GREENWING RESOURCES LTD — Interim / Quarterly Report 2007

Mar 14, 2007

BASS METALS LTD

15 March 2007

The Manager Companies Australian Stock Exchange 20 Bridge Street Sydney NSW 2000

Dear Sir

HALF YEAR REPORT - 31 DECEMBER 2006

Please find following Bass Metals Ltd's half year report for the period ended 31 December 2006.

Please be advised that Bass Metals Ltd request the voluntary suspension on its share trading remain in place pending the release of an announcement.

Yours sincerely

Susan Hunter Company Secretary

Suite 5/2 Richardson Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322-8044 Farsimile (08) 9481-2846 www.bassmetals.com.an-

BASS METALS LTD ABN 31 109 933 995

HALF-YEAR REPORT

FOR THE PERIOD ENDED 31 DECEMBER 2006

Directors' Report	2
Review of Operations	$\overline{2}$
Introduction	$\overline{2}$
Que River Base Metals Project	3
Mt Charter Gold Project ۰	8
Zinifex Hellyer Exploration Alliance	11
Regional Exploration Activities	12
Corporate Management
Corporate Activities ۰	16
Financial Position	16
Financial Statements
Condensed Income Statement	17
Condensed Balance Sheet	18
Condensed Statement of Changes in Equity	19
Condensed Statement of Cash Flows	20
Condensed Notes to the Financial Statements	21
Directors' Declaration	26
Auditor's Independence Declaration	27
Independent Review Report to Members	28

DIRECTORS' REPORT

Your Directors submit their report on Bass Metals Ltd for the half-year ended 31 December 2006.

Bass Metals Ltd (the "Company") is a company limited by shares that is incorporated and domiciled in Australia.

Directors

The Company's directors in office during the half-year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr Don Bover - Chairman

Mr Michael Rosenstreich - Managing Director

Mr Craig McGown - Non-executive Director

Mr Kieran Rodgers - Non-executive Director

Review of Operations

INTRODUCTION

The Company has a focussed strategy of transitioning into a productive mining company whilst maintaining an active exploration programme in what it considers to be one of the most intensely mineralised geological terrains in the world.

It has four key initiatives which it actively pursued during the reporting period;

• 1. Que River base metal project - shallow resource delineation and development plans;
• $\overline{2}$ . Mt Charter gold-silver project – exploration and resource delineation;
• Hellyer Exploration Alliance with Zinifex Limited searching for new Hellyer and Que River style 3. deposits in the Hellyer mine district; and,
• 1. regional exploration covering advanced to grass roots targets prospective for a range of commodities including base metals, gold and nickel, over a 1000km² tenement area.

The following operations report provides details of work completed under each of these initiatives which includes 69 diamond drill holes comprising 6,620m of diamond drilling at Que River. Mt Charter and new Hellver stvie type targets.

QUE RIVER BASE METALS PROJECT

Figure 1: Que River Site Layout Plan

Drilling & Mineral Resource Estimation

During the half year the Company completed 2.951 metres of diamond core drilling comprising 54 drill holes on the Que River project (refer Figure 1) to infill and upgrade current Mineral Resources at S-Lens and Nico lens and to delineate new resource potential on the PQ Lens. Assay results and drill hole details for all drill holes are available in the Quarterly reports for September and December 2006.

Highlights for the lenses drilled include:

S-Lens

• 11.6 metres at 1.2% Cu, 5% Zn, 1.6% Pb, 38 g/t Ag and 0.4 g/t Au from 22.6 metres downhole $\bullet$ (QRD1243)
• 3.6 metres at 3.6% Cu, 4.4% Zn, 3.6% Pb and 66 g/t Ag from 18.5 metres downhole $\bullet$ (QRD1245)
• $\bullet$ 10.5 metres at 0.8% Cu, 12.3% Zn, 3.9% Pb and 466 g/t Ag from 66.4 metres downhole (QRD1238)
• 8.45 metres at 4.1% Cu and 85g/t Ag from 55.4 metres downhole (QRD1235) $\bullet$

PQ Lens

• 19.4 metres at 24.7% Zn, 9.0 % Pb, 356 g/t Ag and 11 g/t Au from 50.6 metres downhole (QRD1269)
• 17.8 metres at 19.7% Zn, 10.4% Pb, 411 g/t Ag and 7.4 g/t Au from 45.5 metres downhole (QRD 1274).

Nico Lens

• $\bullet$ 5.4 metres at 10.8% Zn, 3.2 % Pb, 109 g/t Ag and 1.5 g/t Au from 57.5 metres downhole (QRD1263)
• 8.45 metres at 6.4% Zn, 1.5 % Pb, 38 g/t Ag and 0.6 g/t Au from 59.7 metres downhole (QRD1268)

PQ South & Central Mineral Resource

The first Mineral Resource for this portion of the PQ Lens is presented in Table 1 below. This resource is reported in accordance with the JORC code. It comprises both remnant mineralisation within pillars of the former (1980-1991) mine workings (Decline Stope Pillars) and isolated shallow pods of massive sulphide mineralisation too remote from the previous mine infrastructure to be accessed in the earlier mining phase. Both types occur within 60 metres from the surface.

	Summary of Classified PQ South-Central Mineral Resource
				above 60 metres vertical depth
Ore type/area	JORC Code	Tonnes	Cu	Рb	Zn	Ag	Au	SG
	Category	(000's)	%	%	℅	g/t	α⁄t	$T/m^3$
IPQ South remnants	Inferred	10.30	0.3	7.2	13.6	194	4.52	3.59
IPQ Central-Surface	Inferred	2.60	0.3	7.0	10.7	151	3.18	3.80
l Total Inferred		12.90	0.3	7.2	13.0	185	4.25	3.63
IPQ South remnants	Indicated	30.90	0.3	10.3	18.3	260	6.46	3.99
IPQ Central-Surface	Indicated	1.90	1.1	10.3	24.9	81	3.30	4.22
Total Indicated		32.80	0.4	10.3	18.7	249	6.27	4.01
	TOTAL MINERAL RESOURCE 45.70 9.4 17.1 231 5.70 3.90 0.4

Table 1: PQ South & Central Mineral Resource

Mote:

1 Rounding erors may occur

2 COG >5%(Zn+Pb)

The resource estimate is based on a geological model compiled by the Que River Mining Alliance project Manager, Mr. Tim Akerman. Tonnage and grade estimation has been undertaken bv Mr. Akerman using a simple polygonal model using length weighted averages to estimate grades.

The drilling information on which the estimate is based comprises Bass Metals' and historic diamond drilling on a 12.5m by 12.5m spaced pattern and mine data from the immediate area. The JORC Category classification used is considered appropriately conservative. It recognises the uncertainty associated with remnant mineralised blocks, such as the spatial extent of mining surrounding the remnant and as a consequence its final dimensions. The bulk of the remnant mineralisation comprises a series of pillars within the high-grade, southern and upper part of PQ Lens - the "Decline Stope" pillars.

The drill hole database used for this estimate comprises the diamond core drill holes completed by Bass Metals as well as 35 historic diamond drill holes used to delineate the original PQ Ore Reserve. In addition, original detailed mine geology cross-sections and a long projection were available. Details on mined out areas were sourced from an end of mine life report and discussions with ex-Que River Mine mining personnel involved in the mining of PQ Lens in the 1980's. Full details are provided in ASX Report 20 November 20 2006.

Subsequent to the resource estimate and to provide further confidence a drilling programme testing each Decline Stope pillar was completed. All five pillars were intersected to some degree by Bass Metal's holes. The area of the resource estimate is presented in Figure 2

Figure 2: PQ South long section showing remnant resource area.

S-Lens Updated Mineral Resource

The revised Mineral Resource for S-Lens is presented in Table 2 below. This resource is reported in accordance with the JORC code. The updated model has an overall increased tonnage compared to the original Mineral Resource estimated by the Company from historical data. The increase is due to drilling extensions to the south (the copper zone) and to a lesser extent the northern extensions where The increased drilling density from Bass Metals' drilling has upgraded the zinc predominates. assignment of much Inferred Resource material from the previous model to Indicated Resource status. A portion of material in the most densely drilled part of S Lens is also now in the Measured Resource category.

The resource estimate is based on a geological model compiled by consulting geologist, Mr. Steven Richardson. Tonnage and grade estimation has been undertaken by Mr. Richardson using anisotropic 2D inverse distance interpolation, the same method utilised for the previous estimate and considered appropriate for the purposes of this estimate.

The drill hole database used for this estimate comprises 25 diamond core drill holes completed by Bass Metals as well as 100 historical diamond drill holes. In addition, original 1:500 scale mine geology cross-sections, long projections and underground development surveys were available. Mined out areas were not surveyed but details were sourced from an end of mine life report and discussions with ex-Que River Mine mining personnel involved in the mining of S Lens in the late 1980's. A full report on the Mineral Resource parameters was made to ASX on 20 November 2006.

	Summary of Classified S-Lens Mineral Resource
Ore type/area	JORC Code Category	Tonnes (000's)	Cu %	Рb %	Ζn %	Ag g/t	Au g/t	SG $T/m^3$
South:Cu Zone Central: Cu-Zn Zone North: Zn Zone TOTAL MEASURED	Measured Measured Measured	51.00 5.00 ă. 56.00	1.7 1.8 1.7	0.6 1.7 0.6	1.9 4.0 2.1	69 73 $\overline{\phantom{a}}$ 69	0.34 0.33 0.34	3.88 3.83 3.88
South:Cu Zone Central: Cu-Zn Zone North: Zn Zone	Indicated Indicated Indicated	126.00 67.00 93.00	2.4 2.2 0.6	0.5 2.9 2.7	1.5 5.7 8.1	67 90 46	0.32 0.31 0.42	3.86 3.9 3.73
TOTAL INDICATED South:Cu Zone Central: Cu-Zn Zone North: Zn Zone TOTAL INFERRED	Inferred Inferred Inferred	286.00 56.00 2.00 58.00	1.8 2.6 0.5 2.6	1.8 0.1 3.5 0.2	4.6 0.3 9.8 0.6	66 33 46 34	0.35 0.15 0.28 0.15	3.83 3.95 3.58 3.94
	TOTAL MINERAL RESOURCE 400.00 1.9 3.7 62 3.85 1.4 0.32

Table 2: S-lens Mineral Resource Summary

Note:

1 Rounding erors may occur

2 Cu Zone = >1%Cu and <5% (Zn+Pb)

Cu-Zn Zone = >1%Cu and >5% (Zn+Pb) Zn Zone = $Cu$ <1% and >5% (Zn+Pb)

Mine Plan

The mine plan has been divided into 4 conceptual development stages which the Directors consider have the potential to sustain a 3 to 5 year mine life. Stage 1 is based on a detailed mine plan and the remaining stages will be developed as quickly as possible.

• Stage 1: PQ South down to 60m depth and northern end of S-lens to a depth of 40 metres. ۰
• Stages 2-3: S-lens North and Nico resources and P-North and QR32 target areas. $\bullet$
• Stage 4: Underground access deeper S-Lens resources and other targets in the area. $\bullet$

The current stage 1 mine plan is summarised in Table 3 below. The Directors consider that there is also upside potential with Stage-1 from the PQ South pit. This area was problematical as an underground mine and from historic reports at least one stope was abandoned with high grade ore left behind. The mineralisation potentially remaining in the abandoned stope(s) falls within the proposed PQ South pit design.

Mine Parameter	Description
Total Resource & Reserves to be mined and hauled to plant.	118,000t at 0.7% Cu, 3.9% Pb, 8.3% Zn, 96 g/t Ag and 2.1 g/t Au (full dilution and recovery assumptions applied)
Dilution and and ore. recovery assumptions	Generally dilution is 25% and ore recovery is 85%, but in some more difficult mining situations dilution is assumed to be 50% and ore recovery 80%.
Waste:Ore ratio	S-lens North Pit: 7.6:1 and PQ South Pit: 44:1
Stage 1 time frame	18 months including Trial Pit and site establishment.
Production rate	Between 60,000bcm to 90,000cm per month. Ore production varies over the Stage 1 mining period with greater ore volumes later in the schedule as the waste to ore ratio decreases.

Table 3: Mine Plan Summary Stage 1

Ore Sales

The Hellyer plant is the preferred destination for the Que River ore through an ore sale arrangement. The plant is located 4km north of Que River along an established internal haul road. It is owned by Intec Ltd, who in a 50:50 joint venture with Polymetals Group (IPJV) have re-commissioned the plant to reprocess the Hellver tailings to produce a bulk zinc concentrate.

In December 2006 the Company, in association with its mining alliance partner, Mancala Pty Ltd. signed a Letter of Intent (LOI) setting out the terms under which ore from the Que River project may be sold to the IPJV. The non-binding LOI will be formalised into a binding Ore Sales Contract subject to completion of a trial mining and processing programme which has been approved already and is scheduled to commence in February 2007.

The LOI is an important step as it provides a commercial framework from which assumptions on revenue for the Stage 1 Mine plan over 18 months can be made and these are summarised below in Table 4 for two zinc price scenarios, referred to as Conservative and Reasonable.

		Table 4: Summary of potential financial outcomes - Stage 1 Mine Plan.

Metal Price Assumptions	Conservative	Reasonable
zinc price (US/t)	3,000	3,600
lead price (US\$/t)	970	1,605
silver price (US\$/oz)	10	12.5
IUS\$:A\$	0.75	0.76
Estimated Financial Outcomes	AS(M)	AS(M)
BSM-Mancala Gross Revenue	26.34	30.18
less Capital Expenditures	$-1.06$	$-1.06$
less Operating costs	$-17.31$	$-17.31$
Net Revenue	7.96	11.80

MT CHARTER GOLD PROJECT

Drilling Results

Mt Charter is an outcropping zone of gold and silver mineralisation which had never been subjected to systematic evaluation as a gold ore body. During the half year to 31^st December 2006, the Company completed its second drilling programme at Mt Charter to delineate the deposit to a detail appropriate for a resource estimate for the shallow, wide zone of gold-silver (+ zinc) mineralisation associated with strong barite alteration. Detailed reports are available in Quarterly Reports to ASX for September and December 2006 and a summary drill hole location plan is presented in Figure 3. Highlights from the final part of the drill programme include:

• 34.2 metres at 1.4 g/t Au, 27 g/t Ag (1.9 g/t gold equiv.) from 4.8 metres downhole (MCD29)
• 72 metres at 1.8 g/t Au, 73 g/t Ag (3.2 g/t gold equiv.) from 17 metres downhole (MCD34)

Figure 3: Drill hole location plan for Mt Charter.

Mineral Resource Estimate

As reported in full to ASX on 30 October 2006, the Company has completed a Mineral Resource estimate for the Mt Charter Au, Ag, Ba and Zn deposit as part of the Company's ongoing project evaluation.

The total resource estimated for the Mt Charter deposit is 6.1 Mt at 1.22 g/t Au, 35.5 g/t Ag, 9.7 % Ba and 0.5% Zn. The resource is reported above a 0.7 g/t Au cut-off within the mineralised envelope boundary and is classified as Indicated and Inferred Resources according to the JORC code (December 2004), as listed in Table 5 below.

JORC Code Category	Tonnes	Au	Αg	Bа	Zn	Au	Ag	Au (eq)*
	Mt	g/t	g/t	%	$\%$	koz	koz	koz
Indicated	1.9	1.21	36.3	9.1	0.7	74	2,218	118
Inferred	4.2	1.22	35.2	10.0	0.4	165	4,754	260
Total	6.1	1.22	35.5	9.7	0.5	239	6,972	378
* Au (Eq) is based on Au & Ag price only; US\$590/oz and US\$11.80/oz respectively to give a Ag to Au ratio of 50:1.

The tonnage and grade estimation is based on a 'change of support' geostatistical technique that is targeted at modelling the deposit behaviour using anticipated open pit mining on five metre high benches and a mining selectivity of 5 m by 10 m by 5 m. The change of support process is based on multi-element conditional simulation.

The Mt Charter mineralisation interpretation for this estimate was compiled by Travis Murphy: Bass Metal's Supervising Geologist, with assistance from Snowden Mining Industry Consultants. Paul Blackney of Snowden reviewed data collection procedures undertook database checks and inspected core on site. Shaun Hackett (Snowden) reviewed the geological interpretation and was responsible for compiling the grade estimates. Both P Blackney and S Hackett are Competent Persons being Members of the AusIMM with more than five years experience relevant to gold and multi-element mineral resource estimation.

Metallurgical Testwork

Metallurgical testwork has been undertaken to gain a preliminary understanding of the metallurgical characteristics of the Mt Charter mineralisation and its response to possible processing routes. Preliminary testwork included head assay, mineralogy, direct cyanidation and sulphide flotation followed by cyanidation then barite recovery by gravity and barite flotation.

A composite sample representing variable depths, gold, silver, zinc and copper contents was submitted for testwork. The Bond ball mill work index was determined to be 14.7kW/tonne. Summary results for cyanidation and flotation testwork are presented in Table 6 below.

	Elements
Testwork	Au	Ag	Cu	Zn	Bа
Head Assay	$1.6$ ppm	34.2 ppm	594 ppm	1.50%	17.60%
			Recovery (%)
Direct Cyanidation	48	10	12.	0.2
Flotation	86	92	93	98	2
Cyanidation of Float Tails	60	34	13	4
Overall recovery for float followed by cyanidation	95	95
Barium Recovery by Flotation					84

Table 6: Summary of Metallurgical Testwork Results

The objective of the flotation testwork was to assess the flotation behaviour of Au, Cu, Ag Pb and Zn mineral species and to float a bulk sulphide concentrate. These preliminary, bench scale test results show encouraging recoveries using a flotation stage followed by a cyanidation process route. The low recovery of precious metals by direct cyanidation was consistent with historic results reported previously and appears to be attributable to approximately 50% of the gold being present within the sulphide mineral grains. Direct cyanide recovery was relatively insensitive to grind size over a 45 to 75 micron size range.

Metals recovery to a bulk flotation concentrate is summarised in Table 7. Overall the recoveries obtained were good considering the simplicity of the flotation circuit. The objective of the next phase of testwork is to determine the upgrade potential of these concentrate grades to commercial levels. A separate test was undertaken for barite to assess flotation as a possible process for upgrading barite into a potentially saleable product. The barite concentrate produced had a barium grade of 50.2 % which is equivalent to 85.3% barite which at first pass exceeds the 65% barite standard generally adopted in the drilling and chemical industries.

	______	_
	Au	Ag	As	Cu	Fe	Pb		-Zn
	Ωł	g/t		%	%
Rougher Conc. Grade		183	0.4	0.30	20.9	3.8	30.1
% Recoverγ to Conc.	86	92	70	93	80		54	98

Table 7: Flotation recovery and grade

As the metallurgical testwork continues the exploration team will evaluate other known occurrences of gold mineralisation such as around the Hellyer and Que River deposits and on the newly acquired Farrell tenements along the Henty fault, south of Que River. The aim is to understand the potential resource base which could support the various gold processing options as they emerge from the next phase metallurgical testwork. The metallurgical testwork, whilst very preliminary in its nature shows encouraging potential to provide an opportunity to extract value from this polymetallic deposit as well as others in the district.

ZINIFEX HELLYER EXPLORATION ALLIANCE

The Hellver Exploration Alliance (HEA) is an exploration alliance between Zinifex Limited and Bass Metals whereby each party contributes equally to a \$2.0M exploration programme focused only on the Hellyer Project tenements. During the 2 year HEA period which expires on 2 August 2007 Zinifex has the opportunity to "carve-out" up to four special project joint venture areas (SPJVA) each being less than 2km² on which it can then earn up to a 70% interest. The Que River mining area and the Mt Charter area have been excluded from Zinifex's SPJVA rights.

The HEA is managed by Bass Metals and since early July 2006 it has been busy drill testing a series of targets considered prospective for new Hellver-Que River style high-grade base metal deposits.

The HEA drill holes generally provided positive geological indications of mineralisation in the general areas identified as targets or Hellyer style mineralisation. Figure 4 presents a summary of the targets and completed and proposed drill holes. Whilst no strong massive sulphide mineralisation has been intersected to date samples have been taken for assay for zones of alteration intersected to gain further data on geochemical signatures and alteration styles. Assays have been received for the first 3 drill holes and are summarised in Table 8 below.

FROM (m)	TO(m)	INTERVAL (m)	Cu (ppm)	Pb (ppm)	Zn (ppm)	Ag (ppm)
HED1
189	195	6	130	407	813	17
259	263	4	2502	11	233	$\overline{2}$
HED2
337	350	13	459	309	1104	3
HED 3
132.5	132.75	0.25	2600	53,400	20,5000	46
275	327	52	125	863	1655	3

Table 8: Assays from HEA Drilling

Anomalous intervals in HED1 and 2 correspond with observed traces of sphalerite, galena and chalcopyrite in the drill core. These intervals occur at the base of the Hellyer Basalt immediately above the Hellyer ore-position being targeted. Results for HED3 indicate a zone of anomalous Pb, Zn, and Cu coincident with observed clasts of base metal sulphide in the core. The sample at 132.5m may represent a larger clast at a higher stratigraphic level suggesting a possible new, proximal undetected massive sulphide source. This clast appeared very similar to Que River style mineralisation and has returned similar grades of 0.3% Cu, 20% Zn, and 5% Pb.

A programme of downhole electro-magnetic surveys has been completed on all HED drill holes completed. The down-hole data needs to be compiled and interpreted by a geophysical consultant. Subject to results this may further refine target locations and follow-up drilling.

Figure 4: HEA summary plan of target locations and proposed and completed drill holes

REGIONAL EXPLORATION

In July 2006, 9 months of data compilation, analysis and target generation came to a close with the commencement of filed work following up on the new 65 mineralised targets identified. The following comments summarise the first half years work on regional prospects as presented in Figure 5.

North Rosebery (Cu-Pb-Zn-Ag potential)

(EL54/2004 - 75% Bass Metals Ltd 25% Geoinformatics Exploration Inc.)

The North Rosebery prospect is located 4km north along strike from the Rosebery Mine along the same geological features interpreted as important controls on the formation of the Rosebery deposit. As well as the very favourable geological setting, historic geophysical geochemical data also supports the prospectivity of the area.

Bass Metals took two surface rock chip samples which returned the following assays:

• NR01 1.3% Pb, 0.3% Zn, 136 g/t Ag and 0.14 g/t Au $\bullet$
• NR02 4.2% Zn and 10 g/t Aq. $\bullet$

To follow this up a 67 sample rock chip traverse was completed in this general area. The 5m composite rock-chip results failed to replicate the earlier high grade rock chip sample results.

A follow-up soil sampling programme started in December and completed in January 2007 did not delineate a coherent anomaly over the interpreted target area: only some sporadic high values. However a high-order soil anomaly is evident approximately 1km south of this area along the Rosebery Shale trend. The Company plans to undertake follow-up drilling in this area in 2007.

Oonah Project (Cu-Pb-Zn-Aq-Au & Sn potential)

(75% Bass Metals Ltd 25% Geoinformatics Exploration Inc)

The Oonah project contains several historic mining operations including Oonah, Montana and Zeehan Western with the following historic production records noted in the Mineral Resources Tasmania (MRT) database:

• Oonah: 863,000t at 1.1% Cu, 1.2% Pb, 1.0% tin (Sn) and 153 g/t Ag $\bullet$
• Montana: 40,000t at 5.3% Pb, 143 g/t Ag and 0.5 g/t Au
• Zeehan Western: 300,000t at 8.7% Pb, 480 g/t Ag and 0.5 g/t Au $\bullet$

The Company has two exploration objectives at Oonah:

• 1. discovery of large-scale new high grade Pb-Zn-Ag or Cu-Sn-(Au) deposits.
• 1. delineation of high grade mineralised zones which may be amenable to small scale mining and trucking.

To advance exploration activities a reconnaissance field inspection was made during which 6 samples were collected from historic workings and mine mullock dumps. Sample results support the high grade nature of mineralisation in the area. The high zinc result in sample ON001 is particularly interesting as zinc was a contaminant mineral; that is, the miners avoided it in historic times and the historic production figures may not reflect the zinc potential of the area.

Sample ON001	6.8% Pb, 25.9% Zn, 351g/t Ag
Sample ON002	0.4% Pb, 1.5% Zn, 0.54% Sn, 455g/t Ag, 0.18g/t Au
Sample ON003	3.2% Cu, 286g/t Ag, 1.06g/t Au
Sample ON004	13% Pb, 418g/t Ag
Sample ON006	4.5% Pb, 2.4% Zn, 339g/t Ag

The follow-up work planned comprises soils sampling, geological mapping and if warranted drilling.

Waratah (Magnet Mine) (Pb-Zn-Ag Resource potential)

(75% Bass Metals Ltd 25% Geoinformatics Exploration Inc)

The Waratah licence, like Oonah, is considered prospective for new large scale Hellyer-Rosebery style volcanic hosted VHMS deposits and intrusive related nickel and tin deposits as well as small scale high grade mining opportunities focused on a historic mining centre.

The Company's initial focus is on the early mining potential of the historic Magnet Mine which according to MRT records produced 630,000t grading 5.7% Pb. 7.3% Zn and 394 g/t Ag between 1895 and 1940. Like the Oonah workings the zinc at this time was a contaminant and was either avoided in the mine or left in the tailings. At Magnet those tailings were reportedly retreated in the 1970's to recover the zinc.

Bass Metals' geologists recently visited the site as preparation for the forthcoming field activities during which they also collected 3 rock chip samples from the historic workings. The sample results confirm the high grade nature of the mineralisation as reported in the historic documentation.

Sample WA001	4.9% Pb, 3.3% Zn, 586g/t Ag, 0.21 g/t Au (Fe-rich gossan)
Sample WA002	15.8% Pb, 3.5% Zn, 629g/t Ag (Fe-rich gossan)
Sample WA003_	2.2% Pb, 2.6% Zn, 237g/t Ag (Banded vein)

The Company intends to undertake geological mapping and detailed sampling along the 1km strike of prospective Magnet line looking for repeat lode positions before drill testing the depth and strike potential of the lode previously mined. Of particular interest is the potential for higher grade zinc zones which may have been deliberately left behind in the pre-WW2 mining activities.

Magnet is within easy trucking distance to Que River and successful exploration leading to the delineation of future ore reserves could well compliment the planned mining activities there in terms of contributing high grade Pb-Ag and Zn ore.

Bonds Range (Cu-Pb-Zn-Ag potential)

(EL28/2002 - 60% Bass Metals Ltd 40% Adamus Resources Limited)

Two 150m deep diamond holes at the Mariner 1 Prospect are planned to commence in February to follow-up on a broad Pb-Zn in soil anomaly generated by the Company in August 2006. The soil anomaly is co-incident with an untested historic geophysical (IP chargeability) anomaly. Peak soil anomalism at the prospect is 10,000ppm Pb and 1,050ppm Zn. The soil anomaly overlies the Cambrian Bonds Range Porphyry within the Mount Read Volcanics belt. The Prospect is considered prospective for hybrid volcanic hosted massive sulphide (VHMS) style deposits and for Devonian intrusion-related mineralisation.

Mt Selina (Cu-Pb-Zn-Ag & Au potential)

(EL29/2002 Mt Selina - 60% Bass Metals Ltd 40% Adamus Resources Limited)

• Assay results from an infill soil sampling program completed in the second half of 2006 at the Dora ٠ Prospect confirm the continuity and strike of the previously defined Pb and Zn in soil anomalies.
• The highest assay returned from a single sample was 2,755ppm Pb and 443ppm Zn. $\bullet$
• Further mapping of the area of the anomaly is required so as to better plan follow-up work and $\bullet$ determine the nature of mineralisation based on the limited surface exposure.
• A two hole diamond-drilling program is being prepared to test the anomaly at approximately 100- $\bullet$ 150m below surface.
• Bass Metals met its earn-in requirements on these tenements during the second half of 2006. $\bullet$

Farrell Line Project (Cu-Pb-Zn-Ag & Au potential)

(EL47/2003, EL48/2003 & EL55/2004 100% Bass Metals Ltd)

During the half vear Bass Metals Ltd completed the acquisition of Saracen Mineral Holdings Limited's Tasmanian exploration portfolio comprising 138km² over the highly mineralised Mt Read volcanic belt.

This transaction is a strategic consolidation of tenements which adjoin Bass Metals' Hellyer project, contain extensions of mineralised units, and lie adjacent to the Henty and Rosebery mining centres. This acquisition comprises a large ground position over existing resources, advanced drill targets and highly rated regional targets and anomalies.

Figure 5: Regional Tenement Location Plan & Simplified Geology

CORPORATE MANAGEMENT

CORPORATE ACTIVITIES

The following activities were initiated or completed during the 6 months to the end of December 2006.

• Acquisition of 3 exploration licences from Saracen. Settlement of the transaction occurred in early $\bullet$ November 2006 with the Company issuing Saracen 6.4 million shares and a cash payment of \$300,000. Shareholders approved the issue of these shares to Saracen at the General Meeting held on 10 August 2006.
• A placement of 20 million shares approved by Shareholders at the August 2006 GM was completed $\bullet$ raising working capital of \$3.2 million before costs.
• Ms Susan Hunter was appointed Company Secretary on the 28 September. She is a Chartered $\bullet$ Accountant with a strong background in Company secretarial and corporate Finance roles. Mr Stephen Ross has resigned and will leave the company's employment during March 2007. Mr Lee Henley, a Chartered Accountant and experienced mining industry professional has accepted the role of Financial Controller and will commence on the 10 April 2007.
• The issue to employees and Directors of 2.1 million incentive options. $\bullet$

FINANCIAL POSITION

At the end of the half-year the Company had net cash balances of \$1,632,967. Carried forward exploration expenditure was \$6,999.712 and net assets of the Company were \$8,762,833.

During the half-year the Company issued 26,700,010 fully paid ordinary shares raising a total of \$3,056,840 cash funds, and issued capital increased to \$9,912,956 from \$5,516,114 at the end of June 2006.

Auditor's Independence Declaration

A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 27.

Signed in accordance with a resolution of the directors:

M Rosenstreich Managing Director

West Perth, Western Australia 15^th March 2007

CONDENSED INCOME STATEMENT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

	Half-year
	2006 S	2005 \$
Revenue from continuing operations	143,925	47,109
Employee benefits expense Depreciation expense Borrowing costs Office and administration costs	(599,059) (28, 081) (3, 302) (258, 438)	(47,460) (3,759) (239, 362)
Loss before income tax	(744, 955)	(243, 472)
Income tax expense Loss attributable to members of Bass Metals Ltd	(744, 955)	(243, 472)
Basic loss per share (cents)	(0.0139)	(0.0095)

The Condensed Income Statement should be read in conjunction with the accompanying Condensed
Notes to the Financial Statements

CONDENSED BALANCE SHEET AS AT 31 DECEMBER 2006

	Note	31 December 2006	30 June 2006
		\$	\$
CURRENT ASSETS
Cash and cash equivalents		1,632,967	1,279,180
Trade and other receivables		253,960	47,833
Prepayments		40,256
Total Current Assets		1,927,183	1,327,013
NON-CURRENT ASSETS
Receivables		153,600	186,100
Plant & equipment		163,357	143,974
Exploration and evaluation expenditure		3,891,883	2,155,723
Exploration Properties		3,107,830	1,295,387
Total Non-Current Assets		7,316,670	3,781,184
TOTAL ASSETS		9,243,853	5,108,197
CURRENT LIABILITIES
Trade and other payables		(377, 646)	(289, 786)
Short term borrowings		(16, 590)	(18, 127)
Provisions		(13, 480)	(3,291)
Total Current Liabilities		(407, 716)	(311, 204)
NON CURRENT LIABILITIES
Long term borrowings		(79, 554)	(85, 688)
TOTAL LIABILITIES		(487, 270)	(396,892)
NET ASSETS		8,756,583	4,711,305
EQUITY
Issued capital	8	9,912,954	5,516,114
Reserves	9	553,332	159,940
Accumulated losses		(1,709,703)	(964, 749)
TOTAL EQUITY		8,756,583	4,711,305

The Condensed Balance Sheet should be read in conjunction with the accompanying Condensed
Notes to the Condensed Financial Statements

CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

	Half-year
	2006 \$	2005 S
Total equity at the beginning of the half-year	4,711,305	2,112,038
Loss for the half-year	(744, 955)	(243, 472)
Total recognised income and expense for the half-year	(744,955)	(243, 472)
Transactions with equity holders in their capacity as equity holders
Contributions of equity net of transaction costs	4,396,841	3,248,699
Share based payments	393,392
Total transactions with equity holders	4,790,233	3,248,699
Total equity at the end of the half year	8,756,583	5,117,265

The Condensed Statement of Changes in Equity should be read in conjunction with the accompanying
Condensed Notes to the Financial Statements

CONDENSED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

	Half-year
	2006 \$	2005 \$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees	(401, 708)	(336, 396)
Other Borrowing costs paid	32,500 (3, 302)	(10,000)
Interest received	61,771	39,568
Net cash used in operating activities	(310, 739)	(306,828)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment	(55, 135)	(15, 774)
Payments for exploration properties	(319, 092)	(42, 263)
Expenditure on exploration activities	(2,009,762)	(577,352)
Net cash used in investing activities	(2,383,989)	(635,389)
CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from issue of shares	3,200,000	3,500,000
Principal repayments on finance leases	(8,325)
Costs of share issues	(143, 160)	(344,300)
Net cash provided by financing activities	3,048,515	3,155,700
Net increase in cash held	353,787	2,213,483
Cash at the beginning of the financial period	1,279,180	517,476
Cash at the end of the financial period	1,632,967	2,730,959

The Condensed Statement of Cash Flows should be read in conjunction with the accompanying
Condensed Notes to the Financial Statements

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

$\mathbf{1}$ . REPORTING ENTITY

Bass Metals Ltd (the "Company") is a company domiciled in Australia.

The annual financial report of the Company as at and for the year ended 30 June 2006 is available upon request from the Company's registered office at Level 2, 2 Richardson Street, West Perth Western Australia 6005 or at www.bassmetals.com.au.

$2₁$ STATEMENT OF COMPLIANCE

The interim financial report is a general purpose financial report which has been prepared in accordance with AASB 134: Interim Financial Reporting and the Corporations Act 2001.

The interim financial report does not include all of the information required for a full annual financial report, and should be read in conjunction with the consolidated annual financial report of the Company as at and for the year ended 30 June 2006.

This interim financial report was approved by the Board of Directors on 15 March 2007.

$3₁$ SIGNIFICANT ACCOUNTING POLICIES'

The accounting policies applied by the Company in this interim financial report are the same as those applied by the Company in its financial report as at and for the year ended 30 June 2006.

$\overline{\mathbf{4}}$ . ESTIMATES

The preparation of the interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this interim financial report, the significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial report as at and for the year ended 30 June 2006.

5. RELATED PARTIES

Arrangements with related parties continue to be in place. For details on these arrangements, refer to the 30 June 2006 annual financial report.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

6. SEGMENT INFORMATION

The Company operates predominantly in one business segment, being mining and exploration and in one geographical segment being Australia.

$\overline{7}$ . DIVIDENDS

No dividends were paid or declared payable during or since the half-year.

8. SHARE CAPITAL

On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

(a) Ordinary Shares - number

	Half Year 2006	Half Year 2005
	No.	No.
At the beginning of the reporting period	36,600,003	18,250,003
Ordinary shares issued at 20 cents each pursuant to a prospectus - 18 October 2005		17,500,000
Ordinary shares issued at 15 cents each as consideration for asset purchase - 18 October 2005		150,000
Ordinary shares issued under the Bass Metals Ltd Share Purchase Plan - 18 October 2005		250,000
Ordinary shares issued at a weighted average price of 16.7727 cents each as consideration for asset purchase - 30 November 2005		150,000
Ordinary shares issued at 16 cents per share pursuant to a placement - 16 August 2006	20,000,000
Ordinary shares issued at 16 cents per share pursuant to a short form prospectus - 25 August 2006	10
Ordinary shares issued at a deemed issue price of 20 cents per share for asset purchases - 23 October 2006	300,000
Ordinary shares issued at a deemed issue price of 20 cents per share for asset purchases - 3 November 2006	6,400,000
Balance at 31 December	63,300,013	36,300,003

CONDENSED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

(b) Ordinary Shares - value

	Half Year	Half Year
	2006	2005
	Ŝ	\$
At the beginning of the reporting period	5,516,114	2,230,256
Ordinary shares issued at 20 cents each pursuant to a prospectus - 18 October 2005		3,500,000
Ordinary shares issued at 15 cents each as consideration for asset purchase - 18 October 2005		22,500
Ordinary shares issued under the Bass Metals Ltd Share Purchase Plan - 18 October 2005		37,500
Ordinary shares issued at a weighted average price of 16.7727 cents each as consideration for asset purchase - 30 November 2005		25,159
Ordinary shares issued at 16 cents per share pursuant to a placement $-16$ August 2006	3,200,000
Ordinary shares issued at 16 cents per share pursuant to a short form prospectus $-25$ August 2006	2
Ordinary shares issued at a deemed issue price of 20 cents per share for asset purchases - 23 October 2006	60,000
Ordinary shares issued at a deemed issue price of 20 cents per share for asset purchases - 3 November 2006	1,280,000
Less share issue costs	(143, 162)	(344, 300)
Balance at 31 December	9,912,954	5,471,115

9. SHARE BASED PAYMENTS

On 23 October 2006, 100,000 unlisted options exercisable at 25 cents on or before 31 December 2007 $(a)$ were issued to Geoinformatics Exploration Australia Pty Ltd. The securities were issued pursuant to an agreement dated 10 May 2005 entitled Tasmanian Alliance Agreement between Bass Metals Ltd and Geoinformatics Exploration Tasmania Pty Ltd and Geoinformatics Exploration Australia Pty Ltd.

Fair value at grant date 1	\$0.071
Share price	\$0.24
Exercise price	\$0.25
Volatility factor	66.6%
Expiry date of the options	31 December 2007
Risk free interest rate 2	6.06%

$1$ : The basis of measuring fair value of the options was the Black-Scholes Option Pricing Model.

$2$ : Based on the 1 year Commonwealth Government Bond rate on 23 October 2006.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

On 22 December 2006, 1,600,000 unlisted Options exercisable at \$0.275 each on or before 22 December $(b)$ 2011 were issued to the Directors of the Company pursuant to shareholder approval obtained at the 28 November 2006 Annual General Meeting of Shareholders.

Fair value at grant date 3	\$0.223
Share price	\$0.335
Exercise price	\$0.275
Volatility factor	69.8%
Expiry date of the options	31 December 2011
Risk free interest rate 4	5.78%

$3$ : The basis of measuring fair value of the options was the Black-Scholes Option Pricing Model.

$4$ : Based on the 5 year Commonwealth Government Bond rate on 22 December 2006.

• $(c)$ Mr. Michael Rosenstreich, Managing Director of the Company, holds (i) 350,000 unlisted Options exercisable at \$0.25 each on or before 31 December 2007 vesting at the time the Company's share price reaches \$0.35 for 5 consecutive days, (ii) 350,000 unlisted Options exercisable at \$0.30 each on or before 31 December 2007 vesting at the time the Company's share price reaches \$0.40 for 5 consecutive days and (iii) 350,000 unlisted Options exercisable at \$0.35 each on or before 31 December 2007 vesting at the time the Company's share price reaches \$0.45 for 5 consecutive days.
• $(i)$ 350,000 unlisted Options - exercisable at \$0.25 each on or before 31 December 2007 vesting at the time the Company's share price reaches \$0.35 for 5 consecutive days.

Fair value at grant date 5	\$0.06
Share price	\$0.20
Exercise price	\$0.25
Barrier price	\$0.35
Volatility factor	60.0%
Expiry date of the options	31 December 2007
Risk free interest rate 5	5.36%

CONDENSED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

$(ii)$ 350,000 unlisted Options - exercisable at \$0.30 each on or before 31 December 2007 vesting at the time the Company's share price reaches \$0.40 for 5 consecutive days.

Fair value at grant date 5	\$0.049
Share price	\$0.20
Exercise price	\$0.30
Barrier price	\$0.40
Volatility factor	60.0%
Expiry date of the options	31 December 2007
Risk free interest rate 6	5.36%

350,000 unlisted Options - exercisable at \$0.35 each on or before 31 December 2007 vesting at $(iii)$ the time the Company's share price reaches \$0.45 for 5 consecutive days.

Fair value at grant date 6	\$0.04
Share price	\$0.20
Exercise price	\$0.35
Barrier price	\$0.45
Volatility factor	60.0%
Expiry date of the options	31 December 2007
Risk free interest rate 6	5.36%

$5$ : The basis of measuring fair value of the options was the Monte-Carlo Simulation Model.

$6$ : Based on the 1 year Commonwealth Government Bond rate on grant date.

10. CONTINGENT LIABILITIES

At the end of the financial period the Company had no contingent liabilities.

$11.$ EVENTS OCCURRING AFTER BALANCE DATE

No significant events have occurred subsequent to balance date that would have a material effect on the interim financial report

DIRECTORS' DECLARATION

In the opinion of the directors of Bass Metals Limited ("the Company"):

• the financial statements and notes set out on pages 17 to 25, are in accordance with the $\mathbf{1}$ . Corporations Act 2001 including:
• (a) giving a true and fair view of the financial position of the Company as at 31 December 2006 and of its performance, as represented by the results of its operations and cash flows for the half-year ended on that date; and
• (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and
• $2.$ there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Dated at Perth, Western Australia this 15^th day of March 2007.

Signed in accordance with a resolution of the directors:

$\mathcal{N}$ . $\mathcal{N}$

M Rosenstreich Managing Director

CHARTERED ACCOUNTANTS ADVISORS

A MEMBER OF
MOORES ROWLAND INTERNATIONAL

Bentleys MRI Perth Partnership ABN 17 735 344 518

Level 1, 10 Kings Park Road West Perth WA 6005 Australia

PO Box 570 West Perth WA 6872

T 61 8 9480 2000 F 61 8 9322 7787

LEAD AUDITOR'S INDEPENDENCE DECLARATION under Section 307C of the Corporations Act 2001 to the directors of Bass Metals Ltd

I declare that, to the best of my knowledge and belief, in relation to the review for the financial period ended 31

December 2006 there have been:

• no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in $\bullet$ relation to the review; and
• no contraventions of any applicable code of professional conduct in relation to the review ٠

BENTLEYS MRI PERTH PARTNERSHIP

JW VIBERT Partner Perth WA

Dated 15^th day of March 2007

Chartered Accountants

A member of Bentleys MRI, an association of independent accounting times throughout Australia, and a member of Moores Rowland International, an association of independent accounting firms Inroughout the world. The firms practising as Bentleys MRI and Moores Rowland are independent. The member firms of these associations are affiliated only and not in partnership.

A MEMBER OF MOORES ROWLAND INTERNATIONAL

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of Bass Metals Ltd

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Bass Metals Ltd, which comprises the condensed balance sheet as at 31 December 2006, and the condensed income statement, condensed statement of changes in equity and condensed cash flow statement for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors' declaration.

Directors' Responsibility for the Half-year Financial Report

The directors of the company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting an applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim 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 2006 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 Bass Metals Ltd, 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. We confirm that the independence declaration required by the Corporations Act 2001, provide to the directors of Bass Metals Limited on 15^th March 2007, would be in the same terms if provided to the directors as at the date of this auditor's review report.

Chartered Accountants

tlev Thinking ahead

Bentleys MRI Perth Partnership ABN 17 735 344 518

Level 1, 10 Kings Park Road West Perth WA 6005 Australia

PO Box 570 West Perth WA 6872

1 61 8 9480 2000 F 61 8 9322 7787

A member of Bentleys MRI, an association of independent accounting firms throughout Australia, and a member of Moores Rowland International, an association of independent accounting firms throughout the world. The firms practising as Bentleys MRI and Moores Rowland are independent. The member firms of these associations are affiliated only and not in partnership.

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 Bass Metals Ltd 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 2006 and of its performance for the half-year ended on that date; and
• b) Complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

BENTLEYS MRI PERTH PARTNERSHIP

JWVIBERT Partner Perth, WA

Dated this 15^th day of March 2007