GENESIS RESOURCES LIMITED — Interim / Quarterly Report 2013

Mar 12, 2013

Level 1, 61 Spring Street, Melbourne, Victoria, Australia, 3000

Tel: +61 3 9286 7500 Fax: +61 3 9662 1472 www.genesisresourcesltd.com.au

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

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

TABLE OF CONTENTS

	Page
Directors' Report	1
Auditor's Independence Declaration	17
Financial Report for the half-year ended 31 December 2012
Consolidated Statement of Comprehensive Income	18
Consolidated Statement of Financial Position	19
Consolidated Statement of Changes in Equity	20
Consolidated Statement of Cash Flows	21
Notes to the Financial Statements	22
Directors' Declaration	27
Independent Auditor's Review Report	28

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 2012 and independent auditor's review report thereon. This financial report has been prepared in accordance with Australian Equivalents to 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:

Name	Position	Period of directorship
Mr Eddie Lung Yiu Pang	Chairman	6 Mar 2009 – present
Mr Pok Seng (Peter) Kong	Managing Director	11 May 2012 – present
Mr Hooi Kiang (Alex) Lim	Non-Executive Director	26 Nov 2012 – present
Mr Deric Wee	Non-Executive Director	11 Dec 2009 – 26 Nov 2012
		16 Jan 2013 – present
Dr Allan John Parker	Non-Executive Director	7 Aug 2010 – 27 Jul 2012
Mr Patrick Volpe	Non-Executive Director	11 May 2012 – 26 Nov 2012
		16 Jan 2013 – present
Mr John Karajas	Non-Executive Director	22 Oct 2012 – 26 Nov 2012
		16 Jan 2013 – present
Mr John Zee		11 May 2012 – 26 Nov 2012
		16 January 2013 – present

Events during reporting period

Takeover Bid

Prior to the commencement of the reporting period, in April 2012, Clancy Exploration Limited (Clancy) announced a conditional takeover offer to acquire all the shares in the Company (Clancy Offer). The Board reviewed the Clancy Offer, and commissioned an independent expert which concluded that the Clancy Offer was neither fair nor reasonable to Genesis shareholders. Accordingly, the Board unanimously recommended that all Genesis shareholders reject the Clancy Offer. The Clancy Offer closed during the period on 20 August 2012 with the result that Clancy acquired approximately 8.92% of Genesis' share capital.

Capital Raising

1) Placement to strategic investor – On 9 August 2012, the Company completed the issue and allotment of 11,863,548 shares to a strategic sophisticated investor based in Malaysia, S Active Holding Sdn Bhd at an issue price of \$0.12 per share. The Company raised \$1,423,625 under the placement, with the objective of using such funds to progress the Company's ongoing exploration activities associated with its Plavica Project in Macedonia.

• 2) Rights Issue During the period, the Company completed a fully underwritten pro-rata nonrenounceable rights issue (on a 1-for-3 basis), under which it raised approximately \$2.74 million through the issue of 30,494,892 shares at \$0.09 per share.
• 3) Placement to various sophisticated investors In December 2012, the Company raised a further \$1.8 million through a placement of 18,000,000 shares to number of sophisticated investors at an issue price of \$0.10 per share.

Appointment of Scoping Study Consultant

In August 2012, the Company appointed Golder Associates Pty Ltd as a consultant to undertake a scoping study for the Plavica Project, focused on moving Genesis towards a prefeasibility study stage, and subsequently to a final feasibility study. The scoping study comprises of mine planning, mineralogy and metallurgy, financial analysis, geology, tailings, and the environmental and social impact on the region.

Appointment of Drilling Contractor

In August 2012, Genesis appointed Spektra Jeotek Sanayi ve Ticaret A.S. (Spektra), a drilling company based in Turkey, to complete a drilling program at the Plavica Project. The drilling program included a minimum of 7,000 meters of reverse circulation drilling and 2,500 meters of diamond core drilling, and commenced in September 2012.

Incorporation of Macedonian subsidiary

On 24 July 2012, the Company incorporated a wholly owned subsidiary, Genesis Resources International Dooel Skopje ("GRI"), which will be the operating vehicle for the Company's Plavica Project, and which will manage the Company's interests and activities in Macedonia.

Shareholder requisition for 2013 EGM

After the Company's 2012 AGM on 26 November 2012, the Company received a notice under section 249D of the Corporations Act 2001 (Cth) from a shareholder holding at least 5% of the votes that may be cast at a general meeting of the Company, requesting that the Company hold a general meeting of shareholders to consider a number of resolutions. In accordance with its statutory obligations under the Corporations Act, the Board despatched a notice of extraordinary general meeting of shareholders on 17 December 2012.

The extraordinary general meeting was held after the period on 16 January 2013, and all resolutions proposed were passed on a show of hands.

Change of registered office

In December 2012, the Company changed its registered office and principal place of business address to Level 1, 61 Spring Street, Melbourne, Victoria 3000.

Events after balance date

Drilling Agreement with Spektra

After the period, the Company entered into a further agreement with its Spektra to bolster the Company's ongoing drilling program at the Plavica Project. Spektra had previously been contracted to undertake a minimum of 7,000 meters of reverse circulation drilling and 2,500 meters of diamond core drilling at the Plavica Project. Under the new agreement, the Company contracted Spektra to undertake a minimum of 22,000 metres of diamond core drilling and 44,000 metres of reverse circulation drilling in 2013.

The Board expects that the drilling under the new agreement will be at a cost of approximately \$6 million over the term of the agreement, which is expected to be around 12 months.

This aggressive drilling program is designed to progress the Plavica Project towards a final feasibility study.

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.

On 24 July 2012, a wholly owned subsidiary, GRI was incorporated. It will be the operating vehicle for the Plavica project and also manage the Company's interests and activities in Macedonia.

Other than as stated above, there have been no significant changes in principal activities.

PLAVICA PROJECT: Gold, Copper, Silver (62%)

(Figure 1)

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 the Plavica Project to Genesis Resources' JV partner RIK Sileks AD Kratovo ("Sileks") for a term of 4 years. The project covers an area of 184.94 km² in a region that is highly prospective for gold, copper and silver mineralisation.

During the period, 23 Reverse Circulation (RC) and 3 Diamond Drill holes were drilled for totals of 4,695m of RC and 936m of diamond respectively. Drill hole locations are shown in Figure 2 whilst Table 1 provides details of drill hole coordinates, azimuths, inclinations and depths. Drilling commenced in the latter part of October and was terminated in mid-December with the onset of winter snow.

The RC samples have been sampled in 5m composite zones by a technique known as Spear Splitting and these samples are being despatched to the SGS Ankara laboratory for fire assay of gold content

and ICP-OES analysis of silver, copper, lead, zinc and arsenic as well as 29 other elements. Analytical results from these samples are expected in late February/March. Core splitting is due to commence in early February as will preparation of 1m splits from the RC drill samples.

Every hole was successful in intersecting mineralisation and drill holes RP-008A and RP-009A encountered deep zones of oxidation. A variety of drill hole azimuths were trialled so that the optimal drill direction for intersecting mineralised veins could be determined. This approach was instituted on observations of oxidised mineralised zones freshly cut by the bulldozer around the drill pads and by geological traverse in areas of deeper erosion. Two dominant mineralised directions were determined: east-west and 60-240 degrees. The drill hole azimuth of 150 degrees is drilled perpendicular to the 60- 240 degree trend and this drill hole azimuth appears to intersect mineralised zones as well as zones of deep oxidation (e.g. in RP-009A from surface to total depth of 250m) .

In excess of 46,000m of RC and 23,000m of diamond core drilling is planned for 2013.

Figure 1 Location of Plavica Gold-Copper-Silver Project, Republic of Macedonia.

Figure 2 Plavica 2012 drilling

Drill Hole Number	Easting	Northing	Azimuth	Inclination	Depth
RP-016	596400	4656300	50	60	210
RP-018	596300	4656300	50	60	207
RP-017	596350	4656350	50	60	225
RP-015	596450	4656350	50	60	237
RP-006	596300	4656400	50	60	182
RP-007	596400	4656400	50	60	255
RP-007A	596400	4656400	320	60	260
RP-008	596500	4656400	50	60	207
RP-008A	596500	4656400	150	60	202
RP-009	596600	4656400	360/0	60	225
RP-009A	596600	4656400	150	60	250
RP-010	596700	4656400	360/0	60	220
RP-010A	596700	4656400	150	60	183
RP-011	596800	4656400	360/0	60	183
RP-011A	596800	4656400	150	60	183
RP-012	596800	4656300	360/0	60	143
RP-012A	596800	4656300	150	60	144
RP-013	596700	4656300	360/0	60	250
RP-013A	596700	4656300	150	60	140
RP-036	596800	4656200	360/0	60	207
RP-036A	596800	4656200	150	60	201
RP-014	596500	4656300	360/0	60	180
RP-014A	596500	4656300	150	60	201
DDP-06	596610	4656280	230	50	227
DDP-02	596242	4655830	360/0	50	389
DDP-02A	596242	4655830	150	70	320

Table 1 Plavica 2012 drilling details

Figure 3 Location of Genesis Resources Limited's Australian projects

ARLTUNGA PROJECT: Copper, Gold, (GES : 100%)

1. Introduction

The Arltunga Gold Project, EL25238, is located approximately 110 kilometres northeast of Alice Springs (Figure 3) in the vicinity of the Arltunga Goldfield. Thirty three historical gold mines and prospects are known in the licence area.

A program of electrical profiling (CSAMT) was carried out during December 2012 guided by previously acquired Genesis electrical survey data (GAIP) over the known gold mineralisation (Figure 4).

The survey method was tested at a known occurrence of sulphide mineralisation, which was found by historical prospecting to contain 132g/t gold, and was effective. Subsequently, thirteen lines were surveyed with CSAMT stations at 25m spacing for a total of 5 line kilometres. The lines highlighted significant low resistivity anomalism.

2. Geological background

The primary geological model which determined the choice of the latest electrical survey was the association of massive pyrite with high grades of gold. Specifically, at the Wheal Fortune Mine, it was noted by Matthews in 1905 that an inclined shaft sunk 36m had intersected the reef at depth and cut "almost solid iron pyrites", with a sample of the massive sulphide-quartz ore returning 132g/t Au (Matthews, 1905, p4 and Hossfeld, 1937, p12). These references, combined with Google Earth and modern aerial photography allowed an accurate plot of the location of the mineralisation.

Genesis Resources Limited

Financial Report for the half-year ended 31 December 2012

Geological interpretation suggests there are granite intrusions at relatively shallow depth which may provide mineralising solutions capable of developing a large deposit of gold. This style of mineralisation has the potential to yield a gold discovery of significant grade and dimensions.

Unlike the GAIP method, the Controlled Source Audio Magneto Telluric method (CSAMT) survey employed here outlined the source of electrical conductivity anomalies in profile (3D) and thereby accurately defined targets for drilling.

3. CSAMT survey results

The survey team (Zonge Engineering & Research Organisation) reported that the quality of the data received from the survey equipment was very good giving high background resistivity and good contrast for conductivity and low resistivity measurements. The location of each survey line is shown on GAIP resistivity maps (Figures 5 and 6).

Anomalies with significant gold mineralisation potential were found:

• below known gold quartz-reef-type 'veins',
• below newly discovered interpreted 'veins', and
• within wide, long, deep, low electrically resistive zones, possibly caused by alteration.

Resistivity inversion modelling for each anomalous line is presented as stacked profiles in Figures 7 and 6 and is discussed below.

(i) Wheal Fortune Main Reef (figure 7) - the first line at 7411750N confirmed the efficacy of the CSAMT method over the established position of massive sulphide in a shaft as discussed above. An anomaly was defined which coincided with the sulphide occurrence on this line and on the adjacent lines 50m to the north and south, suggesting the sulphide is likely to occur in a vein at least 50m long but open in both directions. It was associated with a fault which showed a marked vertical displacement.

Figure 4 Arltunga location map and GAIP survey areas

Figure 5 Location of eastern CSAMT profiles on GAIP resistivity image

Genesis Resources Limited Financial Report for the half-year ended 31 December 2012

Figure 6 Location of western CSAMT profiles of GAIP resistivity image

• (ii) Significant anomalism was found at two other historical gold diggings:
• Wheal Fortune Eastern Reef (Figure 7, 7411650N) at 100m depth, and
• Magdala (Figure 7, 7411450N) a 50m wide, shallow anomaly which is possibly oxidised and a deeper, vertical fault-controlled sulphide feature, possibly extending to 250m below surface and beyond.
• (iii) Significant anomalism interpreted as a 'veins' was also mapped at the new gold occurrence (5.16 g/t) found by Genesis at a GAIP conductivity/resistivity anomaly:
• B2-IP10 - (Figure 8, 7412900N)-a vertical to steeply easterly dipping 'vein' of 75-100m depth extent.
• (iv) Several steeply dipping 'veins' were mapped to the west and east of the B2-IP10 anomaly on Line 7412900N (Figure 7) and on Line 7412500N.

(v) A broad zone of low resistivity in the west and northwest on the Eastern GAIP survey (Figure 5) was investigated by two CSAMT lines (7412000N & 7412300N), each of which showed intense high conductivity anomalism (Figure 7); the resistivity map shows the potential for a strike length of this feature of greater than 1.1km. It may represent a significant shear with clay or sulphide alteration possibly with associated gold mineralisation extending to greater than 250m depth. Similar low resistivity features were observed on the Western GAIP survey at 474500E/7412800N and 474700E/7412200N (Figure 4).

It should be noted that, until a representative suite of these CSAMT features have been drilled the source of the anomalies remains uncertain.

It is planned to carry out a programme of field mapping and drilling.

4. References

Hossfeld, P.S. 1937c- The eastern portion of the Arltunga area, eastern MacDonnell Ranges district. Aerial Geological and Geophysical Survey of Northern Australia, Northern Territory, Report 28. Howard, J.P., 2011. Fifth Annual Technical Report on EL25238, Arltunga Goldfields Project, Northern Territory, for the period ending 7th November, 2011. Genesis Report 39. Matthews, W.H., 1905. Arltunga and Winnecke's Goldfields and Hart's Range Mica Fields. S. Aust. Parliamentary Paper No.75.

1. Licence Status

The licence renewal is still awaiting confirmation from the mining registrar.

Figure 7 Eastern area stacked CSAMT profiles.

Genesis Resources Limited Financial Report for the half-year ended 31 December 2012

Figure 8 Western area stacked CSAMT profiles

ALICE SPRINGS PROJECT: Copper, Gold, Iron (GES 100%)

The Alice Springs Project consist of Exploration Licence EL24817, located approximately 110-155 kilometres northeast from Alice Springs in the Northern Territory (Figure 3).

Geochemical results were received from a soil sampling program over the Alice Springs EL. Several significant anomalies were found along the Cadney Fault Zone in Cu, Au, Ag and U as shown in Figures 9 - 12). Further soil sampling is planned.

GLADSTONE-MOUNT MILLER PROJECT: Manganese (GES 100%)

The Gladstone-Mount Miller 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 (Figure 3).

The largest mine on the tenements controlled by Genesis was at Mount Miller. The mine opened in 1895 and operated intermittently until 1916 and then from 1958 to 1960. A total of 21,785 tonnes of ore was mined with a grade which ranged from 71% to 75% MnO2.

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 Miller Mine. The required compensation agreement with Queensland National Railways is now ready to be signed, whilst the agreement with Queensland Main Roads is already signed. The Board has decided not to activate the Agreements as the Queensland Government has not provided clarification of the Urban Restricted zone around the Gladstone Township.

The licence renewal is awaiting confirmation from mining registrar.

Figure 9 -12 Soil sample results for clockwise from top left, cooper, gold, silver and uranium, Alice Springs Project

PIONEER PROJECT: Gold (GES 100%)

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 (Figure 3).

The project lies within the Gaeta Goldfield and has undergone previous exploration for gold, uranium and base metals, with numerous historical gold workings located throughout the area. Historical mining was primarily focused on the Pioneer Reef which was the largest producer, but mining activities also included several other reefs including Gympie, Lord Nelson, West Yorkshire and Happy Jack.

No work was undertaken during the period.

McARTHUR RIVER PROJECT: Manganese (GES 100%)

The McArthur River project is located approximately 850 kilometres south east of Darwin in the Northern Territory and 450 kilometres north-west of Mount Isa in Queensland (Figure 3).

The project area contains the Masterton No2 manganese occurrence.

No work was undertaken during the period.

LAURA RIVER PROJECT: Au-Pt (GES 100%)

No work was undertaken during the period. Annual Technical Report submitted and the Licence Renewal is still pending confirmation from mining registrar.

FENN GAP PROJECT: Mn-Fe (GES 100%)

No work was undertaken during the period.

Results

The loss of the Group for the period ended 31 December 2012 was \$949,393 (31 December 2011: loss of \$90,531).

Significant changes in state of affairs

GRI was incorporated on 24 July 2012, and will be the operating vehicle for the Plavica project and also manage the Company's interests and activities in Macedonia.

Auditor's Independence Declaration

The lead auditor's independence declaration is set out on page 17 and forms part of the directors' report for the period ended 31 December 2012.

Signed in accordance with a resolution of directors:

Mr Peter Kong Managing Director 12 March 2013

Genesis Resources Limited

Financial Report for the half-year ended 31 December 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

	31 Dec 2012	31 Dec 2011
	\$	\$
Other income	-	313,119
Employee costs	(394,055)	(60,110)
Administrative and other expenses	(576,623)	(279,417)
Capitalised exploration & evaluation asset written off	-	(78,556)
Results from operating activities	(970,678)	(104,964)
Finance income	22,868	14,433
Finance expenses	(1,583)	-
Net Finance income/ (Loss)	21,285	14,433
Loss before income tax Income tax expense	(949,393) -	(90,531) -
Loss for the half-year	(949,393)	(90,531)
Other comprehensive income
Net change in fair value of available-for-sale financial assets	-	22,058
Other comprehensive income for the half-year, net of tax	-	22,058
Total comprehensive Loss for the half-year	(949,393)	(68,473)
Earnings per share
Basic loss per share (cents per share)	(0.01)	(0.00)
Diluted loss per share (cents per share)	(0.01)	(0.00)

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

	31 Dec 2012	30 Jun 2012
Assets	\$	\$
Current Assets
Cash and cash equivalents	3,466,719	751,207
Trade and other receivables	102,879	97,574
Other financial assets	709,627	9,627
Total Current Assets	4,279,225	858,408
Other financial assets	78,514	78,514
Property, plant and equipment	85,182	3,762
Exploration and evaluation assets	4,713,543	3,326,543
Total Non-Current Assets	4,877,239	3,408,819
Total Assets	9,156,464	4,267,227
Current Liabilities
Trade and other payables	409,118	197,831
Total Current Liabilities	409,118	197,831
Total Liabilities	409,118	197,831
Net Assets	8,747,346	4,069,396
Equity
Share capital	11,590,114	5,949,802
Reserves	(12,969)	-
Accumulated losses	(2,829,799)	(1,880,406)
Total Equity	8,747,346	4,069,396

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2012 For the half-year ended 31 Dec 2012

	Issued Capital	Accumulated (Losses)	Reserve	Total equity
	\$	\$	\$	\$
Balance at 1 July 2012	5,949,802	(1,880,406)	-	4,069,396
Total comprehensive income for the period		(949,393)		(949,393)
Other comprehensive income	-		-
Issued during the year	5,968,166	-	-	5,968,166
Foreign currency translation reserves	-	-	(12,969)	(12,969)
Transaction costs of share issues	(327,854)	-	-	(327,854)
Balance at 31 December 2012	11,590,114	(2,829,799)	(12,969)	8,747,346
For the half-year ended 31 Dec 2011
	Issued Capital	Accumulated (Losses)	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

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

Genesis Resources Limited

Financial Report for the half-year ended 31 December 2012

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

	31 Dec 2012	31 Dec 2011
	\$	\$
Cash Flows From Operating Activities
Payments to suppliers and employees
(inclusive of goods and services tax)	(764,341)	(331,572)
Interest received	22,867	14,433
Net cash (used in) operating activities	(741,474)	(317,139)
Cash Flows From Investing Activities
Payments for property, plant and equipment	(84,593)	-
Net proceeds from sale of investments	-	486,024
Payments for purchases of financial assets	(700,000)	-
Payments of exploration and evaluation expenditure	(1,385,763)	(753,087)
Net cash (used in) investing activities	(2,170,356)	(267,063)
Cash Flows From Financing Activities
Proceeds from issue of ordinary shares	5,640,312	-
Net cash from financing activities	5,640,312	-
Net increase / (decrease) in cash and cash equivalents	2,728,482	(584,202)
Cash and cash equivalents at 1 July	751,207	958,043
Effects of exchange rate changes on cash and cash equivalents	(12,970)	-
Cash and cash equivalents at 31 December	3,466,719	373,841

The above Consolidated 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 2012

1. Basis of preparation of half-year report

The condensed consolidated interim financial report for the half-year ended 31 December 2012 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report of Genesis Resources Limited ("GES") and its controlled entity (the "consolidated entity" or the "Group"). Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2012 and any public announcements made by GES 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. Principles of Consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by GES at the end of the reporting period. A controlled entity is any entity over which GES has the power to govern the financial and operating policies so as to obtain benefits from the entity's activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left the Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled.

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the consolidated Statement of Financial Position and Statement of Comprehensive Income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

Financial Report for the half-year ended 31 December 2012

3. Incorporation of subsidiary

On 24 July 2012, wholly owned subsidiary, GRI was incorporated. It will be the operating vehicle for the Plavica project and also manage the Company's interests and activities in Macedonia. The balance date of GRI is 31 December.

(a) Controlled Entities Consolidated

				Country of Incorporation		Percentage owned (%)*
	Subsidiaries of GES				31/12/2012	31/12/2011
Genesis Skopje	Resources	International	Dooel	Macedonia	100%	-

*Percentage of voting power is in proportion to ownership.

4. Going concern

For the six months ended 31 December 2012, the Group reported a net loss of \$949,393, had net cash outflow from operating activities of \$741,474 and had net current assets of \$3,870,107 at the balance sheet date. Mining and exploration licences held by the Group have total expenditure obligations of \$878,545 (Note 10) 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. In addition to these known obligations, the Company plans to meet the conditions of the joint venture agreement by paying for all work expenditures up to the completion of the final feasibility study to earn a 62% interest in the Plavica project in Macedonia; these expenditures are forecasted to be approximately \$8 million in the next twelve months and largely relate to drilling costs.

The ability of the Group to continue as a going concern is dependent on the successful completion of a plan to raise additional capital via a placements of shares 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 Group 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 Group 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.

5. Segment information

The Group has reportable segments, as described below, which are the Group's business units.

The two business units are managed separately because they are regulated under different authorities. For each of the business units, the Group'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 Group'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 2012	30 June 2012	31 Dec 2012	30 June 2012	31 Dec 2012	30 June 2012	31 Dec 2012	30 June 2012
	\$	\$	\$	\$	\$	\$	\$	\$
Other income	-	-	-	-	-	447,313	-	447,313
Operating expenses (i)	-	(379,688)	(128,839)	-	(841,839)	(891,487)	(970,678)	(1,271,175)
Net financing income	-	-	123	-	21,162	-	21,285	-
Reportable segment net loss before income tax	-	(379,688)	(128,716)	-	(820,677)	(421,430)	(949,393)	(801,118)
Exploration and evaluation assets	2,179,543	2,040,421	2,534,000	1,286,122	-	-	4,713,543	3,326,543
Total segment assets	2,179,543	2,040,421	2,679,706	1,286,122	4,297,215	980,684	9,156,464	4,267,227
Total segment liabilities	-	36,960	15,327	-	393,791	160,871	409,118	197,831

6. Capital exploration and evaluation asset written off

The capital exploration and evaluation asset written off during the period amounting to \$NIL (30 June 2012: \$379,688). In prior year, \$78,556 of the amount written off related to the Laura River project, as the company had decided to temporarily discontinue exploration and evaluation activities in this area. During the current period, the management has decided to recommence exploration and evaluation activities at Laura River.

7. Share Capital

	31 Dec 2012	30 Jun 2012	31 Dec 2012	30 Jun 2012
	No. of Shares	No. of Shares	\$	\$
Balance at beginning of period	79,621,128	53,080,752	5,949,802	4,826,885
Transactions during the period	60,358,440	26,540,376	5,640,312	1,194,317
4 May 2012	-	19,429,424	-	874,324
11 May 2012	-	7,110,952	-	319,993
9 Aug 2012	11,863,548	-	1,423,626	-
2 Oct 2012	5,001,754	-	450,158	-
1 Nov 2012	10,493,138	-	944,382	-
8 Nov 2012	15,000,000	-	1,350,000	-
10 Dec 2012	18,000,000	-	1,800,000	-
Transaction costs	-	-	(327,854)	-
Balance at end of period	139,979,568	79,621,128	11,590,114	5,949,802

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

Expiry date	Exercise price (\$)	Options on issue as 31 Dec 2012	Options on issue at 30 Jun 2012
4 May 2014	0.10	19,429,424	19,429,424
11 May 2014	0.10	7,110,952	7,110,952
27 October 2012	0.20	Nil (expired)	500,000

8. Contingent Assets and Liabilities

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

Genesis Resources Limited

Financial Report for the half-year ended 31 December 2012

9. Related parties transactions

The aggregate value of transactions and outstanding balances related to key management personnel and entities over which they have control or significant influence were as follows:

Key management person	Note	Transaction	Transaction value period ended 31 Dec
			2012	2011
			\$	\$
Mr John Karajas	(i)	Geological Service	20,000	-

(i) Provision of geological consulting and tenements management services as well as general company services at normal commercial rates.

10. 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:

	Note	31 Dec 2012	30 Jun 2012
		\$	\$
Within one year		455,388	342,685
One to five years		423,157	389,729
Later than five years		-	-
	(i)	878,545	732,414

⁽i) Arltunga, Gladstone and Laura River renewal applications have been submitted and are awaiting confirmation from the mining registrar from NT and Queensland. Consequently, no commitments relating to the tenements are captured above but the Company plans to meet the minimum expenditure requirements once known.

In addition to the obligations above, the Company plans to meet the conditions of the joint venture agreement with its joint venture partner, Sileks; namely by paying for all work expenditures up to the completion of the final feasibility study to earn a 62% interest in the Plavica project in Macedonia.

DIRECTORS' DECLARATION

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

• 1. the financial statements and notes set out on pages 18 to 26 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 consolidated entity's financial position as at 31 December 2012 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 Peter Kong Managing Director 12 March 2013