GOLDARC RESOURCES LIMITED — Interim / Quarterly Report 2012

Sep 12, 2012

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 30 JUNE 2012

DIRECTORS' REPORT

Your Directors submit the financial report of the Group for the half-year ended 30 June 2012.

Directors

The names of directors who held office during the half-year:

Mr Peter J Ashcroft Mr Ian A Johns Mr Mark Cashmore

Consolidated Results

The consolidated loss of the Group after provision of income tax for the half-year was \$860,017.

Review of Operations

The Group's exploration activities were primarily focused on the Vatovorona Gold Project in central Madagascar, where a drilling program has commenced in order to delineate the ore zone for mapping and sampling. 3200 metres of samples and core are waiting pre-sampling preparation and thereafter assaying.

The diamond, gold and sapphire exploration projects in Australia were not the priority whilst efforts were focused on the Madagascan project, and there was little activity on these projects during the half year as a result.

Significant Changes in the State of Affairs

La Jolla Cove Investors Inc

Under the convertible note agreement entered the Group signed with La Jolla Cove Investors Inc, the Group received addition convertible note proceeds of US\$450,000 in the six months to 30 June 2012.

The agreement and outstanding convertible notes were cancelled in May 2012 due to the Directors' concerns regarding the manner of conversion and trading by La Jolla Cove Investors.

The company and La Jolla have agreed to settle a termination of the funding agreement on the following key terms;

• 1. The Company will issue to La Jolla 133.333 million ordinary shares in the Company calculated at AUD0.0015 per share (the "Settlement Shares"), which represents a settlement payment of US\$200,000.
• 1. La Jolla has agreed not sell any of the Settlement Shares during the sixty (60) days following the settlement and to limit its sales to the greater of \$14,000 per month, or seven percent (7%) of the Settlement Shares.
• 1. The funding agreement and convertible note are to be cancelled upon the issue of the Settlement Shares.

DIRECTORS' REPORT (CONT.)

Greenward Willing

In May 2012, Torian entered a mandate agreement for the provision of funding to at least \$980,000. An initial placement of \$80,000 was provided to the company at \$0.001 per share (80 million shares) together with 80 million unlisted options exercisable at \$0.005 on or before 15 December 2013 and a further sum of \$170,000 by way of two convertible notes with zero interest convertible within 12 months of its issue at a 20% discount to the VWAP of the previous five trading days to the conversion.

Each note was fully converted during the period at \$0.0008 per share resulting in the issue of 212,500 ordinary shares. No further funds were provided or organised by Greenard Willing and the company terminated the agreement by mutual consent.

Matters subsequent to the end of the half year

Funding

Subsequent to 30 June 2012, the Group entered into a mandate agreement with Novus Capital Limited whereby Novus will provide advice on capital raising, investor relations and assist on a best endeavours basis with raising an initial \$500,000 by way of placement or convertible note and thereafter assist with a rights issue or similar with a minimum target of \$750,000.

Strategic Alliance

In July 2012, the Group announced that it had entered into a strategic alliance with the Indigenous Monetary Fund of Australia (IMFA). The parties have agreed to jointly manage the new initiative, with Torian being the primary operator in respect to exploration and mining projects in Australia and IMFA providing referrals and funding for the various projects.

Adoption of Australian Equivalents to IFRS

This interim financial report has been prepared under Australian Equivalents to IFRS.

Auditor's Declaration

The auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 3 of the financial report for the half year ended 30 June 2012.

This report is signed in accordance with a resolution of the Board of Directors

Peter Ashcroft Executive Chairman 13 September 2012

Level 6 350 Kent Street Sydney NSW 2000

Level 1, 460 Church Street North Parramatta NSW 2151

PO Box 2210 North Parramatta NSW 1750

AUDITORS INDEPENDENCE DECLARATION

UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

To the Directors of Torian Resources NL

In connection with the review of Torian Resources NL for the period ended 30 June 2012, 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 $(i)$ relation to the review; and
• No contravention of any applicable code of professional conduct in relation to the review. $(ii)$

KS Black & Co Chartered Accountants

Faizal Ajmat Partner

Sydney; 13 September 2012

DIRECTORS' DECLARATION

The directors' of the company declare that:

• 1. The financial statements and notes:
• i) comply with Accounting Standard AASB 1029: Interim Financial Reporting and the Corporations Regulations 2001; and
• ii) give a true and fair view of the financial position as at 30 June 2012 and of the performance of the Group for the half-year then ended;
• 1. In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Made in accordance with a resolution of the Board of Directors.

Peter Ashcroft Executive Chairman Dated at Sydney on 13 September 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 30 JUNE 2012

		June 2012	June 2011
	Note	\$	\$
Sales revenue		1,568	-
Other revenue		35,237	239,724
Total revenue		36,805	239,724
Depreciation and amortisation expense		(5,329)	(8,658)
Employee benefits expense		(378,048)	(1,705,058)
Due diligence and professional services		(89,615)	(165,687)
Finance costs		(9,933)	(5,618)
Exploration expenditure		(212,708)	(32,414)
Other expenses		(201,189)	(136,148)
Loss before income tax expense	2	(860,017)	(1,813,859)
Income tax expense		-	-
Loss after income tax expense		(860,017)	(1,813,859)
Basic earnings per share (cents per share)		(0.03) cents	(0.07) cents
Diluted earnings per share (cents per share)		(0.03) cents	(0.07) cents

The accompanying notes form an integral part of this statement of comprehensive income

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

	June 2012 \$	June 2011 \$
CURRENT ASSETS
Cash assets	112,863	175,143
Inventories	80,084	80,084
Receivables	241,149	235,191
TOTAL CURRENT ASSETS	434,096	490,418
NON-CURRENT ASSETS
Receivables	333,321	333,321
Investment in joint venture	525,148	230,807
Property, plant and equipment Exploration, evaluation and development	33,300	17,891
expenditure	10,795,524	11,609,456
TOTAL NON-CURRENT ASSETS	11,687,293	12,191,475
TOTAL ASSETS	12,121,389	12,681,893
CURRENT LIABILITIES
Payables	615,781	129,059
Provisions	50,596	84,550
TOTAL CURRENT LIABILITIES	666,377	213,609
TOTAL LIABILITIES	666,377	213,609
NET ASSETS	11,455,012	12,468,284
EQUITY
Issued capital	54,837,419	52,739,007
Reserves	2,130,200	1,798,900
Accumulated losses	(45,512,607)	(42,069,623)
TOTAL EQUITY	11,455,012	12,468,284

The accompanying notes form an integral part of this statement of financial position.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 30 JUNE 2012

	Issued Capital	Reserves	Accumulated Losses	Total
	\$	\$	\$	\$
Balance at 1 January 2011	52,201,009	183,200	(40,255,764)	12,128,445
Shares issued during the year	537,998	1,615,700	-	2,153,698
Loss attributable to members	-	-	(1,813,859)	(1,813,859)
Balance at 30 June 2011	52,739,007	1,798,900	(42,069,623)	12,468,284
Balance at 1 January 2012	54,020,419	2,130,200	(44,652,590)	11,498,029
Shares issued during the year	817,000	-	-	817,000
Loss attributable to members	-	-	(860,017)	(860,017)
Balance at 30 June 2012	54,837,419	2,130,200	(45,512,607)	11,455,012

The accompanying notes form an integral part of this statement of changes in equity.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 30 JUNE 2012

	June	June
	2012	2011
	\$	\$
CASH FLOWS FROM
OPERATING ACTIVITIES
Receipts from customers		-
Payments to suppliers and employees	(436,591)	(372,485)
Interest received	3,935	8,528
Finance costs	(9,933)	(5,618)
Net operating cash flows	(442,589)	(369,575)
CASH FLOWS FROM
INVESTING ACTIVITIES
Exploration and development	(7,770)	(44,188)
Payments for property, plant & equipment	-	(116,153)
Proceeds from sale of plant & equipment	98,273	196,861
Payment for rehabilitation	(27,495)	-
Investment in joint venture	(459,731)	(263,221)
Net investing cash flows	(396,723)	(226,701)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issue of shares	80,000	571,591
Cost of raising share equity	90,000	(10,650)
Convertible Note	419,730	-
Director Loans	-	-
Net financing cash flows	589,730	560,941
Net (decrease) / increase in cash and
cash equivalents	(249,582)	(35,335)
Adjustment for reclassification of cash
assets to non-current receivables	-	-
Cash and cash equivalents at beginning
of the year Cash and cash equivalents at end of the	362,445	210,478
period	112,863	175,143

The accompanying notes form an integral part of this statement of cash flows.

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2012

Note 1: Basis of Preparation

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001. Australian Accounting Standard AASB 134: Interim Financial Reporting, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 31 December 2011 and any public announcements made by Torian Resources NL and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

The accounting policies have been consistently applied by the entities in the consolidated group and are consistent with those in the 31 December 2011 financial report.

The half-year report does not include full disclosures of the type normally included in an annual financial report.

Reporting Basis and Conventions

The half-year financial report has been prepared on an accrual basis and is based on historical costs modified by the revaluation of non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Note 2: Going Concern

The Directors have prepared the half-year financial report on the basis that the Company is a going concern. During the half-year ended 30 June 2012, the Company incurred a net loss of \$860,017.

The ability of the Company to continue as a going concern depends upon the generation of future cash inflows, through one or more of the following avenues:

• The inflow of revenue;
• The receipt of additional debt or equity funds;
• The disposal of non-current assets.

Any inability to obtain these additional cash inflows may have a material adverse effect on the Company's ability to continue as a going concern.

Level 6 350 Kent Street Sydney NSW 2000

ARN 57 AAG 308 808

Level 1, 460 Church Street North Parramatta NSW 2151

PO Box 2210 North Parramatta NSW 1750

INDEPENDENT AUDITORS' REVIEW REPORT

TO THE MEMBERS OF TORIAN RESOURCES NL

Report on the Financial Report

We have reviewed the accompanying interim financial report of Torian Resources NL (the company) which comprises the statement of financial position as at 30 June 2012, statement of comprehensive income, statement of changes in equity and statement of cash flows for the half year ended on that date, accompanying notes and directors' declaration of the company.

Directors' Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the interim financial report in accordance with the Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the interim 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.

Auditors' Responsibility

Our responsibility is to express an opinion on the interim 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 interim 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 30 June 2012, and its performance for the half year ended on that date; and complying with Australian Standard AASB 134 Interim Financial reporting and Corporations Regulations 2001. As auditor of Torian Resources NL, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of an interim 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 that 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 mattes that might be identified in an audit. Accordingly, we do not express an audit opinion.

Statement of Independence

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

INDEPENDENT AUDITOR'S REVIEW REPORT

TO THE MEMBERS OF TORIAN RESOURCES NL (continued)

Review Opinion

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half vear financial report of Torian Resources NL does not present fairly, in all material respects the financial position of Torian Resources NL as at 30 June 2012, and of its financial performance and its cash flows for the half year period ended on that date in accordance with Australian Accounting Standard AASB 134 "Interim Financial Reporting" and the Corporations Regulations 2001.

Significant Uncertainty Regarding Going Concern

Without qualification to the opinion expressed above, we draw attention to Note 2 to the financial statements. For the half-year ended 30 June 2012, the consolidated group incurred a net loss after tax of \$860,017 (2011: loss \$1,813,859). The consolidated group generated negative cash flows from operating activities for the period of \$442,589 (2011: negative \$369,575). The consolidated group's deficiency in net current assets at 30 June 2012 was \$232,281.

The ability of the company and the consolidated group to continue as a going concern depends upon the generation of future cash inflows, through one or more of the following avenues:

• The inflow of revenue:
• The receipt of additional debt or equity funds; and
• The disposal of non-current assets.

Any inability to obtain these additional cash inflows may have a material adverse effect on the Company's and Consolidated Group's ability to continue as a going concern.

KS Black & Co Chartered Accountants

Gomei

Faizal Aimat Partner

Sydney: 13 September 2012