GENESIS RESOURCES LIMITED — Interim / Quarterly Report 2012

Mar 14, 2012

Tel: +61 3 9988 5892 Fax: +61 3 9867 4180 www.genesisresourcesltd.com.au

GENESIS RESOURCES LIMITED (ASX CODE: GES) (ABN 22 114 787 469)

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

TABLE OF CONTENTS

	Page
Directors' Report	1
Auditor's Independence Declaration	7
Financial Report for the half-year ended 31 December 2011	8
Statement of Comprehensive Income	8
Statement of Financial Position	9
Statement of Changes in Equity	10
Statement of Cash Flows	11
Notes to the Financial Statements	12
Directors' Declaration	16
Independent Auditor's Review Report	17

Directors' Report

The Directors present their report together with the interim financial report of Genesis Resources Limited ("Genesis" or "the Company"), for the six months ended 31 December 2011 and independent auditor's review report thereon. This financial report has been prepared in accordance with Australian Equivalent International Financial Reporting Standards.

Directors

The names of directors who held office during or since the end of the half-year and until the date of this report are as below:

Mr Eddie Lung Yiu Pang (Chairman) Appointed 6 March 2009 Dr Ahmet Kerim Sener (Non-Executive Director) Appointed 27 March 2006 Dr Allan John Parker (Non-Executive Director) Appointed 07 August 2010

Name Period of directorship

Mr Deric Wee (Non-Executive Director) Appointed 11 December 2009

Review of Operations

Principal Activities

The principal activities of the Company during the period were exploration for and evaluation of gold, manganese and base metals. There was no significant change in the nature of the Company's activities during the period.

MACEDONIA

The Company's main exploration focus during the half year was at Plavica within the Republic of Macedonia where Genesis has the right to earn a 62% joint venture interest. Plavica has a JORC Inferred Resource of greater than 57Mt containing 1.65M oz Au in addition to silver and copper. In 2010 the Ministry of Economics within the Republic of Macedonia (FYROM) granted seven contiguous concession licences over Plavica Project to Genesis Resources' JV partner RIK Sileks AD Kratovo ("Sileks") for a term of 4 years. The project overs an area of 184.94 km² in a region that is highly prospective for gold, copper and silver mineralisation.

During the period, Genesis completed a HQ/NQ diamond core drilling programme for a total of 2,842m on only one of the seven concession areas. This drilling programme of 13 holes was completed in late July 2011 and focused exclusively on the Plavica deposit. The results of the first four holes, which were drilled into an area that contains part of the current inferred resource, were announced on the 17th November 2011 (Table 1). The remaining nine holes, totalling 1,526m, were drilled into the exploration target represented by Plavica Ridge (eight holes) and one hole, PLV-22, was drilled into an area containing historic mining activity. The results from the remaining nine holes were announced on the 15th December 2011 (Table 2).

The drilling programme was designed to test a part of the current Inferred resource and to undertake new exploration drilling along zones of vughy silica alteration in the vicinity of Plavica Ridge. The drilling has now confirmed the presence of continuous gold mineralisation within vughy silica and

Financial Report for the half-year ended 31 December 2011

related alteration along Plavica Ridge over a strike length of approximately 800m and to a depth of approximately 100m below surface. The drilling also generally but not consistently supported earlier Yugoslav drill data, which will have a bearing on the currently defined JORC resource, which was defined solely on this historic drill data.

Highlights of recent drilling within the existing resource area include 72m @ 0.61 g/t Au + 10 g/t Ag and 45.1m @ 0.7% Cu, 0.52 g/t Au, 11.5 g/t Ag + 0.1% Mo. These results were generally supportive of the earlier Yugoslav drilling data. Highlights of drilling across the Plavica Ridge include 102m @ 0.80 g/t Au, 30.3m @ 1.08 g/t Au and 16.4m @ 1.28 g/t Au. Based on these results the Company recognises that there is potential to establish a low-grade heap-leachable oxide resource across the vughy silica ridges at Plavica.

Reconnaissance exploration of the remaining six concession areas in the vicinity of the Plavica project was completed during the period. Remote-sensing imagery has been used to constrain areas of interest within these concessions and ground based follow-up work involving rock-chip sampling and ground truthing of targets was completed. The aim of this work programme was to define areas that show potential for satellite mineral resources to Plavica and to determine sites for future drilling.

Table 1: Summary intercepts obtained from the first four holes of the 2011 drilling programme undertaken by Genesis on the Plavica Project, Macedonia. The intercepts are calculated separately on the basis of Au zones defined at a 0.2 g/t cut-off and Cu zones defined at a cut-off of 0.2% Cu. A minimum composite width of 5m was selected, with maximum internal dilution of 4m.

Hole ID	From (m)	To (m)	Length (m)	Au (ppm)	Cu (%)	Ag (ppm)	Mo (%)	Pb (%)	Zn (%)
PLV-10	161.8	238.0	76.2	0.54	0.16	4.52	0.00	0.15	0.24
PLV-11	12.0	50.6	38.6	0.68	0.11	6.58	0.02	0.15	0.25
PLV-11	221.4	261.8	40.4	0.75	0.04	8.43	0.08	0.22	0.53
PLV-11	268.0	340.0	72.0	0.61	0.52	9.96	0.07	0.04	0.34
PLV-12	100.9	125.3	24.4	0.45	0.16	9.60	0.00	1.05	0.16
PLV-13	147.7	169.8	22.1	0.43	0.26	34.79	0.03	0.31	0.07

Intercepts Defined by Au Zones (0.2ppm Au cut-off)

Intercepts Defined by Cu Zones (0.2% Cu cut-off)

Hole ID	From (m)	To (m)	Length (m)	Cu (%)	Au (ppm)	Ag (ppm)	Mo (%)	Pb (%)	Zn (%)
PLV-10	45.6	67.8	22.2	0.71	0.17	0.37	0.00	0.02	0.10
PLV-10	147.6	169.0	21.4	0.63	0.36	2.36	0.00	0.09	0.38
PLV-11	90.9	116.2	25.3	0.43	0.27	7.76	0.02	0.32	0.65
PLV-11	134.6	174.5	39.9	0.44	0.49	5.89	0.03	0.12	0.93
PLV-11	271.7	316.8	45.1	0.70	0.52	11.54	0.10	0.05	0.38
PLV-12	222.6	246.3	23.7	0.41	0.33	35.09	0.01	0.15	0.17
PLV-13	83.2	94.8	11.6	0.55	0.29	3.35	0.00	0.16	0.02
PLV-13	151.4	169.8	18.4	0.30	0.47	40.16	0.03	0.35	0.08

Financial Report for the half-year ended 31 December 2011

Table 2: Summary intercepts obtained from nine holes of the 2011 drilling programme undertaken by Genesis on the Plavica Project, Macedonia. The intercepts are calculated on the basis of Au zones defined at a 0.2 g/t cut-off. A minimum composite width of 5m was selected, with maximum internal dilution of 4m. Note that PLV-15 ended in mineralisation and the hole was abandoned due to a technical drilling issue.

Hole ID	From (m)	To (m)	Length (m)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
PLV-14	149.5	168.5	19	0.57	0.30	0.02	0.02	0.05
PLV-15	86.5	116.8	30.3	1.08	3.06	0.02	0.02	0.07
PLV-16	0	33.2	33.2	0.62	3.52	0.03	0.04	0.00
PLV-17	50.9	62.9	12	0.69	1.15	0.14	0.01	0.00
PLV-18	28.9	45.3	16.4	1.28	1.93	0.01	0.33	0.01
PLV-18	76.5	89.5	13	0.56	0.57	0.03	0.01	0.00
PLV-18	144.9	151	6.1	0.31	0.76	0.08	0.07	0.01
PLV-19	16.8	118.8	102	0.80	6.28	0.06	0.07	0.08
PLV-20	0	7.9	7.9	0.69	7.42	0.03	0.20	0.00
PLV-21	88.3	95.9	7.6	0.22	0.97	0.14	0.04	0.04
PLV-21	115.2	128.6	13.4	0.25	0.63	0.04	0.01	0.02
PLV-22	0	21.9	21.9	0.35	84.90	0.04	0.82	0.02
PLV-22	27.9	39.5	11.6	0.34	3.67	0.21	0.51	0.76
PLV-22	54.7	77.14	22.44	0.73	6.35	0.36	0.24	0.19

AUSTRALIA

Alice Springs Copper-Gold-Iron project

The Alice Springs Project consists of one granted Exploration Licence (EL24817) and is located approximately 155 kilometres by road from Alice Springs via the Stuart Highway.

Genesis publically reported in September 2011 positive results for samples collected during a field assessment of geological and geophysical targets.

Significant grades of copper, gold, silver and bismuth (with visible malachite, chalcopyrite, chalcocite and chrysocola) were identified in the Cadney Fault shear zone. This zone, which consists of quartzcarbonate veins in sheared gneiss, has a strike-length of over 10km in an east-southeast direction across most of the licence area.

Two prospects on this shear zone revealed strong anomalism in Cu, Bi, Ag and Au in recent sampling: Sample number (SN) G00181 (Corner Post Hill) 5.8% Cu, 4.6% Bi, 27 g/t Ag and 0.7g/t Au, which confirmed historical sampling where high Pb (4320ppm) and iron (28%) were also found. SN G00170, taken over a target electrical anomaly, assayed 3390ppm Cu and supported the historical results of 13% Cu and 0.5g/t Au.

Prospects on cross-cutting northeast-striking faults were also found to be carrying significant mineralisation, including iron stringers, with SN G00176 containing 1340ppm Cu and SN G00184

Financial Report for the half-year ended 31 December 2011

returning 7360ppm Cu and 1.8g/t Au, the latter confirming historical anomalism of 15% Cu and 2.6g/t Au in the area.

The best iron grades received were from samples G00172 from Triple Iron Hill and G00176 from "Diana's Block 8", which returned 59.3% and 57% Fe respectively. However, sample G00159 taken from Magnetite Hill returned only a moderate assay of 23.9% Fe.

Follow-up work focused on soil sampling along the shear zones, especially points of intersection, A total of 351 soil samples of regolith were collected along Cadney Fault in November 2011. Although bush fires delayed progress, most of the planned samples were collected. Results are awaited.

The MMP submitted to the Northern Territory Department of Resources for a proposed drilling program is nearing approval.

McArthur River Manganese Project

The McArthur River project is located approximately 850 kilometres southeast of Darwin in the Northern Territory and 450 kilometres north-west of Mount Isa in Queensland. The project area contains the Masterton No2 manganese occurrence. Previous reviews of the available geophysical and geological data and subsequent reconnaissance rock chip sampling confirmed the location and tenor of the manganese mineralisation. However, historic drilling information acquired in mid-2011 revealed that the main, massive occurrences of manganese did not extend below about 5m in depth.

Results of a detailed gravity survey undertaken over a small surrounding area indicate the possibility of buried massive manganese. Petrophysical data has highlighted a gravity contrast between outcropping manganese mineralisation and surrounding limestone and will be used to model the gravity targets for further investigation. Unexplained gravity anomalies offer potential for the discovery of new manganese deposits.

Arltunga Gold-Copper-Iron Project

The Arltunga gold project is located about 110 kilometres northeast of Alice Springs and encompasses most of the former Arltunga Goldfield. The Arltunga Goldfield has been subject to small scale historical mining activities from the late 1800s to mid 1900s, and again in the 1980s, producing approximately 15,400 oz of gold, primarily from high grade quartz reefs. The Exploration License hosts 33 historical gold mines and prospects with significant gold assays up to 53g/t from rock chip sampling around old mine workings and pyritic-quartz veins.

Genesis Resources publically reported in September 2011 positive results for samples collected during a field assessment of geological and geophysical targets.

High values of gold from widespread historical working were confirmed, which indicated that goldpregnant solutions were generated locally, probably in igneous intrusions evident on magnetic images. Although generally associated with thin quartz veins which are of low interest in themselves, an excellent gold value of 29.2g/t Au (SN G00133) was discovered in chlorite schist which cross-cuts the lines of lode. The possibility of larger scale, shear-hosted gold deposits will be investigated.

Financial Report for the half-year ended 31 December 2011

Some electrical, gradient-array-induced-polarisation anomalies investigated were found to be associated with pyritic quartz veins. Since a previous investigation found that massive pyrite at Wheal Fortune Mine (Figure 2) contained 134 g/t Au, some electrical anomalies will be further investigated.

A drilling program is recommended and an ATR was completed and sent to the Government for approval.

Field work planned for the last quarter of 2011 was cancelled because of intense bush fires.

Gladstone Manganese Project

The Gladstone-Mount Millar Project consists of Exploration Licence (EPM15771) and Mining Lease Application (MLA80166) and is located approximately 15 kilometres by road from the port of Gladstone on the east coast of central Queensland.

On 21 April 2011, the Queensland Government Department of Environment and Resource Management granted an Environmental Authority (Mining Lease) Non Code Compliant Level 2 Mining Project (EA MIN201115110) for the Mount Millar Mine. However, this EA is not activated until compensation agreements ("CA") are in place with Queensland Main Roads and Queensland National Railways. The CA with Queensland Main Roads was finalised in December.

In mid-2011, the Queensland Government advised of its commitment to resolve exploration-urban land use conflict by declaring a buffer zone, an Urban Restricted Area (URA), around Gladstone Township. The outer reaches of the buffer zone impinge on the Gladstone EPM and include the MLA over Mount Miller, so that Genesis has been asked to justify being exempted from this zone. Our reply has been acknowledged and a reply is awaited.

Diamond drilling has been proposed at Mount Miller to confirm the extent of mineralisation believed to remain after previous mining activity. Permission to conduct the drilling programme was sought under the Gladstone EPM and a response is awaited.

Detailed geological and petrophysical logging of previous diamond drill-holes and surface geological mapping and sampling of exposed manganese mineralisation was carried out.

Pioneer Gold Project

The Pioneer Project consists of one granted Exploration Permit Mineral (EPM15619) covering 12.47 square kilometres approximately 70 kilometres by road from Bundaberg via the Bruce Highway in Queensland.

Field work by Genesis geologists during the period identified slightly magnetic pyrrhotite and some magnetite in samples from the Main Shaft on the Pioneer Reef within the Gaeta Goldfield. Samples of vein quartz, volcanic and altered host rocks were sent to be crushed, gravity separated and further characterised using variable gauss magnetic separation. In this way the association of gold with magnetite, pyrite, pyrrhotite and arsenopyrite will be clarified and local and regional exploration techniques will be established.

Other Australian Projects

Planned exploration and evaluation activities of the Laura River project has been discontinued at this time. No field work was undertaken on this project during the 6-month period to 31 December 2011.

Results

The loss of the Company for the period ended 31 December 2011 was \$90,531 (31 December 2010, loss of \$336,206).

Significant changes in state of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Company that occurred during the financial period under review except as otherwise disclosed in this report.

Auditor's Independence Declaration

The lead auditor's independence declaration is set out on page 7 and forms part of the directors' report for the year ended 31 December 2011.

Signed in accordance with a resolution of directors:

Mr Eddie Lung Yiu Pang Chairman 15 March 2012

Auditor's Independence Declaration

As lead auditor for the review of Genesis Resources Limited for the half-year ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been:

• no contraventions of the auditor independence requirements of the Corporations Act 2001 in $a)$ relation to the review; and
• no contraventions of any applicable code of professional conduct in relation to the review. $_b$

This declaration is in respect of Genesis Resources Limited.

John O'Donoghue Partner PricewaterhouseCoopers

Melbourne 15 March 2012

Liability limited by a scheme approved under Professional Standards Legislation.

STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

	Note	31 Dec 2011 \$	31 Dec 2010 \$
Other income		313,119	89,592
Employee costs		(60,110)	(49,390)
Administrative and other expenses		(279,417)	(411,144)
Capitalised exploration & evaluation asset written off	4	(78,556)	-
Results from operating activities		(104,964)	(370,942)
Finance income		14,433	44,546
Finance expenses		-	(9,810)
Net Finance income		14,433	34,736
Profit / (Loss) before income tax		(90,531)	(336,206)
Income tax expense		-	-
Profit / (Loss) for the half-year		(90,531)	(336,206)
Other comprehensive income
Net change in fair value of available-for-sale financial assets		22,058	(7,404)
Other comprehensive income for the half-year, net of tax		22,058	(7,404)
Total comprehensive income for the half-year		(68,473)	(343,610)
Earnings per share
Basic earnings/(loss) per share (cents per share)		(0.00)	(0.63)
Diluted earnings/(loss) per share (cents per share)		(0.00)	(0.63)
The above Statement of Comprehensive Income		should be read in conjunction with the accompanying

notes.

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

	31 Dec 2011	30 Jun 2011
	\$	\$
Assets
Current Assets
Cash and cash equivalents	373,841	958,043
Trade and other receivables	36,976	42,754
Other financial assets	9,627	473,210
Total Current Assets	420,444	1,474,007
Other financial assets	67,190	67,190
Exploration and evaluation assets	3,404,095	2,729,564
Total Non-Current Assets	3,471,285	2,796,754
Total Assets	3,891,729	4,270,761
Current Liabilities
Trade and other payables	100,469	97,909
Total Current Liabilities	100,469	97,909
Total Liabilities	100,469	97,909
Net Assets	3,791,260	4,172,852
Equity
Share capital	4,826,885	4,826,885
Reserves	-	291,061
Accumulated losses	(1,035,625)	(945,094)
Total Equity	3,791,260	4,172,852

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

STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2011

For the half-year ended 31 Dec 2011

	Issued Capital	Accumulated (Losses)	Available-for sale Asset Reserve	Total equity
	\$	\$	\$	\$
Balance at 1 July 2011	4,826,885	(945,094)	291,061	4,172,852
Total comprehensive income for the period	-	(90,531)	-	(90,531)
Other comprehensive income
Net change in fair value of available-for sale financial assets, net of tax Disposal of available-for-sale financial assets,	-	-	22,058	22,058
net of tax	-	-	(313,119)	(313,119)
Balance at 31 December 2011	4,826,885	(1,035,625)	-	3,791,260

For the half-year ended 31 Dec 2010

\$ \$ \$ Balance at 1 July 2010 4,826,885 (383,042) 335,539 Total comprehensive income for the period - (336,206) - Other comprehensive income Net change in fair value of available –for-sale - - (7,404) financial assets, net of tax Disposal of available-for-sale financial assets, net of tax - - (89,096) Balance at 31 December 2010 4,826,885 (719,248) 239,039	Issued Capital	Accumulated (Losses)	Available-for sale Asset Reserve	Total equity
				\$
				4,779,382
				(336,206)
				(7,404)
				(89,096)
				4,346,676

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

STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

	31 Dec 2011	31 Dec 2010
	\$	\$
Cash Flows From Operating Activities
Payments to suppliers and employees (inclusive of goods and services tax)	(331,572)	(453,157)
Interest received	14,433	44,546
Net cash (used in) operating activities	(317,139)	(408,611)
Cash Flows From Investing Activities
Net Proceeds from sale of investments	486,024	155,423
Payments of exploration and evaluation expenditure	(753,087)	(413,384)
Net cash (used in) by investing activities	(267,063)	(257,961)
Cash Flows From Financing Activities
Repayment of loan from related party	-	(5,581)
Net Cash (used in) financing activities	-	(5,581)
Net (decrease) in cash and cash equivalents	(584,202)	(672,153)
Cash and cash equivalents at 1 July	958,043	2,345,145
Cash and cash equivalents at 31 December	373,841	1,672,992

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

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

1. Basis of preparation of half-year report

The general purpose interim financial report for the half-year ended 31 December 2011 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The interim financial report does not include all the 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 Genesis 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.

2. Going concern

For the six months ended 31 December 2011, the Company reported a net loss of \$90,531, had net cash outflow from operating activities of \$317,139 and had net current assets of \$319,975 at the balance sheet date. Mining and exploration licences held by the Company have annual expenditure obligations of \$439,500 (Note 8) to maintain their "good standing" status. Failure to meet individual tenement obligations requires explanation to the relevant government authority and may result in a loss of tenements.

The ability of the Company to continue as a going concern is dependent on the successful completion of a plan to raise additional capital via a rights issue and/or other capital raising, and the sale of surplus assets, combined with strict cost management over administrative spending, to finance planned ongoing exploration activities and meet its tenement and administrative expenditure obligations.

As a result of these matters, there is material uncertainty as to whether the Company will continue as a going concern and therefore, whether it will realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report.

The directors believe that the Company will be successful in obtaining the required funding to meet the expenditure obligations and, accordingly, have prepared the financial report on a going concern basis.

3. Segment information

The Company has reportable segments, as described below, which are the Company's business units. The two business units are managed separately because they are regulated under different authorities. For each of the business units, the Company's Board of Directors, which acts as the Chief Operating Decision Maker, reviews internal reports on at least a quarterly basis. The following summary describes the operations in each of the Company's reportable segments:

• Australia: includes copper, iron, gold, manganese and other base metal exploration projects in the Northern Territory and Queensland.
• Macedonia: includes a gold and base metal exploration project.

Information regarding the results of each reportable segment is included below. As both segments are in the early stages of exploration, there is no associated segment profit or loss, as expenditure is capitalised in accordance with the company's accounting policy. Comparative segment information has been represented in conformity with the requirement of Accounting Standard AASB 8 Operating Segments.

	Australia		Macedonia		Head Office		Total
	31 Dec 2011	30 Jun 2011	31 Dec 2011	30 Jun 2011	31 Dec 2011	30 Jun 2011	31 Dec 2011	30 Jun 2011
	\$	1\$	\$	\$	\$	\$	\$	\$
Other income	-	-	-	-	313,119	141,390	313,119	141,390
Operating expenses	-	-	-	-	(418,083)	(752,616)	(418,083)	(752,616)
Reportable segment profit/(loss) before income tax	-	-	-	-	(90,531)	(542,990)	(90,531)	(542,990)
Other material non-cash items :
Exploration and evaluation assets	2,640,820	2,237,045	763,275	492,519	-	-	3,404,095	2,729,564

Financial Report for the half-year ended 31 December 2011

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items

	30 Jun 2011
\$	\$
	141,390
-	-
313,119	141,390
(90,531)	(542,990) -
(90,531)	(542,990)
3,404,095	2,729,564
487,634	1,541,197
3,891,729	4,270,761
-	-
100,469	97,909
100,469	97,909
	31 Dec 2011 313,119 -

4. Capital exploration and evaluation asset written off

The capital exploration and evaluation asset written off during the period amounting to \$78,556 (30 June 2011: Nil) relates to the Laura River project, as the company has decided to discontinue exploration and evaluation activities in this area.

Financial Report for the half-year ended 31 December 2011

5. Share Capital

	31 Dec 2011	30 Jun 2011
	\$	\$
Issued and fully paid ordinary shares
(31 Dec 2011: 53,080,752, 30 Jun 2011: 53,080,752)	4,826,885	4,826,885

Unissued ordinary shares of the Company under option at period-end are:

Expiry date	Exercise price (\$)	Options on issue as 31 Dec 2011	Options on issue at 30 Jun 2011
24/11/2011	0.30	-	2,500,000
27/10/2012	0.20	500,000	500,000

6. Contingent Assets and Liabilities

There have been no changes of a material nature in contingent liabilities or assets since the last annual reporting date.

7. Related parties

No updates to existing arrangements with related parties are in place. For the details of these existing arrangements, refer to the 30 June 2011 annual financial report.

8. Commitments

In order to maintain current rights of tenure to exploration permits, the Company is required to perform minimum exploration work to meet minimum expenditure requirements. These obligations may vary over time, depending on the Company's exploration program and priorities.

These obligations which include a portion relating to rent are not provided for in the financial report and are payable as follows:

	31 Dec 2011	30 Jun 2011
	\$	\$
Within one year	439,500	403,849
One to five years	-	210,770
Later than five years	-	-
	439,500	614,619

DIRECTORS' DECLARATION

In the opinion of the directors of Genesis Resources Limited, (" the Company"):

• 1. the financial statements and notes set out on pages 10 to 15 are in accordance with the Corporations Act 2001, including:
• a. complying with Accounting Standards, the Corporations Regulations 2011 and other mandatory professional reporting requirements, and
• b. giving a true and fair view of the entity's financial position as at 31 December 2011 and of its performance for the half-year ended on that date, and
• 1. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

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

Mr Eddie Lung Yiu Pang Chairman 15 March 2012

Independent auditor's review report to the members of Genesis Resources Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Genesis Resources Limited, 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, selected explanatory notes and the directors' declaration for Genesis Resources Limited (the company).

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 (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the company's 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 Genesis Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

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

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Liability limited by a scheme approved under Professional Standards Legislation.

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 Genesis 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 the Corporations Regulations 2001.

Material uncertainty regarding continuation as a going concern

Without qualifying our conclusion, we draw attention to Note 1 in the financial report, which indicates that the company incurred a net loss of \$90,531 during the half-year ended 31 December 2011, and that the company's continuation as a going concern depends upon its success in obtaining additional funding to finance ongoing exploration and operating activities. These conditions, along with other matters set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt over the company's ability to continue as a going concern and therefore the 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.

Price westerhouse happy

PricewaterhouseCoopers

John O'Donoghue Partner

Melbourne 15 March 2012