FENIX RESOURCES LTD — Interim / Quarterly Report 2012

Jan 30, 2012

ASX QUARTERLY REPORT for the Period Ending — 31[st] December 2011

HIGHLIGHTS

EMERGENT REOURCES LIMITED

“An emerging Western Australian mineral resource company focused on iron, gold, base metals and uranium”

ASX Code: EMG

Total shares on issue 204,491,001 Unlisted options 5,296,443

Directors

Mr Wolfgang Fischer – Executive Chairman Nathan Lude - Managing Director Mr Francis DeSouza – Non Executive Director

Projects

Extension and Extension North Gold Project: Extension to the Plutonic Well Greenstone Belt with previous drilling for Au

Beyondie Iron Project : (80% EMG, 20% DEG) Established 561 Mt inferred magnetite resource with multiple potential iron products.

EMERGENT SIGNS AGREEMENT WITH NEW STRATEGIC CHINESE PARTNER

• International Natural Resources Limited (INR) agrees to subscribe $4m to acquire 55% equity stake in new company that will move to seek listing on ASX.

• Subject to shareholder approval, Emergent will vend its gold and base metals exploration projects, in return for 20% equity stake in the new company and a $500,000 cash reimbursement.

• Preliminary discussions with INR to provide Emergent with project financing, asset level investment and/or off-take on the Beyondie Iron Project

CAPITAL RAISINGS

• During the quarter the company successfully completed a one for one non-renounceable pro-rata entitlement issue, at 3 cents per share, to raise $2,763,695. The issue closed on 20 October 2011 raising $1,269,350. On 17[th] November, 2011 the Company placed the remainder of the shortfall shares with sophisticated and professional investors to raise the shortfall amount of $1,494,345. Total funds raised were $2,763,695.

• The Company also placed 20,244,609 ordinary fully paid shares with INR at 4.2 cents per share, raising approximately $850,000 for the Company. INR is a strategic investment partner and holds 9.9% of the Company’s issued capital.

EXTENSION & EXTENSION NORTH GOLD PROJECT

Glengarry Gold & Base Metal Project : Comprising 2500 square kilometres of highly prospective ground for Cu, Pb, Zn, precious metals and uranium.

Marble Bar Copper, Gold Project: Potential for gold and VMS deposits.

Paterson Uranium, Copper, Gold Project: Potential for Kintyre, Maroochydore and Nifty style deposits.

• Coherent gold anomalous zones identified from MMI soil geochemistry results

• Main anomalous area is centred over several high grade primary gold intersections returned from historical diamond drilling

• Observed geological setting compares favourably with typical Marymia gold settings

• Wide bands of massive sulphide mineralisation (mainly chalcopyrite) identified in previous historical drilling in the main anomalous area

• Gold anomalous results were returned in stream sediment samples, with encouraging values

• Significant gold targets delineated, warranting drilling.

• • Numerous 2+ g/t gold intercepts identified in past drilling.

• Shallow surface cover has masked much of the prospective geology.

QUARTERLY REPORT for the Period Ending — 31[st] December, 2011

AGREEMENTS SIGNED WITH NEW STRATEGIC CHINESE PARTNER

In December, the Company entered into a binding co-investment agreement with International Natural Resources Ltd (INR). INR subscribed for 9.9% of Emergent Limited’s (“Emergent” or “the Company”) total issued share capital, at 4.2 cents per share, raising approximately $850,000 for the Company. INR has also agreed to subscribe $4 million to acquire 55% equity stake in newly incorporated company - Austrasia International Mining Limited (Austrasia), focused on the further exploration and development of Emergent’s precious and base metals exploration assets in Western Australia.

Subject to Emergent shareholder approval at a General Meeting of Shareholders to be held on 10 February 2012, Emergent will vend its gold and base metal exploration projects into Austrasia and in return will receive $1.6 million in the form of Austrasia shares, representing a 20% equity stake in that company. Austrasia will seek to list on the Australian Securities Exchange (ASX) by way of an Initial Public Offering (IPO) in the first quarter of 2012.

Additionally, Emergent will receive $500,000 in cash as a reimbursement for past expenditure on the projects. The remaining 25% equity in Austrasia will be offered to Emergent’s shareholders through a priority entitlement and any shortfall will be made available to the public, from which it is aimed to raise $2.0 million. Emergent will have direct ongoing involvement with Austrasia through a seat on the Austrasia Board.

The Company has also had preliminary discussions with INR on assistance with the provision of project finance, asset level investment and / or an off-take agreement for the Beyondie Iron Project (80% EMG, 20% DEG), with future negotiation taking place on a non exclusive and good faith basis.

INR is a privately controlled, multi-national company focused on the exploration, development and processing of mineral resources around the world. INR’s Chairman is the founder of the privately owned Jiangsu TianDiLong Group, which is one of China’s leading copper cable production companies. Currently the TianDiLong Group is building the Lianyungang Copper Processing Project, an 800,000 ton per year copper smelting facility in Jiangsu Province, China. INR’s focus is to develop quality exploration projects and enter into off-take arrangement upon project development.

CAPITAL RAISINGS

During the quarter the Company successfully completed a one for one non-renounceable pro-rata entitlement issue, at 3 cents per share, to raise $2,763,695. The issue closed on 20 October 2011 raising $1,269,350. On 17[th] November, 2011 the Company placed the shortfall shares with sophisticated and professional investors to raise the shortfall amount of $1,494,345. Total funds raised were $2,763,695

The Company also placed 20,244,609 ordinary fully paid shares with INR at 4.2 cents per share, raising approximately $850,000 for the Company. The Company is currently in a sound cash position and during the quarter significantly reduced operating costs, so as to conserve capital for value add opportunities. The Company has also recently submitted a Research and Development Grant Tax Concession claim which, if successful, will further add to Emergent’s sound cash position.

BOARD CHANGES

At the end of the quarter the Company made a number of changes to the board including the appointment of Mr De Souza to the board. These changes complement the Company’s cost reduction strategy whilst ensuring that the composition of the Board going forward retains the required management and leadership qualities to advance the Company in the future.

Appointment of Managing Director – Mr Nathan Lude

The Company’s Chief Executive Officer, Mr Nathan Lude, has moved to the role of Managing Director.

Mr Wolfgang Fischer changes from Executive Chairman to Non-Executive Chairman

The appointment of Mr Lude as Managing Director has enabled Mr Wolfgang Fischer to move to a non-executive role as the Company’s Non-Executive Chairman.

Appointment of Non-Executive Director - Mr Francis De Souza

Highly regarded finance professional, Mr Francis De Souza has been appointed as a Non-Executive Director. Mr De Souza, who has a Bachelor of Commerce from Curtin University in Western Australia, has 12 years experience in financial services, especially in corporate advisory and equity markets with a specific focus in the resources sector. Mr De Souza's business experience has included equity structured sales and trading, mergers and acquisitions, asset divestments, equity and hybrid financing, corporate business development and project evaluation across a range of mineral commodities. Mr De Souza is a Director of Epic Resources Ltd and Conto Resources Ltd, both junior exploration companies with projects in Australia.

Emergent Resources also announced that Mr Stuart Hall, Geoff Cowie and Mr Nicholas Martin have stepped down as Non-Executive Directors. We would like to thank them for their service to the Company during their time on the Board.

Mr Martin has generously agreed to remain as an adviser to the Board.

ASSET REVIEW

During the quarter, as a result of the continuing appraisal of its assets. the Company confirmed the importance of it shifting towards developing a portfolio of assets that have the potential to deliver near term value for shareholders. The review was conducted in the context of the current global economic outlook for mineral commodities and highlighted the positive medium to long term outlook for precious metals prices.

FIELD WORK IN THE QUARTER:

SIGNIFICANT GOLD POTENTIAL IDENTIFIED AT EXTENSION & EXTENSION NORTH, MARYMIA PROSPECTS:

The Company has identified gold exploration potential in the extensions of the rich Plutonic Well Greenstone Belt that lie in the eastern parts of the Company’s Beyondie tenure. Through E52/2474 and E52/2559, Emergent directly controls a 21km strike length (approximately 25%) of the Plutonic Well Greenstone Belt in which to date over 7 million ounces of gold have been found.

During the quarter the Company received results from its Mobile Metal Ion[1] (MMI) soil sampling program at its Extension prospect. The survey involved the collection of 545 soil samples (including QAQC duplicates) on two separate grids with samples collected at 60m intervals on lines 120m apart. The survey was necessary at Extension as the prospect has very little outcropping geology, being mostly covered by a veneer of Recent sediments.

The main sampling area tested a 3.5km length of a northeast trending shear zone interpreted from the Company’s aeromagnetic data. Historical drilling activity, concentrated mostly in this area, carries numerous high grade gold intercepts. The smaller sampling area (at the southern end and to the east of the main area) tested past drilling intercepts and the contact between granite and mafic rocks as shown by the aeromagnetic data and geological mapping.

The MMI geochemistry has outlined a major gold anomaly in the central part of the main grid (Figure 2 ‘Drill target zone’). The anomaly in total is approximately 50 hectares in area and measures 1,100 by 430 metres. It constitutes a major drill target.

The anomaly mainly lies over the sheared hanging wall contact between mafic and granitic rocks; a structural setting similar to several Marymia gold deposits. The main anomaly is modified by several inferred north-trending structures that intersect the major shear, also highlighting its prospectivity.

The anomaly is coincident with several high grade gold intercepts returned from historical RAB, RC, and Diamond drill holes. Most other intersections are located in the ‘foot wall’ position of the shear and intercepted gold rich supergene or secondary zones that have plausibly bled southeast off the primary mineralisation (i.e. the prevailing groundwater flow direction). In most cases, past drilling simply has not penetrated deep enough to intersect the possible primary sources identified through the use of MMI. Previous historical drilling within the main anomaly has also identified several wide bands of massive sulphide, comprising chalcopyrite (primary copper ore) and pyrite. These require further evaluation, up-dip and along strike.

1 MMI geochemistry is a super sensitive technique that analyses extremely low levels of elements that adhere as metal ions to the soil particles. These ions, having travelled vertically through the regolith cover from metal ore bodies below, accurately mark the positions of these bodies at surface.

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Drill
Target
Zone
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Figure 1: MMI gold in soil geochemistry contour map at Extension-Marymia Prospect

(hot colours reflect anomalous gold results)

EXTENSION NORTH MARYMIA

During the quarter a stream sediment sampling program at the Extension North gold prospect was completed. The program involved the collection of 72 samples (including QAQC duplicates) in two phases from first, second and third order ephemeral creeks that drain the Extension North prospect.

In total the sampling covered a combined drainage catchment area of over 1,250 hectares. The sampling was designed to include catchments over areas highlighted by historical drilling completed in the early 1990’s and also additional areas not covered by that drilling.

The sampling has returned some encouraging gold assays with results of 2510, 615 and 564 ppb, along with a number of results in the 100’s of ppb. These results are considered strongly anomalous relative to background values for gold.

The survey has outlined three strongly anomalous drainage catchments labelled as A, B and C in the diagram below (Figure 1). Areas A and C have been the focus of past historical drilling with some high grade results (6m at 5.07g/t and 4m at 3.31g/t) among other intersections located in the respective catchments (Figure 2).

The gold anomalous catchment located between A and C, area B, is a new discovery and no prior drilling has been conducted in this area. This catchment returned the highest BLEG values of 2,510 and 615ppb Au. The area is draining granite terrain with photo lineament features present, as well as a likely faulted margin between granite and Proterozoic lithologies to the south.

Emergent believes that these three gold anomalous catchment areas represent strong targets for further field work that will include geological mapping, rock chip sampling and soil sampling. The newly defined area B is also exciting because gold deposits can have a surface expression within mainly granite terrains with the extremely high stream sediment results in area B pointing to a potential nearby source.

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Figure 2 – Historical drilling near the identified anomalous drainage catchments (Au drilling intercepts using 1g/t lower cut and 2 m internal dilution)

CHANGE OF REGISTERED OFFICE

During the quarter the Company advised the contact details of its new registered office and principal place of business, effective 30 November 2011:

Suite 8, 7 The Esplanade Mt Pleasant WA 6153 Tel (08) 9316 9100 Fax (08) 9315 5475

ENDS

For further information please contact:

Nathan Lude Wolfgang Fischer Managing Director Non Executive Chairman Emergent Resources Limited

Ph: +61 8 9380 9122 E: admin@emergentresources.com.au Website: www.emergentresources.com.au

Competent Persons Statements

The information in this report that relates to Exploration Results is based on information compiled 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 report 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.

TABLE 1 – Total Stream Sediment Sample Results

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Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

	Emergent Resources Ltd	Emergent Resources Ltd
	ABN 68 125 323 622 Consolidated statement of cash flows
			31 December 2011
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows		Current quarter $A’000		Year to date (6 months) $A’000
		- (77) - - (369) - 8 - - -		- (505) - - (699) - 13 - - -
		(438)		(1,191)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets (d) environmental bonds 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - - - - - 55 - - -		- - (8) - - - 55 - - -
		55		47
		(383)		(1,144)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(383)	(1,144)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other – Share issue costs Net financing cash flows	3,614 - - - - (46)	3,968 - - - - (51)
	3,568	3,917
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	3,185 407 -	2,773 819 -
	3,592	3,592

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

related entities
1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
	152
	-

• 1.25 Explanation necessary for an understanding of the transactions

Item 1.23 – Remuneration of Directors

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Not Applicable

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Not Applicable

Financing facilities available

Add notes as necessary for an understanding of the position.

• 3.1 Loan facilities 3.2 Credit standby arrangements

	Amount available		Amount used
	$A’000		$A’000
		-		-
		-		-

• See chapter 19 for defined terms.

Appendix 5B Page 2

17/12/2010

Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration Total	$A’000
	80
	-
	-
	160
	240

Reconciliation of cash Reconciliationof cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	542	407
	3,050	-
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	3,592	407

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	N/a	-	-	-
	N/a	-	-	-

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions	-	-	-	-
	- -	- -	- -	- -
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	204,491,001	204,491,001
	112,367,805 -	112,367,805 -	-	-
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-	-	-
	- -	- -	- -	- -
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	3,700,000 300,000 1,046,443 125,000 125,000	- - - - -	Exercise price $0.20 $0.26 $0.26 $1.00 $1.50	Expiry date 31/08/2012 08/09/2012 27/10/2012 30/09/2012 30/09/2013
	-	-	-	-
	-	-	-	-
	-	-	-	-

• See chapter 19 for defined terms.

Appendix 5B Page 4

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Appendix 5B Mining exploration entity quarterly report

7.11 Debentures (totals only)	-	-
7.12 Unsecured notes(totals only)	-	-

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here:

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Date: 31 January 2012

(Company secretary)

Print name: Kevin Hart

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

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