. 1,500,000 shares were issued to the Managing Director, whilst the Non-Executive Directors each received 500,000 shares.

• On 2 March 2012, the Company issued 2,000,000 unlisted options exercisable at 10 cents each on or before 2 March 2013, to a consultant in relation to the introduction of International Natural Resources Limited as an investor in the Company.

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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 6 to 13 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 2011 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 Perth this 13[th] day of March 2012

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Nathan Lude Managing Director

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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 info.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 statement of financial position as at 31 December 2011, 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

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 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 financial position as at 31 December 2011 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 Emergent Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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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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 Company’s financial position as at 31 December 2011 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.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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J W Vibert Partner - Audit & Assurance

Perth, 13 March 2012

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